AFRICAN DEVELOPMENT BANK GROUP MADAGASCAR INDIAN OCEAN - PROJECT TO DEVELOP CORRIDORS AND FACILITATE TRADE PICU/RDGW DEPARTMENTS November 2018 Translated Document Public Disclosure Authorized Public Disclosure Authorized
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AFRICAN DEVELOPMENT BANK GROUP
MADAGASCAR
INDIAN OCEAN - PROJECT TO DEVELOP CORRIDORS AND
FACILITATE TRADE
PICU/RDGW DEPARTMENTS
November 2018
Translated Document
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TABLE OF CONTENTS
1.1 STRATEGIC THRUST AND RATIONALE: ................................................................................... 1
1.2 PROJECT LINKAGES WITH COUNTRY STRATEGY AND OBJECTIVES ...................................................... 1
1.3 RATIONALE FOR BANK INVOLVEMENT .............................................................................................. 2
1.4 AID COORDINATION ......................................................................................................................... 2
2. PROJECT DESCRIPTION .................................................................................................................. 3
2.1 PROJECT OBJECTIVES AND COMPONENTS .......................................................................................... 3
2.2. TECHNICAL SOLUTIONS RETAINED AND ALTERNATIVES EXPLORED ......................................................... 5
2.2 PROJECT TYPE .................................................................................................................................. 6
2.4. PROJECT COST AND FINANCING ARRANGEMENTS.................................................................................... 6
2.5. PROJECT AREA AND BENEFICIARIES ....................................................................................................... 9
2.8. KEY PERFORMANCE INDICATORS ......................................................................................................... 11
3. PROJECT FEASIBILITY ................................................................................................................. 11
3.1 ECONOMIC PERFORMANCE ............................................................................................................. 11
3.2 ENVIRONMENTAL AND SOCIAL IMPACT ........................................................................................... 12
ENVIRONMENT ........................................................................................................................................... 12
CLIMATE CHANGE ...................................................................................................................................... 13
GENDER ..................................................................................................................................................... 13
SOCIAL AND YOUTH EMPLOYMENT SOCIAL................................................................................................. 14
ROAD SAFETY ............................................................................................................................................ 14
INVOLUNTARY RESETTLEMENT................................................................................................................... 15
4. IMPLEMENTATION ....................................................................................................................... 15
4.1 IMPLEMENTATION ARRANGEMENTS ................................................................................................ 15
4.2 PROCUREMENT ............................................................................................................................... 16
4.3 DISBURSEMENT ARRANGEMENTS .................................................................................................... 16
4.4 FINANCIAL MANAGEMENT.............................................................................................................. 16
4.5 AUDIT ............................................................................................................................................ 17
4.6 GOVERNANCE ................................................................................................................................ 17
4.7 SUSTAINABILITY ............................................................................................................................ 17
4.8 RISK MANAGEMENT ....................................................................................................................... 18
4.9 KNOWLEDGE BUILDING .................................................................................................................. 19
5. LEGAL FRAMEWORK AND AUTHORITY ................................................................................... 19
5.1 LEGAL INSTRUMENT ....................................................................................................................... 19
5.2 CONDITIONS FOR BANK INVOLVEMENT ........................................................................................... 19
5.3 UNDERTAKINGS ............................................................................................................................. 21
6. CONCLUSION AND RECOMMENDATION .................................................................................. 21
6.1 CONCLUSION .................................................................................................................................. 21
6.2 RECOMMENDATION ........................................................................................................................ 22
7. APPENDICES ..................................................................................................................................... I
APPENDIX I : COMPARATIVE SOCIO-ECONOMIC INDICATORS ........................................................................... I
APPENDIX II : TABLE ON PROCUREMENT OF GOODS AND SERVICES ................................................................ II
APPENDIX III : AFDB PORTFOLIO AS AT 28/09/2018 AMOUNT IN UA (CPO) ................................................ III
APPENDIX IV:).PROCUREMENT SYSTEM .............................................................................................. IV
APPENDICE V. PROJECT FRAGILITY ASSESSMENT REPORT (PFAR ................................................................. V
APPENDIX VI: MAP OF PROJECT AREA ........................................................................................................ IX
Appendix VII: Information Note - Eligibility Criteria for Accessing the ADF RO Envelop X
i
Currency Equivalents
May 2018
UA 1 = USD 1.44
UA 1 = EUR 1.19
UA 1 = MGA 4 557.57
USD 1 = MGA 3 169.25
EUR 1 = MGA 3 828.12
Fiscal Year
From 1 January to 31 December
Weights and Measures
1 metric tonne = 2204.62 pounds (lbs)
1 kilogramme (kg) = 2.20 lbs
1 metre (m) = 3.28 feet (ft.)
1 millimetre (mm) = 0.04 inches (“)
1 kilometre (km) = 0.62 mile
1 hectare (ha) = 2.47 acres
i
Acronyms and Abbreviations
AADT Average Annual Daily Traffic IOC Indian Ocean Commission
ADF African Development Fund MTPI Ministry of Public Works and Infrastructure
ADG “As dug” Gravel
AFD French Development Agency NH National Highway
AIDS Acquired Immunodeficiency Syndrome OFID OPEC Fund for International Development
AIIB Asian Infrastructure Investment Bank PACN National Committee Action Plan
AIP Africa Investment Platform (EU)
ARM Madagascar Road Authority PACPT Toliara Fishermen's Community Support Project
BADEA Arab Bank for Economic Development in
Africa
PAPs Project-affected persons
BN Standards Bureau
CEG Comprehensive Secondary School PIA Project Impact Area
COMESA Common Market for Eastern and Southern
Africa
PIU Project Implementation Unit
CSP Country Strategy Paper PK Kilometre Point
DDP Public Debt Department PRPIM Manombo Irrigation Scheme Rehabilitation
Project
ERR Economic Rate of Return PRPT Toliara Province Road Project
ESIA Environmental and Social Impact Assessment
RECs Regional Economic Communities
ESMP Environmental and Social Management
Plan
RER Road Maintenance Charges
EU European Union RMF Road Maintenance Fund
GCS Graded Crushed Stone SDF Saudi Development Fund
HIMO High Labour Intensity STI Sexually Transmitted Infection
HIV Human Immunodeficiency Virus TSF Transition Support Facility
INSTAT National Institute of Statistics UA Unit of Account
WB World Bank
ii
Project Information
Client Information Sheet
BORROWER : REPUBLIC OF MADAGASCAR
EXECUTING AGENCY : MADAGASCAR ROAD AUTHORITY
Financing Plan
SOURCE
Amounts in million UA
Devises Local
currency Total % total INSTRUMENTS
ADF loan 3.2 0.8 4.00 3.6% Loan
ADF grant 10 2.5 12.50 11.45% Grant
TSF Loan 6.76 1.69 8.45 7.74% Loan
ADF regional resources, loan 14.944 3.736 18.68 17.13% Loan
ADF regional resources, grant 15 3.75 18.75 17.19% Grant
EU (AfIF) 25.736 6.434 32.17 29.49% Grant
OFID 7.224 1.806 9.03 8.28% Loan
GdM 0 5,45 5.45 5.00% Counterpart funds
ADB PROJECT : TOTAL 82.904 26.176 109.08 100%
BADEA and Arab Funds 33.36 8.34 41.7 27.74% Loan
GRAND TOTAL 116.264 34.516 150.78
Key ADF Financing Information
Loan Currency Unit of Account (UA)
Interest Type Not Applicable
Interest Rate Margin Not Applicable
ADF Loan Service Fee 0.75% per year on the disbursed but unreimbursed loan
amount
ADF Loan Commitment Charge 0.5% on the undisbursed loan amount 120 days following
signature of the Loan Agreement
Other Charges Not Applicable
ADF Loan Maturity 40 years
Grace Period 10 years
FRR Not Applicable
ERR, NPV (baseline scenario) 18% and MGA 4609 million
iii
Timeframe – Main Milestones (expected)
Concept Note Approval :
May 2018
Project Approval : November 2018
Effectiveness : March 2019
Last Disbursement : December 2023
Completion : December 2024
Last Reimbursement : December 2058
iv
EXECUTIVE SUMMARY
Project Overview
Inadequate development and ageing transport infrastructure are among the main obstacles to
Madagascar's capacity to expand its trade with other member countries of the Common Market for
Eastern and Southern Africa (COMESA), the Southern African Development Community (SADC) and
the Indian Ocean Commission (IOC) and, consequently, to promote regional integration. The country's
road network has hardly received any major interventions in the last ten years, due in part to the impact
of the 2009-2013 political crisis. Only 24.6% of the paved road network is in good condition. According
to the Bank's 2018 African Infrastructure Development Index, Madagascar has a very low scores for
transport: 3.01 points out of 100. Freight transport is estimated at around 8 million tonnes per year,
including 3 million tonnes of domestic trade in local agricultural products, 1.5 million tonnes of
domestic distribution of imported goods and 3.5 million tonnes of external trade in dry goods, of which
1.5 million tonnes of containerized goods.
Consequently, improving transport systems connectivity between production areas and export points
(ports and airports) to countries in the sub-region is still a key element for increasing trade and
investment within the framework of regional integration. This project aims to lay the groundwork for
road network development in Southern Madagascar (currently the most isolated part of the Big Island),
which is connected to potentially important ports on two maritime fronts: the South-West with Tuléar
Port and the South-East with the Ehoala Mineral Port. Both ports provide the country access to the
Mozambique Channel and Indian Ocean countries, respectively.
The project will be implemented over 5 years, from 2019 to 2023. It will open up Southern Madagascar,
thus unlocking a vast region with a considerable agricultural potential to the rest of the country and
through the two seaports (Ehoala and Tuléar), and providing access to COMESA countries and the
Indian Ocean.
Needs Assessment
Despite its significant agricultural potential, the project impact area is inaccessible for nearly two to
four months in the year. This inaccessibility is the consequence of adverse weather conditions, the most
prominent of which are frequent cyclones and floods. The project will attract the private sector and
develop agricultural value chains, while consolidating the achievements of agricultural and fishery
projects that the Bank has financed in the South-West region over the past ten years. The two road
sections combined with the establishment of major port facilities will develop opportunities for
agricultural product export especially to COMESA and Indian Ocean countries, thus confirming
Madagascar's vocation as the "breadbasket of the Indian Ocean" as proclaimed by the IOC. The project
needs assessment was carried out in May 2018.
The lack of road infrastructure to facilitate trade and connectivity, high levels of poverty and inequality,
high unemployment rate, vulnerability to natural disasters (droughts, floods and cyclones) and climate
change, as well as the absence of economic opportunities, are key factors of fragility in the project area,
as indicated in Appendix V.
This project is in line with the Bank's Strategy for Addressing Fragility and Building Resilience in
Africa (2014-2019) and has been designed to promote activities that can address fragility and develop
mechanisms to strengthen the country’s resilience. Building road infrastructure will improve trade,
connectivity and regional integration, and at the same time address social exclusion, inequality and
poverty. The project will support vulnerable groups by providing them with stable sources of income,
sustained food security, and expanded economic opportunities, especially for the youth and women.
v
The Bank’s Value Added
The thirteenth transport sector operation to be financed by the Bank in Madagascar, this project will tap
from the body of knowledge that AfDB experts and the Country Office have of the sector, particularly
in the region concerned. Implementing the trade facilitation and institution building component will
also strengthen aspects of inclusive growth and regional integration. Inclusive growth will be achieved
by developing value chains around agricultural products, which abound in some areas of both regions,
thus creating substantial income for the local population and building their capacity. Moreover, regional
integration will be enhanced through trade in three of the RECs of which Madagascar is a member: IOC,
COMESA and SADC. Furthermore, the main project component studies conducted under the previous
Road Project in the Toliara (Tuléar) and Taolagnaro (Fort Dauphin) Provinces will facilitate a better
implementation of the project. This will showcase the impact of the Bank's previous and ongoing
interventions, particularly in agriculture and fisheries.
Knowledge Management
This new operation will provide an opportunity to enhance road infrastructure knowledge in
Madagascar, especially trade facilitation through road - maritime - aviation inter-modality, to achieve
inclusive growth. The relevant development components will facilitate the construction of local
infrastructure, vital for the transportation of agricultural production and social cohesion across the
regions of Madagascar. Furthermore, the National Institute of Statistics (INSTAT) will monitor and
evaluate the project, contributing to knowledge building and training of local experts in this area.
v
RESULTS-BASED LOGICAL FRAMEWORK
Country and Project Title: Madagascar: Project to Develop Corridors and Facilitate Trade between Madagascar, COMESA and Indian Ocean Countries Project
Objective: Contribute to opening up the Southern Region and creating competitive corridors
RESULTS CHAIN PERFORMANCE INDICATORS
MEANS OF
VERIFICATION
RISKS/
MITIGATION MEASURES Indicator
(including ISC) Baseline Situation Target
IMP
AC
T Enhanced regional integration
through the growth of inter-
regional trade.
Volume of trade between Madagascar, COMESA and
Indian Ocean countries.
