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Document of The World Bank

Report No: ICR00001314

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-71510)

ON A

LOAN

IN THE AMOUNT OF EURO 34.7 MILLION (USD 34.0 MILLION EQUIVALENT)

TO THE

REPUBLIC OF TUNISIA

FOR A

NORTHWEST MOUNTAINOUS AND FORESTRY AREAS DEVELOPMENT PROJECT (PNO3)

April 27, 2010

Sustainable Development Department Maghreb Country Management Unit Middle East and North Africa Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective 10/15/2009)

Currency Unit = Tunisian Dinar (TD) TD 1.00 = USD 0.77 USD 1.00 = TD 1.30

FISCAL YEAR

January 1 – December 31

ABBREVIATIONS AND ACRONYMS

AC ADL AFA AFIC AGR ANPE APEL

Field Advisor/Animateur-Conseiller Local Development Association/Association de Développement Local Agricultural Land Agency/Agence Foncière Agricole Forestry Association for Collective Interest/Association Forestières d'Intérêt Collectif Income-Generating Activities/Activités Génératrices de Revenu Environmental Protection Agency/Agence Nationale de Protection de l 'Environnement Employment and Housing Promotion Association/Association de Promotion de l’Emploi et du Logement

ATLAS BTS CAS CD CES CP CPA CPS CPW CRDA DGF DGFIOP

DREE EA EIA EMFP ERR

ATLAS Foundation for Self-Development/Fondation ATLAS pour l’auto – développement Tunisian Bank for Solidarity/Banque Tunisienne de Solidarité Country Assistance Strategy Development Committee/Comité de Développement Water and Soil Conservation/Conservation des Eaux et des Sols Program Contract/Contrat Programme Annual Program Contract/Contrat Programme Annuel Country Partnership Strategy Connections for Potable Water/Adduction d'Eau Potable Regional Commissariat for Agricultural Development/Commissariat Régional au Développement Agricole General Directorate for Forests/Direction Générale des Forêts General Directorate for Finance, Investments and Professional Organizations/ Direction Générale du Financement, des Investissements et des Organisations Professionnelles Directorate for Water Resources/Direction des Ressources En Eau Environmental Assessment Environmental Impact Assessment Environmental Management Framework Plan Economic Rate of Return

FAO FRR GDA GDAP GIS GOT IBRD

Food and Agriculture Organization Financial Rate of Return Agricultural Development Association/Groupement de Développement Agricole Agricultural and Fisheries Development Group/Groupement de Développement Agricole et de la Pêche Geographic Information System Government of Tunisia International Bank for Reconstruction and Development

IPA INRAT INS IRESA

Integrated Participatory Approach/Approche Participative Intégrée National Agronomic Research Institute of Tunis/Institut National de Recherche Agronomique de Tunis National Statistics Institute/Institut National de la Statistique Agricultural Research and Higher Education Institute/Institution de la Recherche et de l’Enseignement Supérieur Agricoles

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MARHP MdE M&E

Ministry of Agriculture, Hydraulic Resources and Fisheries/Ministère de l’Agriculture, des Ressources Hydrauliques et de la Pêche Ministry of Equipment/Ministère de l’Equipement Monitoring and Evaluation

MEHAT Ministry of Equipment, Housing and Territorial Development/Ministère de I 'Equipement, de l 'Habitat et de l'Aménagement des Territoires

MIS MTR NGO

Management Information System Mid-Term Review Non-Governmental Organization

ODESYPANO OEP OP OPAF PDC PDO

Northwest Forestry and Pastoral Development Agency/Office du Développement Sylvo-Pastoral du Nord-Ouest Office for Livestock and Pasture/Office de l’Elevage et des Pâturages Operational Policy Pilot Operation for Forest Population Support/Opération Pilote d’Appui Aux Populations Forestières Community Development Plan/Plan de Développement Communautaire (PDC) Project Development Objective

PHRD Policy and Human Resources Development Fund (Japanese Grant) PIP PNO

Project Implementation Plan Northwest Mountainous and Forestry Areas Development Project Projet de Développement des Zones Montagneuses et Forestières du Nord Ouest

SMSA Mutual Group for Agricultural Services/Société Mutuelle de Services Agricoles TAA Total Agricultural Area/Superficie Agricole Totale TD Tunisian Dinar USD U.S. Dollar

Vice President: Shamshad Akhtar

Acting Country Director: Françoise Clottes

Sector Manager: Luis Constantino

Project Team Leader: Lucie Tran Huong-Giang

ICR Team Leader: Garry Charlier

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REPUBLIC OF TUNISIA

Northwest Mountainous and Forestry Areas Development Project (PNO3)

CONTENTS

Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph

1. Project Context, Development Objectives and Design............................................................1 2. Key Factors Affecting Implementation and Outcomes ...........................................................4 3. Assessment of Outcomes.........................................................................................................9 4. Assessment of Risk to Development Outcome .....................................................................13 5. Assessment of Bank and Borrower Performance ..................................................................14 6. Lessons Learned ....................................................................................................................16 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners........................17 Annex 1. Project Costs and Financing.......................................................................................18 Annex 2. Outputs by Component ..............................................................................................19 Annex 3. Economic and Financial Analysis..............................................................................28 Annex 4. Bank Lending and Implementation Support/Supervision Processes..........................38 Annex 5. Beneficiary Survey Results (if any) ...........................................................................40 Annex 6. Stakeholder Workshop Report and Results (if any)...................................................41 Annex 7. Summary of Borrower’s ICR and/or Comments on Draft ICR..................................42 Annex 8. Comments of Co-financiers and Other Partners/Stakeholders...................................59 Annex 9. List of Supporting Documents ...................................................................................60 Annex 10. Photo Set of Project Results and Outputs ................................................................61

MAP No.

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A. Basic Information

Country: Tunisia Project Name: Northwest Mountainous and Forestry Areas Development Project

Project ID: P072317 L/C/TF Number(s): IBRD-71510,TF-26699

ICR Date: 04/28/2010 ICR Type: Core ICR

Lending Instrument: SIL Borrower: GOVERNMENT OF TUNISIA

Original Total Commitment:

USD 34.0M Disbursed Amount: USD 34.1M

Revised Amount: USD 24.8M

Environmental Category: B

Implementing Agencies: Ministry of Agriculture, Hydraulic Resources and Fisheries

Cofinanciers and Other External Partners: B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: 06/14/2001 Effectiveness: 07/14/2003 07/14/2003

Appraisal: 04/29/2002 Restructuring(s):

Approval: 10/31/2002 Mid-term Review: 12/01/2005 01/29/2007

Closing: 12/31/2008 07/31/2009 C. Ratings Summary C.1 Performance Rating by ICR

Outcomes: Satisfactory

Risk to Development Outcome: Moderate

Bank Performance: Satisfactory

Borrower Performance: Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings

Quality at Entry: Satisfactory Government: Satisfactory

Quality of Supervision: Moderately SatisfactoryImplementing Agency/Agencies:

Satisfactory

Overall Bank Performance:

Satisfactory Overall Borrower Performance:

Satisfactory

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C.3 Quality at Entry and Implementation Performance IndicatorsImplementation

Performance Indicators

QAG Assessments (if any)

Rating

Potential Problem Project at any time (Yes/No):

No Quality at Entry (QEA):

None

Problem Project at any time (Yes/No):

No Quality of Supervision (QSA):

None

DO rating before Closing/Inactive status:

Satisfactory

D. Sector and Theme Codes

Original Actual

Sector Code (as % of total Bank financing)

Agricultural extension and research 20 20

Crops 15 15

General agriculture, fishing and forestry sector 30 30

Roads and highways 35 35

Theme Code (as % of total Bank financing)

Land administration and management 22 22

Other rural development 23 23

Participation and civic engagement 11 11

Rural markets 22 22

Rural non-farm income generation 22 22 E. Bank Staff

Positions At ICR At Approval

Vice President: Shamshad Akhtar Jean-Louis Sarbib

Country Director: Francoise Clottes Pedro Alba

Sector Manager: Luis F. Constantino Petros Aklilu

Project Team Leader: Garry Charlier Idah Z. Pswarayi-Riddihough

ICR Team Leader: Garry Charlier

ICR Primary Author: Jean-Marc Bisson

Song Li

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F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document) The PDO was to improve the socioeconomic conditions of the populations in five governorates covering the mountainous and forested areas of the northwest region, Béja, Bizerte, Le Kef, Jendouba, and Siliana, while ensuring sustainable management of the natural resources. Revised Project Development Objectives (as approved by original approving authority) The PDO was not revised. (a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Lower unemployment in rural areas of the Northwest Value quantitative or Qualitative)

Unemployment: 19.4% 10% (source: ISR)

Not formally revised

Unemployment: 16%

Date achieved 07/14/2003 12/31/2008 12/31/2008 07/31/2009 Comments (incl. % achievement)

Unemployment figures are for the whole Northwest area. The original target of 10%was overestimated given the evolution of the unemployment rate in the Northwest and in comparison to the national average of 13.9% in 2004.

Indicator 2 : Improved household income in rural areas of the Northwest Value quantitative or Qualitative)

Income: TD 2,050 TD 3,900 Not formally revised

Income: TD 3,784 (in TDs of 2003)

Date achieved 07/14/2003 12/31/2008 12/31/2008 07/31/2009

Comments (incl. % achievement)

Average annual agricultural income of targeted rural household increased from TD 2,050 to TD 3,900 in 2007; TD 3,280 in 2008 (due to rain shortfall during cropping season), and TD 3,784 in 2009; representing an 85% increase from 2003-09.

Indicator 3 : Better access to basic infrastructure in rural areas of the Northwest

Value quantitative or Qualitative)

a) communities with access by road: 56% b) communities with access to potable water: 69%

a) None b) 80%


a) 81% b) 81%

Date achieved 07/14/2003 12/31/2008 12/31/2008 07/31/2009


a) 275 additional communities out of 1,100 identified in the PDCs (mainly construction/rehabilitation of rural roads) b) 4,980 additional households out of 41,500 identified in PDCs (mainly water connections/individual water tanks).

Indicator 4 : Improved vegetation and forest cover in the Northwest Value quantitative or

32% (existing cover in intervention areas)

Not specified Not formally revised

38%

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Qualitative) Date achieved 07/14/2003 12/31/2008 12/31/2008 07/31/2009 Comments (incl. % achievement)

Vegetation and forest cover (including tree plantation, mainly olive and semi-forest trees; plantation of small forage trees for pasturing and wood, and perennial prairie installation) representing 27,000 ha additional coverage.

Indicator 5 : Increases in magnitude of cultivated areas and crop yields over a five-year average period

Value quantitative or Qualitative)

a) % of cropped areas: Fodder crops: 17% Horticulture: 0.8% b) Average yields of selected crops: Olives: 13qx/ha Wheat: 14 qx/ha


a) % of cropped areas: Fodder crops: 23% Horticulture: 2% b) Average yields of selected crops: Olives: 24qx/ha Wheat: 19 qx/ha


% of fallow land reduced overall from 21.7% in 2003 to 11.1% in 2009.

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised

Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Adjustments to ODESYPANO's organization carried out as planned

Value (quantitative or Qualitative)

a) Adjustments to ODESYPANO's organization b) Adjustment Program to be prepared with technical assistance

a) ODESYPANO's organization adjusted b) Adjustment Program completed


a) ODESYPANO's organization adjusted b) Adjustment Program completed

Date achieved 07/14/2003 12/31/2008 12/31/2008 07/31/2009


Capacity building investments to enhance efficient, cost effective planning, implementation, and M&E, including training and workshops for the ODESYPANO and other key partners and beneficiary organizations have been successfully carried out and completed.

Indicator 2 : Number of conventions (by type) signed between the ODESYPANO and other agencies


a) 1 convention b) of which with Gov/non-gov. partners: 1 / 0

a) 23 b) 18/5


a) 48 b) of which with Gov/non gov. partners: 38/12


48 conventions prepared during project implementation (209% of the original target). Before the PNO3, the only convention was with the BTS.

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Indicator 3 : Number of PDCs prepared Value (quantitative or Qualitative)

4 180 Not formally revised

101


Socio-territorial unit areas used for PDC planning were consolidated and expanded from village clusters (douar) to administrative sectors (imadas). Hence the reduction in the number of geographic units and corresponding PDCs.

Indicator 4 : Number of CPs completed and level of partner and beneficiary intervention in project implementation and financing


0 CPs Funding by: Partners: 0 MTD/0% Beneficiaries: 0 MTD/0%

598 CPs formulated and signed


476 CPs implemented Funding by: Partners: 29 MTD/35% Benefic.: 3.8 MTD/7%


PDCs are composed of five annual CPs (or CPAs). Financing for the remaining 122 CPAs falling beyond the project closing date is expected from the Government's own resources and from partner organizations.

Indicator 5 : Number of functional informal and formal organizations by type Value (quantitative or Qualitative)

a) CDs: 243 b) GDAs: 18 c) Cooperatives: 0

180 (1 PDC = 1 CD)


a) CDs: 101 b) GDAs: 52 c) Cooperatives: 3


243 CDs established under the PNO2 were regrouped into 56 larger CDs within the consolidated and expanded PDC unit areas under the PNO3. The target for this indicator has therefore been fully met.

Indicator 6 : Number of CPs completed and level of CD or socio-professional group contribution to financing


a) 0 CPs b) 0%

a) 598 CPs b) 8.9%


a) 476 CPs b) 7%


In reality, the level of beneficiary contribution exceeded the 7% indicated as this only takes financial contributions into account, without factoring in kind contributions, which were significant.

Indicator 7 : Number of landless, women and youth in CDs or socio-professional groups Value (quantitative or Qualitative)

a) Landless: 23% b) Women: 15% c) Youth: 7%


a) Landless: 22% b) Women: 17% c) Youth: 13%

Date achieved 07/14/2003 12/31/2008 12/31/2008 07/31/2009


Representation of youth and women in CDs has been strengthened given the interest that the PNO3 brought to these special and vulnerable groups. For the landless, the rate of representation is stable as there were no changes during PNO3 implementation.

Indicator 8 : Percent increase in crop yields and agricultural incomes, including from

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livestock and dairy production; % increase in crop and income diversity; diversity of agricultural crop products


a) Percentage of cropped areas Fodder crops: 17% Horticulture crops: 0.8% b) Average crop yield: Beans: 6.9 qx/ha Olives: 12.6 qx/ha c) Livestock yield Meat: 178kg/head/yr Milk: 1,060 L/head/yr


a) Percentage of cropped areas Fodder crops: 23%Horticulture crops: 2% b) Av. crop yield: Beans: 10.6 qx/ha Olives: 23.6 qx/ha c) Livestock yield Meat: 235kg/head/yr Milk: 1,544 L/head/yr


Other beneficial impacts include noticeable genetic improvements in livestock and small ruminants with subsequent substantial increases in milk/meat yields, when coupled with better quality fodder.

Indicator 9 : Land area treated for CES - by treatment type


a) % area treated: 0.3% b) Area treated: 0 ha

a) Not specified b) 29,850 ha

a) Not formally revised b) 20,907 ha

a) % area tr.: 13.6% b) Area treated: 22,251 ha cumulated


Mainly stone sills to protect tree crops and stone walls and plantations to control gully erosion against water runoff.

Indicator 10 : Land area under pasture and/or tree crops


a) Improved pastures: 0 ha b) Tree crops: 0 ha

a) 8,650 ha b) 9,500 ha

a) 14,815 ha b) 13,742 ha

a) Pastures: 14,919 ha b) Tree crops: 17,710 ha

Date achieved 07/14/2003 12/31/2008 12/31/2008 07/31/2009


Results significantly exceeded original targets (172% and 186% respectively, of original amounts). There were no such improvements (including establishment of resting areas, reseeding and fertilizing) within project areas before PNO3 implementation.

Indicator 11 : Number of km of improved rural roads (inter and intra-douar)


a) km of additional rural roads constructed: 0 b) km of additional. rural roads rehabilitated: 0

a)279 b)248

a)242 b)532

a) km of add. rural roads const.: 272 b) km of add. rural roads rehab.: 599


Results achieved met the original targets for rural road construction (97.5%) and more than doubled the targets for road rehabilitation (242%).

Indicator 12 : Number/size of rehabilitated wells, tanks and small irrigation plots

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a) Wells: 0 b) Tanks: 0 c) Small irrigation plots: 0

a)11 b)515 c)330 ha

a)1 b)878 c)201 ha

a) Wells: 1 b) Tanks: 906 c) Small irrigation plots: 345ha

Date achieved 07/14/2003 12/31/2008 12/31/2008 07/31/2009


Individual tanks/small irrigation plots were in high demand from beneficiaries, in contrast to well rehabilitation (only 1 out of a projected 11). Targets for small irrigation systems and tanks were met (105%) and largely exceeded (176%), respectively.

G. Ratings of Project Performance in ISRs

No. Date ISR Archived

DO IP Actual

Disbursements (USD millions)

1 11/12/2002 Satisfactory Satisfactory 0.00 2 03/25/2003 Satisfactory Satisfactory 0.00 3 09/30/2003 Satisfactory Satisfactory 1.53 4 04/09/2004 Satisfactory Satisfactory 1.53 5 10/14/2004 Satisfactory Satisfactory 1.53 6 04/27/2005 Satisfactory Satisfactory 2.41 7 12/21/2005 Satisfactory Satisfactory 5.54 8 06/26/2006 Satisfactory Satisfactory 7.46 9 01/23/2007 Satisfactory Satisfactory 11.89

10 09/26/2007 Satisfactory Satisfactory 16.93 11 04/30/2008 Satisfactory Satisfactory 21.52 12 12/31/2008 Satisfactory Satisfactory 28.27 13 06/29/2009 Satisfactory Satisfactory 32.55 14 08/30/2009 Satisfactory Satisfactory 32.55

H. Restructuring (if any) Not Applicable

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I. Disbursement Profile

1

1. Project Context, Development Objectives and Design

1.1 Context at Appraisal 1. Although overall poverty in Tunisia has been among the lowest in the MENA region, it is nevertheless concentrated in a few pockets where poverty rates are much higher than the national average. At appraisal, this was particularly true for the Northwest region, inhabited by 15% of the country’s population (with close to five times the country’s average population density of 67 inhabitants per km2). Poverty levels in the Northwest are mainly due to historical phenomena originating in colonial times, which saw a concentration of the rural population in mountainous areas with adverse agro-ecological conditions, coupled with weak public infrastructure and support services. At the same time, Northwest watersheds covered by the project supply around 80% of the country’s water resources, and the region is also home to more than half of the country’s forested areas. However, high population density, non-adapted agricultural practices, livestock pressures, naturally poor soils often located on steep slopes, and heavy winter precipitation compound to make the Northwest vulnerable to soil erosion and degradation. There was (and still is) an urgent need to break the vicious circle of low agricultural productivity, overexploitation of natural resources and rural poverty in the Northwest.

