Document of The World Bank FOR OFFICIAL USE ONLY Report No: 82305-PY PROJECT PAPER ON A PROPOSED ADDITIONAL LOAN IN THE AMOUNT OF US$ 100.00 MILLION TO THE REPUBLIC OF PARAGUAY FOR A SUSTAINABLE AGRICULTURE AND RURAL DEVELOPMENT PROJECT November 7, 2013 Sustainable Development Department Argentina, Paraguay, and Uruguay Country Management Unit Latin America and the Caribbean Region This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank's policy on Access to Information. CURRENCY EQUIVALENTS (Exchange Rate Effective October 31, 2013) Currency Unit = Guarani (PYG) PYG 1,000.00 = US$ 0.23 US$ 1.0 = PYG 4,436.95 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS AF Additional Financing CPS Country Partnership Strategy DA Designated Account EOP End of Project ESMF Environmental and Social Management Framework FM Financial Management IBRD International Bank for Reconstruction and Development ICDP Indigenous Community Development Plan IPPF Indigenous People Planning Framework IFR Interim Financial Report INDERT Instituto NacionalDesarrolloRural y Tierras (National Rural Development and Land Institute) INDI Instituto Paraguayodel Indigena (National Indigenous Peoples Institute) ISR Implementation Status and Results Report M&E Monitoring and Evaluation MAG Ministry of Agriculture and Livestock (Ministeriode Agricolturay Ganaderia) MDP Municipal Development Plan MEF Ministry of Economy and Finance (Ministeriode Hacienda) PAD Project Appraisal Document PDO Project Development Objective PMU Project Management Unit PRODERS Proyecto de DesarrolloRural Sostenible (Sustainable Agriculture and Rural Development Project) SENACSA Servicio Nacional de Saludy CalidadAnimal (Nat.1 Animal Health and Quality Service) UAF UnidadAdministrativay Financiera(Administrative and Financial Unit) UOC Unidad Operativa Contable (Accounting Operational Unit) ZCU Zone Coordination Unit Vice President: Hasan A. Tuluy Country Director: Penelope Brook Sector Director: Ede Jorge Ijjasz-Vasquez Sector Manager: Laurent Msellati Task Team Leader: Renato Nardello 11 PARAGUAY ADDITIONAL FINANCING TO SUSTAINABLE AGRICULTURE RURAL DEVELOPMENT PROJECT CONTENTS Project Paper Data Sheet page iv Project Paper I. Introduction Page 1 II. Background and Rationale for Additional Financing Page 1 III. Proposed Changes Page 3 IV. Appraisal Summary Page 5 Annexes 1. Revised Results Framework and Monitoring Indicators Page 8 2. Operational Risk Assessment Framework Page 14 3. Revised Estimate of Project Costs Page 18 Map Section Page 20 111 PARAGUAY ADDITIONAL FINANCING TO SUSTAINABLE AGRICULTURE RURAL DEVELOPMENT PROJECT ADDITIONAL FINANCING DATA SHEET Basic Information - Additional Financing (AF) Country Director: Penelope Brook Sectors: General agriculture, fishing and Sector Manager: Laurent Msellati forestry sector (600); Sub-national Team Leader: Renato Nardello government administration (20%); General Project ID: P148504 public administration sector (20%) Expected Effectiveness Date: February 17, Themes: Rural non-farm income generation 2014 (60%); Administrative and civil service Lending Instrument: IPF reform (10%); Decentralization (10%); Additional Financing Type: Scale-up, Rural markets (20%) Restructuring Environmental category: B-Partial Assessment Expected Closing Date: December 29, 2017 Joint IFC: Joint Level: Basic Information - Original Project Project ID: P088799 Environmental category: B-Partial Assessment Project Name: Sustainable Agriculture and Expected Closing Date: December 28, 2013 Rural Development Lending Instrument: SIL Joint IFC: Joint Level: AF Project Financing Data [X] Loan []Credit []Grant [ ] Guarantee [ ] Other: Proposed terms: Fix Spread Loan payable in 30 years including 8 years of grace period, repayment schedule linked to commitment, customized repayment schedule, and all conversion options AF Financing Plan (US$ng) Source Total Amount (US$M) Total Project Cost: 116.00 Cofinancing: Borrower: 6.00 Beneficiaries: 10.00 Total Bank Financing: 100.00 IBRD IDA New Recommitted iv Client Information Recipient: Republic of Paraguay Responsible Agency: Ministry of Agriculture and Livestock (MAG) Contact Person: Jorge Gattini, Minister of Agriculture and Livestock Telephone No.: +595 Email: AF Estimated Disbursements (Bank FY/US$m) FY 14 15 16 17 18 Annual 8 20 30 30 12 Cumulative 8 28 58 88 100 Project Development Objective and Description Original project development objective (PDO): To improve the quality of life of