In 2017 :
Trade combined: EUR 4.8
billion:
Exports: EUR 2 billion
Imports: EUR 2.7 billion.
1.
In 2024 :
Exports up 15%, or EUR 2.3 billion
Imports: 15% increase in the value of
imports: EUR 3.1 billion.
Sources :
Central Bank of
Madagascar; Customs
Authority of the Atsimo
Andrefana and Anosy
regions.
1.1 Risks:
Failure to maintain roads due to
insufficient resources in the Road
Maintenance Fund.
Early degradation caused by
failure to comply with the axle
load.
1.2 Mitigation Measures:
-Acceleration of reforms aimed at
building the capacity and
autonomy of the RMF. Continue
and improve the replenishment of
the Road Maintenance Fund, in
particular by settling outstanding
debts owed by oil companies and
regular payments in future;
Institutional study on road
maintenance financing.
- Axle load control by axle scales
acquired under the first phase of
the project.
2.1 Risks:
Delays by the Government in
paying the counterpart funding
2.2 Mitigation Measures:
- Obtaining the necessary
commitments from the
Government during negotiations;
consultations between COMG and
OU
TC
OM
ES
Outcome 1: Improved service
level on the RN9 and RNT
12A roads.
Average daily heavy goods vehicle traffic on the RN 9
and RNT 12A, Tuléar-Manja and Fort Dauphin-
Vangaindrano sections.
In 2017 :
1. 93 veh./d
In 2024 :
1. 174 veh./d.
Sources:
ARM counts, surveys
and activity reports, and
report of the Monitoring
and Evaluation
Consultant.
Travel time of a heavy goods vehicle on the RN9
1. Tuléar-Manja section:
2. Fort Dauphin-Vangaindrano section:
In 2017 :
1. 11 h
2. 16 h
In 2024:
1. 6 h
2. 10 h
Average vehicle operating cost, VOC (MGA/KM):
Tuléar-Manja section:
Fort Dauphin-Vangaindrano Section:
In 2017 :
1. MGA 910 /km
2. MGA 910 /km
In 2024 :
1. MGA 591 /km ;
2. MGA 591 /km
Average vehicle operating cost, VOC (MGA/km)
heavy trucks
Tuléar – Manja Section:
1. Fort Dauphin – Vangaindrano Section :
In 2017 :
1. MGA 2644 /km
2. MGA 2644 /km
In 2024 :
1. MGA 1718 /km
2. MGA 1718 /km
Number of people sensitised on road safety. In 2017 :
1. 0 person. In 2024 :
1. 15 000, of whom at least 40% women. Source:
ARM Report.
Outcome 2: Increased
productivity and
competitiveness of SMEs, and
improved living conditions for
the PIA population.
Annual value of goods procured by exporting companies
from local SMEs.
Improved production volume and profitability of
targeted agricultural SMEs.
Number of jobs created in man/day.
1.
Number of people with improved income.
Number of people sensitised on HIV/STI, gender-based
violence.
2.
In 2017 :
1. To be determined ;
2.
3. To be determined ;
4.
5. 0 pers.
6.
7. 0 pers.
8.
9. 0 pers.
In 2024 :
1. 15% increase
2.
0% increase in production volume for
targeted SMEs.
40 000 person/days, at least 20% of whom
women
45 young graduates recruited, at least 50%
of whom women
3 000 people, at least 50% of whom women.
Sources :
Quarterly ARM reports
and project monitoring
and evaluation reports
from the Chamber of
Commerce, Ministry of
Trade.
vi
OU
TP
UT
S
1. Linear of the paved distance on the rehabilitated
RN9 Analamisampy –Manja section
2.
3. Bridges and access roads built on RN9
4. Bridges and access roads built on RN12A
In 2017 :
1. 107 km
2. 0 km
3. 2 km
4. 0 km
In 2024 :
1. 275,9 km
2. 74 km
3. 4 (all bridges)
4. 2 bridges over 350 m
Sources:
ARM activity report.
the Government party, for
inclusion of the counterpart
funding in various budget years;
including this point among the
conditions precedent to first
disbursement.
3.1 Risks :
ARM's institutional weaknesses
3.2 Mitigation Measures:
Capacity building for ARM
managers
- Technical Assistance
Output 2: MTPI and ARM’s
capacity built and related
facilities built and
commissioned.
1.
Number of MTPI and ARM managers, counterpart
engineers from the Befandriana Engineering School and
the DDP trained
Number of boreholes /mini DWSS completed
Linear of rural roads developed
Number of markets rehabilitated
In 2017 :
1. Inadequate
2. Inadequate
3.
4. 0
In 2024 :
1. TBD
2. Number of technical audit reports
3. Number of road security reports
4.
5. About 30 km
6.
7. 4
Sources :
ARM Report and
Supervision Mission
Output 3: SMEs trained to
meet market needs.
Agricultural SMEs benefiting from the incubation and
business relations programme launched through the
project
Members of business or SME associations trained in
business management skills, export standards and good
agricultural practices
1.
In 2018 :
1.
2. In 2018 : 0
In 2024
1. 300 SMEs
2. 5 000 members
Sources :
Report of the Malagasy
Employer’s Association
(FIVPAMA)
Regional Chamber of
Commerce.
Output 4: Strengthened,
digitised and simplified quality
control systems and customs
procedures.
Level of implementation of the National Trade
Facilitation Committee Action Plan.
Institutional and regulatory framework for quality
management and standardisation of export products in
place and functional.
In 2018 :
1. 0% (2018)
2. No Framework.
In 2024 :
1. 45%.
2. Framework in place and operational.
Sources :
Reports: National Trade
Facilitation Committee
(CNFE), Customs
Department, Ministry of
Trade and Madagascar
Country Office.
KE
Y A
CT
IVIT
IES
COMPONENTS RESOURCES (UA Million)
Road and bridge works
Related facilities
Trade facilitation and institution building
Project management and monitoring
TOTAL RESOURCES: UA M (100%)
1. Road and civil engineering works : 96.18
2. Related facilities : 1.68
3 Trade facilitation and institutional building: 6.43
4. Project Management and Monitoring : 4.74
TOTAL RESOURCES : 109.08
vii
PROJECT IMPLEMENTATION SCHEDULE
Year
Month 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12
N° Task Name
1 Trade Facilitation Project Implementation Schedule X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
2 1. GENERAL ACTIVITIES
3 1.1. Grant approval by the Bank X
4
1.2 Publication of the General Procurement Notice
(Advance Contracting - AC) x
5 1.3 Grant effectiveness x
6 2. ROAD WORKS
7 2.1 Development and asphalting of Section RN9 x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x
8 2.2. Mission to supervise work on the RN9 x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x
9 2.3. Development and asphalting of Section RNT 12A x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x
10 2.4. Control and monitoring of works on the RNT 12A x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x
11 3. RELATED WORKS
12 RN9
13 3.1. Ancillary facilities X X X X X X X X X X X X X X X X X X X
14
3.2. Supply of farming equipment kits to women's
associations X X X X X X X X X X X X X X X X X X X
15 3.3 Control of related work on RN 9 Phase II X X X X X X X X X X X X X X X X X X X x
16 RN12A
17 3.4. Ancillary facilities X X X X X X X X X X X X X X X X X X X
18
3.5 Supply of farming equipment kits to women's and youth
associations X X X X X X X X X X X X X X X X X X X
19 3.6 Control and monitoring of works on the RN 12A X X X X X X X X X X X X X X X X X X X x
20 4. TRADE FACILITATION AND INSTITUTIONAL SUPPORT
21 CUSTOMS
22 4.1 PACN implementation for trade facilitation x x x x x x x x x x x x x x x x x x x x x x x x x x x x
23 STANDARDS
24 4.3 Support to the Standards Bureau (BN) for the deployment of mobile laboratories x x x x x x x x x x x x x x x x x x x x x x x x x x x x
25 4.4 SME & agricultural value chains x x x x x x x x x x x x x x x x x x x x x x x x x x x x
26
4.5 Design and implementation of an incubation
programme for export-oriented companies x x x x x x x x x x x x x x x x x x x x x x x x x x x x
27
4.6 Support to farmers' cooperatives and agricultural
SMEs in the selected value chains x x x x x x x x x x x x x x x x x x x x x x x x x x x x
28
4.7 Design and deployment of a business relations
programme to link SMEs to large companies and facilitate
trade with SADC, COMESA and IOC x x x x x x x x x x x x x x x x x x x x x x x x x x x x
29 INSTITUTIONAL SUPPORT
30 4.8 Procurement of VOR for Tulear Airport x x x x x x x
31 4.9 Improving the employability of young engineers x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x
32 4.10 Training of PIU and DDP managers x x x x x x x x x
33 5. PROJECT MANAGEMENT AND MONITORING
34 5.1 Accounting and financial audit x x x x x x x x x x x x x x x
35 5.2 Project-technical Audit x x x x x x
36 5.3. Road Safety Audit x x x x x x
37 5.4 Sensitization of people in the Project Impact Area (RN 9 and RN 12A) x x x x x x x x x x x x x x x x
38 5.5 Project impact monitoring and evaluation (RN 9 and RN 12A) x x x x x x
39 5.6 Functioning of the Project Implementation Unit x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x
202420232018 2019 2020 2021 2022
1
BANK GROUP MANAGEMENT'S REPORT AND RECOMMENDATION TO THE
BOARD OF DIRECTORS CONCERNING A LOAN AND GRANT PROPOSAL TO
MADAGASCAR TO FINANCE THE PROJECT TO DEVELOP CORRIDORS AND
FACILITATE TRADE
Management hereby submits this report and its recommendations concerning a proposal to
award: (i) an ADF grant of UA 31.25 million (UA 18,75 million on the regional envelope and
UA 12.50 million on the country allocation); (ii) an ADF loan of UA 22.68 million (UA 18,68
million on the regional envelope and UA 4.00 million on the country allocation); (iii) Transition
Support Facility loan of UA 8.45 million and (iv) a grant under AIP (Africa Investment
Platform) EU investment facility equivalent to EUR. 39.2 million to the republic of
Madagascar, for the funding of the Project to Develop Corridors and Facilitate Trade.
1.1 STRATEGIC THRUST AND RATIONALE:
1.2 Project Linkages with Country Strategy and Objectives
1.2.1 Madagascar's National Development Strategy covers the period 2014-2019. It stems
from the broad outlines of the General State Policy (PGE) announced by the President of the
Republic at the beginning of his term of office and which the Government must commit to
implement in accordance with the provisions of the Constitution. Therefore, a new PGE is
expected in view of the upcoming elections scheduled for November 2018. Under these
conditions, the project is aligned on the current strategy as set out in the National Development
Programme (PND) 2015-2019. The same continuity approach has been adopted at sector level,
namely the confirmation of the priorities set out in the PND and the 2015-2019 Strategies and
Action Programmes, with updates by the Ministry of Public Works for 2017-2021. The linkage
between infrastructure, growth and poverty reduction is reaffirmed in the sector strategy. The
opening up of the regions is also deemed of primary necessity, justifying the allocation of
substantial resources to them, with priority to the transformative national road network. In
November 2017, the Bank approved the new Country Strategy Paper 2017-2021, which
followed the Interim CSP 2014-2016 that guided its support to the country's efforts to meet
pressing political and economic consolidation challenges. The new CSP 2017-2021 aims to
innovate, paying greater attention to removing the structural constraints that prevent the country
from embarking on the path of strong and shared economic growth. Therefore, it focuses on
structural transformation and the creation of decent jobs that generate high value added. The
two pillars around which the current CSP is structured are: (i) the development of energy and
transport infrastructure to support inclusive growth; and (ii) support for agricultural
transformation and industrial development. In the same vein, the project is in full harmony with
four (4) of the Bank’s High 5s: (1) Integrate Africa, (2) Feed Africa (3) Improve the quality of
life for the people of Africa, and (4) Industrialise Africa.
1.2.2 The project is in line with the Strategy for Addressing Fragility and Building
Resilience in Africa, which focuses on building state capacity, establishing effective
institutions, promoting resilient societies through inclusive growth, and equitable access to
employment and basic services, as well as ensuring fair distribution of the benefits derived from
natural resources, among others. The strategy also aims to strengthen the Bank's leadership role
in policy dialogue and foster partnerships and advocacy on fragility issues.
1.2.3 This project is a continuation of the national socio-economic development policy and
is part of the new operations proposed in CSP 2017-2021 for the development of transport
infrastructure to support inclusive growth, agricultural transformation and promotion of
industry. The implementation of the project's main components, namely: (i) development and
asphalting of sections of RN 9, and construction of the bridge over the Ranozaza River and its
2
access points at PK 71 on RN 9; and (ii) development and asphalting of sections 1 and 5 of
RNT 12A and construction of the Ebakika and Masianaka bridges, will contribute to opening
up rural areas by providing access to the Tuléar and Fort Dauphin Port facilities. This will
establish increased trade opportunities with COMESA and Indian Ocean countries. It should be
noted that the priority given by the country's authorities to this project is amply justified by the
fact that it covers a landlocked agricultural production area, where there is also a very high
incidence of rural poverty (82.2%). The "Trade Facilitation" component of the project aims to
improve the development of value chains around specific agricultural products, whose
processing for export will create significant added value for the country's economy. It will also
strengthen quality control systems and customs procedures.