2. The Government’s strategy, as laid out in its 10th Five-Year Development Plan, was to accelerate poverty reduction measures and improve environmental management, including the protection of scarce natural resources. One of its goals was to promote rural development as an instrument for reducing poverty and improving the living standards of rural populations. This was supported by the Bank’s Country Assistance Strategy (CAS) objective, which aimed to strengthen the Government’s social agenda through the implementation of sustainable development measures, including the continuation of poverty reduction initiatives. The CAS recognized that more investments were necessary in agricultural support services and institutional capacity building and that more active participation by local communities was a prerequisite for sustainable development. The Northwest Forestry and Pastoral Development Agency /Office du Développement Sylvo-Pastoral du Nord-Ouest (ODESYPANO) was created in 1981 to protect natural resources, through the construction of rural infrastructure, mainly roads, and the implementation of anti-erosion measures. The ODESYPANO1

had previously benefited from two Bank co-financed Northwest Areas Development Projects2, known as the PNO1 and PNO2, which helped deepen and expand its development activities.

3. In order to pursue its development strategy in the Northwest region, the Government sought to capitalize on both the ODESYPANO’s and the Bank’s accumulated experiences in agricultural and rural development. In particular, the Ministry of Agriculture, Hydraulic Resources and Fisheries/ Ministère de l’Agriculture, des Ressources Hydrauliques et de la Pêche (MARHP3) sought to promote a more active involvement of local populations in the formulation and implementation of rural investments. The partnership mechanism put in place under the Project was thus aimed at motivating rural communities to participate in the preparation and implementation of Community Development Plans (PDCs) using a community-based and consultative Integrated Participatory Approach (IPA)/Approche Participative Intégrée in support of bottom-up, local development. Indeed, the Bank already had significant practical experience with several rural development projects in Tunisia coupled with a wide expertise in community-based and community-driven participatory approaches, which was considered a definitive asset by the Government.

1.2 Original Project Development Objectives and Key Indicators (from Project Appraisal Document)

1 In a few instances throughout the ICR, it is simply referred to as the “Office”. 2 (i) The Northwest Rural Development Project Loan No. 1997-TUN (from 1982-89), and (ii) the Northwest Mountainous Areas Development Project Loan No. 3691-TUN (from 1994-2001). 3 Previously the Ministry of Agriculture, Environment and Hydraulic Resources/Ministère de l’Agriculture, de l’Environnement et des Ressources Hydrauliques at the time of appraisal.

2

4. The Project Development Objective (PDO) was to improve the socioeconomic conditions of the populations in five governorates covering the mountainous and forested areas of the Northwest region, Béja, Bizerte, Le Kef, Jendouba, and Siliana, while ensuring sustainable management of the natural resources.

5. More specifically, the project aimed to increase household incomes through the improvement and diversification of the agricultural/pastoral production systems as well as the promotion of off-farm, income-generating activities. The Project was to achieve its development objective by supporting: (i) capacity building for the beneficiary communities, (ii) limited institutional restructuring and capacity building for the implementing agency (ODESYPANO) and its development partners to render them more effective at assisting the communities in planning, implementing and monitoring their own rural development programs/activities, (iii) identification and implementation of income-generating activities, on- and off-farm, to increase revenues, (iv) improvement in the protection and management of natural resources, and (v) improvement in beneficiary access to basic rural infrastructure.

6. Key performance indicators for the PDO cited in the Project Appraisal Document (see Section A2 and Annex 1 - Project Design Summary) to measure successful achievements were: (i) improved household incomes4 and better access to basic infrastructure in the rural areas of the Northwest, (ii) improved vegetation and forest cover in the Northwest, and (iii) increases in magnitude of cultivated areas and in crop yields over a five-year average period.

1.3 Revised PDO (as approved by original approving authority), Key Indicators, and Reasons/Justification 7. Neither the PDO nor the Key Indicators were revised.

1.4 Main Beneficiaries 8. Local level. The primary target group consisted of the households in the rural communities covered by the Project. The majority of these beneficiaries owned their land but there were also communally held and state-owned forest areas. The average cropped or pasture land per person was less than 3 ha, with marginal and fragile lands on steep slopes brought under production, resulting in soil degradation and siltation of downstream dams. This situation was worsened by traditional inheritance practices that resulted in severe land fragmentation and non-viable farms. It was estimated at appraisal that more than 70% of individual lands were not registered or lacking a title. Some 60% of households raised livestock, although meat and milk yields were low due to poor livestock breeds and inadequate feed quality and quantity. At least 30% of areas were cropped with cereals, another 30% with fruit trees, slightly less than 20% with legumes, fruits and vegetables, and the remaining 20% left fallow. Illiteracy was widespread, particularly among women, which made their participation in decision-making even more difficult. The Project Appraisal Document estimated the targeted population at about 260,000 inhabitants (52,000 households) but did not offer a breakdown of quantitative estimates for direct or indirect beneficiaries.

9. Sub-regional (délégation) and regional (gouvernorat) levels. The secondary target group of beneficiaries was the ODESYPANO and all its partners in the context of the project. These included the regional and sub-regional public administrations in the five targeted governorates, their regional and local councils, as well as various governmental and non-governmental organizations, with some implicitly included in the project financing plan through Government co-financing. Governmental organizations involved in the Project included the Regional Commissariats for Agricultural Development/Commissariats Régionaux au Développement Agricole (CRDAs), the regional departments of the Ministry of Equipment (MdE), the Agricultural Land Agency/Agence Foncière Agricole (AFA), the Tunisian Bank for Solidarity/Banque Tunisienne de Solidarité (BTS), the General

4“Lower unemployment” is also mentioned as an outcome/impact indicator in Annex 1 but not in Section A2 (page 3) of the

Project Appraisal Document.

3

Department of Forestry/Direction Générale des Forêts (DGF), the Office for Livestock and Pasture/Office de l’Elevage et des Pâturages (OEP), and the Institute for Agricultural Research and Higher Education/Institution de la Recherche et de l’Enseignement Supérieur Agricoles (IRESA). All of these entities usually intervened separately and on a sector basis, with limited active consultations with the local populations. The Project put in place a partnership mechanism to induce these entities to participate in Community Development Plan/Plan de Développement Communautaire (PDC) preparation and implementation using community-based IPA.

1.5 Original Components (as approved) The Project had five components and 15 sub-components (see Project Appraisal Document, Annex 2). 10. Component 1: Institutional strengthening for ODESYPANO and partners (USD 3.36 million5or 7.5% of total project cost). This component included capacity building investments aimed at enhancing efficient and cost-effective planning, implementation, and Monitoring and Evaluation (M&E) of developmental activities, essentially: (i) adjustment/strengthening of ODESYPANO’s organizational structure, (ii) improvement of information systems, (iii) training programs, and (iv) capacity building for participating agencies and beneficiary populations through workshops, training, small office equipment, and materials.

11. Component 2: Implementation of pilot operations (USD 3.92 million or 8.7% of total project cost). Three types of pilot operations were planned: (i) formulation and implementation of one PDC in each of the five governorates, centered on forest-dwelling communities and aimed at improving their living conditions as well as reducing pressure on limited forest resources, (ii) six land consolidation operations over 5,400 ha, to be carried out on a demand-driven basis with the provision of titles and access tracks to enhance land productivity, and (iii) promotion of micro-projects and microenterprises6, including preliminary studies, specialized training, assistance for request preparations to existing credit institutions, and support to marketing.

12. Component 3: Agricultural and livestock development (USD 3.69 million or 8.2% of total project cost). This component included: (i) provision of agricultural extension services to producers, including demonstration activities and upgrading of reference manuals, (ii) livestock development activities aimed at improving genetic stocks, animal health, and feed quantity and quality, and (iii) rehabilitation of small-scale irrigation schemes, with water supplied from community wells or communally managed existing springs.

13. Component 4: Sustainable natural resource management (USD 17.23 million or 38.4% of total project cost). This component included: (i) soil and water conservation works, including stone walls, anti-erosion plantations, small dikes, and grass strips, (ii) improvement of pasture and rangelands in degraded areas, including the establishment of resting areas as well as reseeding and fertilizing activities in other areas, and (iii) agro-forestry development, essentially through the establishment of plantations, mainly olive and fruit trees with some forage for livestock development, as a complement to mechanical soil and water conservation works.

14. Component 5: Improvement of basic rural infrastructure (USD 16.66 million or 37.1% of total project cost). This component included: (i) the rehabilitation and construction of rural roads in order to improve access from remote areas, and (ii) improved access to potable water mainly through the construction of 515 individual tanks and the establishment of eight potable water connections in order to improve the living conditions of remote communities.

1.6 Revised Components 15. The original project components were not revised.

5 All costs in this section included physical and price contingencies. 6 The difference between income generating micro-projects and microenterprises pertain mainly to the size of investments (up to 10,000 TD for micro-projects and from 10,000 TD up to 50,000 TD for microenterprises).

4

1.7 Other significant changes

16. Expansion of unit areas used for PDC planning: Shortly after project launch, it was found that some of the communities benefitting from the project through a PDC and located in the same administrative sector could benefit more if they were regrouped under one single larger PDC where economies of scale could play a role. This was done to ensure a better overall integration and coherence at the sector level without losing the social specificities of the smaller socio-territorial units. As a result, the number of geographic units and corresponding PDCs was reduced from 180 to 101 while fully maintaining the initial covered geographic area and population targeted by the project (i.e. 500,000 ha and 260,000 inhabitants).

17. Early cancellation of projected surplus: The project loan was for 34.7 million Euros. Due to the substantial appreciation of the Euro relative to the USD and TD during project implementation, the Government requested an early cancellation of 8.5 million Euros or 24.5% of the original loan amount, in 2008 bringing the loan to 26.2 million Euros. This resulted in a proportional reduction of the initial amount allocated to each of the five project components. Therefore, the amount cancelled almost exactly offset the net effect of the currency fluctuations during the implementation period so that the total project disbursement, in USD terms at completion, is 100.6% of the appraisal estimate (see Annex 1).

18. Extension of closing date: In addition, the Project closing date was extended once by seven months from December 31, 2008 to July 31, 2009, mainly because of the need to complete cropping activities overlapping two calendar years within PDC.

19. Confirmation of the role of the ODESYPANO: At the project design stage, the government envisioned the gradual disengagement of the ODESYPANO and the subsequent transfer, by the end of the project, of its responsibilities for beneficiary socioeconomic development to the CRDAs of the MARHP. However, a study commissioned by the ODESYPANO in 2007 and subsequently validated by the Government concluded that the CRDAs were not ready to undertake the new responsibilities to be transferred to them and recognized the uniqueness of the role and specificity of services provided by the ODESYPANO in the mountainous and forested areas of the Northwest region. The Government has now come to the conclusion that the ODESYPANO and the CRDAs are to play complementary roles in servicing different target areas and beneficiary groups. The Government has also decided to continue using the ODESYPANO as one of the main implementing agencies to promote bottom-up development in the Northwest using IPA.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design, and Quality at Entry 20. Soundness of the background analysis. The background analysis supporting the design of the Project was sound and based on priorities set by the Government in its 10th Development Plan to promote rural development as an instrument for reducing poverty and improving living standards of rural populations. The strategic directions adopted for this operation were based on the lessons learned from the Government’s experience in implementing the previous PNO2 and in using an IPA. The main lessons taken into account included: (i) a well-managed IPA generates great interest among populations, particularly for soil and water conservation, (ii) land consolidation is greatly appreciated by beneficiaries, and (iii) investments in staff training and institutional capacity building are key. During project preparation, a Policy and Human Resources Development Fund (PHRD) grant from Japan was used to finance key technical background studies, a detailed project implementation plan with an operations manual, provision of preliminary intensive training for ODESYPANO staff, as well as the formulation of four experimental PDCs (before the start of project implementation).

21. Assessment of project design. The project design was adequate. The PDO was fully consistent with the Government’s development strategy in the Northwest, the Bank’s CAS at the time, and the Bank’s MENA Region Rural Development Strategy “Reaching the Poor” which focused on poverty

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reduction and improved livelihoods in rural areas. The Project sought to achieve multiple goals at both the regional and local levels while deepening the use of the IPA. The multiplicity of the 15 sub-components under the five components supporting project objectives, including participatory PDC preparation, investments to improve basic infrastructure, sustainable natural resource management, land consolidation, and piloting productive and income-generating activities, required very strong management and operational capacities at all levels. To support such objectives, the project design adequately recognized the need for and included adequate provisions for training and technical assistance. During project preparation and through the PHRD grant, sizeable investments in staff training, production of methodological tools, and provision of logistical means were incorporated and have greatly aided the ODESYPANO to broaden/deepen its use of community-based IPA.

22. As highlighted above, the project was appropriately designed based on national priorities, local conditions, and beneficiary requirements. The design quality has also been reflected in: (i) strategic choices made, namely the combination of institutional adjustments, pilot operations, revenue generating activities and physical works, through participatory project preparation, (ii) careful targeting of vulnerable groups, namely women and youth, (iii) the use of adaptive capacity building practices, and (iv) pilot operations providing opportunities to learn by doing and encourage innovation. Nevertheless, while much emphasis was rightly put on the central importance of using IPA, there is no reference in the PDO to this key underlying strategic choice. Furthermore, improvements to the indicators used for M&E would have also been welcome. For example, it would have been desirable to have indicators more directly linked to project interventions, or better measurement of capacity/maturity of grassroots organizations serving as interfaces between communities and the ODESYPANO, instead of the use of national statistics on unemployment and household income. Finally, expectations regarding the time it would take for the Project to become effective and for technical assistance to ODESYPANO to materialize were overoptimistic (see Section 2.3 below for details).

23. Adequacy of Government commitment. Government commitment to the operation was strong. The operation itself was built around main Government priorities for rural community development and poverty reduction in the Northwest, and project activities were endorsed by all levels of Government.

24. Risk Assessment.The critical risks associated with meeting the PDO were identified as: (i) Government commitment to support partnership development between the ODESYPANO and other agencies, and (ii) resistance by partner agencies. There were also additional risks identified in relation to a number of components and outputs: (iii) the reluctance of local communities to participate, (iv) delays in implementation, (v) inadequate capacity of the ODESYPANO to adapt to its new role of increased M&E and reduced implementation function, and (vi) inadequate maintenance of rural roads in remote areas. As demonstrated during implementation, these risks were indeed adequately assessed.

25. However, the unpreparedness of CRDAs in assuming the ODESYPANO role in targeted areas toward the end of implementation prevented the actual transfer of responsibilities as envisaged by the Government. The Tunisian authorities, at the time of project preparation, strongly recommended incorporating a disengagement mechanism, whereby the ODESYPANO would transfer the leading role in PDC preparation and implementation to the CRDAs of the MARHP upon completion of the second generation of PDCs7. Some logistical support was allocated to the CRDAs for this purpose in the project and the MARHP had indicated its intention to eventually provide additional support if and when required. However, the risks associated with this approach were not identified and assessed at appraisal and no actionable mitigation measures were formulated. The Northwest region CRDAs proved to be unprepared to take over this role toward the end of implementation. With the insight of implementation results, it is more realistic at this stage to think in terms of a realignment of various

7The first generation consisted of basic PDCs in which “hard” investments prevailed (mainly physical ones) with a

complement of “soft” components (essentially capacity building for the grassroots organizations). The second generation, in the same socio-territorial units, consisted of consolidating PDCs in which “soft” components prevailed on the basis that most “hard” investment needs would have been met in the basic PDCs.

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responsibilities between development partners (CRDAs, ODESYPANO, and others) at the local and regional levels in order to maximize complementary synergies and economies of scale. 2.2 Implementation 26. The implementation of the PNO3 was successful in achieving project objectives and key results set out during preparation. The project met most of its original and revised targets and even exceeded them in many cases. Key project achievements, also reported in the borrower’s summary completion report (Sommaire du Rapport d’Achèvement), include: (i) a significant increase in average rural household income from TD 2,050 in 2003 to TD 3,784 in 2009 in constant terms8, (ii) lower unemployment rates of 16% in 2009, down from 19% in 2003, although still short of the overambitious 10% original target9, (iii) better access to basic infrastructure, with access to roads increasing from 56% to 81% and access to potable water increasing from 69% to 81% over the same period10, (iv) increases in vegetation and forest cover from 32% to 38%11, (v) increases in the percentage of areas treated with soil and water conservation investments from 0.3% to 13%, covering 20,700 ha of fragile land, and (vi) significant progress in terms of improvements through increased yields, diversification of agricultural production systems, and land use rationalization (see Annex 7 for details). Institutions have also evolved and been reinforced over this period.

27. In addition to the capacity building and strengthening for grassroots organizations, the ODESYPANO is now covering close to 50% or about 500,000 ha of mountainous and forested areas in the Northwest. The agency’s development partners, including governorate administrations, CRDAs, regional directorates of other ministries, the OEP, the BTS, as well as communities in the project areas, are now familiar with coordinating and working jointly to prepare and implement integrated PDCs in a participatory manner. This represents a positive and significant step toward mainstreaming and institutionalizing PDCs and the use of IPA in their preparation. Accordingly, progress toward development objectives and implementation ratings were consistently rated as satisfactory throughout implementation.

28. Factors that contributed to the successful implementation of the project include: (i) strong interest, ownership, and commitment to the Project at all levels of Government (central, regional, and local), which remained consistently high throughout the project life, (ii) high level of commitment and involvement demonstrated by the beneficiary community organizations and their leaders, (iii) high level of commitment, dedication, and technical competency of ODESYPANO staff, and (iv) the support and technical backstopping provided throughout Bank supervision. The high level of ownership by the Government at all levels, and by communities and local leaders, as well as the consultation and coordination mechanisms developed and implemented by the ODESYPANO and its partners, both significantly facilitated the development of effective partnerships between governmental and non-governmental organizations in support of promoting local and community-based development. This is best illustrated by: (i) the high level of contributions leveraged from ODESYPANO partners, representing around 35% on average of the total cost of the 476 annual CPs completed under the project, (ii) the successful transition from “basic PDC” (limited to the smaller douar level) to “consolidated PDC”, covering the entirety of the administrative sector (imada), and (iii) the positive evolution of the relationship between regional and local administrations and communities that evolved from being frequently confrontational to more productive and constructive, with communities transitioning from a passive recipient stance to a more active participant role in their local development. Finally, supervision and field visits to remote areas by Bank missions were important in understanding arising problems (technical, administrative, fiduciary, etc.), identifying adequate responses, and verifying progress throughout implementation.

8 Source: systematic household survey carried out by the ODESYPANO. Not all income growth can be directly attributed to the project and more in-depth studies would be needed to estimate the project’s actual contribution to these factors in the targeted project areas. 9 Not all unemployment reduction can be directly attributed to the project and more in-depth studies would be needed to estimate the project’s actual contribution to these factors in the targeted project areas. 10 Based on INS methodology/raw data applied to project areas. 11 Data from the ODESYPANO’s GIS including only perennial cover.