Small-Scale Farmers and Indigenous Communities in the Project Area in a sustainable manner, through the support of actions to strengthen community organization and self-governance, improve natural resources management and enhance the socio-economic condition of said farmers and communities. Revised project development objective: To improve in a sustainable way the socio-economic condition of Small-Scale Farmers and Indigenous Communities in the Project Area, through the support of actions to strengthen their community organization, self-governance, and access to markets and value chains. Project description: The Project comprises five components: Component 1. Community Organization Development and Capacity Building (US$ 3.5M) (a) Design and implementation of a training program, which program consists of the provision of training to Project extensionists (such as, microcatchment, Indigenous Communities, social organization technicians and rural communities in Target Areas), MAG's personnel assigned to the Project, and other Project stakeholders on, inter alia: (i) conceptual and methodological aspects of the Project; (ii) Project administrative procedures; (iii) community development and strengthening of local organizations; (iv) principles and practices of participatory rural assessments, formation and operation of CDGs, lAs, MDCs and MSCs, participatory planning, and stakeholder monitoring; (v) sustainable natural resources management practices; (vi) on-farm production and off- farm income generation; (vii) gender sensitization; (viii) animal production and health practices; (ix) agricultural production techniques and good practices; and (x) any other area acceptable to the Bank, all for the benefit of Small-Scale Farmers and Indigenous Communities. (b) Design and implementation of an environmental education program to, inter alia, raise awareness amongst Project stakeholders on the need to address environmental problems that would improve the livelihood of the rural population. (c) (i) Provision of technical assistance: (A) to assist MAG in the selection of microcatchment areas, areas in which Indigenous Communities are located and Target V Areas; (B) to improve the production capacity and the sustainable management of natural resources of Small-Scale Farmers, Indigenous Communities, and other Project stakeholders acceptable to the Bank; and (C) to establish MDCs and CDGs (as legal entities) in the areas mentioned in (A) herein, as applicable; and (ii) strengthening of existing CDGs, lAs and MSCs, all in accordance with the criteria set forth in the Operational Manual, and in a manner acceptable to the Bank. (d) Design and implementation of a financial education program aimed at, inter alia, increasing knowledge amongst Project stakeholders about financial and commercial matters to improve their ability to optimize the monetary benefits from their agricultural production and marketing. Component 2. Rural Extension and Adaptive Research (US$ 27M) (a) (i) Carrying out of: (A) information workshops and participatory rural assessments in the selected areas referred to in Part 1 (c) (i) (A) of the Project; (B) an exchange of experiences program among Small-Scale Farmers, Indigenous Communities and other Project stakeholders; and (C) complementary socioeconomic and environmental diagnostic surveys/censuses in the selected areas referred to in Part 1 (c) (i) (A) of the Project; (ii) design of resource mapping of the selected areas referred to in Part 1 (c) (i) (A) of the Project; and (iii) provision of technical assistance and/or training to Beneficiaries in: (A) the preparation of MDPs, MIPs and ICDPs; (B) the formulation of Community Subprojects which shall be based on the corresponding MDP, MIP and ICDP; and (C) the implementation of Community Subprojects, the adoption of productive and environmental practices, and the improvement of marketing in respect of said subprojects. (b) (i) Carrying out of on-farm technology validation trials for: (A) the improvement and validation of existing agricultural production technologies and practices aimed at diversifying production and addressing farming issues raised by Small-Scale Farmers, Indigenous Communities, and other Project stakeholders acceptable to the Bank; and (B) the adaptation and validation of existing productive systems to local agro-ecological conditions and/or to Small-Scale Farmers' production systems; and (ii) carrying out of the following activities to