1.3 Rationale for Bank Involvement
1.3.1 Madagascar is still an economically uncompetitive country, with a sharp deterioration
in the business environment since the 2009 political crisis. Despite the abundant and relatively
cheap labour, the private sector faces several constraints, including high input costs due to the
lack of road and energy infrastructure.
1.3.2 The government has striven to improve the situation, in the context of a sluggish
recovery that is highly exposed to macroeconomic shocks and the impact of climate change.
The increase in the 2017 budget deficit is attributable to the high public spending on emergency
aid and reconstruction following the March 2017 cyclone, as well as the drought that preceded
the cyclone. As a result, there has been a shortage of financial resources to cover both
infrastructure investments and related recurrent costs, leading to further deterioration of the
country’s road network.
1.3.3 Furthermore, the project is located in the South part, which is characterised by an
82.1%1 poverty rate (one of the highest among the country) and chronic exposure to natural
disasters. However, the southern part has a rich and diversified natural heritage and great
agricultural, fishing, tourism and mining potential. The development of the two road sections,
RN 9 and RN 12A, the backbone of this part of the country in terms of road infrastructure, is of
crucial importance to facilitate trade with other parts of the country, COMESA and Indian
Ocean regions. It will also facilitate the development of eco-tourism in the country, which is a
priority for IOC states. The project will contribute to poverty reduction and inclusive growth in
the region concerned, and will enable the Bank to consolidate results achieved through the
agricultural and fishery projects that it is currently implementing and financing2 in the area.
1.4 Aid Coordination
1.4.1 Besides the Bank, several sister institutions such as the OPEC Fund for International
Development (OFID), the World Bank (WB), the European Union (EU), the French
Development Agency (AFD), the Japanese International Cooperation Agency (JICA), the
European Investment Bank (EIB), the Arab Bank for Economic Development in Africa
(BADEA), the Saudi Development Fund (SDF), the Kuwait Fund for Development, South
Korea and China are active in the transport sector in Madagascar. The interventions of these
donors target diverse sectors and geographic areas, and are implemented in a spirit of
1 Cf. Periodical Household Survey (PHS) 2010, page 222. 2 The Lower Mangoky Rice Scheme Rehabilitation Project, the Manombo Irrigation Scheme Rehabilitation Project (PRPIM) in the
implementation phase, and the Toliara Fishing Community Support Project (PACPT). For the latter project, the development of RN9 into
a paved and all-season road will help to connect 16 fishing villages located along this road axis.
3
complementarity and synergy. Accordingly, this project is being co-financed by AfDB, the EU
and the Arab Funds on a parallel basis.
Table 1.1 Aid Coordination: Madagascar's Development
Partners (2018) involved in the Transport Sector
Sector or Sub-
Sector
Size
GDP Exports Labour
Transport 14.6 % 0 % N/A
Stakeholders – Annual Public Expenditure (Average)
Government Donors AfDB : 27 % EU : 22 % WB : 0 %
UA 23,206,849.83 144,969,369.3 CHINA: 2 % EIB : 21 %
% Total 14 % 86 % ARAB F. : 28
Level of donor coordination
Existence of Thematic Working Groups (this sector/subsector) [O]
Existence of SWAps or Integrated Sector Approaches [N]
AfDB Participation in Donor Coordination [M]
2. PROJECT DESCRIPTION
2.1 Project Objectives and Components
2.1.1 The project's overall objective is to help improve Madagascar's connectivity with
countries of the sub-region, with a view to increasing trade. The specific objectives pursued
include: (i) opening up Madagascar’s Southern Region by improving its accessibility; (ii)
promoting trade by facilitating export processes to add value to various activities that are typical
to Southern Madagascar, particularly agriculture, mining and tourism; and (iii) improving the
living conditions of the PIA population.
2.1.2 The project is in line with the key regional operations of NEPAD, COMESA and
SADC, and will contribute to strengthening Madagascar's integration with Southern African
countries and IOC member countries. It will also improve traffic conditions, and reduce travel
time and costs to coastal hubs that connect with countries in the region.
2.1.3 The project is structured around the following four (4) components:
A. Road and Civil Engineering Works: UA 96.18 million
A.1 Upgrading and asphalting Section 2 of RN 9: Analamisampy
Antaninieva and Bevoy (Mangoky Bridge), PK 107 + 840 to PK 192+784;
Section 3: Exit of Mangoky and Manja Bridge, from PK 194+730 to PK 274+844;
Upgrading and asphalting the urban section at the beginning of RN 9 (PK 0+00 and PK 1+400);
and Construction of the bridge over the Ranozaza River and its access points at PK 71;
4
A.2 Control and supervision of RN 9 works;
A.3 Upgrading and asphalting of the RNT 12 A Section: Fort Dauphin-Ebakika and
Masianaka-Vangaindrano sections; Construction of the Ebakika and Masianaka
bridges
A.4 Control and supervision of RNT 12 A works
B. - Related Development: UA 1.68 million
Road Axis RN 9
B.1 Construction of the Antanimieva Market
B.2 Strengthening the Befandriana Centre for Trades
B.3 Rehabilitation of the Ankiliabo Health Centre
B.4 Construction and equipment of the Ankiliabo, Ankatsakatsa and Befandriana
gendarmeries
B.5 Construction of the Manja Social and Cultural Centre
B.6 Drilling of boreholes for drinking water supply
B.7 Supply of school furniture
B.8 Supply of agricultural equipment kits to women's groups
B.9 Mission to control related works on RN 9 Phase II
RNT 12A Road Axis
B.10 Rehabilitation and equipment of schools
B.11 Rehabilitation and equipment of health facilities
B.12 Construction of 3 local markets
B.13 Provision of agricultural equipment for women and youth groups
B.14 Drilling of boreholes for drinking water supply
B.15 Construction of 30 km of related tracks
B.16 Control and supervision of RNT 12 A related works
C. Trade Facilitation and Institution Building: UA 6.43 million
5
Customs
C.1 Support for the implementation of the National Trade Facilitation Committee Action
Plan (simplification of customs clearance procedures, studies on transport formalities and costs,
digitalisation of customs services at border crossings, etc.)
Standards
C.2 Establishment of a National Product Certification System
C.3 Support to the Standards Bureau for the deployment of mobile laboratories and
auditors to facilitate the verification of compliance with standards for products sold frequently
or exported
C.4 SMEs and agricultural value chains - implemented through the Malagasy Employer’s
Association (“Groupement du Patronat Malgache”) and the Regional Chamber of Commerce
C.5 Design and implementation of an incubation programme for exporting companies
C.6 Support to farmers' cooperatives and agricultural SMEs in selected value chains,
including: lychee, vanilla, rice, coffee, cassava, sisal and zebu cattle. This activity could include
the establishment of small production units for value added purposes
C.7 Design and implementation of a business relations programme to link SMEs to large
enterprises and facilitate exchanges with SADC, COMESA, and the IOC
Institution Building:
C.8 Procurement of the VOR for Tuléar Airport
C.9 Support for improving the employability of young engineers
C.10 Support for the training of PIU and DDP professionals
D. Project Management and Monitoring: UA 4.74 million
D.1 Accounting and financial audit
D.2 Project technical audit
D.3 Road safety audit
D.4 Monitoring and evaluation of project impacts
D.5 Operation of the Project Implementation Unit.
2.2. Technical Solutions Retained and Alternatives Explored
2.2.1 According to the traffic study conducted under RN 9 Phase II (the Analamisampy -
Bevoay Section + Mangoky Bridge), the pavement structure selected has an average base course
of 20 cm in lateritic gravelly sandy soil, a 20 cm base course in ADG 0/31.5 and 4 cm in semi-
dense bituminous concrete (SDBC). For the section between the exit of the Mangoky Bridge
(Bevoay) and Manja, the pavement structure selected has an average subgrade thickness of 20
to 25 cm in lateritic sandy silty loamy soil, with the other elements identical to the section
6
described above. A subgrade layer varying in thickness between 0 and 35 cm in places, made
of viable materials, will be used to raise the pavement above water in steep areas or to replace
low load-bearing platform soils. For both sections, the shoulders will be covered with a single-
layer surface coating.
2.2.2 With regard to the RNT 12 A, the project provides for the systematic raising of the red
line in order to address water-related concerns. As a result, the selected pavement structure
includes a base course with an average thickness of 15 cm of selected materials, a base course
of 20 cm of ADG 0/31.5 and a wearing course of 5 cm of semi-dense bituminous concrete
(SDBC). A 30 cm subgrade layer of viable materials will be used to raise the pavement above
water in steep areas or to replace low-load-bearing platform soils. For both sections, the
shoulders will be covered with a single-layer surface coating.
2.2.3 The alternative technical solutions explored and reasons for their rejection are given
in the Table below:
Table 2.2
Alternative Solutions Explored and Reasons for Rejection
Alternatives Brief Description Reasons for Rejection
Paved road with surface
coating
15 to 20 cm lateritic gravel base,
0/31.5 untreated natural gravel
base and 4 cm asphalt concrete
wearing course
The durability of the pavement
structure is considered
inadequate in view of the high
volume of overloaded heavy
vehicle traffic on this section.
2.3 Project Type
2.3.1 The project is an investment operation. This financing instrument has been selected as
the most appropriate for the Bank's intervention in this operation. Donor interventions in
transport infrastructure in Madagascar are generally through such operations.
2.3.2 Investments to be financed are specifically defined. Accordingly, combined project
loans and project grants were deemed the appropriate instruments for the Bank's participation
in financing this public investment operation, given the fragility situation of the country.
2.4. Project Cost and Financing Arrangements
2.4.1 The overall project cost, net of taxes and customs duties, is UA 109.08 million,
equivalent to USD 156.81 million at the May 2018 exchange rate (UA 1 = USD 1.44), including
UA 71.15 million in foreign currency and UA 37.93 million in local currency, representing
65.23 % and 34.77% respectively of the total cost. Provision for physical contingencies
represents 8% of the base cost, while that for financial contingencies represents 5% of the base
cost and the provision for physical contingencies. Summaries of estimated project costs by
component and by expenditure category are provided below in Tables 2.3 and 2.4 respectively.
The project will be jointly financed by AfDB (TSF and ADF loans and grants), the EU through
a grant from AIP, the Government of Madagascar, OFID, on a parallel funding by BADEA and
Arab fund.
2.4.2 The estimated cost of the components (excluding taxes), as summarised in Table 2.3.,
is UA 109.08 million, of which UA 71.15 million in foreign currency (65,23%) and UA 37.93
million in local currency (34,77%).
7
2.4.3 Regarding the financing arrangements by the African Investment Facility (AfIF), the
Board approved on July 12th 2017 (Resolution Nº B/BD/2017/124 – F/BD/2017/87) the
cooperation framework between the European Commission (EC) and the Bank, known as “PA
Grant or Delegation Agreements (PAGODA)”. The EC has approved on 5th October 2018, a
grant equivalent to 39.92 million Euros under this project. It is expected that the Bank and the
EC will sign a delegation agreement in the framework of this project. The said agreement will
define the activities conferred to the Bank during implementation of the project. The agreement
will also determine implementation arrangements, but also will define the rules governing the
payment of the EU contribution and the relationship between the Bank and the EC. The
mobilized resources under the AfIF mechanism, will be disbursed and managed by the Bank.
Table 2.3
Project Cost by Component
COMPONENTS USD Million UA Million MGA Million
For.
Exch.
Loc.
Cur. Total
For.
Exch.
Loc.
Cur Total For. Exch. Loc. Cur. Total
A. ROAD WORKS 81.98 38.18 120.27 58.14 27.08 85.22 273 333.05 127 297.03 400 630.09
B. RELATED
DEVELOPMENTS 0.42 1.71 2.13 0.30 1.21 1.51 1 409.52 5 704.68 7 114.21
C. TRADE
FACILITATION
AND
INSTITUTION
BUILDING 5.64 2.42 8.06 4.00 1.71 5.72 18 808.68 8 060.86 26 869.55
D. PROJECT
MANAGEMENT 0.85 3.58 4.43 0.60 2.54 3.14 2 822.07 11 931.30 14 753.37
E.MISCEL. 0.00 1.50 1.50 0.00 1.07 1.07 0.00 5 015.58 5 015.58
PROJECT BASE
COST 88.89 47.39 136.31 63.05 33.61 96.66 296 373.33 158 009.46 454 382.79
Physical
contingencies (PC)
8% 6.98 3.72 10.70 4.95 2.64 7.59 23 265.31 12 403.74 35 669.05
Financial
contingencies and
Price escalation (5%) 4.44 2.37 6.81 3.15 1.68 4.83 14 818.67 7 900.47 22 719.14
TOTAL PROJECT
COST 100.32 53.48 153.80 71.15 37.93 109.08 334 457.31 178 313.68 512 770.98
8
Table 2.4
Sources of Financing
SOURCES UA Million USD Million
For.