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29. Factors that hindered implementation: The project became effective on July 14, 2003, slightly more than five months later than planned, due mainly to longer-than-expected processes for final approval and loan signing. One other main cause of start-up delays was the complexity of organizing and mobilizing the delivery mechanism for the large-scale technical assistance to strengthen the ODESYPANO organizational structure at the project start. Ultimately, the Food and Agriculture Organization (FAO) was contracted to carry out this assistance that started in late 2005 with a delay of about two years. However, the ODESYPANO managed to ultimately recover these start-up delays with no negative impacts on the project outcomes and results. Finally, the lack of adequate access to micro-credit in support of pilot activities to promote income-generating micro-projects and micro-enterprises became an obstacle for this sub-component during implementation. Taking into account the complexity and challenges of promoting income-generating micro-projects, the project rightfully opted for the cautionary approach of starting with pilot activities. The necessary provision of micro-credit could not be part of the project design, as there were already institutions in place in Tunisia dispensing rural credit, such as the BTS. However, due to reasons beyond project control, micro-credit availability from the BTS did not adequately materialize during implementation. Lack of such micro-credit resulted in a serious constraint to income-generating micro-project development.

30. The Mid-Term Review (MTR) was postponed by about a year until January 2007 in response to a request from the Government, which intended to carry out key related activities prior to the MTR in light of the start-up delays. The project achievements during the MTR were found to be commendable despite these initial delays. For instance, all 101 PDCs had already been prepared. The mission noted that the resulting commitment and disbursement rates at the end of 2006 were only 51% and 29%, respectively. Finally, the project was never rated at risk during implementation.

2.3 Monitoring and Evaluation Design, Implementation and Utilization 31. Data on PNO3 performance indicators were collected on a regular basis. The ODESYPANO had a relatively well-developed framework to monitor project progress using a set of 34 indicators built on the 17 indicators (five outcome/impact indicators and 12 output indicators) developed during preparation and listed in the Project Appraisal Document, which were subsequently complemented during implementation by a set of 17 additional indicators. As is often the case with integrated rural development projects, some of the impact and output indicators set out at appraisal were difficult to measure or not fully under the project control. This was the case, for instance, in measuring lower unemployment or improved household income in the targeted project areas. As per the recommendations of Bank supervisions and the MTR, additional indicators were developed as needed to improve or facilitate the measurement and understanding of some of these original indicators. Sizeable investments in staff training, production of methodological tools, and provision of logistical means were provided under the project to help the ODESYPANO institutionalize its Management Information System (MIS). The ODESYPANO’s good management of M&E was also based on the use of its database, which is supported by a fully functional Geographic Information System (GIS) as well as by quality relevant studies undertaken by the agency.

32. Involving populations directly in monitoring/collecting project indicator data and in M&E has also been used as a tool to empower beneficiaries to manage their own local development. At the field level, CPAs were used in the year-to-year implementation of PDCs and also had their own M&E mechanism. Output indicators and, occasionally, impact indicators were incorporated into CPAs and used to follow execution for each program and to evaluate results at completion, as well as before formulating the subsequent CPA. The beneficiaries also used M&E channels to give feedback on project implementation. Indeed, M&E was used as an efficient and successful policy instrument to directly involve populations in project implementation, thus empowering them in the management of their own local development. In retrospect, M&E should have also included criteria allowing for better measurement of the capacity and maturity of grassroots organizations serving as an interface between communities and the ODESYPANO.

2.4 Safeguard and Fiduciary Compliance

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33. Safeguard measures were included in the project design, but Bank supervision and to a lesser extent the Government team fell short of ensuring proper compliance, application and monitoring of these safeguard measures. This is in part due to some confusion in the interpretation of application modalities for these measures. The project was classified as a Category B in accordance with OP 4.01 (Environmental Assessment), an Environmental Management Framework Plan (EMFP) was prepared, and no safeguard policies other than OP 4.01 were triggered. The EMFP required the screening of sub-projects, which included both environmental and social triggers12, to be cleared by the Tunisian Environmental Protection Agency/Agence Nationale de Protection de l’Environnement (ANPE) for further environmental analysis.

34. During a thematic review mission conducted by the MNSSD safeguard team in April 2008, it was found that the EMFP was not properly implemented except for the training on environmental impact assessments. The major reason for not adequately implementing the EMFP was that the ANPE made a determination that screened sub-projects are exempted from environmental assessment in accordance with Tunisian Environmental Impact Assessment (EIA) legislation 91-362, which was subsequently abrogated and replaced during project implementation by EIA decree #2005-1991. The ODESYPANO team also informed the thematic mission that some sub-projects related to the construction of rural roads, well drilling, and plot irrigation had infringed on private property for which oral agreements were obtained from private owners. The ODESYPANO team was not aware that Tunisian regulations required that written authorizations be obtained for temporary occupations. Their views were that social impacts generated by these temporary occupations were very limited, if not minimal, and were resolved in a mutually satisfactory manner, including through the participatory PDC preparation process.

35. Although the Project did not trigger OP 4.12 (Involuntary Resettlement), as demand-driven sub-projects were not identified during the project design and no resettlement had been envisaged, the World Bank project team should have reassessed the social safeguard requirements during the MTR and assisted in the proper treatment and documentation of voluntary temporary cessation agreements from participating private land owners or in the preparation of a resettlement policy framework to address the potential loss of assets or revenues as a result of private property infringement. Even though most of the sub-projects were under implementation by the time of the thematic mission visit, the ODESYPANO reinstated environmental screening for the remaining sub-projects and agreed that, during the design of the next project phase, the PNO4: (i) due diligence would be carried out on selected PNO3 sub-projects, and (ii) an environment and social management plan for the PNO4 would take into consideration the lessons learned from such a review and include detailed procedures for screening and environmental assessment similar to what was carried out for the Second Water Sector Investment Project (PISEAU II) and the Second Natural Resources Management Project (PGRN2).

36. Fiduciary. Overall, financial management has been satisfactory with proper financial information always readily available. The ODESYPANO put in place a good computerized system to prepare financial statements for the project, including commitments and disbursements by component, sub-component and category, as well as financing sources. The development of an integrated information system for M&E was instrumental in ensuring satisfactory project management, including adequate monitoring of procurement activities and signed contracts at the regional level, once the five regional directorates were connected. This helped accelerate the transfer of data from the region to headquarters and avoid the risks of exceeding budget allocations. Audits were conducted annually by the ODESYPANO’s external auditor, delivered to the Bank, and revealed no particular accounting issues.

2.5 Post-completion Operation/Next Phase

12 The Operational Manual explicitly excluded any resettlement activity and provided that “one important component of the environmental assessment is to confirm that physical works to be undertaken would not involve either a physical or economic resettlement of populations. Population resettlement will not be included in this project” (see Manuel des Procédures, Projet de Développement des Zones Montagneuses et Forestières du Nord-Ouest (PNO), page 14).

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37. The Government will continue to support community-based rural development in the Northwest region of Tunisia via a new operation (PNO4) to start in 2011 under the technical responsibility of the ODESYPANO, for which World Bank financing is sought. The new operation is consistent with Tunisia’s 11th 5-year Development Plan (2007-2011) and the Tunisia Country Partnership Strategy (CPS) recently approved by the World Bank. Greater attention will be paid to enhancing and deepening IPA in order to improve the socioeconomic conditions of the populations in the five targeted governorates of Béja, Bizerte, Le Kef, Jendouba, and Siliana, covering the mountainous and forested areas of the Northwest region, while addressing climate change impacts and ensuring sustainable management of natural resources. The proposed PNO4 would build upon and expand the PNO3’s positive achievements.

38. The choice to continue with the ODESYPANO as the main implementing agency for the proposed PNO4 recognizes its comparative advantages in dealing efficiently and successfully with poor and remote communities in the Northwest region and in working together with other partners. This also represents an important step toward ensuring the ODESYPANO’s sustainability and mainstreaming of IPA as an effective tool to promote local development and reduce rural poverty. As such, the Government has already allocated the ODESYPANO sufficient investment budgets for the second half of 2009 and for 2010, coupled with the expected partner contributions, for the purpose of executing the remaining 122 CPAs out of the 43 PDCs still to be finalized after project closing in July 2009. To carry out its work, the ODESYPANO also has a recurrent operation budget of more than USD 2.0 million per year.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation 39. The project objectives remain highly relevant. Tunisia has dedicated a particular importance to its Northwest region in recent decades because of its elevated poverty incidence as compared to the country average, as well as its large watersheds and forested areas, which are very vulnerable to soil erosion and degradation. The region remains critical to the socioeconomic development of Tunisia’s rural population and sustainable management of limited natural resources. Implementation of the previous PNO1 and PNO2 achieved satisfactory results. More than ever, the Government strategy in the region is to build on these achievements by accelerating poverty reduction measures and improving environmental management, including the protection of scarce natural resources. The decision to provide bridging budgets to the ODESYPANO over 2009 and 2010 is clear and solid proof of the high relevance of project objectives, design, implementation, and achievements, as well as the Government’s resolve to tackle poverty in the Northwest.

40. Bottom-up rural development as an instrument for reducing rural poverty and improving living standards of the Northwest region is an important area of continued dialogue between Tunisia and the World Bank. The 2010-2013 Tunisia CPS encompasses three pillars: (i) growth, competitiveness, and employment, (ii) sustainable development and climate change, and (iii) improving the quality of service delivery. Under the result area focusing on improving agriculture sector performance, the CPS proposes to continue “supporting interventions that improve the incomes and socio-economic conditions of some of Tunisia’s poorest people who live in the rural areas of the Northwest of the country, with a focus on farmers associations, small and medium enterprises, and microfinance.” To this effect, implementation start of the proposed PNO4 is aimed for 2011. Furthermore, the Administration wants to expand and deepen the use of IPA in all local governmental structures as a well-recognized tool for promoting self-managed local development. This is evidenced by the completion of the first phase of the large-scale PGRN, based on CRDAs intervention in the field using IPA, with a second phase now in preparation with the Bank’s assistance: the Community-Based Integrated Rural Development project (CBIRD/PGRN2).

3.2 Achievement of Project Development Objectives

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41. The PDOs of improving socioeconomic conditions of populations in the five governorates covering the mountainous and forested areas of the Northwest region, while ensuring sustainable natural resource management, have been achieved. This was done mainly through the improvement and diversification of revenues, improvements in access to basic infrastructure, and better natural resource management. This assessment is based on the findings and conclusions of the final supervision mission, the ICR mission, and the Borrower’s Completion Report.

42. The Project’s key outcome indicators show that: (i) average household agricultural income increased by 84.5% from TD 2,050 in 2003 to TD 3,784 in 2009 (or 97% of the original target) in constant terms, and unemployment decreased from 19.4% in 2003 to 16% in 2009 (compared to the overambitious original target of 10%), (ii) the percentage of communities with improved access to roads has increased from 56% to 81%, with 275 additional communities during the project implementation period, with almost 272 km of rural roads constructed and 599 km rehabilitated (97% and 241% of the original targets, respectively), (iii) the percentage of households with better access to potable water has increased from 69% to 81% (compared to the original target of 80%), with 4,980 additional households, for a total of 906 individual tanks constructed (176% of the original target) and six potable water connections installed, (iv) the increase in vegetation and forest cover within project areas grew from 32% in 2003 to 38% in 2009, with a total of 22,251 ha treated with soil and water conservation works to reduce erosion and to increase protection against water runoff; this total grows up to 54,880 ha if improvements to rangeland and forestry (14,919 ha), and agro-forestry (17,710 ha) are included, representing 114% of the initial 48,000 ha target, and (v) cultivated areas significantly increased (from 17% to 23% for fodder crops and 0.8% to 2% for market gardening), and as did key crop yields (for instance, olives from 13 qx/ha to 24 qx/ha or wheat from 14 qx/ha to 19 qx/ha).

43. Extensive applied research was carried out for crops and livestock, and the resulting improved technologies and cultural practices were then effectively disseminated by the ODESYPANO’s Field Advisors/Animateurs-Conseillers (AC) and specialists. This resulted in better yields for crops, meat, and milk, as well as changes in cropping patterns towards higher value-added productions, essentially in horticulture and arboriculture. Other successful initiatives supported by the project include income-generating beekeeping micro-projects and the well-received land consolidation operations (covering 5,346 ha or 99% of the original 5,400 ha target through six operations) that have enabled even more intensive and improved cultural practices with better yields. In addition, 685 micro-projects were initiated, of which 40% are still fully operational and most are even in expansion13. The average revenue per micro-project is estimated at around TD 2,000 per year.

44. Capacity building for beneficiary communities, the ODESYPANO, and its partners represented a prerequisite for achieving the PDO. The project was very successful in providing well-tailored technical assistance to help the ODESYPANO upgrade its organizational structure, albeit with about a two-year delay. Several information/sensitization forums were set up between the Office, its partners and beneficiaries. Moreover, the Office and the CRDAs (its main partners) were given training (technical, administrative, and other), vehicles, and office equipment/materials (including computers). Community-level beneficiaries received training in technical and organizational matters as well as small equipment/materials. As a result, 101 Development Committees/Comités de Développement (CDs, informal grassroots organizations), and three cooperatives were created14.Additionally, 101 five-year PDCs were prepared and validated, with 60 in administrative sectors (imadas) already covered under the PNO2 and 24 in new sectors. On the basis of these PDCs, 476 CPAs were executed at project completion for a total amount of TD 53 million, with co-financing from PDC partners reaching TD 29 million, or about 35% of total PDC financing. Evidence of the strengthened capacity of all of these entities is given hereafter in Section 3.5 (b). The ODESYPANO is now regarded as a center of excellence in the use of community-based IPA and is effectively managing partnerships with regional and sub-regional public administrations in the five governorates, as well as with various governmental and non-governmental organizations involved in the project.

13 However, 1,863 persons received training of whom only 685 (37%) could obtain a micro-credit to start a micro-project (see Section 2). 14 It is worth mentioning that one of the women groups who benefited from capacity building assistance from the Project received a national Presidential award.

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3.3 Efficiency

45. The project economic rate of return after completion is estimated at 27% over 20 years, with a net present value of TD 41.5 million, or around USD 32 million, at an opportunity cost of capital of 12% (see Annex 3). This rate compares favorably with the 17% calculated at appraisal and mainly reflects the better-than-expected performance of agricultural support services provided by the ODESYPANO to beneficiaries, as well as the significant synergies generated between various productive activities in the context of PDCs. On the one hand, the rate does not account for less quantifiable benefits such as better access to basic rural infrastructure, including rural roads and water points, or better protection of vegetation and forest cover. On the other hand, financial returns for all major crops involved and on-going off-farm income-generating activities were found to be attractive, thereby guaranteeing the sustainability of quantifiable benefits.

3.4 Justification of Overall Outcome Rating

Rating: Satisfactory

46. This satisfactory rating is based on the following considerations: (i) project objectives were highly relevant to the needs of Tunisia and, in particular, those of its Northwest region, (ii) project design, components, and activities were consistent with objectives, and project activities were in high demand by communities and responded to priority needs as identified by beneficiary populations in consultation with regional and local authorities, (iii) project objectives were largely achieved with significant results that in many cases even exceeded original targets, as demonstrated by the evolution of impact indicators set at appraisal, (iv) the project generated very positive and direct benefits and is also expected to generate long-term social, economic, and environmental benefits through IPA, (v) the project shows significant potential for sustainability and replication in other regions of Tunisia through partnerships in support of decentralization and bottom-up local development, and (vi) important experiences and lessons were gained for future and similar operations for all levels of the national government (central, regional, and local). The project also has significant potential for replication in other regions North African countries with similar conditions (Algeria, Morocco).

47. The PNO3 main outcome indicators show good progress in the main implementation areas, namely in improvements and diversification of rural household agricultural income in mountainous and forested areas of the Northwest region, community access improvements to basic rural infrastructure and services, and improvement and protection of sustainable natural resource management in the region. There are also a number of other positive results not necessarily reflected in the indicators. First, the project used local manual labor for small-scale field works whenever possible (tâcheronnat), which not only created local jobs and gained more support from the populations for the works once established (for example, soil and water conservation) but also initiated and encouraged a network of small entrepreneurs. Second, the responsibility for maintaining non-classified rural roads was a persistent issue during the PNO2. Under the PNO3, the MdE carried out standard surfacing for most of the constructed or rehabilitated roads by the project, using funds provided by the governorates in the context of PDCs. This resulted in the upgrade of these roads to the level of “classified” roads, placing them directly under the Ministry’s responsibility for their maintenance.

3.5 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects and Social Development

48. The project has substantially improved socioeconomic conditions of rural communities and significantly empowered vulnerable groups, namely women and youth. The approach and interventions supported by the PNO3 were largely pro-poor, reaching some of the poorest populations in the remote

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areas of the Northwest region and promoting gender and geography-based equity. As demonstrated previously, the project has substantially improved the socioeconomic conditions of the local population (around 260,000 inhabitants, or more than 52,000 households) both in terms of increased revenues and better access to basic infrastructure. Moreover, marginal groups, mainly women, young graduates and landless inhabitants, were represented in CDs and GDAs. These groups benefited directly from specific project activities. For instance, at project completion, women accounted for 17% of CD members, 64% of the training in person/days for off-farm income-generating activities, and 51% of income-generating activities in terms of project numbers. Furthermore, significant progress was made toward the long-term goal of institutionalizing the use of community-based IPA to empower local populations in managing their own local development.

(b) Institutional Change/Strengthening

49. The PNO3 significantly contributed to strengthening and promoting community-based, participatory, and better-coordinated local development with greater citizen involvement. Institutional strengthening was an important prerequisite to achieve the PDO. The ODESYPANO made significant inroads into the traditional local governance structure by increasing community participation, as well as promoting and facilitating coordination and partnerships between key development actors. The ODESYPANO is now clearly better organized and equipped both in terms of physical means and methodologies to:

(i) Use IPA efficiently. The ODESYPANO is recognized as a center of excellence on the subject and is solicited to carry out external seminars.

(ii) Prepare and implement PDCs and their CPAs successfully. 101 PDCs were prepared under the project and 476 CPAs executed. The beneficiary communities have expressed their appreciation for these initiatives on numerous occasions. As a result, communities have contributed the equivalent of TD 3.8 million, representing 7% of the aggregated PDCs and related activities costs undertaken over the project implementation period.

(iii) Manage partnerships effectively with regional and sub-regional public administrations in the five governorates as well as with various governmental and non-governmental organizations involved. 48 partnership agreements (conventions de partenariat) were signed with regional and local councils, CRDAs of the MARHP, regional departments of the MdE, the AFA, and the BTS. As a result, these partners contributed TD 29 million, representing an average 35% of the total costs of the 476 executed CPAs15.

50. Furthermore, grassroots organizations, namely CDs and GDAs, have strengthened significantly over the project years. The gradual improvement in the education level of key representatives and the increasing presence of all community socioeconomic segments in these groups (women and marginal groups included) suggest that populations are now using these organizations more. There are several examples of this acquired dynamism among GDAs. For instance, 43 out of 52 GDAs are productively using equipment provided under the project, including distillers, grinders, and extractors. Additionally, 25 have recruited a technical director, four have contracted credit and achieved an aggregated repayment rate of 98%, and one has mobilized a World Wildlife Fund grant of USD 20,000. Finally, ODESYPANO partners, mainly regional and sub-regional public administrations, as well as governmental and non-governmental organizations, are now familiar with IPA and more accustomed to working together in the context of agreed, integrated plans such as PDCs. All partners understand that this reinforces their actions and in many ways facilitates their work.