address technical and social constraints: (A) studies to identify and develop specialized markets (including access to the same) and inclusive value chains; (B) assessments on land tenure; (C) studies to support mainstreaming of natural resources management and rural development strategies into national policy; (D) feasibility studies to identify opportunities for new products in the areas referred to in Part 1 (c) (i) (A) of the Project; (E) assessments of alternative financial mechanisms so that the microcatchment development assistance to be provided under the Project is sustainable; and (F) any other study acceptable to the Bank. (c) Strengthening the operational capacity of the ZCUs. Component 3. Sustainable Rural Development Fund (US$ 60M) Provision of Community Grants to carry out demand-driven investments, which investments consist of, inter alia: (i) home improvements and construction of sanitation infrastructure; (ii) adoption of sustainable land use practices; (iii) increasing crop and livestock production; (iv) post-harvest food processing and storage; (v) animal health vaccination and identification of tagging activities, including the provision of training on animal health and production issues; (vi) forest and water conservation practices at farm Vi levels; (vii) diversification and improvement of production systems to increase income; (viii) construction of minor water supply facilities; (ix) acquisition and utilization of minimum tillage equipment; (x) establishment of micro-enterprises; (xi) rehabilitation of roads (within the existing right of way); (xii) establishment of nurseries and/or greenhouses; (xiii) construction of waste disposal facilities, and recycling of pesticide containers; and (xv) any other investment acceptable to the Bank. Component 4. Animal Health Improvement (No AF funds allocated for this component) Strengthening of the institutional and operational capacity of: (a) SENACSA, through, inter alia: (i) the improvement of its management information system (Sistema de Informaci6n de Gesti6n de Oficinas Regionales-SIGOR); (ii) the improvement of laboratory facilities; (iii) the improvement of selected animal health control posts and units located within the Borrower's territory; and (iv) the acquisition and utilization of equipment, and the provision of technical assistance and training required therefor; (b) VMG, through, inter alia: (i) the construction of small infrastructure (as approved by the Bank); (ii) the improvement of the Borrower's genetic program for small-holders; (iii) the improvement of training programs on animal husbandry, animal health, artificial insemination and processing of agricultural products for small-holder livestock farmers; (iv) the improvement of pasture programs for small-holder livestock farmers; and (v) the acquisition and utilization of equipment, and the provision of technical assistance and training required therefor. Component 5. Project Mana2ement, Monitorin2 and Evaluation (US$ 7.1M) (a) (i) Strengthening of MAG's institutional, operational, administrative and financial management capacity to enable MAG (including the operational and administrative capacity of the PMU, the Sub-UAF and the UOC) to assist the Borrower in the implementation, management, evaluation and monitoring of the Project; (ii) carrying out of semi-annual audits of Part 3 (a) of the Project in a manner acceptable to the Bank; and (iii) carrying out of annual performance assessments of the PMU, the Sub-UAF, the UOC and the ZCUs. (b) Design and implementation of a training program for MAG's selected personnel on Project management, public sector accounting, organization and procurement, treasury management, and financial management and control (including accounting). (c) Establishment and implementation of: (i) a Project management information system; (ii) a geographic information system; and (iii) a Project monitoring and evaluation system. (d) Design and implementation of a communication and dissemination strategy, which strategy consists of, inter alia: (i) the carrying out of Project launch workshops, informational workshops, educational programs, and promotional and animal health campaigns at the national, departmental and local levels; (ii) the establishment and operation of a Project internet home page; (iii) the printing and distribution of informational material; and (iv) any other activity of similar nature acceptable to the Bank. Vii Safeguard and