Exch.
Loc.
Cur Total %
For.
Exch. Loc. Cur Total %
ADF Loan 3.20 0.80 4.00 3.67% 4.51 1.13 5.63 3.67%
ADF Grant 10.00 2.50 12.50 11.46% 14.11 3.53 17.63 11.46%
TSF Loan 6.76 1.69 8.45 7.75% 9.53 2.38 11.91 7.75%
ADF Regional
Resources Loan 14.94 3.74 18.68 17.12% 21.07 5.27 26.34 17.13%
ADF regional
resources Grant 15.00 3.75 18.75 17.19% 21.15 5.29 26.44 17.19%
OFID 7.22 1.81 9.03 8.28% 10.18 2.55 12.73 8.28%
EU 25.74 6.43 32.17 29.49% 36.30 9.07 45.36 29.49%
GOV. 0.00 5.50 5.50 5.04% 0.00 7.76 7.76 5.05%
TOTAL COST 71.15 37.93 109.08 100.00% 100.32 53.48 153.80 100.00%
Table 2.5
Project Cost by Expenditure Category
CATEGORIES USD million UA million MGA Million
For.
Exch.
Loc.
Cur Total
For.
Exch.
Loc.
Cur Total For. Exch. Loc. Cur Total
A. GOODS 1.13 0.69 1.82 0.80 0.49 1.29 3 763.30 2 304.60 6 067.91
B. WORKS 76.04 38.08 114.12 53.93 27.01 80.94 253 531.76 126 957.58 380 489.33
C. SERVICES 11.48 4.95 16.43 8.14 3.51 11.65 38 273.39 16 487.76 54 761.15
D.PROJECT
OPERATING
COSTS 0.24 2.17 2.41 0.17 1.54 1.71 804.88 7 243.94 8 048.82
E. MISCL. 0.00 1.50 1.50 0.00 1.07 0.00 804.88 5 015.58 5 015.58
PROJECT BASE
COST 88.89 47.39 136.29 63.05 33.61 96.66 296 373.33 158 009.46 454 382.79
Physical
contingencies (8%) 6.98 3.72 10.67 4.95 2.64 7.59 23 265.31 12 403.74 35 669.05
Financial
contingencies and
Price escalation
(5%) 4.44 2.37 6.81 3.15 1.68 4.83 14 818.67 7 900.47 22 719.14
TOTAL
PROJECT COST 100.32 53.48 153.80 71.15 37.93 109.08 335 357.76 178 313.68 512 770.98
9
Table 2.6
Expenditure Schedule by Category
N° CATEGORY IN UA MILLION TOTAL
2019 2020 2021 2022 2023 2024
A GOODS 0.00 0.12 0.55 0.63 0.00 0.00 1.29
B ROAD WORKS 12.42 24.96 35.66 7.42 0.48 0.00 80.94
C SERVICES 0.90 3.17 3.08 2.21 1.22 1.07 11.65
OPERATING COSTS 0.26 0.34 0.34 0.34 0.26 0.17 1.71
D MISCELLANEOUS 0.53 0.43 0.11 0.34 0.00 0.00 1.07
PROJECT BASE COST 14.11 29.02 39.73 10.59 1.96 1.24 96.66
Physical Contingencies 1.11 2.28 3.12 0.83 0.15 0.10 7.59
Financial Contingencies 0.71 1.45 1.99 0.53 0.10 0.06 4.83
TOTAL COST
15.92 32.75 44.83 11.96 2.20 1.40 109.08
2.5 Project Area and Beneficiaries
2.5.1 The project’s impact area is located in the southern part of the country, in particular
the South-West and South-East of Madagascar, straddling the Atsimo-Andrefana (9 districts:
Toliara I, Beroroha, Morombe, Ankazoabo, Betioky, Ampanihy, Sakaraha, Toliara II and
Benenitra) and Menabe regions (5 districts : Morondava, Manja, Mahabo, Belo - Tsiribihina
and Miandravazo) for the South-West; Atsimo Antsinanana (5 districts: Farafangana,
Vangaindrano, Midongy-Atsimo, Vondrozo and Befotaka) and Anosy regions (3 districts either
Taolagnaro or Fort Dauphin, Betroka and Amboasary Atsimo) for the South-East. In all, the
project will cover a large area of 22 districts in four regions. Atsimo Andrefana is Madagascar’s
largest region with an area of 66,236 km2 and a population of 1,400,756 inhabitants. The
Menabe region stretches over 48,860 km2, with a population of 828,649 inhabitants (52% of
whom women, and 75% of the population are aged below 45).
2.5.2 In the South-East part, the project covers two important regions, namely Anosy with
an area of 25 731 km2 and a population of 510 000, and Atsimo Antsinanana with an area of
18 863 km2 and a population of 621 200. These regions have the highest poverty rates, with
minimum and maximum levels ranging from 85% to 93% of people living below the poverty
line. The population growth rate in the Anosy region is estimated at 2.9% compared to 2.7% in
Atsimo Antsinanana. Projections (Regional Territorial Planning Framework, SRAT 2012)
indicate that by 2030, Anosy region will have a population slightly above one million.
2.5.3 The area’s population is made up mainly of farmers, fishermen and agro-pastoralists.
The region offers significant economic opportunities for the development of agricultural and
agro-pastoral activities as a result of its considerable water resource potential. The tourism
sector3 is also a source to be tapped. However, the potential is underutilised as there are no all-
season access roads. The project will make a substantial contribution to opening up the southern
part, developing its economic potential and, subsequently, improving the living conditions of
the people by easing both input supply and product flow to domestic, regional and export
3 In particular with the Mikea forest reserve, as well as in the eastern part of RN9, the Andraitsazo and Ambatomainty baobab forests, the
Andranobe Lake site, the Amboboka and Andranomafana hot springs, the Ifaty and Morombe seaside resorts.
10
markets. The project will thereby contribute to strengthening regional integration through
increased trade, by opening up export opportunities for products in the context of regional
integration with COMESA, SADC and Indian Ocean countries.
2.6 Participatory Approach to Project Identification, Design and Implementation
2.6.1 Various project stakeholders (NGOs, local communities, associations, women's
groups, cooperatives, administrative and political authorities at the national and local level)
were consulted during Bank missions. Participatory consultations were held with the people,
the main road users and stakeholders in the Malagasy transport system (carriers, Malagasy port
authorities, etc.). Plenary participatory sessions were also organised in both the project area and
the capital. This approach will be pursued during project implementation in order to strengthen
the process, particularly with regard to: (i) compensation; (ii) site installation and
commencement of works; and (iii) establishment of the baseline situation and monitoring and
evaluation of the project's socio-economic impact.
2.6.2 Participatory sessions helped to take account of the population’s grievances and needs,
with a view to determining related facilities to be financed under the project. Activities to
enhance the project's socio-economic impact include: (i) developing the Antanimieva rural
market to market products from agricultural production areas; (ii) providing social support for
women by purchasing agricultural equipment; (iii) improving children's learning conditions by
building appropriately equipped classrooms and structures protecting schools from road traffic;
(iv) drilling boreholes for drinking water supply to villages; (v) rehabilitating health centres;
and (vi) rehabilitating and equipping gendarmerie stations for the protection of the people.
2.7 Bank Group Experience and Lessons Reflected in Project Design
2.7.1 The Bank's portfolio review (PR) was conducted in May 2018. Table 2.7 summarises
the measures taken to ensure that the project design takes account of the main lessons drawn
from implementing operations in the road subsector covered by the review, as well as those
from completed projects.
Table 2.7
Lessons Reflected in Project Design
Lesson Activities integrated into the design of the Project to Develop
Corridors and Facilitate Trade
Large counterpart funding arrears are a
recurrent problem that severely penalizes companies.
Opening a special account and replenishing it periodically at
the beginning of the year by paying the estimated amount of the counterpart funding for the year in question is a loan
condition.
Frequent changes in Project Management
Teams.
Since its establishment, ARM has been the sole executing
agency for Bank-financed road projects (on a permanent
basis).
Delay in undertaking project audit and
monitoring activities.
The Bank will ensure that the dossiers relating to these
components are prepared at the same time as those for road
works. Moreover, the fact that INSTAT will be directly
entrusted with the monitoring and evaluation task will
substantially reduce its mobilization.
The ownership of a collective asset such as
infrastructure by local communities is built
through a process that should be an integral
part of the project.
Sensitisation on infrastructure ownership and management is
a sub-component of the project.
11
2.8. Key Performance Indicators
2.8.1 The key performance indicators and expected outcomes on project completion are
presented in the Results-based Logical Framework, namely: (i) increased volume of trade
between Madagascar, COMESA and Indian Ocean countries; (ii) substantial increase in exports
and imports; (iii) lower vehicle operating costs (VOCs); (iv) reduced travel duration; (v)
increased annual average daily traffic (AADT), which strongly correlates with changes in
economic activities; (vi) modernised and simplified customs procedures; and (vii) rendering the
road useable at all season. The baseline situation for these indicators will be
validated/confirmed at the beginning of the project. A mid-term and end-of-project evaluation
will be conducted by an agency to be selected in consultation with the Government.
2.8.2 Performance indicators for project implementation should also be considered in
addition to the key impact and outcome indicators. These are mainly: (i) the time required to
implement and meet conditions precedent to first disbursement; (ii) procurement timeframes,
(iii) the average indicator of project status (PI); and (iv) disbursement trends vis-à-vis the
expenditure schedule. These indicators will be monitored during supervision missions and
routine project management.
3. PROJECT FEASIBILITY
3.1 Economic Performance
3.1.1 For RN 9, the road segment under consideration is that between Analamisampy and
Manja, which links Toliara and RN 35 and can be broadly divided into two main sections
considered to be homogeneous: the Analamisampy - Bevoay Section (PK107-PK192+784) and
Bevoay bridge exit (PK194+730) - Manja (PK274+744). The current traffic on the two
segments was assessed based on the outcome of the campaigns carried out in 2014 by the
Madagascar Road Authority (ARM) with the support of the Louis Berger Company. The data
collected at the time gives an AADT of 30 vehicles per day (including 65% LV and 35% HGV)
on Analamisampy/Bevoay and 23 vehicles per day (including 65.3% LV and 35% HGV) on
Bevoay/Manja. In the year of service, the total traffic will comprise normal traffic, induced
traffic resulting from the increase in the level of economic activities in the project impact area,
and diverted traffic consisting of vehicles operating on the Toliara/Morondava link and
currently using RN 7 and RN 35, given the poor condition of RN 9. The recommended annual
growth rate assumptions are 4% for light vehicles and 6% for heavy vehicles.
3.1.2 In the case of RNT 12A, which is the section between Taolagnaro (Fort Dauphin) and
Vangaindrano, current traffic is assessed based on information from the registers of the various
road ferries on the route. Traffic counts and Origin-Destination Surveys have been carried out
although traffic on the current road is very low, mainly due to its condition, features and
numerous ferry crossings. Traffic counts were conducted from 26 February to 1 March 2015
and Origin-Destination Surveys on 26, 27 and 28 February 2015 due to weather conditions.
3.1.3 The economic benefits obtained by the community in a project situation concern
reduction in vehicle operating costs (VOCs), reduction in maintenance costs and the residual
value of road infrastructure, which in this case is estimated at 30% of the cost of works. The
economic benefits of implementing the project over the period covered by the analysis (2016-
2035) present an economic rate of return (ERR) of 22.10% on the RN 9 section and 14.70% on
the RNT 12A section, representing a consolidated ERR of 18.4% for the entire project. The
corresponding net present values (NPVs) are MGA 2 916 million for the first section and MGA
1 693 million for the second section, representing a consolidated NPV of MGA 4 609 million
for the entire segment. The sensitivity tests conducted (10% variation in the costs of works and
12
benefits) yielded an ERR of 20.76% in the case of an increase on RN 9 and 13.0% in the case
of an increase on RNT 12A. Therefore, the project is economically viable for the community.
Table 3.1 Key Economic and Financial Figures (detailed calculations available in the Technical Annex)
Economic Parameters
Analysed Toliara-Manja (RN 9)
Toalagnaro-Vangaindrano
(RNT 12A) Entire Project
ERR 22.10% 14.70% 18.4%
NPV in MGA million 2916 million Ar. 1693 million Ar. 4609 million Ar.
ERR sensitivity test
(+10%) 20.76% 13.0% 16.88%
3.2 Environmental and Social Impact
Environment
3.2.1 The project is classified under Category 1 in accordance with the Bank (AfDB)
Integrated Safeguards System (ISS), based on the scale of the works and the number of people
affected. It is also classified as a Category 1 operation as per national regulations. The project
was the subject of two ESIAs: the RN 9 Road ESIA (Phase II) prepared in January 2017, and
an Environmental Permit issued on 12 December 2017 by the National Office for the
Environment (ONE); and the RNT 12A Road ESIA prepared in October 2017, and an
Environmental Permit issued on 20 November 2017. A Resettlement Action Plan (RAP) was
also prepared for each of the two components.