(c) Other Unintended Outcomes and Impacts (Positive or Negative)

15 The partner contributions to the CPAs, realized within the framework of their regular work programs, mainly to create more synergy between various actors and developmental activities, are considered parallel financing and were therefore not part of the project’s financing plan at appraisal.

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51. A number of developments were not originally envisaged or expected. Several of the PDCs prepared before the end of 2006 were used as input at the regional and sub-regional levels for the formulation of the country’s 11th Development Plan (2007-11). This has facilitated the participation of ODESYPANO partners in PDC implementation, since these plans better fit with their annual work programs, which are actually derived by desegregation from the 11th Plan (see Section 6). Furthermore, in reflecting on the way forward and on the future of local development in the Northwest after the PNO3, a study was commissioned in 2008, which concluded that further large-scale investments were still needed in the region to support local and bottom-up community-based development. It also recognized the specificity of the role played by the ODESYPANO in the Northwest and recommended against its phasing out as initially envisaged.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops

52. There were no specific beneficiary surveys or stakeholder workshops conducted as part of the preparation of this core ICR. Nevertheless, throughout various forums during project implementation (see Annexes 5 and 6) beneficiaries and other stakeholders expressed their satisfaction with project outcomes and results. Beneficiaries were satisfied not only with the physical realizations in their communities but also with the sense of empowerment that the project, through the IPA, has allowed them to build with regard to their own local development and through their representation in CDs. As mentioned above, strong demand from beneficiaries for improved access to basic rural infrastructure, especially water tanks and rural roads, prompted an increase in Component 5 financing to USD 19.99 million (from USD 16.65 million), representing 120% of original financing. Beneficiary training represents another area of beneficiary satisfaction with the project: project-provided training originally targeted 440 persons, and 1,863 participants ended up benefiting from this training, amounting to 423% of the original target. ODESYPANO partners now recognize the many advantages of intervening together in the context of PDCs on an integrated basis rather than separately with only a sector approach. The high rate of partners’ co-financing of PDCs (up to 35% of the total cost) is evidence of their increased involvement and willingness to collaborate.

4. Assessment of Risk to Development Outcome Rating: Moderate

53. Several factors increase the likelihood that project development outcomes achieved will be maintained. These include: (i) enhanced recognition and commitment of all levels of the national Government to further accelerate poverty reduction measures and improve environmental management, including the protection of scarce natural resources in the Northwest region, (ii) strength of political will and leadership at all levels of Government (central, regional, and local) to further enhance and expand bottom-up local development interventions using the community-based IPA in the targeted Northwest region, and (iii) increased institutionalization and mainstreaming of partnerships and coordination mechanisms between the ODESYPANO, CRDAs, beneficiaries, and other partners built during the PNO3 and previous projects as evidenced by the framework agreement (convention de partenariat) under preparation between the MARHP and other partner ministries (Ministry of Development and International Cooperation, Ministry of Interior and Local Development, and Ministry of Finance) to better define and enhance collaboration among these key actors, (iv) strong indication from the field after project closing demonstrating the extent to which the Project fostered social capital formation and community empowerment in the Northwest, coupled with increased community interest and willingness to participate in CDs as well as preparation and implementation of PDCs and associated CPAs, (v) operation and maintenance arrangements in place and functioning for most investments, as is the case in particular for rural road improvement investments, which have been included in the classified national highway network after rehabilitation and resurfacing, and for which maintenance responsibility has been transferred to the MdE, and (vi) increased interest and understanding demonstrated by participating communities of how to establish and regularly apply sustainable natural resource management practices, including better forms of production, cropping patterns, and diversification favoring natural resource conservation and better use of available resources.

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54. Ultimately, the sustainability of the partnership established through the PNO3 will depend on anumber of requirements: (i) the need for better linkages between PDC programming and financing as well as planning and budgeting procedures used by the regional administration, and (ii) the need for more flexibility in regional administrative procedures for allocating budgets to technical ministries, so that CPAs can be financed when ready rather than having to wait for funds at fixed intervals during the fiscal year. ODESYPANO partners would find it much easier to participate in PDC preparation and implementation, as these plans would better fit within their respective annual work programs.

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry

Rating: Satisfactory

55. The Bank performance in ensuring quality at entry is rated satisfactory. As already indicated, the PDO and the detailed project design were fully consistent with the Government’s development strategy in the Northwest and with the Bank’s CAS. Project components, sub-components and activities were also found to be well-formulated and consistent with the PDO. Additionally, a PHRD grant was made available to support project preparation, provide intensive staff training, and formulate experimental PDCs before the project start. Through preparation missions and at the time of appraisal, the Bank team provided timely inputs and helped with the detailed design of the Project, in particular advising on PDC formulation and taking part in organizing and holding the project launching workshop. However, given the critical importance of using the IPA as a critical tool in all aspects of project activities and interventions, the definition of the PDO could have been sharpened further by including a reference to the IPA as a central underlying strategic option chosen by the project and to the related improvements of the M&E to better measure the strengthening of grassroots organizations serving as interface between the beneficiary communities and the ODESYPANO.

56. The World Bank project team also performed due diligence in terms of environmental and social safeguards in accordance with Bank requirements and discussed these matters with the Borrower in addition to field visits. The team took a series of preventive measures to meet Bank safeguard requirements: (i) the team adequately rated the safeguard category and rightly triggered the Bank OP 4.01; (ii) all physical works, such as road rehabilitation and drilling, were to be undertaken subject to previous requests formulated by individual farmers in the PDC; (iii) a screening practice in the EMFP was introduced; (iv) the EMFP was included in the Operations Manual; and (v) the ODESYPANO was trained on safeguard-related activities, including the screening process. Based on the above factors, a satisfactory rating is recommended. (b) Quality of Supervision

Rating: Moderately Satisfactory 57. The Bank quality of supervision is rated moderately satisfactory. In general, Bank supervision was proactive. The Bank provided adequate and critical substantive and operational support that contributed to the satisfactory achievement of project objectives throughout implementation. Substantive and quality assistance was provided on technical issues, including enhancing both IPA and the required methodological, planning, and operational tools needed for its implementation. Support was also provided to strengthen the capacity of the implementing agency to comply with fiduciary requirements. Financial management was well-covered during supervision and contributed to the early identification of the favorable exchange rate fluctuations impact that led to the decision to cancel 8.5 million Euros. During implementation, fourteen supervision and technical assistance missions were conducted. There were four TTLs responsible in turn for the Project. The first was responsible for project preparation until approval and the fourth took care of ICR preparation only. Thus, two TTLs were in effect involved in project supervision over six years. Most missions were modest in size with 3 to 4 members but were deemed both helpful and productive by Tunisian authorities. However, none of these missions included specialists in the area of environmental and social safeguard. Limitations in

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the availability of supervision resources (financial and human) are the reasons most frequently mentioned for these shortcomings.

58. Safeguard supervision was deemed inadequate and had to wait for the safeguards thematic mission, which took place in April 2008, slightly more than one year before project completion. The March 2007 MTR mission should have represented an important opportunity to discuss and eventually address environmental and social safeguard-related issues with the client. No safeguard specialist was included in the MTR mission, apparently due to a lack of available human and financial resources. The thematic mission on safeguards did raise safeguard issues and made recommendations in April 2008. The mission specifically raised the issue of sub-projects, including the rehabilitation of rural roads and drilling, that infringed on private land. Despite agreement of farmers and/or land owners participating in the PDCs, these sub-projects did not strictly address World Bank procedures, as the process for these verbal agreements for voluntary cession of land were not adequately documented in written form. Even though no damages or complaints have been identified so far, this issue is counted among the weaknesses identified during the PNO3, and corrective measures should be considered during the preparation of the proposed follow up PNO4 operation. Because safeguards were not adequately covered during implementation, and in spite of the high quality and effective technical and fiduciary backstopping provided during supervision, a Moderately Satisfactory rating for the quality of Bank supervision is recommended. (c) Justification of Rating for Overall Bank Performance Rating: Satisfactory

59. Overall Bank performance is rated satisfactory for the reasons outlined above. The project was innovative and sought to capitalize on the Government’s sustained and growing attention to improving the socioeconomic conditions of poor populations in the Northwest region of the country. The project was well-designed and responded effectively to both Government priorities and beneficiary community needs in terms of poverty reduction and governance reform. Strong, substantive, and effective technical, operational, and fiduciary support provided during supervision helped to implement the project in line with the agreements reached during appraisal, provide opportunities for lessons, and ultimately achieve project objectives, despite shortcomings mainly in the safeguard supervision area. Finally, the cooperation between the Bank and the client has been described as a model by the client (see the Borrower’s ICR Report, page 8).

5.2 Borrower Performance (a) Government Performance Rating: Satisfactory

60. Government performance during project preparation and implementation is rated satisfactory. The Government remained highly committed to project objectives and implementation. As planned at appraisal, an inter-ministerial steering committee (chaired by the MARHP) was set up at the project start and met four times over the implementation period16. Furthermore, several of the ODESYPANO advisory board meetings, in which most of the main PNO3 actors were represented, helped coordinate project activities. In addition, the Government, through the Ministry of Finance, co-financed the Project in an adequate and timely manner. In fact, because of the appreciation of the TD in relation to the USD, the Government provided 12.4% more funds (in USD terms) than agreed at appraisal under the project financing plan (see Annex 1). It must be noted, however, that several key staff changes on the Tunisian Administration side in the Northwest, mainly governors and their general secretaries, as well as general directors of the CRDAs, presented at times additional challenges for project implementation, as each newcomer needed to be acquainted with the project, while in several instances they had different views from that of previous officials. Although this turnover was normal and due to regular rotation of civil servants, more continuity in regional authorities would have been more beneficial to project implementation.

16 A recommended frequency was never specified in project documents.

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(b) Implementing Agency or Agencies Performance Rating: Satisfactory

61. ODESYPANO’s performance in ensuring design quality and project implementation is rated satisfactory. Overall, the ODESYPANO implemented the project effectively and efficiently. Despite the fact that the technical assistance to upgrade the ODESYPANO organizational structure was initiated only in late 2005 (with a delay of two years), it is remarkable that the agency staff managed to adapt on its own during the first years to several challenges brought on by the project, namely the experimental PDC preparation, the setup of a pioneering partnership mechanism, and a more progressive use of community-based development with the populations. However, weaknesses were identified in dealing with the implementation and supervision of environmental and social safeguards. The implementing agency capacity in this area should be strengthened during preparation of the proposed PNO4 operation.

(c) Justification of Rating for Overall Borrower Performance Rating: Satisfactory

62. The Borrower and implementing agency’s overall performances are rated satisfactory because of the reasons outlined above. The project benefited from a strong and sustained commitment and ownership from all levels of Government. Despite start-up delays, the Borrower brought this project to a satisfactory conclusion and is committed to a new operation with the aim of consolidating, expanding, and deepening the positive results already achieved. As already indicated, the project was never rated at risk by the Bank.

6. Lessons Learned 63. The PNO3 experience provided the following important lessons:

(i) An efficient partnership for local and community-based development is possible between governmental and non-governmental organizations in Tunisia. This is best illustrated by the high level of contributions leveraged from ODESYPANO partners (35% on average of the total cost of the 476 CPAs executed under the Project). This achievement is largely due to the partnership mechanism implemented by the ODESYPANO with active collaboration from regional and sub-regional public administrations in the five governorates.

(ii) However, further strengthening is needed to consolidate these established local partnerships.As indicated, the sustainability of this partnership will depend on enhancing and institutionalizing key requirements such as: (a) better linkages between PDC programming and financing as well as planning and budgeting procedures used by the regional administrations, and (b) more flexibility in regional administrative procedures for allocating budgets to technical ministries, so that CPAs can be financed when ready, rather than having to wait for funds at fixed intervals during the fiscal year.

(iii) Further decentralization of the decision-making process is warranted in the targeted Northwest governorates and more decision power could be given to regional and local authorities. More specifically: (a) ODESYPANO partners at the regional level should be able to make quick decisions concerning their participation in PDCs, within the limits of their regular work programs, without having to refer in most cases to their national authorities. This would avoid unnecessary delays and rigidity in the process, and (b) local councils, chaired by delegates representing the Governors at the sub-regional level, could evolve from being simply consultative to a becoming more decisional forums. These councils represent the most direct institutional channel for communities, and decisions taken there, at least for strictly local development matters, need to be acted upon without further procedural steps.

(iv) The PNO3 has demonstrated that it is now possible to prepare PDCs at the imada or administrative sector level as opposed to the smaller douar (village) or cluster of douars level, therefore covering a substantially larger socio-territorial unit without losing significant social

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cohesion among communities. Using the larger planning unit allows for gains in time, money, and economies of scale. This is now made possible due to two main factors: (a) the ODESYPANO has developed better methodological IPA tools for approaching populations and is more efficiently using them, and (b) grassroots organizations, namely CDs and GDAs, used by the Office as an interface with communities are growing in strength and can therefore better play the catalyzing and orchestrating roles expected of them.

(v) The use of community-based IPA has helped the administrations at regional and local levels to move from an often confrontational relationship with communities in project areas to a more productive relationship based on mutual trust. IPA has also helped communities progress from a mentality of passive contributor to that of an active participant in their own local development. From an environmental viewpoint, IPA has also reinforced community adhesion to soil and water conservation works on private lands, when combined with productive activities in the context of PDCs. These works are then better designed and maintained since they are conceived in close collaboration with populations. It was also observed that land consolidation activities, when integrated into PDCs, proved to be very useful in paving the way for conservation works. In the future, such activities should become a prerequisite to soil and water conservation works, wherever and whenever possible.

(vi) Promoting income-generating micro-projects remains a complex and challenging undertaking, requiring a more comprehensive approach. As in several other rural development projects in Tunisia and elsewhere, the active promotion of income-generating activities has proved difficult through PNO3 pilot operations. Three main constraints were identified: (a) income-generating activities, particularly off-farm initiatives, require the delivery of a well-synchronized combination of prior specialized training, adequate access to credit, and subsequent customized advisory support. These different services are normally provided by various organizations with their own objectives, work programs, and limitations, and thus having them intervene in a synchronized manner is often challenging, (b) Government staff is not optimally suited in terms of qualifications and organization to promote off-farm income-generating activities. Such tasks should perhaps be entrusted to professional experts with the proper organizational set-up. Consideration should be given to fulfill this function in the future by non-governmental partners on a “turn-key” basis, and (c) it is often difficult to diversify from a limited range of occupations with appealing income-generating potential, such as beekeeping, handicrafts, and small-scale processing of agricultural produce. Indeed, the markets for these products are relatively narrow, and market access and opportunities coupled with adequate marketing advisory services are ultimately key to successful income-generating activities.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners

(a) Borrower/implementing agencies

64. The Borrower’s letter dated April 23, 2010 (see Annex 7) commenting on the Bank’s draft ICR concurs in general terms with the thrust of the ICR and its depiction of successes, achievements, and deficiencies of the project.

(b) Co-financiers

Not applicable.

(c) Other partners and stakeholders (e.g. NGOs/private sector/civil society)

Not applicable.

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Annex 1. Project Costs and Financing

(a) Project Cost by Components (in USD million equivalent)

Components Appraisal Estimate

(USD million)

Actual/Latest Estimate (USD

million) 1/

Percentage of Appraisal

1. Institutional Strengthening for ODESYPANO and Partners 3.01 3.52 117.0%

2. Implementation of Pilot Operations 3.25 2.44 75.0% 3. Agricultural and Livestock Development 3.14 2.39 76.0%

4. Sustainable Natural Resources Management

14.85 16.41 110.5%

5. Improvement of Basic Rural Infrastructure

13.79 19.99 145.0%

Total Baseline Cost 38.04 44.74 117.6%

Physical Contingencies 0.85 0.00

Price Contingencies 5.97 0.00

Total Project Costs 44.86 44.74 Front-end fee PPF 0.00 0.00 Front-end fee IBRD 0.00 0.39

Total Financing Required 44.86 45.13 100.6%

(b) Financing

Source of Funds Type of Co-financing

Appraisal Estimate

(USD million)

Actual/Latest Estimate

(USD million)1/


Borrower 6.85 7.70 112.4% International Bank for Reconstruction and Development

34.002/ 34.483/ 101.4%

Local Sources of Borrowing Country 4.01 2.95 73.5%

1/ Projections of the amounts estimated to be effectively disbursed at the end of the grace period for loan disbursement, which was 31 January 2010, after extension by two months. The average exchange rate used for calculating the USD amounts during the period July 2003 – January 2010 is estimated at USD 1 = TD 1.29.

Local sources are the beneficiary communities’ counterpart financing to the CPA’s implementation and have therefore be included in the project’s financing plan. On the other hand, the ODESYPANO partners’ parallel financing is not included – see paragraphs 8 and 9 for definitions and paragraph 35 for financing levels.

NB. The loan agreement was signed in December 2002 and the loan was of Euro 34.7 million, including a front-end fee of Euro 347,000. Euro 8.5 million were cancelled in September 2008.

2/ At the date of project approval.

3/ Using exchange rate at completion. If using exchange rate at approval, the revised total amount is USD 24.80 million.

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Annex 2. Outputs by Component A. Summary of Main Project Results 2.1. The Project was implemented in the five Northwest governorates of Béja, Bizerte, Jendouba, Le Kef, and Siliana. The areas of intervention included the administrative sectors already covered by previous projects (59 sectors in 15 delegations) plus 24 new sectors in 6 new delegations. These 24 new sectors cover 150,000 ha and about 70,000 inhabitants. The total intervention area is 500,000 ha and 260,000 inhabitants.

2.2. The PNO3 was implemented using a more enhanced, community-based IPA than that used for the PNO2. Under the PNO3, IPA was more centered on promoting partnerships with local and regional operators, integrating development activities, and fostering appropriate conditions for their sustainability. These improvements were characterized by: (i) strengthening of local organizations, while insuring population involvement in various decision-making stages in relation to development activities and natural resource management planning, prioritization, and programming, (ii) the progressive trial-basis adoption of the administrative sector (imada) as the basic unit for planning and programming covered by a PDC17, (iii) the mobilization of development partners and their participation in PDC preparation and implementation (CP implementation). This involvement took place within consultation frameworks initiated by the ODESYPANO within Regional Councils/Conseils Regionaux (CR), and Local Development Councils/ Conseils Locaux de Développement18, (iv) the populations and partners’ involvement in M&E activities, and (iv) adaptation of the ODESYPANO organization and strengthening its management and intervention capacity.