Exception to Policies Safeguard policies triggered: Environmental Assessment (OP/BP 4.01) [X ]Yes [ ] No Natural Habitats (OP/BP 4.04) [X ]Yes [ ]No Forests (OP/BP 4.36) [X ]Yes [ ]No Pest Management (OP 4.09) [X ]Yes [ ]No Physical Cultural Resources (OP/BP 4.11) [ ]Yes [X] No Indigenous Peoples (OP/BP 4.10) [X ]Yes [ ]No Involuntary Resettlement (OP/BP 4.12) [ ]Yes [X ] No Safety of Dams (OP/BP 4.37) [ ]Yes [X]No Projects on International Waterways (OP/BP 7.50) [ ]Yes [ X ] No Projects in Disputed Areas (OP/BP 7.60) [ ]Yes [ X ] No Does the project require any waivers of Bank policies? [ ]Yes [ X] No Have these been endorsed or approved by Bank management? [ ]Yes [ ] No Conditions and Legal Covenants: Financing Agreement Description of Condition/Covenant Date Due Reference 5.01(a) INDI Participation Agreement has been amended Effectiveness by the parties thereto, in a manner acceptable to the Bank. 5.01(b) The Operational Manual has been updated by the Effectiveness Borrower, in a manner acceptable to the Bank. Schedule 2, SENACSA Participation Agreement has been One month after Section I.B(a)(ii) amended in a manner acceptable to the Bank effectiveness Schedule 2, The auditor to carry out the audits of Part 3 has Section II B.4 been hired Schedule 2, Hire a human resources firm to assist MAG in the Section I.K selection of the Borrower's civil servants and individual consultants for the Project Viii I. Introduction 1. This Project Paper seeks the approval of the Executive Directors to provide an Additional Financing (AF) Loan in the amount of US$100.00 million to the Paraguay Sustainable Agriculture and Rural Development Project (P088799, Loan 7503-PY, "PRODERS"). This Project Paper also seeks the approval of minor changes to the Project Development Objective (PDO). 2. The proposed AF will help finance the costs associated with scaling up the activities of a Project that has proven an effective tool for fighting rural poverty in Paraguay. The AF would expand the Project Area to three additional departmentsI of Eastern Paraguay (Regi6n Oriental), where 97 percent of the country's population and an even greater share of smallholders and rural poor live. With the AF, the Project is expected to reach 200,000 additional beneficiaries, bringing the total number of Project beneficiaries to 256,000. Based on Project results to date, it is estimated that US$100 million of financing to PRODERS would lift an additional 125,000 beneficiaries out of poverty and reduce extreme poverty in Paraguay by more than two percentage points. 3. The AF will maintain the same institutional arrangements and overall implementation mechanisms currently used by the parent project, with minor adjustments based on lessons from experience. These include the need to increase the market orientation and linkages with inclusive value chains of farm-level investment supported by the Project. 4. This Project Paper also reflects (i) the first extension of the closing date of the Project to December 29, 2017 in order to complete its activities; and (ii) a restructuring consisting in minor changes to project components and activities, and related changes to the Results Framework. It is expected that all additional activities would be completed within four years, i.e. within 10 years from the approval date of the original Project. II. Background and Rationale for an AF in the Amount of $100.00 million 5. Country context. With about one third of the population living below the poverty line and 18 per cent in extreme poverty, Paraguay is one of the countries in Latin America with the highest levels of poverty. Poverty is even more pervasive in rural areas, where two thirds of the extreme poor of Paraguay live, even though only 40 percent of the total population is rural. In rural Paraguay, almost 45 per cent of the population (1.2 million Paraguayans) lives in poverty, compared to less than 25 percent in urban areas. 6. The new Government recently included the fight against extreme poverty among its top priorities. Considering that two thirds of the rural poor of Paraguay (or about 782,000 people) are also extreme poor and mostly live off agriculture, the Government concluded that PRODERS includes the appropriate mix of activities (community organization, rural investment financing, and extension services) to contribute to reduce poverty in rural areas. The AF is intended to scale 1Caazapi, Canindeyu and Concepci6n, in addition to San Pedro and Caaguazu, already covered under the original Project. The Project Area can be further expanded, with the Bank agreement, when covered by the Environmental and Social Management Framework acceptable to the Bank. 2 Source: Technical Planning Secretariat, Directorate-General of Statistics and Census, Permanent Household Survey 2011. 