3.2.2 The main impacts during the works will primarily relate to the worksite effects and the
risks to the physical environment, such as compaction (on the structure and texture) of soils
outside the works area, deterioration of surface and ground water quality, and risks of
uncontrolled discharge of solid and liquid waste from the construction site. While the right-of-
way remains almost exclusively on the current route, the impacts on the environment involve
the clearing and felling of trees. Threats in some areas will primarily concern the destruction of
food crops along the road. Work in the quarries will cause noise pollution, due to the sound of
earth-moving machinery and the firing of explosives. During the operational phase, the
improved level of road service will result in increased traffic, which will in turn raise the risk
of accidents when crossing urban areas, not just for the local population. The impacts identified
will be contained through the implementation of appropriate mitigation measures as described
in the ESMPs. The RN 9 and RNT 12A ESMPs were used by ONE to establish the
Environmental Compliance Specifications (ECS). ESIA reports (including ESMPs) already
validated by NEB will be included in the bidding documents for the recruitment of the
contractor and the Control Mission.
3.2.3 The Supervision Consultant will ensure compliance with regulatory and legal
provisions on environmental protection. It will have a full-time environmental officer on site to
verify that: the required contractual documents are produced on time; the implementation of
mitigation measures is effective; the results of the environmental monitoring programme are
acceptable; and the mitigation measures are effective. The Control Mission will report to the
management body (i.e. the project manager, MTPI and ARM) on its work. During the road
operation phase, MTP and ARM will work in partnership with the Regional Directorate in
charge of the environment and local authorities to ensure that the planned mitigation and
enhancement measures are implemented.
13
Climate Change
3.2.4 The process of climate risks identification (screening) undertaken through the Bank’s
Climate Safeguards (SSC), classifies the project as category II (the project can be vulnerable to
risks linked with climate change, which necessitates an analysis of said risks and the
development of mitigation measures. Workable options for risk management and adaptation
should be incorporated in the conception plans and implementation of the project). The project
area is classified as a "high cyclone risk area" and is vulnerable to the effects of climate change.
Although cyclones are not frequent, they have become more violent in intensity, wind speed
and amount of rain. Rainfall, particularly in the southern part, is becoming even less frequent
than before, albeit with significantly higher intensities, which can cause floods. These
phenomena will aggravate landslides, the "lavaka" phenomena (i.e. erosion and formation of
breaches characteristic of lateritic hillsides), the silting of rivers, change of the beds of big
rivers, the erosion of riverbanks and the rise in water levels.
3.2.5 In terms of adaptation, the construction of suitable structures (submersible riffles) is
being considered in areas exposed to violent flooding. The bidding documents will also include
the necessary provisions to address the adverse effects of climate change. The project design
takes into consideration: (i) the waterproofing of road sections to be developed; (ii) the
installation of ditches to protect against erosion; (iii) the design of hydraulic structures to take
into account the fifty-year flood recurrence interval, in light of climate zoning in Southern
Madagascar. Furthermore, with regard to the bridge over the Mangoky River, the design took
into account the 100-year flood recurrence interval. Climate change considerations must be
further developed when updating the ESIA/ESMP/RCP prior to project implementation,
particularly for RNT 12A. The SSC report on annex presents more proposed adaptation
measures to the identified climate risks. Moreover, it should be noted that the country has
committed to reduce gas emissions by 14% by 2030, through the activation of actions geared
at reducing the latter, but also adaptation measures, as proposed in the report on annex.
Gender
3.2.6 Project implementation will reduce gender disparities on the social and economic
front. These disparities affect the health sector, where access to basic health services remains
problematic for women. In terms of access to education, there is still discrimination that favours
access to education for boys to the detriment of girls. In the agricultural sector, women continue
to be marginalised because of the lack of mastery of modern techniques. Moreover, in terms of
daily work, women's workload is higher because of the social roles they have to perform. This
project will help to develop ancillary activities, especially agriculture and facilitation of trade
in food products. These activities will contribute to the improvement of women's socio-
economic situation. The cultivation of food products remains a favourite field for women. They
derive income from the sale of food products. However, such income is quite limited because
of low production resulting from the use of rudimentary techniques. Women cultivate food for
domestic consumption and the surplus is often for commercialisation. Income from sales is used
to cater for the children's education and health. However, the lack of reliable transport
infrastructure and inadequate mastery of modern farming techniques reduce women's ability
and determination to produce on a large scale. To enable them and other vulnerable groups to
benefit from the project, specific actions will be taken based on the expectations of various
social categories.
3.2.7 In this regard, measures have been taken in the context of related activities to reduce
these inequalities through social and economic developments aimed specifically at: (i)
promoting the proper functioning and better quality of service of health and education facilities;
14
(ii) alleviating women's domestic tasks; (iii) improving the income of women and youths; (iv)
providing access to drinking water in terms of quantity and quality; (v) opening up production
areas; (vi) assisting farmers to sell their local products; and (vii) promoting community
reforestation and renewable energies.
3.2.8 It should be noted that emphasis will be placed on the project's impact on gender and
vulnerability when updating the RCP.
Social and Youth Employment
3.2.9 The project will provide a number of economic opportunities (employment,
development of local production) during construction periods, which may not be of equitable
benefit to the poor. The impacts can be summed up as the improvement of the socio-economic
conditions of the local people concerned by the monetary benefits provided by the site workers;
the creation of temporary direct jobs during the construction works; and the development of
new access roads that will open up the area.
3.2.10 During the road construction phase, the project will create direct, skilled and unskilled
jobs, i.e. 40,000 person/days, of which at least 20% will be women.
3.2.11 To promote employability, the project will recruit and train 45 young graduate interns,
at least 50% of whom will be girls. The recruitment will be done in 3 waves during the
implementation phase, for a period of 6 months renewable only once. The trainees will be
placed respectively within the management unit, the control mission and the contracting firm,
to assist various experts. They will be remunerated during their internship period according to
applicable Malagasy terms and conditions. This training will be funded from the project budget.
Road Safety
3.2.12 Three entities are responsible for road safety: (i) the Vehicle Registration Centre, under
the supervision of the Ministry of Interior, which registers vehicles; (ii) the General Directorate
of Road Safety, under the supervision of the Ministry of Defence, which carries out
roadworthiness tests on vehicles; and (iii) the Road Safety Department of the Ministry of
Transport, in charge of developing and monitoring sector policy and regulations. The data is
patchy and the effective monitoring of texts is not centralised, resulting in some confusion for
stakeholders.
3.2.13 In terms of the number of accidents recorded each year, Madagascar's roads are highly
prone to accidents. However, the tendency is decreasing: the number of accidents dropped from
1 482 in 2006 to 1 091 in 2011, indicating a slight reduction. The main factors behind these
accidents are: (i) human error (drink-driving, excessive speed, lack of civility); (ii) the generally
deplorable mechanical state of vehicles; and (iii) road infrastructure defects (poor design, lack
of proper facilities, insufficient markings and signs, lack of maintenance).
3.2.14 To address this situation, the project design provides for measures to improve road
safety through: (i) the training of gendarmes to gain a better understanding of accidents and in
data collection; (ii) compliance, in the design of structures, with the regulations and technical
standards in force relating to road safety with regard to signs, slopes, embankments and detours;
(iii) the development of temporary parked vehicle clearance areas; (iv) road safety awareness
campaigns that will target users and local communities; and (v) road safety audits during the
implementation phase and upon works completion.
15
Involuntary Resettlement
3.2.15 The construction of the 2 main roads, RN 9 and RNT12A, will entail the loss of
agricultural land and crops (all crops combined), the loss of residential houses, ancillary
structures (veranda, outdoor kitchen, outbuilding, hangars, kiosks, fences, etc.), the loss of
unused bare land, tenant farming land, businesses, etc. In this regard and in accordance with the
social protection policy relating to the protection of persons affected by any infrastructure
investment project, the Malagasy Government has submitted a Resettlement and Compensation
Plan (RCP) for each of the main roads.
3.2.16 1421 households or 6395 people would be affected on RNT 12A and 159 households
or 731 people on RN 9. The total cost of the RCP is MGA 2,189,826,455 or EUR 625,665 for
RN 9 and MGA 8,212,230,023 or EUR 2,494,831 for RNT 12A. This represents a total RCP
cost of MGA 10,402,056,478 or EUR 3,120,496 to be financed by the Malagasy Government
as part of the counterpart funding. The Government shall show evidence of mobilising these
funds before project start up ("conditions precedent to disbursement").
3.2.17 To meet the Bank's requirements, provision has been made to review the two RCPs
prior to effective project start-up, with a view to updating, consolidating and finalising the data.
This should be one of the conditions precedent to disbursement and/or start of works.
4. IMPLEMENTATION
4.1 Implementation Arrangements
Executing Agency and Institutional Arrangements
4.1.1 The ARM will be the executing agency. Given the complexity of the Project, a Project
Implementation Unit (PIU) will be set up within ARM. The PIU will comprise a coordinator, a
procurement specialist and an administrative and financial officer, two public works engineers
(including a specialist in civil engineering structures), an environmental expert, a trade
facilitation specialist and an accountant. Given the project’s multi-sector nature and complexity,
the Unit will be provided a technical assistance to undertake ad-hoc interventions throughout
the implementation phase. The PIU members will be selected on a competitive basis, to
guarantee the best project management capacity. The appointment of the coordinator and the
establishment of the PIU is one of the conditions precedent to first disbursement (Condition C
(i). The CV for the PIU’s selected members shall be approved by the Bank.
4.1.2 In addition to the Unit responsible for the day-to-day management of the project, a
Steering Committee (SC) and a Technical Committee (TC) made up of key government
agencies in charge of transport infrastructure, trade and the private sector issues, will be put in
place. The SC will comprise the following: (i) Chairperson of the Steering Committee: S.G.
(Secretary General) Ministry of Finance and Budget; (ii) 1st Chairperson: S.G. Ministry of
Public Works and Infrastructure; (iii) 2nd Chairperson: S.G. Ministry of Trade and Consumer
Affairs; (iv) Members: Chairpersons of APMF, the Private Sector, Regional Chambers of
Commerce (Atsimo Andrefana, Menabe, Anosy and Atsimo Antsinanana); the Public Debt
Department (DDP) (v) ARM will provide serve as the secretariat. The Steering Committee will
meet twice a year to approve the work programme and annual budget as well as annual activity
reports.
4.1.3 The Technical Committee (TC) will be the monitoring agency for project activities. It
will comprise ten (10) focal points designated by each of the beneficiary structures. These ten
focal points will be made up of the following: Ministry of Finance and Budget (Borrower’s
16
representative), Ministry of Public Works and Infrastructure, Ministry of Trade and
Consumption, a representative of APMF, a representative of the Private Sector, a representative
of the Chamber of Commerce in the Atsimo Andrefana, Menabe, Anosy and Atsimo
Antsinanana regions as well as a representative of the General Customs Directorate.
4.2 Procurement
4.2.1 Procurement. Goods (including services other than those of consultants), works and
consultancy services, financed by the Bank under the project, will be procured in accordance
with the Procurement Framework for Bank Group-Funded Operations, October 2015 edition,
and the provisions set out in the Financing Agreement.
The Borrower’s Procurement System (BPS): the Borrower’s Procurement
System (BPS) governed by law No. 2016-055 on Public Contracts Code (CMP)
of 25 January 2017, will be applied, using the national standard bidding
documents (SBD) or other bidding documents, as agreed during project
negotiations. This will apply for the case of the less complex contracts for goods
and works, provided they are available in the national market.
Bank’s Procurement Methods and Procedures (PMP): the Bank’s
Procurement Framework for Bank Group funded Operations, and its
Procurement Methods and Procedures (PMP) shall apply to the major complex
contracts for goods and works as well as for consultancy services, which are
deemed to be the most suitable and in the event where use of the BPS is not
deemed appropriate for a given activity or set of activities considering the high
risks associated and to ensure a smooth implementation of the project’s
activities. The plan is to request a waiver from the Board, to open the
procurement of goods, works and services, financed by EU AfIF resources, to
Non-Bank’s members.
4.2.2 Procurement Risks and Capacity Assessment: Risk assessment at country, sector
and project level as well as the Executing Agency's procurement capacity was conducted and
the results guided the choice of the country's system, which will be used for part of the
procurement to be made under the project. Appropriate risk mitigation measures have been
included in the Action Plan provided in para. B.5.9. of Annex B 5.
4.3 Disbursement Arrangements
4.3.1 Part of the ADF grant resources will be disbursed into the special project account as
working capital to cover the project’s operating expenses. In this regard, an account bearing the
project’s name will be opened with the Central Bank of Madagascar, in accordance with the
legal provisions in force in the country. This will be a condition precedent to first disbursement
of loan resources. Expenditures on consultancy services, construction companies and suppliers
shall be made by direct payment or reimbursement, in accordance with the provisions of the
Bank's Disbursement Manual.