2.3. For the 59 sectors where former CDs or GDAs had already been created during the previous PNO2 operation and where PDCs had already been initiated, these PDCs implementation was planned to continue through “Basic PDCs” with subsequent consolidation through a new generation of “Consolidated PDCs” (implemented through CPs). For the 24 new sectors, the project planned for awareness raising, capacity mobilization and strengthening for 110 local rural communities, and their organization into CDs and/or GDAs. These CDs /GDAs were to be subsequently supported to enable them to develop basic PDCs (110 PDCs-B) and implement these PDCs through CPs.

2.4. The project enabled populations to be organized and involved in PDC formulation and implementation Populations received assistance to support them in organizing into various formal and informal structures depending on the growth dynamics of community development. Thus, 101 CDs, 52 GDAs and three Mutual Groups for Agricultural Services/Société Mutuelle de Services Agricoles (SMSAs) were created. Women represent 17% of membership to these local organizations.

2.5. 101 PDCs were thus developed under the PNO3, covering 101 basic administrative sectors (imadas) instead of the 180 PDCs initially planned during appraisal. This was done while maintaining original objectives in terms of territorial (500,000 ha) and population (260,000 inhabitants) coverage. PDC implementation was conducted through 476 CPs.

2.6. In terms of beneficiary contribution to investments, populations contributed to the implementation of various development activities in line with commitments made in CPs. Beneficiaries also participated in maintaining and safeguarding developed infrastructure. Total beneficiary contribution reached 3.802 million TD, or 7% of investments made under the PDCs and 95% of readjusted project estimates. Contributions were mainly related to enhancement measures and CES activities.

17 Initially, it was expected that a PDC would cover a basic socio-territorial unit corresponding to a sub-division (douar) of the administrative sector (imada) (option applied under the PNO2). 18 Government Councils in charge of coordinating development at regional and local levels.

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2.7. In terms of other partner contributions, the ODESYPANO established 48 partnership agreements19 with government agencies involved in regional development. These included mainly CRDAs, regional directorates from other ministries, the Office for the Crafts Industry, the BTS, as well as NGOs, local development associations, and research institutions. Partner contributions to investments for the PDCs’ implementation amounted to 29 million TD (65% of their commitments). This contribution has increased near project completion. Indeed, funding provided in 2009 by the partners to implement the CPs reached 7 million TD against only 1.3 million TD mobilized by the project. This funding concerned mainly infrastructure, micro-projects, works relating to CES, pasture improvement, forest management, and agro-forestry.

B. Project Achievements by Components and Subcomponents20

Component 1: Institutional Strengthening for the ODESYPANO and Partners (USD 3.52 million, 117% of appraisal estimates and 7.8% of actual total costs)

2.8. This component aimed to strengthen the ODESYPANO’s institutional capacity in order to improve its performance effectiveness, including participatory planning, integrated development component implementation, M&E, and project management. Other planned activities also included partner and beneficiary capacity building. The investments made in implementing the various sub-components listed below amounted to 4.544 million TD (97.4% of the anticipated amount).

2.9. Subcomponent 1.1: Upgrading/strengthening the ODESYPANO’s organizational structures: (a) Organizational assistance. The ODESYPANO received technical assistance21 support, thus allowing it to: (i) to upgrade its structures in order to better carry out its more progressive modes of operation/intervention (mainly improved IPA and partnership mechanisms) as well as improving its internal audit manual, (ii) design and implement a management monitoring system, (iii) establish a competency-based human resources planning and management system, (iv) define and implement a redeployment and recruitment plan22 as well as a training plan, and (v) adopt a objectives-based management system for the different directorates. Results obtained and measures taken were appropriate and relevant beyond the PNO3 implementation period, since their purpose was to strengthen the partnership approach with regard to integrated participatory development, which will also be a part of the future ODESYPANO mission.

2.10. (b) Vehicle acquisition. The planned vehicles by the project (50 cars and 1 bus) were all acquired and were provided mostly to the ACs and specialists in the regions. The partner CRDAs received 4 vehicles in order to participate in PDC formulation and implementation.

2.11. Subcomponent 1.2: Improvement of information systems: ODESYPANO was provided with an information system and management tools that were adapted to the requirements of an integrated participatory development approach. Support and capacity building activities were conducted under the PNO3, including through technical assistance undertaken by FAO in 2005. Most modules designed to improve the information system have been implemented, except for the simplified cost accounting system, which was not undertaken due to a lack of additional staff.

2.12. The actions carried out on the basis of recommendations for improving the M&E system focused on: (i) developing and testing a computer application relating to the establishment of a

19 (i) collaboration conventions (and/or subcontracts) with the OEP, the Office for the Crafts Industry, the Ministry of Professional Training and Employment, research institutions, the AFA, Professional training centers, NGOs, companies and private promoters, (ii) conventions with the DGF for participatory development pilot operation implementation in forest areas, (iii) agreement protocols signed between the Office and the CRs for the five Northwest governorates. 20 A detailed report on results/outputs by component is available in the Project Files. 21 Three studies have been completed: (i) updating the operations manual, which was distributed and used at all levels, (ii) establishing a planning and skills management system; and (iii ) implementing an internal audit and management control system. 22 As part of the restructuring of the Office and the redeployment of workers, 247 workers of the 310 planned departures have left. Solutions should be found for the 63 remaining workers by the end of the year with a payroll of around 0.378 million TD.

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monitoring system for physical achievements integrated with the GIS, (ii) defining indicators and methods for data collection as well as information on the effects and impacts monitoring system and baseline development, (iii) developing a methodology for CPs evaluation applied from 2006 onward and a survey methodology “household/farm” in order to assess the impacts of agricultural and non-agricultural activities (tested with 380 households in 37 PDCs).

2.13. The ODESYPANO acquired 186 computer units instead of the 145 originally planned (70/47 computers, 71/47 uninterrupted power suppliers, 40/49 printers, and 5/2 servers). These acquisitions have strengthened the various units in charge of management, planning, and M&E at the central and regional levels.

2.14. Sub-component 1.3: Training program: The ODESYPANO, in agreement with the World Bank, opted to establish annual demand-driven training programs in order to better reflect the needs expressed by various staff categories and those identified in the studies on the upgrading of ODESYAPNO structures and modes of operation. ODESYPANO staff has thus benefited from several training modules for a total of 2,780 person-days (112% of the initial estimate). Training covered all topics identified during project preparation and focused on planning, M&E, computer tool use, statistical analysis, rural socioeconomics, environmental assessment, and project management.

2.15. Sub-component 1.4: Support for PDC preparation: To ensure a better adoption and expanded use of IPA, the following planned actions were implemented:

(i) Manual development: The methodology and tools relating to IPA practices have been improved by ODESYPANO staff without recourse to external consultants as planned (due to a lack of appropriate offers).

(ii) Workshop organization with populations: The number of information, awareness-raising, and learning workshops far exceeded expectations (267% of initial plans and 106% of MTR plans). This is explained by the importance of training needs and the relevance of this activity in the IPA implementation process.

(iii) PDC preparation assistance: This included the short-term recruitment of five specialists (sociology/socioeconomics) to support regional teams in PDC formulation.

(iv) Baseline establishment: This was implemented as part of the consultation for the M&E comprehensive study. Given the complexity of the proposed system requires significant time and resources to become operational, the ODESYPANO attempted to recreate the initial situation by analyzing available data at the PDC level and by updating the quantitative monitoring of selected indicators after improvements to the logistical framework.

2.16. Sub-component 1.5: Institutional support for beneficiaries/partners. (a) Training, information and awareness-raising: To support beneficiary participation and involvement in the development process, the following actions were implemented under the PNO3:

(i) Training for beneficiaries and partners totaled 3,802 person-days, far exceeding initial plans (2000 person-days).

(ii) 18 consultation workshops with partners at the regional level leading to the development of framework agreements (conventions de partenariat) with the five CRs within the five governorates, to integrate PDCs and CPs into the regional and local planning and programming systems. The workshops also led to cooperation agreements with regional partners to ensure their participation in the PDC formulation and implementation23.

(iii) Interregional workshop organization in 2005, attended by hundreds of staff and representatives from regional authorities and various ministries, to introduce the practical IPA

23 PDC implementation was monitored by a technical committee created by the project in every governorate. It is chaired by the Secretary General of the governorate and includes all partners involved in the PNO3. Each committee met at least four times a year to review the PDCs before presentation to the CR, validate the CPs, monitor CP performance, prepare annual budgets, and in general monitor project progress.

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implementation modalities adopted in the PNO3 (consultation framework, formulation methodology, implementation, and PDC M&E).

(iv) Organization of four meetings with the PNO3 inter-ministerial monitoring committee to engage reflection on the future mission of the ODESYPANO after project completion.

(v) Training in community organization and management for CD members (971 persons-days)24,focusing on legal, organizational, and functional aspects of socio-professional organizations (GDAP and SMSA roles, as well as tax benefits and investment support).

(vi) Organization of visits to share experiences (1,190 persons-days) with other local organizations operating in the agricultural sector according to the IPA.

(vii) Training in CP participatory assessment (212 persons-days) for CRDAs and OEP executives and CRs district heads from the five governorates concerned by the PNO3.

(viii) Staff training in environmental assessment (96 person-days), conducted under a contract with the Centre International de Technologie et de l’Environnement en Tunisie (CITET), according to the PNO3 environmental management plan and operations manual.25

2.17. (b) Provision of equipment to partners: To promote partners support for IPA and facilitate their participation in PDC formulation and implementation, the ODESYPANO provided them with logistical support. The CRDAs received four cars (pick-ups), six computers, five photocopiers, office furniture, and organization equipment. The other partners have benefited from training in methodological aspects related to IPA practice.

2.18. The project has also made available to the GDAs and CDs various office equipment and supplies (tables, chairs, whiteboards, calculators, etc.), and small equipment to enable them to provide certain services to their members (honey extractors, grinders, etc.). This support was provided to 45 GDAs /CDs.

Component 2: Implementation of Pilot Operations (USD 2.44 million, 75% of appraisal estimates and 5.4% of actual total cost)

2.19. The pilot overall objective was to contribute to sustainable socioeconomic development of populations, according to IPA principles. Objectives related to the following areas: (i) supporting forest populations, (ii) broadening the experience of agricultural dry-land consolidation, and (iii) promoting micro-projects.

2.20. Subcomponent 2.1: Pilots integrated development operations to support forest dwelling communities: OPAFs aimed to test the feasibility of IPA and the methodology adopted by PNO3 in forest areas, in close collaboration with the DGF. Training (120 person-days) was provided to thirty ACs in charge of assisting subcomponent implementation. Training sessions (25 person-days) in IPA were offered to the heads of forest districts of the five concerned CRDAs. They have also benefited from assistance from a forestry expert for zoning, forest sites diagnosis, and methodological support for PDC formulation.

2.21. In accordance to PNO3 targets, OPAFs were conducted in five regions covered by the project, by developing five PDCs in the selected areas and initiating their implementation within the CP. OPAFs involved 1,373 households and covered an area of 18,635 ha, 69% of which is forest, for a total investment of 1.960 million TD. An amount of 0.480 million TD has been reserved for forest management works identified in the PDCs (management of forest trails, small forestry works such as (clearing and maintenance of trenches for firewalls). Logistical support was provided to the concerned

24 Members of expanded CDs and DGAPs received specialized training (291 person-days), focusing on (i) GDA role, mission, and positioning in institutional arrangements at the local and regional levels, and (ii) Socio-professional organization administrative and financial management procedures. Training was supplemented by field visits and participation in fairs for 924 person-days. 25 The ODESYPANO has established a convention with the ANPE in order to assess and monitor the environmental impact studies linked to project implementation.

23

GDAs by the OPAFs, providing them with small equipment to carry out some forestry works and promote development activities in forest products. ODESYPANO has made available to the GDAs of Tabouba (Nefza) and Ouled Helal (Ain Draham) offices, shops, and office equipment.

2.22. Sub-component 2.2: Pilots for land consolidation activities: Consolidation of agricultural lands/plots in dry mountainous areas, initiated first by the ODESYPANO under the PNO2, was consolidated under the PNO3 through the implementation of six pilot operations over an area of 5,346 ha (the totality of project and PDC goals). The consolidation work was entrusted to the AFA under a collaboration agreement. Access roads to the consolidated plots were built (31 km in 2009), representing, respectively, 58% and 74% of initial project and PDC goals. The amount committed for this operation was 0.996 million TD, or 94.5% of the expected cost. These achievements were accompanied by training provided to ACs and subject specialists (123 person-days) and by intense information and awareness-raising for operators.

2.23. Subcomponent 2.3: Promotion of micro-projects and microenterprises: In the initial design of the PNO3, this subcomponent would have been implemented as a pilot in conjunction with land consolidation and support for forest population activities and through a partnership with institutions operating in this area, particularly the BTS and NGOs. In practice, activities related to the promotion of microenterprises were not carried out during project implementation26 and activities thus focused on micro-projects. The outcomes in this area should contribute to building a model for new projects and an orientation framework for investments in rural areas in the future. In this context, it was planned to conduct studies on market opportunities/niches and research to identify beneficiaries, organize a program for rural communities, and develop training for beneficiaries and Office executives. Investments for this subcomponent implementation amounted to 0.357 million TD, or 95.4% of the planned costs. These are described below:

2.24. Market opportunities/niches identification and analysis: Instead of conducting the two planned studies during the first and third years of the PNO3 to identify and analyze market opportunities/niches in the areas of intervention, the ODESYPANO opted, in agreement with the Bank World, for a phased approach to first identify those opportunities/niches in consultation with partners and then to study and analyze them through small, more specialized, and more focused consultations. In this context, five of them were identified, but only two were studied, namely: (i) study on the association of the inhabitants in mountainous and forested areas in the Northwest to promote essential oils production and marketing; the results of this study have been disseminated during a workshop with stakeholders, and (ii) a study identifying the potential of organic farming in pilot forest sites.

2.25. Research and development actions on households’ socioeconomic strategies and the potential for diversification of household economies and micro-project impacts on household socioeconomic conditions and local economies have not been conducted. Indeed, these issues have not attracted the interest of concerned institutions that do not consider them a priority, given their workload. The first topic was studied with a short consultancy. The second subject was not addressed.

2.26. Support to target groups interested in micro-projects: Support for the promotion of micro-projects was provided through a partnership between the ODESYPANO and national NGOs working in the region and with proven experience in the field of rural organization. This partnership was solidified by seven agreements with two NGOs and two Local Development Associations/Associations de Développement Local(ADL) specializing in microcredit. NGOs have conducted beneficiaries and needs identification as well as monitoring of micro-projects.

2.27. The project provided training (organization and financing) for 1,863 interested persons (57% women) in various agricultural areas (1,058 persons), extra-agricultural (728 in crafts, and 77 in essential oils extraction), representing 423 % of initial plans (440 persons). The project also facilitated

26 The budget allocation for microenterprise promotion activities was 419,000 TD or about 325,000 USD, representing 0.007% of total project costs at appraisal.

24

credit access for 685 beneficiaries (37% of the people trained27), 50% being women. Loans were granted by ADLs. NGOs benefited from capacity building provided by the PNO3 (means for work, facilitator wages, and operating costs). Staff in charge of assisting the promotion of micro-projects have trained 310 person-days (instead of 56 person-days as originally planned). Training included methods of diagnosis of micro-projects and family savings, facilitation and communication, and micro-project management.

Component 3: Agricultural and livestock development (USD 2.39 million, 76% of appraisal estimates and 5.4% of actual total cost).

2.28. Support to agricultural and pastoral production aimed to help farmers increase agricultural productivity through improved farming practices and livestock development, rational use of natural resources, and improved watersheds development facilities. The achievements were: (i) the organization of information days (20,430 person-days) and training (2,987 person-days), (ii) the organization of visits to other projects (1,974 person-days), and (iii) the installation of demonstration plots (450 plots). The rates of achievement compared to PDC expectations are respectively 97%, 98%, 82%, and 87%. The investment for implementing these activities was 1.052 million TD. The achievements have covered all sub-components under the project and are presented below. The investment for these achievements amounted to 3.083 million TD (92% of the plans).

2.29. Subcomponent 3.1: Agricultural extension to producers: Activities included beekeeping, small ruminant farming, olive growing, rabbit keeping, dairy cow rearing, bull fattening, extraction of essential oils, and large-scale crop areas. Technical-economic field manuals (référentiels) developed in 2002 by the ODESYPANO have been adapted and updated by specialists in the area by exploiting the research and development results (see below). These manuals were used by facilitators in providing advisory support services to various interest groups.

2.30. A research and development program was developed under a framework agreement with the IRESA established in December 2003 and other specific agreements with specialized institutions. Thus, six researcher groups were formed to undertake collaborative projects involving multiple disciplines and institutions. Research topics related to pasture lands and forests, crops, fodder production, animal health and breeding, water and soil conservation, and soil fertility. Monitoring the implementation of research activities was carried out by a steering committee comprising five researchers and ODESYPANO staff. All activities in support of farmers under the project have been implemented: (i) installation of 450 demonstration plots, organization of 20,430 information days, farmer training (2,987 persons-days), and organization of study trips (1,974 person-days). These achievements represent respectively 113%, 120%, 119%, and 106% of the plans determined during the MTR.

2.31. Subcomponent 3.2: Livestock development activities: (a) Support to dairy cattle farmers: Support was provided to 360 dairy farmers, whose identification was based on PDCs in 24 areas where bovine milk production is important. These farmers own a herd comprised of 1,220 dairy cows. A group of seven cattle-raising consultants from ODESYPANO provided technical assistance to the farmers (one consultant for 50 farmers). In addition to information, education, training, and visit exchange activities, support was provided for monitoring milk quality (9,424 milk analyses have been conducted) and forage quality (515 analyses). Moreover, 7,640 information notes (fiches techniques d’action) have been provided.

2.32. (b) Livestock genetic improvement: In order to support cattle farming development, the following actions have been carried out at a cost of 0.664 million TD (that is, 99% of the plans):

(i) Inseminator training (105 person-days), to improve the quality of artificial insemination services as well as performance and profitability and to promote privatization.

27 The tightening of eligibility criteria applied by the BTS prevented beneficiary access to credit.

25

(ii) Strengthening artificial insemination circuits: artificial insemination was provided by 16 inseminators operating in eight circuits28, who did 48,874 inseminations, of which 46,000 were first inseminations. The privatization of this service, launched in 2005 (Fernana), has produced substantial improvements, leading to the privatization of all circuits except one fixed circuit in Ain Draham, where performance has not exceeded 200 inseminations per year.

(iii) Strengthening livestock in areas that are still isolated by introducing 629 breeders (83 purebred bulls, 439 Barbarine rams, 107 Boer and Alpine goats). These breeders allowed 14,000 matings for cattle, 22,000 for sheep, and 6,500 for goats. Breeding animals’ management is ensured by farmers as part of "management breeding contracts" with the Office29.

(iv) Improving animal health: Monitoring animal health has been linked to the monitoring of artificial insemination by targeting cattle affected by this action. Improving animal health 30 was carried out under agreements established with four private veterinarians (one in each regional office) for a period of three years (2004-2007).

2.33. (c) Action in favor of apiculture: Support for the promotion of beekeeping included theoretical and practical training of 654 person-days, targeting 332 young people (including 23% young women/girls) and representing 97% of PDC plans. Training has been conducted mostly by the Unit for Promotion of Beekeeping in the Northwest/Unité de Promotion de l’Apiculture dans le Nord Ouest (UPANO) in the regional branch of Sejnane. Some training has been provided by the Agricultural Services Cooperative (Coopérative de Services Agricoles) in Amdoun, and the training center of Sidi Bourouis.

2.34. Subcomponent 3.3: Rehabilitation of small-scale irrigation schemes: This action aimed mainly at enabling small farmers to gain access to irrigation water. Achievements included: (i) construction of 80 water sources, representing all the initial plans of the Project, and 73% of those of PDCs. This is because some sources identified in PDCs had insufficient flow and posed a risk of drying up in summer. The only well identified in the PDCs has been constructed, and (ii) installation of small irrigated perimeters covering an area of 345 ha, or 104% of the original plans, 196% of the plans determined at mid-term, and 171% of that of PDCs. This is due to the extension of some existing perimeters through water savings achieved thanks to improved irrigation control.

Component 4. Sustainable natural resource management (USD 16.41 million, 110.5% of appraisal estimates and 36.4% of actual total cost)

2.35. Cumulative achievements amounted to 54,880 ha, or 114% of initial plans, 111% of plans determined at mid-term, and 89% of the needs emanating from PDCs. These achievements are: (i) protection of 22,251 ha of farmland through CES works, (ii) pastoral and sylvo-pastoral improvements on 14,919 ha, and (iii) tree planting (in dry soil), mainly olive trees, on about 17,710 ha. These achievements represent respectively 86%, 80%, and 103% of PDC predictions and 70%, 172%, and 186% of the initial project plans. Investments for these achievements were 25.795 million TD, representing 101.4% of the plans.

Component 5. Improvement of basic rural infrastructure (USD 19.99 million, 145% of appraisal estimates and 44.3% of actual total cost)

2.36. Subcomponent 5.1: Rehabilitation and construction of rural roads: The implementation of this subcomponent is part of the improved access plan developed by the ODEPSYPANO in consultation with relevant partners and led by the CR for each governorate. Activities involved the

28 Three (3) in Sejnane, 2 in Aïn Draham, 2 in Béja, and 1 in Le Kef), and 3 fixed posts: 1 in Ain Draham (Ain Snoussi), 1 in Le Kef (Oued Souani), and 1 in Béja (Rihana), which became a mobile circuit in July 2006. 29 Bull management was carried out directly by farmers, who were chosen by the CDs, taking care of feeding and maintenance at a cost estimated at 1,500 TD per year. For small ruminants, the contribution of farmers was 200 TD for the acquisition of rams regardless of race, 130 TD for Boer goats, and 150 TD for Alpine goats, starting from the 2006 campaign. 30 Monitoring activities involved knowledge of the pathological problems associated with reproduction and application of appropriate therapy and the development and improvement of artificial insemination and treatment of non-pregnant cows.

26

construction (272 km) and rehabilitation (599 km) of rural roads for a total of 871 km (at a total cost of 21.662 million TD), thus exceeding both the 527 km initially planned by the project and the 784 km revised during the MTR. Road rehabilitation was assigned to local workers/petits tâcherons (skilled/unskilled labor), which helped accelerate implementation and improve the quality of works. Maintenance will be carried out under the CRs program.

2.37. Sub-component 5.2: Improved access to potable water: The project has contributed to the construction of 906 rainwater storage tanks and the establishment of eight potable water supply systems. These achievements represent respectively 85% and 100% of PDC plans and go well beyond initial forecasts, improving the supply of water to benefit approximately 4,500 households at a cost of 4.125 million TD (100%).

Appendix

Appendix 2.I: Sketch 1. Implemented Works in the Ouled Mfedda Sector

Appendix 2.II: Sketch 2. Implemented Works in the Hlima Sector

27

Appendix 2.I: Sketch 1. Implemented Works in the Hlima Sector

Appendix 2.II: Sketch 2. Implemented Works in the Ouled Mfedda Sector

28

Annex 3. Economic and Financial Analysis

Introduction

3.1. This Annex presents the financial and economic calculations made after project closure. They are based on the same methodology and approach used in the PAD. The economic rate of return (ERR) is calculated for the project measurable benefits, in terms of additional agricultural production, mainly olives, wheat, barley, bean, fodder, olives, and garden produce. For this purpose, the value of forage is used as "proxy" for the increase in value of livestock products, mainly milk and meat. Data is supplied by ODESYPANO and cover the three sub-agro-ecological zones in the Northwest covered by the project: the Mogods-Khroumirie region, as well as the sub-humid and semi-arid areas.

3.2. The working hypotheses of the analysis are as follows:

• All calculations were made on the basis of monetary data that have been converted into 2009 TDs in order to obtain constant price series.

• Economic benefits calculations for each crop are based on the areas covered by the project, from sown areas where ODESYPANO has intervened (see Table 1 in Appendix 3.I).

• It was estimated that agricultural extension (conseil agricole) covers 50% and 100% of the sown areas, in the first and second years, respectively. Moreover, the adoption rate with regard to the covered areas is 25% per annum, i.e. 100% after four years.

• In addition, the final yield increase that was observed (see below) is spread over two years. In the case of olive trees, in addition to the initial growth period for the new ones, it was estimated that production occurs every two years because of the trees’ regular size.

Financial and Economic Prices

3.3. The financial prices used are “prices paid to producers”, as collected by ODESYPANO’s

29

Regional Directorates. In Tunisia, there is no parallel market for the exchange of national currency (Tunisian Dinars - TDs) and no significant market distortions for major agricultural products, except for wheat, barley, olives, and some fertilizers. Consequently, financial prices are considered valid approximations of the economic value of products, except for the above-mentioned crops, for which imports parity prices have been calculated, based on calculations made in the recent preparation of the second phase of the Natural Resources Management Project, co-financed by the Bank.

3.4. Tunisia is a net importer of wheat, mainly from the United States, Canada, and the EU; domestic production continues to benefit from protected prices. This is a strategic choice on the part of the Government, intended to protect farmers' interests (including those in the Northwest’s poorest regions, where national cereal production is concentrated) and to ensure that domestic markets are adequately supplied with basic foodstuffs.

3.5. Given the significant unemployment rate in the country’s northwest regions, the non-qualified workforce economic cost (shadow-price), used by the project (mainly for Component 4), is estimated at 3.5 TD/day, or 50% of the official rural wage. The prices used in the economic and financial analysis are shown in Table 2, in Appendix 3.II.

Benefits and Project Cost

3.6. Yield increases by crop - as observed after project completion - are shown in Table 3. These increases are applied to the land covered by the project, based on the assumptions described above. The resulting increases by crop production are then converted into economic value in multiplying economic net income margins in Table 4. These margins result from crop budgets per ha maintained by ODESYPANO as part of its monitoring and evaluation of the project target groups. For each crop per hectare, the margin is the difference between gross value of production and all production costs. Agricultural incomes are not taxable, and margins in economic terms are calculated using economic prices in TD (2009). The evolution of economic benefits is shown in Appendix 3.V in Table 5.

3.7. Project costs are presented in Table 6 of Appendix 3.VI. They are taken from ODESYPANO’s monitoring-evaluation system and relate to investments over the project implementation period, as well to replacement, operating, and maintenance costs. In order to convert these costs into economic values manual labor has been calculated at 50% of its financial cost (see economic prices), and the pre-2009 values have been deflated based on the annual consumption price index provided by the

financial economic

Cereals* Wheat 69 60* Barley 78 72

Leguminous* Broad bean 56 73* Field bean 85 119* Chick peas 118 133* Lentils 118 133

Fodder 15 27Olive trees

* Old 392 587* New 392 587

Vegetable 595 404

Table 4Net profit margin (DT/ha)

Produce q/haOlives 11

Durum wheat 4.7Barley (harves t) 7.4Broad bean 3.7Fie ld bean 4C hick peas 3Lentils 3Pota toes 60Fodder oats 15

Incre a se in yie lds w ith PNO3

Ta ble 3

N.B.: In the cas e o f fo rage production , one qu in ta l equa l four hay ba les (oat) o f

25 kg . 1 qu in ta l =100kg=0.1 t

30

Central Bank of Tunisia.

Results of the economic and financial calculations

3.8. a) Economic calculations: Table 8 illustrates ERR calculation as well as the Net Present Value (NPV) of cash flow for an opportunity rate of capital of 12%. This rate represents 27% over 20 years and a NPV of 41.5 million TD. The ERR is higher than the 17% estimated during appraisal, which confirms the more than expected profitability of the project at completion. Sensitivity analysis summarized in Table 8 shows that the ERR is slightly more sensitive to declines in profits by 20% (23% ERR) than comparable cost overrun (24% ERR).

3.9. The significant profitability of the project is mainly due to:

• the use of improved technical and cropping practices, thanks to an efficient agricultural extension service (conseil agricole);

• substantial changes in cropping patterns with the adoption of crops with higher value added (mainly olives, fruits, and vegetables); and

• improved rural infrastructure that permitted better commercialization.

3.10. b) Financial calculations: Net financial margins shown in Table 4 illustrate the profitability of each variety of crops grown. In addition, Table 6 in Appendix 3.VI provides further details on crop budgets per ha in the case of key crops per area of intervention. Net income per hectare varies from 28% in the case of leguminous in Mogods Khroumirie and sub-humid areas, to 57% for market gardening products in Mogods-Khroumirie.

3.11. In addition, Table 10 shows the (average) net profits that have been made by type of micro-project, part of the project. An average of 2,000 TD per year is estimated for all types.

Table 10

Apiculture 2,596Cattle farm ing 3,060Sheep farm ing 1,500Irrigation 1,033Cuniculture 1,220Crafts for women 1,200Small trades for men 1,766

Average for 685 m icro-projetcs implemented 2,067

Net profits (average) by type of microprojects (DT/year)

3.12. Finally, the 2009 study on micro-projects’ promotion, as part of the Project, focuses on the following impacts:

• Impact on job creation

ERR NPV

Base rate 27% 41,473Cos t overrun of 20% 24% 35,542Decrease of profit by 20% 23% 26,875

Table 8Sensitivity analysis

31

o equivalent of 830 permanent jobs for promoters and family members, o equivalent of 37 salaried permanent jobs, amounting to 76,000 TD annually in

salaries. • Impact on incomes

o Micro-projects generate directly a total income of almost 773,000 TD, o of these 773,000 TD, 163,000 TD represent incomes for women, o 10% of projects are part of the effort to diversify income sources through the

financing of new economic activities. • Impact on living conditions

o 39% of projects have contributed to improve living conditions (equipment, developments, etc.),

o 35% improvement in domestic consumption.

Non-quantifiable benefits

3.13. In addition to the quantifiable benefits, other non-quantifiable benefits are also significant. The most important are:

• improved access by rural communities to basic infrastructure, mainly rural roads, water supply systems, and individual cisterns;

• increased vegetation and forest cover, and provision of environmental training, resulting in better protection and management of natural resources;

• institutional strengthening of ODESYPANO and its development partners; and

• strengthening of beneficiaries’ grassroots organizations in order to get more involved in local development and its management.

Appendix

Appendix 3.I: Table 1. Yearly evolution of sown areas in PNO3 intervention areas

Appendix 3.II: Table 2. Financial and economic prices

Appendix 3.III: Table 3. Evolution of economic profits

Appendix 3.IV: Table 4. PNO3 cost

Appendix 3.V: Table 5. Calculation of profitability

Appendix 3.VI: Table 6. Financial budget type by crop (TD/ha)

Appendix 3.I

(inha) 2003/2004 2004/2005 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010 2010/2011 2011/2012 2012/2022

Cereals 1,527 5,879 13,199 24,016 37,078 51,223 64,368 74,015 79,890 81,856*Wheat 1,069 4,104 9,175 16,601 25,427 34,828 43,486 49,789 53,623 54,915*Barley 458 1,775 4,024 7,415 11,652 16,396 20,882 24,226 26,267 26,941

Leguminous 113 451 1,071 2,108 3,606 5,592 7,684 9,359 10,460 10,848*Broadbeans 85 339 806 1,592 2,734 4,238 5,810 7,064 7,877 8,158*Fieldbeans 23 88 201 374 595 851 1,098 1,284 1,400 1,439*Chickpeas 4 15 40 89 176 325 506 662 777 822*Lentils 2 9 24 53 100 178 271 349 407 429

Fodder 2,208 6,546 11,974 19,561 29,835 41,791 47,760 47,760 47,760 47,760Olivetrees 5,151 7,967 12,065 17,603 24,408 28,398 32,230 34,621 36,082 36,562

*Old 307 1,193 2,718 5,040 7,985 11,332 14,520 16,911 18,372 18,852*New 4,844 6,774 9,347 12,563 16,423 17,067 17,710 17,710 17,710 17,710

Gardenproduce 27 111 279 594 1,108 1,927 2,893 3,713 4,307 4,538Fallows 2,887 8,072 12,874 17,560 20,958 22,437 22,701 22,701 22,701 22,701Total 11,912 29,025 51,461 81,441 116,993 151,369 177,636 192,168 201,199 204,265

Yearlyevolutionof sownareasinPNO3interventionareasTable 1

Appendix 3.I I

financial economic

ProductsOlives DT/q 60 74Durrum wheat (harvest) DT/q 58 54Barley (harvest) DT/q 40 37Broad beans DT/q 50 50Field beans DT/q 50 50Chick peas DT/q 120 120Lentils DT/q 90 90Potatoes DT/q 90 90Oat fodder DT/q 18 18Wood DT/q 9 9Straw DT/q 11 10Fertilisers Am m onitre 33.5 % DT/kg 0.32 0.27TSP 45 DT/kg 0.34 0.43DAP DT/kg 0.43 0.45IrrigationWater M3 0.13 0.13Phytosanitary treatment Treatm ent Unit 1.3 1.3M echanizationPlowing Hour 20 20Recroissing Hour 15 15Seeding (with seeder) Hour 30 30Planting Hour 20 20Phytosanitary treatm ent Hour 20 20Fertilisation Hour 20 20Com bine-harvester Hour 70 70Labour Pers/d. 7 3.5

F in a n cia l a n d e co n o m ic p rice s

T a b le 2

Source : Financial prices provided by ODESYPANO. Im port parity prices calculated for olives, wheat, barleyet engrais.

Unit Price(DT 2009)

34

Appendix 3.I I I

(1000DT) 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/22Cereals 48 282 741 1,410 2,231 3,127 4,027 4,705 5,080 5,206 5,206

*Wheat 32 186 486 918 1,441 1,998 2,551 2,965 3,193 3,270 3,270*Barley 16 97 256 492 790 1,129 1,476 1,741 1,887 1,936 1,936

Leguminous 5 29 79 162 283 446 641 803 899 933 933*Broadbeans 3 19 51 104 183 289 413 515 574 594 594*Fieldbeans 1 8 21 41 67 97 129 153 167 172 172*Chickpeas 0 1 4 10 21 39 64 88 103 110 110*Lentils 0 1 3 6 12 21 35 47 54 57 57

Fodder 7 44 121 245 422 654 914 1,124 1,245 1,285 1,285Olivetrees 45 265 703 1,361 2,205 6,023 8,164 10,446 12,762 15,169 15,547

*Old 45 265 703 1,361 2,205 3,179 4,188 4,959 5,388 5,528 5,528*New 2,843 3,976 5,487 7,375 9,641 10,018

Gardenvegetables 5 33 96 211 402 706 1,123 1,501 1,741 1,835 1,835Total 111 654 1,741 3,389 5,543 10,955 14,869 18,579 21,727 24,427 24,805

Evolution of economic profitsTable 3

N.B.:Itis estimatedthattheAgriculturalCouncil covers 50%ofsownareas the1styear and100%the2ndyear.Theadoptionrateonareas coveredbytheAgriculturalCouncil is 25%per year --thatis,100%after four years.

Appendix 3.IV

(1000 DT) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018/21

Investments 2,380 4,947 9,913 11,927 13,632 13,657 1,264Components:1. Organisational strengthening 1,084 792 944 475 511 605 1332. Pilot activities 200 247 343 464 713 965 2133. Support to agricultural production 152 273 583 536 625 783 1254. Natural resources management 663 1,512 3,783 4,170 5,232 5,201 6025. Rural infrastructures 281 2,122 4,261 6,281 6,550 6,103 191Replacements 12 508 516 442 24 46 102Vehicles 480 510 420 90Computer material 12 28 6 22 24 46 12Recurring expenditures 265 265 265 265 320 320 320 320 320Vehicles 250 250 250 250 300 300 300 300 300Computer material 15 15 15 15 20 20 20 20 20Total cost 2,380 4,947 9,913 11,927 13,632 13,657 1,264 265 277 773 781 762 344 366 320 422

Ta ble 4 PNO3 Cost

36

Appendix 3.V

2003 2004 2005 2006 2007 2008 2009 2010 2015 2018/21

Total economic profits 111 654 1,741 3,389 5,543 10,955 14,869 23,520 23,520Total costs 2,380 4,947 9,913 11,927 13,632 13,657 1,264 265 344 422Cashflow -2,380 -4,836 -9,260 -10,186 -10,243 -8,114 9,691 14,604 23,176 23,098Cashflow (in DT of 2009) -1808 -3820 -7593 -8964 -9424 -7789 9,691 14,604 23,176 23,098

TRE 27%VPN 41,473

3) For VPN calculation, the opportunity cost of capital is estimated at 12%.

Calculation of profitabilityTable 5

1) To obtain the 2009 DT, the 2003 to 2008 totals have been deflated by yearly consumption prices index provided by Tunisia's Central Bank.2) Compte tenu du ch™mage dans la r?gion, la valeur ?conomique de la main d'oeuvre manuelle (shadow priced) a ?t? estim?e ̂ 50% du co?t

37

Appendix 3.VI

Durrum whe a t Ma rke t ga rde n produce Le gum inous(broa d be a ns) olive sTota l incom e s 1316 7600 569 1416Tota l e x pe nse s 748 3282 410 630Ne t incom e 568 4318 159 786Pe rce nta ge of ne t incom e s (%) 43% 57% 28% 56%

R?gions of production Sub-humid and semi-arid areas.

Mogods-Khroumirie essentially. In sub-humid et semi-arid areas, market garden produce is developed on small irrigated

perimeters.

Mogods-Khroumirie and sub-humid areas

Mogods-Khroumirie, and sub-humid and

semi-arid areas

Ta ble 6

Fina ncia l budge t type by crop (DT/ha )

Source: Calculations based on crop budgets used by Odesypano for its monitoring-evaluation activities.