4.4 Financial Management
4.4.1 The Madagascar Road Authority that implemented the PAIR project has satisfactory
management tools, namely a management procedures manual that has been validated by the
Bank and the TOM2PRO management software. However, internal control and communication
weaknesses were identified during the implementation of the PAIR project. As a result,
financial and administrative management arrangements will be proposed as part of this new
17
operation to ascertain, with reasonable assurance: (i) the use of project resources for the
intended purposes and in an efficient and cost-effective manner; (ii) the accountability and
availability of project financial information in the required formats, quality and timelines; and
(iii) the security of assets acquired as part of the project.
4.5 Audit
4.5.1 As regards financial and technical audit, latest six (6) months following project
effectiveness, the Ministry of Public Works and Infrastructure, in collaboration with the Court
of Auditors, will recruit an external audit firm on a competitive basis and in accordance with
the terms of reference approved by the Bank, to conduct the annual financial and technical audit
of the project.
4.5.2 The Court of Auditors will be responsible for: (i) the recruitment of the audit firm with
the support of the Ministry’s Procurement Committee; (ii) the signing of the auditor’s contract;
(iii) audit monitoring; and (iv) the submission of the audit report to the Bank within six months
following the end of each fiscal year.
4.6 Governance
4.6.1 State capacity building, the establishment of effective institutions and the promotion
of inclusion remain key to containing the effects of fragility and building greater resilience. The
elements of fragility to which Madagascar is not immune include, among others: (i) the lack of
basic road infrastructure to facilitate trade; (ii) limited economic opportunities; (iii)
vulnerability to natural disasters and climate change (droughts, cyclones and floods); (iv) weak
institutions and governance issues; (v) high incidence of poverty; and (vi) gender inequalities.
The project will help to address these causes of fragility through the construction of road
infrastructure to promote trade and community facilities to ensure access to basic services such
as education, health, water and sanitation. It will also facilitate market access and contribute to
capacity building and food security. Moreover, the Government of Madagascar has undertaken
a number of reforms to strengthen governance, transparency and accountability with a view to
promoting trade and regional integration.
4.6.2 There are risks to project governance, which could arise during project
implementation, through issues such as decisions on procurement and the use of project
resources. These risks will be mitigated through the governance structures put in place, financial
management, procurement procedures and monitoring systems built around project
implementation. The PIU will be required to produce periodic progress reports on project
implementation, audited financial statements and external auditors’ report on the financial
statements. The Bank will monitor governance issues through works and annual budgets,
project implementation and progress reports, supervision missions, procurement plans and audit
reports.
4.7 Sustainability
4.7.1 The technical analysis of the dossier shows that the sustainability of the road sections
to be upgraded under this project will depend on the following key factors: (i) quality of the
preliminary technical studies; (ii) quality of the work carried out; (iii) operation of the
infrastructure; and (iv) level and quality of maintenance. In this regard, it should be noted that
the project was subject to comprehensive studies in July 2016 and the technical solutions
adopted were deemed satisfactory.
18
4.7.2 For works execution, the contractors will be selected through international bid
invitation based on a bidding document validated by the Bank. The special technical clauses
will set out all technical specifications of the materials to be used, as well as the criteria for
works acceptance. The selected contractors will then be required to prepare works
implementation dossiers, which will be submitted to the supervision mission and the delegated
contracting authority (ARM) for approval. To ensure that quality standards are met during the
construction phase, works control and supervision will be carried out by two consulting
engineering firms (for RN 9 and RNT 12A) chosen from among the most qualified and familiar
with similar projects, in accordance with relevant Bank rules and procedures. Furthermore, a
top-rated road engineer is expected to participate in the project technical and road safety audit.
Finally, the Bank's supervision of the project, as well as the technical and road safety audit
missions of consultants recruited as part of the project, will contribute to better technical
monitoring of works execution and mitigate any risk of defects.
4.7.3 With regard to infrastructure operation, in particular, the pavement and its
surroundings, Madagascar has a set of laws and regulations that contribute to the protection of
its road assets. The Bank’s supervision missions will ensure the effective application of the laws
in force and the gradual reduction of the problem of overloading on the classified road network.
The Government must take all necessary measures to apply the financial penalties under the
laws in force and to discharge offending trucks.
4.7.4 With regard to classified road network maintenance, it was noted that the total
financial resources mobilised by the Road Maintenance Fund (RMF) for the 2018 financial year
was approximately MGA 110 billion, mainly from fuel charges. This amount is insufficient to
cover all the maintenance needs of national roads estimated at MGA 400 billion. It is necessary
to diversify financing resources to increase the coverage rate of national road maintenance
needs and ensure the sustainability of infrastructure to be implemented under this project. The
Bank's Country Office and other development partners will continue the dialogue with the
country to ensure that the necessary resources are provided for the RMF to prevent road network
deterioration.
4.8 Risk Management
4.8.1 There are relatively high risks of fragility and resilience regarding the above-
mentioned factors. The country is also facing periods of severe food insecurity, resulting in
significant food imports. Unemployment rates are high, especially among the youths. Economic
reforms are proceeding at a relatively slow pace and the uncertainty surrounding the upcoming
elections adds to the country's fragility to a certain extent. The project design took these factors
into account with the aim of targeting interventions and actions that can mitigate the risks
involved, while contributing to building resilience.
4.8.2 The project design has integrated measures and technical options to address threats
related to climate change. These provisions were mentioned above. Other risks over which the
project has little or no control are summarised below:
• Risks related to the socio-political crisis. Despite the restoration of democratic
institutions in 2014, Madagascar is struggling to build a peaceful political
climate. This situation could lead to political instability. This risk would be
mitigated by the organisation of free and fair elections scheduled for December
2018.
19
• Risks related to ARM's institutional and technical weaknesses. To mitigate these
risks, the Bank and other development partners provided ARM with technical
assistance and capacity-building programmes under previous projects.
• Risks related to delays in the payment of counterpart funds. In light of experience
from implementing previous operations, the Government is taking steps to
mitigate this risk by including a budget chapter on overall project counterpart
funding in the Finance Act. The counterpart funds will be transferred to a deposit
account to be opened with the Treasury.
4.9 Knowledge Building
4.9.1 The establishment of a baseline before the start of project activities will provide a basis
for comparison to realistically assess the project's outputs and impacts. The knowledge
generated during project implementation will be based on best practice in road project
management, monitoring and evaluation. Such best practice will be disseminated by INSTAT
to project stakeholders through regular meetings and briefs.
4.9.2 Moreover, the outcomes of the institutional study on road maintenance will be
disseminated following a national workshop on the conclusions and recommendations to be
implemented to ensure the sustainability of road infrastructure.
4.9.3 Key knowledge and lessons learned will be managed from a database at the ARM
level. This database will facilitate the management of all knowledge accumulated on the
activities, achievements, key outcomes and lessons learned under the project. Summaries may
be published on the Bank's website.
5. LEGAL FRAMEWORK AND AUTHORITY
5.1 Legal Instrument
5.1.1 The financing instruments retained are: (i) a Grant agreement between the ADF; and
the Republic of Madagascar (ii) a Loan agreement between the ADF and the Republic of
Madagascar; (iii) a Loan agreement between the TSF and the Republic of Madagascar; and (v)
a Grant agreement between the EU AFIf and the Republic of Madagascar.
5.1.2 It is worth noting the fact that all obligations undertaken by the Bank with regard to
the European Commission, both pursuant to the framework agreement concluded between the
Bank and the EC (PAGODA), and to PAGODA general conditions and the delegation
agreement related to this project, and its annexes (in regard to, among others, financial
management, disbursement, financial and accounts audit, visibility and communication, etc..),
will be entirely transferred to each country in accordance with the AfIF grant agreement.
5.2 Conditions for Bank Involvement
A. Conditions Precedent to Loan Effectiveness
5.2.1 Effectiveness of the Loan Agreement shall be subject to fulfilment by the Borrower of
the conditions set forth in Section 12.01 of the General Conditions Applicable to Loan
Agreements and Guarantee Agreements of the Bank, to the Fund’s satisfaction.
B. Conditions Precedent to Grant Effectiveness
20
5.2.2 Effectiveness of the ADF grant and AFIf grant, shall be subject to signature of the
relevant Grant Agreements by the Government of Madagascar and the Bank.
C. Conditions Precedent to first Disbursement of the Loans and the Grants
5.2.3 In addition to the effectiveness of the ADF and TSF Loan Agreements and Grant
Agreements for ADF and AfIF, the first disbursement of loan and grant resources shall be
subject to the fulfilment by the Borrower/Donee of the following conditions:
(i) Signature and submission of the co-financing agreement between the
Donee/Borrower and OFID of which the terms and conditions will have been
considered acceptable by the Fund/ Bank or submission of satisfactory evidence of
obtainment of other funds that can allow for bridging the financing gap due to
absence of co-financing agreement; and
(ii) Submission of supporting documents as proof of appointment of a project
coordinator, two public works engineers (including a road structure engineer), an
environmentalist, a procurement expert and an accountant for the project
implementation unit, of which qualifications and terms of reference will have been
deemed acceptable by the Fund/Bank;
D. Conditions precedent to disbursements for works involving resettlement
5.2.4. The obligation of the Fund and Bank to disburse loan and grant resources for works
involving resettlement shall be subject to the fulfilment by the Donee/Borrower to the satisfaction
of the Fund/Bank of the following additional conditions:
(a) Submit a works and compensation schedule prepared in accordance with the
Resettlement Plan and the Fund's Safeguard Policies satisfactory in substance and
form to the Fund detailing: (i) each Project works area; and (ii) the timeframe for
compensation and/or resettlement of all Project affected persons ("PAP") for each
area; and
(b) Provide satisfactory evidence that all Project affected persons ("PAP") in the works
area have been compensated and/or relocated in accordance with the
Environmental and Social Management Plan ("ESMP"), Resettlement Plan ("RP")
and/or the Works and Compensation Schedule, as agreed and the Fund's Safeguard
Policies, prior to the commencement of such works and in any event prior to
movement and/or taking possession of the land and/or related assets of the PAPs;
or
(c) In lieu of paragraph (b) above, provide satisfactory evidence that the resources
allocated for the compensation and/or resettlement of the PAPs have been
deposited in a dedicated account in a bank acceptable to the Fund or deposited with
a trusted third party acceptable to the Fund, where the Donee can demonstrate, to
the satisfaction of the Fund, that the compensation and/or resettlement of the PAPs,
in accordance with paragraph (b) above, could not be achieved in whole or in part,
for the following reasons:
21
(i) the identification of PAPs by the Donee is not feasible or possible;
(ii) there are ongoing disputes involving PAPs and/or affecting the compensation
and/or resettlement exercise; or
(iii) any other reason beyond the Donee’s control, as discussed and agreed with
the Fund/Bank.
E. Other Conditions
5.2.5 Furthermore, the Borrower/Donee shall :
(i) Provide the Fund/Bank, latest 30th April of each year, with evidence of payment
into the deposit account opened by the State in respect of the State' s counterpart
funds for the project for the year concerned (para. 4.4.5);
(ii) Provide the Fund/Bank, latest twelve months after the first disbursement, with the
original or certified copy of the certificate opening an account with the
Antananarivo General Revenue, intended to finance the Involuntary Resettlement
Plan, into which a total amount equivalent to at least MGA 4.2 billion shall be paid
(paragraph 3. 2. 15) ;
(iii) Provide the Fund/Bank, latest 30th June 2019, with evidence of recovery of arrears
owed the RMF for 2011 under the RER (para. 4.3.4); and
5.3 Undertakings
5.3.5 The Borrower/Donee undertakes to:
(i) Implement the Project, the Environmental and Social Management Plan (ESMP)
and the Involuntary Resettlement Plan (IRP) and have them implemented by its
contractors in accordance with national law, the recommendations, requirements
and procedures laid out in the ESMP, the IRP and the relevant rules and
procedures of the Fund/Bank;
(ii) Not start work in a given project area without fully compensating and/or
resettling project-affected persons in that area, except in disputed cases, in
accordance with the FRP as might have been updated; and
(iii) Provide the Fund with quarterly reports on the implementation of the ESMP and
IRP, including, where applicable, weaknesses and corrective measures taken or
to be taken.
F. Compliance with Bank Policies
5.3.6 The project is compliant with all applicable Bank policies.
6 CONCLUSION AND RECOMMENDATION
6.1 Conclusion
6.1.5 The Project to Develop Corridors and Facilitate Trade consists of the construction of
two road sections, namely RN 9 in the South-West and RNT 12A in the South-East, Ranozaza
Bridge, Mangoky, Ebakika and Masianaka as well as the implementation of trade facilitation
22
actions. By helping to open up rural and agricultural areas through the link with the Tuléar and
Fort Dauphin Port facilities, this project will create opportunities for increased trade with
COMESA, SADC and Indian Ocean countries. The project is economically viable and has an
economic return of 20.43%.