38

Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members

Names Title Unit Responsibility/

Specialty Lending Idah Pswarayi-Riddihough Sr. Natural Res. Management SpecialistMNSRE TTL-I Kutlu Somel Senior Economist MNSRE Concepcion del Castillo Senior Social Scientist MNSRE Sarnia Msadek Sr. Financial Management Specialist MNSRE Harry Palmier Institutional Development Specialist AFTRE Douglas Lister Senior Agricultural Economist MNSRE Petros Aklilu Sector Manager Rural Development MNSRE Nadia Gouhier Procurement Analyst MNSRE Hovsep Melkonian Senior Disbursement Officer LOAG1 Hassine Hedda Disbursement Analyst LOAG1 Arbi Ben-Achour Senior Social Scientist MNSRE Alan Rotman Senior Environment Specialist MNSRE Hocine Chalal Environmental Specialist MNSRE Dominique Bichara Senior Counsel LEGOP Maurice Gress Principal Procurement Specialist MNA Marjory-Anne Bromhead Sector Manager, Peer Reviewer ESSD Alexandre Marc Sector Manager, Peer Reviewer ESSD Christopher Ward Lead Oper. Officer, Peer Reviewer MNSRE Michelle Keane Senior Country Officer MNC01 Aloysius Ordu Regional Quality Advisor MNACSLaurent Msellati Sr. Oper. Off. -Procurement Accr. StaffMNSRE Rafika Chaouali Sr. Financial Management Specialist MNACSIssam Abousleiman Senior Financial Officer BCFPS

Supervision/ICR Anas Abou El Mikias Sr. Financial Management Specialist MNAFM

Jean-Marc Bisson Agricultural Economist FAO-CP

Abderrahmane Ben Boubaker Consultant (Nat. Spec. Community-based Dev. Matters)

MNSSD

Slaheddine Ben-Halima Consultant (Procurement) AFTED Fatou Fall Social Development Spec. MNSSO Nadia F-Z. Gouhier Procurement Analyst MNAPR

Gael A. Gregoire Environmental Spec. MNSEN

Abdelghani Inal Consultant (Roads) MNSSD Moez Makhlouf Consultant (Financial Management) MNAFM

Abdelkrim Oka Consultant (Institutional Development)MNSSD TTL-II Lucie Tran Huong Giang Operations Officer MNSARTTL-III Garry Charlier Senior Operations Officer MNSARTTL-IV (ICR only)

39

(b) Staff Time and Cost

Staff Time and Cost (Bank Budget Only) Stage of Project Cycle

No. of staff weeks USD thousands (including travel and consultant costs)

Lending FY01 11 70.03 FY02 32 223.55 FY03 21 124.23 FY04 0.00 FY05 0.00 FY06 0.00 FY07 0.00 FY08 0.00

Total: 64 417.81 Supervision/ICR

FY01 0.00 FY02 0.00 FY03 1 9.06 FY04 13 97.21 FY05 11 78.28 FY06 8 68.69 FY07 11 89.49 FY08 11 89.62 FY09 8 0.00

Total: 63 432.35

40

Annex 5. Beneficiary Survey Results (if any)

Although a formal survey is not necessary for a core ICR, several representatives of the target communities attended a number of forums, including workshops and roundtables, in which they expressed their comments and suggestions about project implementation. Their feedback is reflected in the present document.

41

Annex 6. Stakeholder Workshop Report and Results (if any)

Although a formal stakeholder wrap-up workshop is not necessary for a core ICR, a number of the stakeholders attended the forums indicated in Annex 5, and others participated in meetings with the supervision missions during project implementation. Their feedback is reflected in the present document.

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Annex 7. Summary of Borrower’s ICR and/or Comments on Draft ICR

A. Borrower’s Letter Commenting on Draft ICR

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B. Summary of Borrower’s Completion Report

Translation from French

I. Overview

7.1. The Northwest Mountainous and Forested Areas Development Project (IBRD Loan –7151 TUN), co-financed by the World Bank, was implemented by the Northwest Forestry and Pastoral Development Agency/Office de Développement Sylvo Pastoral du Nord Ouest (ODESYPANO) under the supervision of the Ministry of Agriculture, Hydraulic Resources and Fisheries, over an 6-year period from 2003 to 2009. The project area covers 83 mountainous and forested sectors located in four governorates in the Northwest of Tunisia (Le Kef, Jendouba, Béja and Siliana) with the addition of the Sejnane and Joumine delegations from the Bizerte governorate. The loan was signed on December 23, 2002 between the Tunisian Government and the IBRD. The project became effective on July 14, 2003.

7.2. The ultimate objective is the improvement of socioeconomic conditions for communities in the mountainous and forested regions of the Northwest, while ensuring a sustainable management of natural resources.

7.3. Specifically, the project aims to achieve the following objectives: (i) to reinforce community capacity and grassroots organizations; (ii) to reinforce the executing agency, the ODESYPANO, through organizational upgrading and assistance in refocusing/re-sizing its activities and to better organize management of project development through partnerships; (iii) to identify and implement activities to improve and diversify production systems (on- and off-farm) in order to increase operator revenues; (iv) to protect and better manage natural resources; and (v) to improve rural infrastructure and facilitate access by communities.

7.4. The project was completed in July 2009, and the objective of this summary Completion Report is to highlight results and determine how these have contributed to the realization of project objectives. The second objective is garner lessons learned for future interventions of this kind.

II. Context and Main Events Reached

7.5. The PNO3 aimed to consolidate and sustain ODESYPANO’s achievements realized during predecessor projects as well as to translate Government orientations in terms of investment and program rationalization. The initial cost was 62.8 million TD (USD 44.8 million). The project area covers a 500,000 ha zone, touching 260,000 inhabitants in these mountainous and forested areas in the Northwest of Tunisia.

7.6. The project registered a loan surplus of around 8.5 million Euros recorded during the MTS due essentially to the Euro exchange rate evolution compared to the TD, which was 1.3 at the time of the loan signing and 1.9 at project completion. A decision was subsequently taken in agreement with the World Bank to cancel the surplus. A decision was also made to extend the project closing date to 07/31/2009 instead of 12/31/2008 as initially planned. This prolongation was decided upon in order to complete community engagements in 2008 CPAs in relation to the 2008/2009 agricultural campaign. The disbursement deadline (end of grace period) was also extended to January 30, 2010.

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III. Project Situation Post-Completion

3.1 Project Objective Results (see Appendix 1)

7.7. Project objective results were deemed to be satisfactory.

3.1.1 Global Objective Result

7.8. Selected development indicators within the PNO3 logical framework for the global objective show that socioeconomic conditions of targeted populations were significantly improved, as illustrated in the following table:

Impact Indicator 2003 2009

Average Household Agricultural Revenue 2,050 TDs 3,784 TDs

Unemployment Rate 19% 16%

Community Access Rate 56% 81%

Household Potable Water Access Rate 69% 81%

Vegetation and Forest Cover Rate 32% 38%

7.9. The above table shows that agricultural revenues have increased by 85% from 2,050 TDs in 2003 to 3,784 TDs in 2009 in terms of 2003 TDs. Work days offered by the PNO3 from realization of different activities contributed to reducing unemployment rates by 3%. In terms of living conditions, the Project was able to improve access for 275 additional communities among the 1,100 identified communities in the PDCs, thus increasing the access rate from 56% in 2003 to 81% in 2009. Additionally, potable water access rates have evolved by 12%, or around 5,000 additional households receiving potable water through the PNO3 among 41,500 households identified in the PDCs.

7.10. In terms of protection/management of natural resources, the vegetation and forest cover rates have increased by 6%. The targets achieved by the PNO3 (around 55,000 ha of CES, forest and pastoral plantations and agro-forestry works), completion of five support pilot operations to forest populations, and environmental training provided to ODESYPNO managers show an improved protection and management of natural resources.

3.1.2. Specific Objective Achievement

7.11. Specific project objectives achievement evaluated through the completion of fixed results in the following logical framework:

Achieving Result 1: “The ODESYPANO is better organized and efficient, in particular for the execution of partnership activities”

7.12. ODESYPANO’s reorganization and reinforcement of its capacities, achieved through the PNO3, have enabled:

• Formulation and validation of 101 PDCs, representing the total revised plans and the establishment and validation of 476 CPAs;

46

• Financing by the project of PDCs for a total of 53,204 million TD, or 98% of the total cost of PDCs (after re-adjustment); and

• Financing of PDCs by partners up to 29 million TD, or 35% of the total cost of PDC financing.

Achieving Result 2: “Community and grassroots organization capacity are reinforced as well as partners involved in PNO3 execution”

7.13. PNO3 activities have enabled community grassroots organizations/Comités de Développement (CDs) and the Agricultural and Fisheries Development Groups/Groupement de Développement Agricole et de la Pêche or (GDAPs) to considerably reinforce their capacity in terms of their development. The progress observed in the instruction level of organization members as well as increasing presence of all socioeconomic classes – including marginal groups: 13%, 17%, and 22% of young graduates, women, and landless, respectively – in the CDs in 2009 reflect a newfound awareness of populations toward the organization of their local development. Finally, populations have acquired a local expertise – principally in terms of agricultural production and natural resources protection, but also in terms of organization of their activities. These are now more independent and will eventually be completely self-managed in the coming years.

7.14. The same goes for the Office’s partners. Indeed, the partnership mechanisms implemented through the regional and local development councils have enabled different governmental and non-governmental partners to participate actively in the whole elaboration process for PDC implementation. Their important participation in CPA financing is a reflection of this. One of the sustainability criteria for this partnership approach is that in 2009, after PNO3 completion, partners should be engaged in 2009 CPA financing of near 7 million TD.

Achieving Result 3: “The agricultural production systems have been improved and diversified and the agricultural and non-agricultural revenues have increased”

7.15. For this third result, the ODESYPANO has deployed considerable efforts through the PNO3 in terms of support to agricultural and pastoral production through an advisory and coaching of producers approach, genetic improvements, and micro-project promotion for revenue diversification. These efforts have resulted in:

• Improvements to cultural systems through a transition towards higher value crops such as forage, legume, tree, and vegetable crops;

• Improvement of yields for main crops and olive trees;

• Increases in bovine meat and milk yields with a decrease in calving intervals – 49-day calving; and

• Promotion of 685 micro-projects for a total of 1 million TD, of which 51% are designated for women.

Achieving Result 4: “Management of Natural Resources Is Improved

7.16. Completions linked to this result have often surpassed initial predictions and have contributed significantly to improvements in natural resource management. Impacts have been evaluated through the following indicators:

• Volume of completions in terms of CES, pastoral plantations, prairies, rangelands, and agro-forestryrepresent 13.6% of the Total Agricultural Area (TAA) covered by PDCs and 10% of the total intervention area;

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• Covered areas in terms of agro-forestryare of the order of 17,710 ha (contribution to perennial vegetation cover); and

• Prairie and rangeland covered areasare 14,919 ha (contribution to perennial vegetation cover).

Achieving Result 5: “Rural Infrastructure in the Northwest Have Improved and Are More Easily Accessible”

7.17. Indicators used to evaluate achievements of this result are reflected in the construction of 272 km of principal and secondary tracks, rehabilitation of 599 km of secondary tracks and construction of 995 rainwater cisterns.

3.2 Summary of Results

3.2.1. Implementation of the Integrated Participatory Approach and Partnerships

7.18. Overall, the PNO3 has enabled the preparation of 101 PDCs compared to the 180 PDCs initially planned. This adjustment has not affected the size of the geographic area targeted by the PNO3, since these PDCs cover all 83 sectors targeted by the project. The number has decreased as a result only of a transition from a reduced planning unit (part of the sector) to a larger unit area corresponding to the administrative sector itself. The project has also created 101 CDs, 52 GDAPs, and two SMSAs and has completely executed 476 CPAs compared to the 598 CPAs initially planned. The remaining 122 CPAs without PNO3 financing will be financed by the Government and partner funds. On this subject the Government has allocated the ODESYPANO investment budgets of 1.5 million TD and 4.5 million TD for 2009 and 2010, respectively, in addition to a 10 million TD support for interventions in the Béja governorate.

7.19. With regard to partnerships, 48 conventions have been signed with 16 different types partners (governmental and non-governmental including regional councils). Partner contributions in executed CPA financing was 29 million TD or 35% of the total cost. Beneficiary financing contributions were 3.8 million TD or 7% of financing for activities needing their contribution. In any case, these numbers are underestimated, as they do not take into account private initiatives.

3.2.2. Physical Results per Component

Component 1. Organizational Adjustment/Reinforcement (Planned Cost at Appraisal: USD 3.01 million - Cost at Completion

31

: USD 3.52 million or 117% of Project Cost)

7.20. The ODESYPANO benefitted from technical assistance for organizational adjustment and information system improvement through a contract established with the FAO. However, this assistance planned for the first year of the Project did not materialize until 2005 due to complexities in administrative procedures. Most proposed improvements measures were already implemented. Remaining measures were adopted progressively. Similarly, the ODESYPANO proceeded with a redeployment of the quasi totality of agreed worker departures (267/310) as well as cession of much-stalled heavy machinery during PNO3 preparation.

7.21. In parallel, the ODESYPANO acquired 50 vehicles or 100% of project provisions as well as electronic equipment (186 units or 128% of initial plans) to improve its information system in addition to varied training (2,780 persons-days representing 112% of initial plans) that were provided mainly to personnel.

7.22. CRDAs received four all-terrain vehicles as well as electronic, office, and workshop/forum equipment and specialized training. Study visits/travel were completed for

31 This was the total amount expected to be disbursed upon the end of the grace period for disbursement of the loan on 01/31/2010.

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partners and beneficiaries in addition to community equipment and administrative quarters provided for 45 local grassroots organizations (GDAPs, enlarged CDs).

Component 2. Pilot Operation Execution (Planned Cost at Appraisal: USD 3.25 million–Cost at Completion

32

: USD 2.44 million or 75% of the Project Cost)

7.23. Three types of pilot operations were identified under the PNO3: support for forest dwellers using IPA/PDCs, broadening of dryland consolidation experiences, and promotion of micro-projects and micro-enterprises.

Sub-component 2.1 Pilot Operations Support to Forest Populations

7.24. Five PDCs concerning forest dwellers in the five governorates covered under the PNO3 were completed over an area of 18,635 ha, of which 69% were forests, with a total investment of 1.960 million TD. The elaboration of these PDCs was delayed due to the inability to respect initially planned criteria for site selection, in particular existence of user organizations and the availability of a recent development plan. Indeed, among selected sites, there was no socio-professional organization, and only three sites out of five met the second criteria. It was thus necessary to devote more time to aid forest users to organize themselves within GDAPs and identify development and forestry resource management operations.

7.25. PDCs implementation enabled: (i) basic training in forestry aspects for 30 field advisors for five days; (ii) initiation sessions to IPA for 50 person-days, profiting the heads of forest districts in the five CRDAs; (iii) training sessions for village leaders for a total of 740 person-days concerning the forest species distillation (rosemary, myrtle, mint) and wood and organic agriculture exploitation. This was in addition to a fair and exchange visits.

7.26. The project brought logistical support to GDAPs by providing them small equipment, enabling them to participate in the execution of small forestry works and promote certain enhancement measure activities for forestry products (chainsaws, distillers, honey extractors, concentrated shredders, electric hatchers, water tanks). This equipment is used communally through fees established by the GDAPs. The ODESYPANO also provided certain GDAPs with quarters (offices and shops) and office equipment.

7.27. OPAF implementation resulted in:

- Collaboration between forestry services and the ODESYPANO in the implementation of programmed development works in the CPAs.

- Enhancement of the roles of the GDAs where experience is showing the relevance of the tasks allocated to these GDAs in terms of both technical compliance and implementation time frames, and even in terms of unemployment rates and increase of daily salary levels from 4.415 TD to 6 TD (Lachileb and Tabouba cases).

Sub-component 2.2: Pilot operations for Land Consolidation

7.28. 5,346 ha were consolidated, representing the totality of initial project and PDC goals. Execution of consolidation works were done by the AFA in the context of a collaboration convention. The operation was accompanied by personnel training (123 person-days) and by intense information and awareness actions for operators. 31 km of access roads were constructed, aimed at improving access for consolidated plots.

Sub-component 2.3: Micro-project/Microenterprise Promotion


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7.29. Plans for this sub-component include the completion of competitive production chains, research work to identify beneficiary actions, facilitation program for rural communities and training activities for beneficiaries and ODESYPANO managers.

7.30. As of 07/31/2009, two studies were completed on competitive production chain identification for population associations in the Northwest mountainous and forested areas, in terms of essential oils promotion and the identification of organic agriculture potential on forestry pilot operation sites. Similarly, another study was completed on the impacts of micro-projects on household socioeconomic conditions and local economies.

7.31. In terms of beneficiary organization, seven conventions were signed with two NGOs and two credit associations (one convention with ATLAS, four conventions with APEL in Jendouba , Bizerte, Kef and Béja, and two conventions with the Nefza and Joumine credit associations). Implementation of these conventions resulted in the concretization of 581 micro-projects over a total of 685 micro-projects. The rest are covered by the convention signed with the BTS. The number of micro-projects designated for women is 349 or 51% of total micro-projects.

7.32. In terms of beneficiary training, the initial plan was for 440 people. As of 07/31/2009, the program involved 1,863 beneficiaries, or 423% of initial plans. Strong demand from the populations, expressed in the PDCs, was a driving factor for surpassing these initial targets. Similarly, for manager training, initial plans were for 56 persons-days. As of 07/31/2009, total completions were 310 persons-days for 87 managers.

Component 3. Support for Agricultural and Pastoral Production (Cost Planned at Appraisal: USD 3.14 million – Cost at Completion

33

: USD 2.39 million or 76% of the Project Cost)

7.33. The PNO3 planned a program focused on support to producers through agricultural councils, for livestock and development of communal water sources, and small irrigated plots.

Sub-component 3.1: Producer Agricultural Advisory Services

7.34. The advisory approach (approche conseil) was implemented by a group of facilitators and specialists. The selection of group activities for advisory services was based on extensive diagnostics during PDC preparation. The registered results were very significant, especially in terms of techniques needed by producers and subsequently yield increases. It must be highlighted, however, that this approach was very costly and necessitates both a continuous presence and mobilization from facilitators.

7.35. The technical advisory approach was supported by the research program initiated under the PNO3 – actions completed by the IRESA, INRAT, and veterinary medicine institute of Tunis – and enabled the development of improved techniques for six selected themes (rangelands and forests, animal production, CES and soil fertility, foraging crops, revenue improvements, as well as animal health and reproduction), of which the results are now available to the ODESYPANO. In terms of activities for milk producers, the ODESYPANO mobilized seven livestock specialists, each of which coached 50 farmers. Results were conclusive and were translated into an increase in milk production by 65% for pure races and 93% for mixed races with a decrease in the calving interval – 49-day calving due to close supervision of these farmers in terms of management of their herds.

7.36. Additionally, equipment, training, and study trips were provided to the AC and specialists in addition to the completion of 450 demonstration plots and a number of important information/training days for producers (around 25,400 persons-days).


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Sub-component 3.2: Actions in Support of Livestock

7.37. Project results were:

• Provision of pure race bovine sires to farmers through management contracts, representing 166% of initial plans, 91% of PDC programs and 106% of the mid-term revised program;

• Distribution of 439 rams and male goats representing 88% and 86%, respectively, of initial plans, 94% and 63%, respectively of PDC demands, and 113% and 73%, respectively, of mid-term targets. Implementation of this activity was constrained by a lack of availability of performing specimens on the market;

• Formation of 16 inseminators to improve the success rate of first insemination;

• Practical and theoretical training for beekeeping of 654 person-days, aimed at 332 young people (of which 23% were young women/girls with micro-projects).

Sub-component 3.3: Small Irrigated Plots Development

7.38. Small irrigated plots development under the project regroups small irrigated perimeter development and spring and well development. As of 07/31/2009, results were:

• Development of 345 ha of irrigated plots or 104% of initial plans, 171% of PDC targets and 196% of mid-term plans; and

• Development of 80 springs and one well, or 96% and 9%, respectively of initial plans and 71% and 100%, respectively of PDC targets, as well as 835 and 100%, respectively of mid-term targets.

7.39. Physical objectives in terms of spring development are partially completed due to depletion of these selected springs the summer period, resulting in unfavorable opinions from the DREE of the CRDAs.

Component 4. Support for the Protection/Management of Natural Resources (Cost at Appraisal: USD 14.85 million – Cost at Completion

34

: USD 16.41 million or 110.5% of Project Costs)

7.40. Physical realizations for this component have reached 54,880 ha for all actions, representing 114% of initial targets (48,000 ha), 89% of PDC plans (61,798 ha) and 111% of revised plans at the MTR (49,464 ha). Program execution was done through local contractors selected through a competitive process.

Component 5. Rural infrastructure (Cost at Appraisal: USD 13.79 million – Cost at Completion

35

: USD 19.99 million or 145% of the Project Costs)

7.41. Rural road development:The Project enabled the construction of around 272 km of principal and secondary tracks, representing 97% of the initial target, 100% of PDC plans and 112% of mid-term plans. These constructions were planned through an improvement of access scheme for the four governorates of Jendouba, Béja, Kef and Siliana (governorates where extension zones exist) in which all concerned actors participated.

34 This was the total amount expected to be disbursed upon the end of the grace period for disbursement of the loan on 01/31/2010. 35 This was the total amount expected to be disbursed upon the end of the grace period for disbursement of the loan on 01/31/2010.

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7.42. Secondary road upgrade:Under the PNO3, the upgrade program of older roads involved Consolidated PDCs. As of 07/31/2009, and since the launch of the PNO3, 599 km of older roads were rehabilitated, representing 242% of initial targets, 92% of targets in the context of PDCs and 113% of mid-term targets.

7.43. Water point developments:Potable water access results largely exceeded initial targets, following strong demand from beneficiaries during PDC elaboration, especially in new zones which are greatly lacking in water. Indeed, the results were 906 individual tanks, representing 176% of the initial prevision, 85% of the PDC, and 103% of the mid-term previsions. In terms of potable water connection systems, eight systems are now completed, representing 133% of initial targets, 100% of demand in the PDCs and 100% of mid-term plans.

IV. Bank and Tunisian Government Performance

7.44. In general, World Bank and Government performance is deemed satisfactory. On the Bank side, nine consultation and supervision missions were completed during the PNO3 period. Missions were very useful for the good implementation of the Project. The trust established between the Bank and the executing agency and the way this operated during the PNO3 is truly a model experience.

7.45. On the Tunisian authority side, the ODESYPANO fully fulfilled its role with much satisfaction. The orchestration of partnerships, mobilization and synergizing of financing sources through the PDCs reflect this. The PNO3 inter-ministerial steering committee met four times and addressed several issues, essentially related to project advancement by ODESYPANO post-PNO3. Similarly, several council meetings were held (four per year).

V. Relevance of Objectives

7.46. Project objectives are deemed relevant and realistic compared to the issues linked to socioeconomic conditions of target populations and to the protection/management of natural resources. These are also relevant to Government policy promoting local development, protection of hydraulic works, promotion of job creation, and reduction of rural migration.

7.47. However, concerning risk evaluation, problems linked to ODESYPANO disengagement in favor of the CRDAs and the promotion of microenterprises area were underestimated.

VI. Lessons Learned

7.48. The following lessons have been learned:

- Achieved results on the physical and financial level have largely exceeded targets from the project appraisal report, which shows that a well-conceived, participatory approach can work well.

- PDCs can be elaborated at the sector level, which would enable economies of scale. This is also due to the reinforcement of local grassroots organization capacity (CDs and GDAPs) and to partners that fully fulfilled their roles. Similarly, ODESYPANO institutional reinforcement and appropriate methodological tool development enabled the ODESYPANO to operate in these larger geographical units.

- In forest areas, leveraging of forest potential for populations through a participatory management plan involving forestry services, populations, and the ODESYPANO enabled a sustainable management of resources as well as employment and income opportunities.

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- Partnerships between governmental and non-governmental organizations for community development in the Northwest are possible. Indeed, as indicated previously, the portion of partner financing for actions in the context of the 476 completed CPAs reaches 35% on average, and there are plans for this share to be even greater for the 122 CPAs remaining to complete current PDCs. This result was achieved through partnership mechanisms implemented by the ODESYPANO and active collaboration with regional and local authorities.

- The ODESYPANO disengagement in favor of the CRDAs is not possible, as CRDAs are not organized according to IPA requirements and did not have the necessary means to play a similar role to that of the ODESYPANO. It would be more effective to now experiment with diverse forms of “realignment” of the role of different actors’ respective responsibilities in development in this region. The goal is to alleviate ODESYPANO from tasks in sectors where it previously has intervened over several years so that it can cover as many more new sectors as possible.

- From an environmental point of view, the IPA has enabled the reinforcement of involved community to carry out diverse anti-erosion works and rehabilitation of agricultural lands and rangelands. For example, CES works on private lands are much better accepted when these are combined, in the context of PDC implementation, with productive activities such as tree plantations.

- Systematic practice of IPA in areas covered by the ODESYPANO improved an initially conflicting relationship between diverse administrations involved in PDCs, to a more productive partnership based on trust. IPA has also helped these populations shed a certain mentality of passive spectator to one of active participant in the self-management of their community development. This evolution will still take time, and it is thus necessary to see the promotion of local development in the context of long-term programs rather than with a short-term project view.

- The PNO3 experience also demonstrated the complexity of promoting off-farm income generating activities. PNO3 investments in this area did generally have the desired success despite some problems. The same issues are found in practically all rural development projects in Tunisia and in other countries. Three important constraints contribute to this situation. It is necessary to focus further in the future on obstacles to this component.

- Pilot operations for land consolidation are very useful to pave the way for diverse development actions and improvements to agricultural and pastoral lands. The conclusion is that these operations should be integrated directly in the support component for the protection/management of natural resources and even act as a preliminary intervention for future land developments, depending on the circumstances.

VII. Project Costs and Disbursements

7.49. The total project cost estimated at appraisal was USD 44.86 million. At the loan disbursement deadline date (01/31/2010), the total disbursement amount was expected to be USD 45.13 million, representing 100.6% of estimated costs. This shows that the cancellation of 8.5 million Euros was fully compensated by fluctuations in exchange rates.

7.50. The financing scheme is as follows: (i) USD 7.7 million in Government participation, or 112.4% of initial plans; (ii) USD 34.48 million taken from the loan or 101.4% of initial plans; and (iii) USD 2.95 million as contribution from the populations or 73.5% of project estimates.

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7.51. Disbursement costs by component are indicated in Annex 1. These show:

- An over-disbursement for Component 1 (Organization Adjustment/Reinforcement: 117%) due mainly to the institutional support to beneficiaries and partners (mainly training workshops), for which demand was higher than expected, as well as to technical assistance, which was more costly than predicted.

- An under-disbursement for Component 2 (Pilot Operation Execution: 75%) due to the late launch of pilot operation PDCs and the non-completion of the microenterprise sub-component because of reasons indicated above.

- An under-disbursement of Component 3 (Support for Agricultural and Pastoral Production: 76%) due to several factors: (i) the number of trainings provided to the ACs and specialists was less than what was planned; (ii) the execution modality of the milk livestock advisory approach, implemented through the ODESYPANO managers, instead of OEP managers, with associated cost savings; and (iii) the number of realized water springs was less than planned due to the weak water potential of these sources (insufficient flow and depletion in summer periods), which were at the origin of unfavorable opinions from the CRDAs (DREE).

- An over-disbursement for Component 4 (Support for Protection/Management of Natural Resources: 110.5%) due mainly to the high demand from populations in PDCs for pastoral, forestry-pastoral, and agroforestry actions. Similarly, the use of local contractors for the completion of diverse activities linked to the component was favorable to competitiveness and subsequently minimized costs.

- An over-disbursement for Component 5 (Rural Infrastructure Improvement: 145%). This was caused in general by high demands expressed in the PDCs, especially for potable water (individual tanks) and road construction/rehabilitation, for which completions largely exceeded initial targets.

Appendix

Appendix 7.I: Main Impacts and Results Indicators

Appendix 7.II: PNO3 Costs and Financing Schemes

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Appendix 7.I : Main Impacts and Results IndicatorsPNO3 Impact and Outcome Indicator Quantification

Intervention Logic Code Indicator Unit Year/Quantification

2003 2004 2005 2006 2007 2008 2009

Objectives

O-1 Increase in average householdagricultural revenue (1)

TD/year 2,050 2,600 3,900 3,280 3,784

O-2 Unemployment rate evolution % 19 18 17 17 16 16 16

O-3 Isolated communities accessrate

% 56 58 63 71 75 81 81

O-4 Household access rate topotable water

% 69 69 72 76 79 80 81

Improvesocioeconomicconditions ofcommunities inthe mountainousand forestedNorthwestregion, whileensuringsustainablenatural resourcemanagement

O-5 Vegetation and forest coverrate

% 32 33 33 35 35 37 38

Results R1-1 Cumulative # of PDCs validatedby regional councils

# 4 47 74 87 101 101 101

R1-2 Cumulative # of PDCscompleted

# 4 30 58

Cumulative # of CPAscompleted

62 117 191 278 379 476 476

Total cumulative costs forcompleted activities in CPAs

MTD 1.5 10.0 24.5 43.4 60.9 80.1 82.5

R1 - The Officeis betterorganized andefficient, inparticular in theexecution ofpartnershipactivities R1-3 Percent of costs financed by

Office partners in CPAs% 13 46 41 40 36 35 36

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PNO3 Impact and Outcome Indicator Quantification

R2 - Communityand grassrootsorganizationscapacity isreinforced as wellas that of partnersinvolved in PNOimplementation

25 GDAs out of the 52 implemented have recruited technical directors. 43 GDAs efficiently use equipmentprovided by the Office to productive ends (distillers, grinders, extractors, etc.). 21 GDAs have taken over forthe Office in rangeland and other activity management. 4 GDAs have contracted credit and ensured areimbursement rate of 98%. 1 GDA has mobilized exterior financing (WWF, 20,000 USD). 1 GDA hasinitiated/supported the creation of 8 private livestock projects. The Office has provided training, vehicles andequipment/materials to 5 CRDAs. 24% of these CRDAs managers now have practical knowledge in IPA.Regional and local development councils are now in possession of methodological tools that have beenused during the validation and monitoring of PDCs under the PNO3. The percentage of costs financed bypartners in CPAs had reached 36% in 2009.

R3-1 Land and Crop Occupation

Cereals % 45.9 37.3 37.1 40.1

Leguminous crops % 3.4 4.7 4.8 5.3

Forage % 16.6 22.1 22.4 23.4

Arboriculture plantations % 11.6 16.1 17.4 17.9

Vegetable crops % 0.8 2.1 2 2.1

R3 - Agriculturalproductionsystems havebeen improvedand diversified

Fallow % 21.7 17.7 16.2 11.1

R3-2 Main crop yields

Wheat Qx/ha 14.2 17.9 17.4 13.3 18.9

Barley Qx/ha 13.9 17.1 16.5 12.7 21.3

Beans Qx/ha 6.9 9 10.9 8.5 10.6

Olives Qx/ha 12.6 18.5 21.9 18.2 23.6

R3-3 Bovine herd composition

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Pure race % 20.5 26 26 27

PNO3 Impact and Outcome Indicator QuantificationMixed race % 37.9 51 52 53

Local race % 41.6 23 22 20

R3-4 Meat yields

Pure race bovines Kg/head/year 277 348 370 355 375

Mixed race bovines Kg/head/year 178 210 231 215 235

Local race bovines Kg/head/year 102 123 125 117 127

Sheep Kg/head/year 30 37 37 31 35

Goats Kg/head/year 22 27 27 22 25

R3-5 Milk yields

Pure race bovines L/head/an 2,650 3,326 3,873 3,450 3,911

Mixed race bovines L/head/an 1,060 1,350 1 468 1 260 1,544

Local race bovines L/head/an 285 352 414 380 468

R3-6 Created micro-projects: # ofimplemented micro-projects 8 91 179 221 353 621 685

Small-scale livestockraising

# 2 44 70 71 97 130 158

Bovine raising # 4 16 41 44 80 81 81

Sheep/goat raising # 1 29 33 36 74 96 118

Support for agriculture 134 134

Handicrafts and smalloccupations

# 1 2 35 70 102 180 194

R3-7 Created micro-projects:investment amount 1000 TD 15 149 289 337 551 913 1,000

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Small scale livestockraising

1000 TD 3 66 105 107 146 195 237

PNO3 Impact and Outcome Indicator QuantificationBovine raising 1000 TD 10 40 103 110 200 203 203

Sheep/goat raising 1000 TD 1 41 46 50 104 134 165

Support for agriculture 0 0 0 0 0 201 201

Handicrafts and smalloccupations

1000 TD 1 2 35 70 102 180 194

R3-8 % women micro-entrepreneurs # 25 37 46 52 49 50 51

R3-9 Created microprojects: # of jobscreated

# 8 91 179 221 353 621 685

R4-1 % ha covered (PNO3) / ha SAU % 0.3 1.2 2.6 5.6 8.8 12.2 13.6

R4-2 Arboriculture plantations(receiving ha)

ha - 741 1 858 7,256 10,083 13,635 17,710

R4 - Naturalresourcemanagement hasimproved

R4-3 Improved rangelands andprairies (receiving ha)

ha 413 1,396 2,333 5,006 7,222 10,119 14,919

R5-1 Km of constructed receivingroads

Km 31,5 53,1 123,4 214,2 272

R5-2 Km rehabilited receiving roads Km 51 87 246 341 539 599

R5 - Ruralinfrastructure inthe Northwest hasimproved and ismore easilyaccessible

R5-3 Receiving water points (tanks,water connections, sources)

# 6 64 228 480 688 918 995

(1) The agricultural campaign always overrides two calendar years. Revenues are registered in the first year and constitute thedifference between the market value of that agricultural production and exploitation costs (gross margin). Calculations are done indinars from 2003 to eliminate the effect of inflation.

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Appendix 7.II: PNO3 Costs and Financing Schemes

(a) Project Cost by Component (in USD million equivalent)

Components Appraisal Estimate

(USD million)

Actual/Latest Estimate (USD

million)1/


1. Institutional Strengthening for ODESYPANO and Partners 3.01 3.52 117.0%

2. Implementation of Pilot Operations 3.25 2.44 75.0%

3. Agricultural and Livestock Development 3.14 2.39 76.0%

4. Sustainable Natural Resources Management

14.85 16.41 110.5%

5. Improvement of Basic Rural Infrastructure

13.79 19.99 145.0%

Total Baseline Cost 38.04 44.74 117.6%

Physical Contingencies 0.85 0.00

Price Contingencies 5.97 0.00

Total Project Costs 44.86 44.74 Front-end fee PPF 0.00 0.00 Front-end fee IBRD 0.00 0.39

Total Financing Required 44.86 45.13 100.6%

(b) Financing

Source of Funds Type of Co-financing

Appraisal Estimate

(USD million)

Actual/Latest Estimate

(USD million)1/


Borrower 6.85 7.70 112.4%International Bank for Reconstruction and Development

34.00 34.48 101.4%

Local Sources of Borrowing Country 4.01 2.95 73.5%

1/ Projections of the amounts estimated to be effectively disbursed at the end of the grace period for loan disbursement, which is 31 January 2010, after extension by two months. The average exchange rate used for calculating the USD amounts during the period July 2003 – January 2010 is estimated at USD 1 = TD 1.29.

Local sources are the beneficiary communities’ counterpart financing to the CPAs’ implementation and must therefore be included in the project’s financing plan. On the other hand, the ODESYPANO partners’ parallel financing is not included – see paragraphs 8 and 9 for definitions and 35 for financing levels.

NB. The loan agreement was contracted in December 2002 and the loan was of Euro 34.7 million, including a front-end fee of Euro 347,000. Euro 8.5 million were cancelled in September 2008.

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Annex 8. Comments of Co-financiers and Other Partners/Stakeholders

No formal comments were prepared by stakeholders other than that of the borrower in Annex 7. However, several remarks, comments, and suggestions were put forward by ODESYPANO partners in the context of the supervision missions during project implementation as well as the ICR mission. Their feedback has served to enrich the content of the present document.

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Annex 9. List of Supporting Documents

1. ICR of PNO2, April 2001 2. Project Concept Note, June 2001 3. Operation Manual, September 2002 4. Project Implementation Plan, November 2002 5. Project Appraisal Document, September 2002 6. Loan Agreement, December 2002 7. Project Agreement, December 2002 List of studies undertaken for the PNO3 1. Studies undertaken for technical assistance - Planning system implementation and skills management - ODESYPNO organizational measures - Operations Manual update - Information system improvement and structuring - Physical works follow-up module modification - GIS update reinforcement 2. Studies complementary to technical assistance - Management control system implementation - Master computer system update

3. Other studies - Institutional support for the Northwest CRDAs (Disengagement) - Local grassroots organizations’ strategy and action plan definition - Dryland consolidation operations’ impact evaluation - Essential oils production chain promotion through the mountainous and forested areas of the Northwest population association - Potential organic agriculture identification within forestry pilot operations sites - Micro-project impact analysis on socioeconomic conditions of households and local economies

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Annex 10. Photo Set of Project Results and Outputs

Photo 1. Agroforestry Plantations (Olive and Almond Trees)

Photo 2. CES mechanical works (low stone walls for gully treatment)

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Photo 3. CES works: basin creation for arboriculture

Photo 4. CES works: stone sills with olive trees

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Photo 5. Rangeland improvements with sulla

Photo 6. PDC elaboration session

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Photo 7. CP and CD evaluation session

Photo 8. Beekeeping advisory approach

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Photo 9. Income-generating activities for women: plant distillation

Photo 10. Agricultural road construction and rehabilitation

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Photo 11. Potable water: well construction

Photo 12. GDAP administrative council formation

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Photo 13. GDAP fair participation

Photo 14. GDAP support for community equipment

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