6.2 Recommendation
6.2.5 Management recommends that the Boards of Directors :
(i) Decide that the procurement of goods, works and services financed by the AFIf
grant resources be open to non-Bank member countries;
(ii) Approve the proposal to extend: (i) an ADF loan of UA 22.68 million, (ii) a TSF
loan of UA 8.45 million, (iii) and ADF grant of UA 31.25 million, and (iv) a
grant of EUR 39.2 million from AfIF resources to the Republic of Madagascar
to finance this project, in accordance with the conditions set out in this report.
I
APPENDIXES
Appendix I: Comparative Socio-economic Indicators
YearMadagasca
rAfrica
Develo-
ping
Countries
Develo-
ped
Countries
Basic Indicators
Area ( '000 Km²) 2017 587 30 067 80 386 53 939Total Population (millions) 2017 25,6 1 184,5 5 945,0 1 401,5Urban Population (% of Total) 2017 36,4 39,7 47,0 80,7Population Density (per Km²) 2017 44,0 40,3 78,5 25,4GNI per Capita (US $) 2016 400 2 045 4 226 38 317Labor Force Participation *- Total (%) 2017 86,4 66,3 67,7 72,0Labor Force Participation **- Female (%) 2017 83,8 56,5 53,0 64,5Sex Ratio (per 100 female) 2017 99,5 0,801 0,506 0,792Human Dev elop. Index (Rank among 187 countries) 2015 158 ... ... ...Popul. Liv ing Below $ 1.90 a Day (% of Population) 2012 77,8 39,6 17,0 ...
Demographic Indicators
Population Grow th Rate - Total (%) 2017 2,8 2,6 1,3 0,6Population Grow th Rate - Urban (%) 2017 4,6 3,6 2,6 0,8Population < 15 y ears (%) 2017 41,2 41,0 28,3 17,3Population 15-24 y ears (%) 2017 20,6 3,5 6,2 16,0Population >= 65 y ears (%) 2017 2,9 80,1 54,6 50,5Dependency Ratio (%) 2017 78,9 100,1 102,8 97,4Female Population 15-49 y ears (% of total population) 2017 24,4 24,0 25,8 23,0Life Ex pectancy at Birth - Total (y ears) 2017 66,3 61,2 68,9 79,1Life Ex pectancy at Birth - Female (y ears) 2017 67,8 62,6 70,8 82,1Crude Birth Rate (per 1,000) 2017 33,7 34,8 21,0 11,6Crude Death Rate (per 1,000) 2017 6,2 9,3 7,7 8,8Infant Mortality Rate (per 1,000) 2016 34,0 52,2 35,2 5,8Child Mortality Rate (per 1,000) 2016 46,4 75,5 47,3 6,8Total Fertility Rate (per w oman) 2017 4,2 4,6 2,6 1,7Maternal Mortality Rate (per 100,000) 2015 353,0 411,3 230,0 22,0Women Using Contraception (%) 2017 46,7 35,3 62,1 ...
Health & Nutrition Indicators
Phy sicians (per 100,000 people) 2012 14,3 46,9 118,1 308,0Nurses and midw iv es (per 100,000 people) 2012 21,8 133,4 202,9 857,4Births attended by Trained Health Personnel (%) 2013 44,3 50,6 67,7 ...Access to Safe Water (% of Population) 2015 51,5 71,6 89,1 99,0Access to Sanitation (% of Population) 2015 12,0 51,3 57 69Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 2016 0,2 39,4 60,8 96,3Incidence of Tuberculosis (per 100,000) 2016 237,0 3,8 1,2 ...Child Immunization Against Tuberculosis (%) 2016 70,0 245,9 149,0 22,0Child Immunization Against Measles (%) 2016 58,0 84,1 90,0 ...Underw eight Children (% of children under 5 y ears) 2004 36,8 76,0 82,7 93,9Prev alence of stunding 2009 49,2 20,8 17,0 0,9Prev alence of undernourishment (% of pop.) 2015 42,3 2 621 2 335 3 416Public Ex penditure on Health (as % of GDP) 2014 1,5 2,7 3,1 7,3
Education Indicators
Gross Enrolment Ratio (%)
Primary School - Total 2016 143,8 106,4 109,4 101,3 Primary School - Female 2016 144,0 102,6 107,6 101,1 Secondary School - Total 2016 38,3 54,6 69,0 100,2 Secondary School - Female 2016 38,2 51,4 67,7 99,9Primary School Female Teaching Staff (% of Total) 2016 55,2 45,1 58,1 81,6Adult literacy Rate - Total (%) 2012 71,6 61,8 80,4 99,2Adult literacy Rate - Male (%) 2012 75,0 70,7 85,9 99,3Adult literacy Rate - Female (%) 2012 68,3 53,4 75,2 99,0Percentage of GDP Spent on Education 2013 2,1 5,3 4,3 5,5
Environmental Indicators
Land Use (Arable Land as % of Total Land Area) 2015 6,0 8,6 11,9 9,4Agricultural Land (as % of land area) 2015 71,2 43,2 43,4 30,0Forest (As % of Land Area) 2015 21,4 23,3 28,0 34,5Per Capita CO2 Emissions (metric tons) 2014 0,1 1,1 3,0 11,6
Sources : AfDB Statistics Department Databases; World Bank: World Development Indicators; last update :
UNAIDS; UNSD; WHO, UNICEF, UNDP; Country Reports.
Note : n.a. : Not Applicable ; … : Data Not Available. * Labor force participation rate, total (% of total population ages 15+)
** Labor force participation rate, female (% of female population ages 15+)
MadagascarCOMPARATIVE SOCIO-ECONOMIC INDICATORS
May 2018
0
10
20
30
40
50
60
70
80
90
100
2000
2005
2010
2011
2012
2013
2014
2015
2016
Infant Mortality Rate( Per 1000 )
Madagascar A frica
0
500
1000
1500
2000
2500
2000
2005
2010
2011
2012
2013
2014
2015
2016
GNI Per Capita US $
Madagascar A frica
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
2000
2005
2010
2012
2013
2014
2015
2016
2017
Population Growth Rate (%)
Madagascar A frica
01020304050607080
2000
2005
2010
2012
2013
2014
2015
2016
2017
Life Expectancy at Birth (years)
Madagascar A frica
II
Appendix II: Table on Procurement of Goods and Services
III
Appendix III : AfDB Portfolio as at 28/09/2018 Amount in UA
No. Project
Title and
Sector
Project
Reference
Number
Loan or
Grant°
Approval
Date
Date of
Signature
Closing
Date
Allocated
Amount
Original situation as at 01/01/2018
Cumulative
Disbursement
Disbur.
Rate
INITIAL
UNDISBURSED
BALANCE
Sub-total AGRICULTURE SECTOR
54.71% 101,296,000 19,010,848.21 18.77% 82,285,151.79
1 PRIASO P-MG-
AAB-004
ADF
LOAN
6/19/2013 7/8/2013 12/31/2018 18,300,000 7,652,862.82 41.82% 10,647,137.18
NTF
LOAN
6/19/2013 7/8/2013 12/31/2018 6,500,000 4,165,318.29 64.08% 2,334,681.71
GEF
GRANT
6/19/2013 10/2/2014 12/31/2018 4,076,000 997,170.27 24.46% 3,078,829.73
2 PEPBM P-MG-
AAB-003
ADF
LOAN
11/26/2014 3/6/2015 5/31/2020 16,140,000 2,198,979.65 13.62% 13,941,020.35
TAF
LOAN
11/26/2014 3/6/2015 5/31/2020 24,000,000 2,812,172.98 11.72% 21,187,827.02
3 PROJER
MO
P-MG-
AA0-027
ADF
LOAN
11/9/2015 11/9/2015 12/31/2021 16,610,000 751,085.41 4.52% 15,858,914.59
TAF
LOAN
11/9/2015 11/9/2015 12/31/2021 8,000,000 183,474.57 2.29% 7,816,525.43
4 ENABL
E
YOUTH
P-MG-
AA0-029
ADF
LOAN
4/13/2016 5/23/2016 6/30/2018 670,000 159,965.27 23.88% 510,034.73
5 PTAM P-MG-
AA0-040
TAF
GRANT
2/19/2016 11/25/2016 12/31/2018 1,000,000 89,818.95 8.98% 910,181.05
6 PEJAA1 P-MG-
AA0-039
ADF
LOAN
1/11/2018 2/12/2018 12/31/2021 700,000 0 0% 700,000
TAF
GRANT
1/11/2018 2/12/2018 12/31/2021 4,300,000 0 0% 4,300,000
7 PICAS P-MG-
A00-006
ADF
LOAN
7/20/2017 6/30/2019 1,000,000 0 0% 1,000,000
Sub-total TRANSPORT SECTOR
31.44% 58,200,000 31,515,009.57 54.15% 26,684,990.43
8 PAIR P-MG-
DB0-015
ADF
LOAN
10/18/2013 11/18/2013 12/31/2018 46,140,000 25,786,330.37 55.89% 20,353,669.63
ADF
GRANT
10/18/2013 11/18/2013 12/31/2018 130,000 68,743.05 52.88% 61,256.95
OFID
LOAN
10/18/2013 4/29/2013 12/31/2018 11,930,000 5,659,936.15 47.44% 6,270,063.85
Sub-total GOVERNANCE SECTOR
11.61% 21,500,000 12,964,288.49 60.30% 8,535,711.51
9 PAGI P-MG-
K00-008
ADF
LOAN
9/17/2013 11/18/2013 12/31/2018 4,320,000 2,717,455.48 62.90% 1,602,544.52
ADF
GRANT
9/17/2013 11/18/2013 12/31/2018 180,000 36,150.34 20.08% 143,849.66
10 PAPI P-MG-
K00-009
ADF
LOAN
7/9/2015 9/28/2015 9/30/2019 4,000,000 155,510.70 3.89% 3,844,489.30
TAF
LOAN
7/9/2015 9/28/2015 9/30/2019 3,000,000 55,171.97 1.84% 2,944,828.03
11 PACE P-MG-
K00-011
TAF
GRANT
11/28/2017 12/5/2017 6/30/2018 10,000,000 10,000,000 100% -
Sub-total WATER AND SANITATION SECTOR 0.78% 1,442,800 64,607.90 1,378,192.10
12 SDAUM P-MG-
EB0-001
AWF
GRANT
12/23/2015 3/21/2016 12/31/2019 1,442,800 64,607.90 4.48% 1,378,192.10
Sub-total ENERGY SECTOR 0.54% 1,000,000 0 1,000,000
13 PPF -
ENERG
Y
P-MG-
FA0-006
ADF
LOAN
11/21/2017 2/12/2018 12/31/2020 1,000,000 0 0% 1,000,000
Sub-total SOCIAL SECTOR 0.92% 1,702,000 89,622.70 1,612,377.30
14 BNGRC P-MG-
CZ0-002
TAF
GRANT
11/23/2016 12/1/2016 12/31/2018 1,000,000 89,622.70 8.96% 910,377.30
15 PEST
GRANT P-MG-
E00-010
FSS
GRANT
11/21/2017 2/12/2018 5/31/2018 702,000 0 0% 702,000
GRAND TOTAL 100% 185,140,800 63,644,376.87 34.38% 121,496,423.13
IV
Appendix IV: Procurement methods and procedures
- The Borrower’s Procurement System (BPS): Procurement methods and procedures under
the Borrower's procurement system governed by Law No. 2016-055 of 25 January 2017
on the Public Procurement Code (CMP) shall be used, using the National Standard
Bidding Documents (DNSAO) or other bidding documents as approved during the
project negotiations and generally for low complexity works and goods contracts
provided for in the project and available on the local market. The use of the BPS can
improve procurement efficiency through better ownership of the procurement system to
be used by the executing agency, and by saving time in the absence of the Bank's a priori
review, which is the second control after control by the National Procurement
Committee. This new public procurement code generally took into account Bank
recommendations during the joint assessment of the BPS with the World Bank in
February 2016. However, the Bank reserves the right to ask the Borrower to return to the
use of the Bank's System if: (i) the provisions of the above code were not complied with
by the Borrower; (ii) the appropriate risk mitigation measures included in the risk
assessment action plan were not complied with; and (iii) unsatisfactory changes to the
Bank's legal framework for public procurement in the country were made.
- Bank Procurement Methods and Procedures (BPM): The Bank's standard procurement
methods and procedures, based on the relevant Standard Bidding Documents (SPDs),
will be used for larger and more complex works and goods contracts as well as
consultancy services contracts, which are considered the most appropriate and in the
event that the use of the BPS is not suitable for a given activity or set of activities in view
of the high risks identified that would hinder the effective implementation of project
activities. To speed up procurement delays and to start, as from the first quarter of the
project's implementation, the following works deemed to be in advanced stages of
deterioration, the Government submitted a request to the Bank to use advance contracting
(AC) to complete procurement for: (i) the recruitment of key executing agency staff
(Project Coordinator, Administrative and Financial Officer, Procurement Officer); (ii)
the development and asphalting of RN 9 Section 2 between Analamisampy and Bevoay
(Mangoky Bridge), from PK 107 to 187+840, including the Ankililoaka platform; (iii)
the development and asphalting of RNT 12A Section 1 between Fort Dauphin and
Ebakika (from PK 3 to 45); and (iv) control and monitoring services for these works.
V
Appendix V: Project Fragility Assessment Report (PFAR)
Background Information
The project area is located in the South, the South-West and South-East regions of Madagascar and has
the highest poverty rate, inequality, and social exclusion of the 22 regions of the country. The project
will cover an area of 22 districts distributed over four regions. Its population is mainly made up of
farmers, fishermen and agro-pastoralists. The region has rich and diverse natural heritage, and has high
unexploited economic potential in the field of agriculture, fishing, tourism and mining, yet very prone
to natural disasters such as cyclones, drought and floods. Despite its potential for connectivity, trade
and regional integration, the region has an acute infrastructure and energy deficit to facilitate trade and
private sector development. The project will help to open up rural areas, reduce poverty, inequality,
social exclusion through increased agriculture value chain and regional trade within the sub-region.
Methodology for Drivers of Fragility Assessment
The project fragility assessment (PFA) of the Project to Develop Corridors and Facilitate Trade is
informed by the Country Fragility Assessment and the Youth and Fragility Study for Madagascar. It is
also informed by the preliminary findings of the Country Resilience and Fragility Assessment (CRFA)
tool, which objectively, systematically and quantitatively measure pressures and capacities the country
faces and complement its findings with the qualitative fragility assessment. The PFA was carried out in
accordance with the draft Guidelines on the Application of Fragility Lens issued by RDTS in May 2015.
The assessment is aimed at identifying entry points for programs to address, mitigate, or adapt to drivers
of fragility as well as program/project areas that can have the greatest impact in building resilience.
Key project/sector drivers of fragility (and indicators)
Lack of infrastructure to support trade and connectivity: While the region and project area has high
trade, port, connectivity, fisheries and agriculture potential, it suffers from poor infrastructure including
lack of adequate roads, Other intensifying structural constraints include infrastructural deficiencies
(roads, electricity and water provision, communication), education and the lack of a skilled labor force
(less than 15% of the labor force has a secondary education, and only 3.4% of workers have a tertiary
education). To unlock its potential, the country needs to improve integration and connectivity of
transport systems between production areas within the country and export points (ports and airports)
within the region. The infrastructure would also create economic opportunities for local and vulnerable
communities working in agriculture and reduce the inequality, poverty and social exclusion.
High levels of poverty and inequality: Madagascar has very low human development with poverty
that has increased sharply over the years. Over 80% live below the $1.25-per-day extreme-poverty line
and this is highest in rural areas, where 80% of the population lives. Two-thirds of the rural population
can be classified as living in extreme poverty. The poverty ratio in rural areas exceeded 75%, increasing
to 90% in the south of the island, which is the project area, compared with 31% in the capital and 55%
in the secondary cities. The poorest regions are Androy and Atsimo-Atsinanana, both rural areas. The
most vulnerable communities are farmers followed by the self-employed. The Gini Index was last
measured at 42.7 in 2012, indicating an increase in income inequality since 2005 (Gini index was 38.88).
One-third of the population is deprived in terms of consumption, education, basic household assets and
access to public services such as health care and electricity. Significant disparity inequality and poverty
has created regional social exclusion with south having high poverty and inequality rates with minimal
access to education, employment and the market. This is more so for women and youth due to
traditional, cultural, social and economic constraints prevent women and youths from having overall
equal opportunities. It remains a challenge for women to inherit land and property. In addition, the
literacy rate in Madagascar is below the average in Sub-Saharan Africa, and access to secondary and
tertiary education remains limited for the vast majority of the population particularly for women.
VI
Environmental and Spatial Factors: Within the continent, Madagascar is the second most vulnerable
country to natural disasters, largely due to its geographic position and low adaptive capacity that is
driven by high rates of poverty and unsustainable land and natural-resource utilization. The country’s
isolated geographical position further complicate management performance. Yet, it accounts for more
than 5% of the world’s biodiversity, of which about 90% of it is endemic and the yearly cost of
environmental degradation is very high, over 9% of GDP. The project area is rich and diverse natural
heritage, and has great potential in the field of agriculture, fishing, tourism and mining yet is the most
vulnerable to natural disasters, particularly cyclones, instances of drought and floods, locust invasions,
diseases (plague).
High Youth Population and lack of economic opportunities: Madagascar suffers from high levels of
youth unemployment. The long period of conflict and instability has worsened this situation, leaving
large numbers of the communities and youth population without viable economic engagement. Those
that are employed are underemployed, carrying out work that does not correspond to their training. The
communities’ lack of access to basic needs constitutes a major factor of fragility and socio-economic
vulnerability and are more vulnerable to shocks such as economic crises, conflicts or natural disasters.
Addressing this challenge requires finding viable economic opportunities. Research shows that one of
the most viable areas for providing employment for youths and women in Africa is in agriculture. In
low purchasing power and in countries facing fragility like Madagascar, to ensure sustainability,
focusing on critical sectors of the economy such as agriculture is key.
VII
Table 1
Linkages of Drivers of Fragility and Design Responsiveness
Key areas of the Project linked to addressing root causes of fragility as identified in Complementary Qualitative Fragility
Assessment, Youth Study for Madagascar, CRFA and Knowledge of the Project Area
Driver of Fragility Downside risks stemming from the root causes
of fragility
Proposed Project interventions
Lack of infrastructure to
support trade and
connectivity
(a) Lack of roads to facilitate trade and
connectivity
(b) Lack of health, water, school, markets and agriculture infrastructure to support
vulnerable communities
(c) Unexploited agriculture potential
Component 1 & 2: Road works and
bridges
High levels of poverty and
inequality
(a) High levels social exclusion, social
instability and increased insecurity
(b) Potential for violence and conflict if youths
not gainfully engaged over long periods of
time
(c) High social inequality and lack of economic
opportunities
Component 2: Provision of the basic
services to vulnerable communities in the
project area
Environmental and Spatial
Factors
(a) Vulnerability to cyclones, droughts and
floods
(b) Threats to biodiversity
(c) Threats of locust invasion and diseases
(plagues)
(d) Disruption to economic opportunities
(e) Unsustainable land and natural-resource
utilization
Component 1, 2 & 3
High Youth Population and
lack of economic
opportunities
(a) Potential loss of youth and women
productivity which forms the highest portion
of the population in the rural project area
(b) Vulnerability to shocks such as economic
crises, conflicts or natural disasters
(c) Unexploited biodiversity, huge population,
agriculture and fisheries
Component 2 and 3
Assessment Conclusion
The design of the project responds well to the vulnerable communities that remain isolated, forgotten
and with no hope when development is taking place in the country. While the project will facilitate trade
and create economic opportunities, it also has very specific interventions that have direct and immediate
impacts to the community at the bottom of pyramid in the project area. Support programs such as (i)
construction of the socio-cultural Center of Manja to promote social cohesion; (ii) the development of
the rural market for marketing of products from agricultural production areas; (iii) social support for
women through the acquisition of agricultural equipment; (iv) improvement of the conditions of
education of children through the construction of equipped classrooms and school protection structures;
(v) construction of water supply for villages; (vi) rehabilitation of health centres; (vii) rehabilitation and
equipment of police stations for the safety of the population; and (viii) rehabilitation of health centres
will significantly reduce factors of fragility and socio-economic vulnerability for communities in the
project areas.
VIII
The project does not have dual objective on fragility nor specific fragility indicators for monitoring and
evaluation but the design has duly incorporated the key drivers of fragility. The M & E budget has taken
into account the cost of monitoring the implementation of the related interventions. Follow up will be
made to ensure actions are taken on the implementation of these activities.
IX
Appendix VI: Map of Project Area
N.B.: The link between RN 9 and RNT 12A will be built according to the section marked in red on the map above.
This is RN 13 between Taolagnaro and Toliara, the two port cities.
X
Appendix VII: Eligibility Criteria for Accessing the ADF RO Envelop
Eligibility Criteria for Accessing the ADF RO Envelope
Information Note
I. Background | RO instruments
In response to increased RMC demand, in 2008, the Bank Group started earmarking a growing pool of
ADF resources to support regional operations. The Strategic and Operational Framework for
Regional Operations (adopted in 2008), was the Bank’s first strategic framework to finance regional
operations.
Since 2008, an additional instrument was approved and then revised by the Board: i) the Regional
Operations Prioritization Framework (ROPF) in 2011; ii) and Revised ROPF in 2014. Collectively, the
two instruments above govern the allocation and management of the ADF’s RO envelope.
II. Chronology of events
2008 - Strategic and Operational Framework for Regional Operations - 2008
The Strategic and Operational Framework for Regional Operations was intended to provide a rigorous
but flexible framework to mobilize resources for regional integration in Africa. The instrument (see
section 4.2) contains the basic eligibility requirements for accessing RO resources4. The eligibility
criteria has never been amended since.
2010 - ADF-12 Replenishment Meeting – Proposed Adjustments to the RO Framework
During the ADF 12 replenishment process, Deputies proposed adjustments to the 2008 Strategic and
Operational Framework for Regional Operations to enhance project selection and prioritization.
2011 - Regional Operations Prioritization Framework (ROPF)
The Regional Operations Prioritization Framework was approved by the Board in 2011 as a direct
response to the Deputies’ request to enhance the focus, prioritization and methodology in the allocation
of RO resources. No revisions were made to the basic eligibility criteria.
2014 – Revised ROPF
Drawing on lessons learnt and results obtained from three years of implementation, amendments to the
ROPF were proposed by the Board and the Independent Evaluation unit. The changes to the ROPF
focused on the need to improve the methodology for project selection, intensify co-financing efforts,
and improve regional and sector balances. The eligibility requirements for RO financing were not
revised and remained the same as the 2008 instrument.
III. Eligibility Criteria for accessing the ADF RO envelope
The Strategic and Operational Framework for Regional Operations details the eligibility criteria (see
Annex I) for accessing the regional operations window. The part relevant to this note is included below:
4 The eligibility criteria focuses on three aspects: project sponsors, regional character, commitment.
XI
The framework explicitly states that for an operation to have “regional character” and qualify for RO
financing it must “involve costs and/or benefits in at least two participating countries…”.
Furthermore, the Revised ROPF categorizes regional projects as either: i) integration operations; or ii)
single country operations with cross-border benefits.
The Madagascar Operation is a Single Country Operations with Cross Border Benefits since its trade
facilitation component contains a series of activities aimed at driving standards reforms and deepening
business linkages between Madagascar and countries within the SADC, COMESA in IOC regions. The
project shall also require the involvement of 3 RECs.
For example, in the area of Standards and Quality Infrastructure5, the project plans to support the
Madagascar Bureau of Standards secure a SADC Standards Accreditation. SADC Accreditation would
remove the need for repetitive testing, certification and inspection which in turn would facilitate trade.
Standards accreditation shall entail significant involvement from SADC in providing the requisite
trainings and facilitating the accreditation process.
With regard to business linkages6, the project shall work through the COMESA Business Council to
facilitate business networking and partnerships between Malagasy private actors and SMEs and
investors/importers in Egypt, South Africa and Mauritius to name a few.
Examples of Single Country Operations with Cross-Border Benefits that secured RO financing in the
past including the 2010 Regional ICT Center of Excellence Project in Rwanda (8.6MUA); the 2013
Inga Site Development and Electricity Access Support Project (23.64 MUA) in the Democratic
5 See Page 5 of the Project Appraisal Report, section C2 and C3.
6 See Page 5 of the Project Appraisal Report, section C7.
XII
Republic of Congo (DRC); and the 2017 Central African Republic Fibre Optic Backbone Project (4.50
MUA). In these three precedents, the countries concerned were the sole recipients of RO funding and
were able to show that other countries benefited from the project.
IV. Conclusion & Recommendations
By unlocking the southern region of Madagascar, the project is expected to provide significant benefits
in terms transport access, trade and SME development to not only Madagascar but also countries in the
wider COMESA, IOC and SADC region.
Management proposes to revise the ROPF to remove the confusion relating to the eligibility of single
country operations with cross-border benefits, such that the definition is aligned with established
practice as described above.
On the basis of the information provided in this note, Management hereby requests the Board to
approve the proposed operation as per the PAR.
XIII
References:
Strategic and Operational Framework for Regional Operations: https://bit.ly/2yW78G5
ADF-12 Replenishment Meeting: https://bit.ly/2QrBuaa
Regional Operations Prioritization Framework (Revised): https://bit.ly/2yUzVus
Rwanda Regional ICT Project: https://bit.ly/2qyetH0
Inga Site Development and Electricity Access Support Project: https://bit.ly/2qyetH0
XIV
Annex I
Eligibility Criteria
Extract - Strategic and Operational Framework for RO
XV
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