1 up the Project to some of the departments with the highest incidence of rural poverty in order to reduce the number of rural poor and extreme poor. 7. Consistency with Country Partnership Strategy (CPS). The Project is consistent with the current World Bank Group's CPS for the Republic of Paraguay for the period FYO9-FY13 (Report n. 48087-PY) discussed by the Board of Executive Directors on May 5, 2009 and the CPS Progress Report 2009-2013 (Report n. 66782-PY), discussed by the Board of Executive Directors on April 9, 2012. The original Project was included in the CPS lending program as an instrument to reduce the vulnerability of the rural poor under the cross-cutting theme "Poverty". The proposed AF is expected to widen the impact of the Project in some of the poorest regions of the country and contribute to support the Government's program of "Opportunities for all". 8. The Original Loan. The original loan for an amount of US$37.5 million was approved on January 29, 2008, became effective almost 18 months later on June 30, 2009, and has a closing date of December 28, 2013. The balance of the proceeds is fully committed for 2014. As of November 1, 2013 disbursements were at 55 percent and are expected to exceed 60 percent by the end of 2013. 9. The original PDO was "to improve the quality of life of Small-Scale Farmers and Indigenous Communities in the Project Area in a sustainable manner, through the support of actions to strengthen community organization and self-governance, improve natural resources management and enhance the socio-economic condition of said farmers and communities". 10. Original Project activities included support to the Community organization development and Capacity building for producers groups and Indigenous Communities (Component 1); Rural Extension and adaptive research technical assistance to increase production and improve natural resources management (Component 2); Support to demand-driven investments in microcatchment areas and Indigenous communities through the Sustainable Rural Development Fund (Component 3). The Original Project also included a component to strengthen the institutional and operational capacity of (a) SENACSA and (b) Vice-Ministry of Livestock (Component 4), as well as a component supporting Project management, monitoring and evaluation (Component 5). 11. The original Project Area comprised 84 microcatchments areas (microcuencas) and 73 Indigenous Communities (reduced at 61 and 40, respectively, under the restructuring of 2013) in the departments of San Pedro and Caaguazfi, in the Eastern Region of Paraguay. Project beneficiaries include an estimated 56,000 rural poor, organized in 440 rural associations and 40 indigenous communities, achieving close to 100 percent of the results expected in the May 31, 2013 restructuring. Analysis of these results indicates that the incidence of extreme poverty among the Project beneficiaries decreased from 75 percent to 25 percent between 2011 and 2013, which exceeds the expectations set out in the Project Appraisal Document (PAD)3 12. Performance to date. The most recent Implementation Status and Results Reports (ISR) for the Project shows that, after delayed effectiveness, the Project's results have been generally consistent with the expectations set out in the PAD and the Project Restructuring Paper 4 in 2013. 3 PAD dated December 11, 2007; Report n.41419-PY 4 Project Paper dated May 31, 2013; Report n.78048-PY. 2 13. Project performance for Implementation Progress has been consistently rated Moderately Satisfactory for more than two years (last five ISRs) and has recently been upgraded to Satisfactory. While progress towards achievement of the PDO had until recently been rated Moderately Unsatisfactory, this was mainly because of the effects of the initial effectiveness delay on the likelihood of achieving the original results. Further to the May 2013 restructuring, the PDO rating was recently upgraded to Moderately Satisfactory. 14. The issues that affected implementation up to the end of 2012 (complex procedures, slow disbursement, lack of processing of monitoring data) have been thoroughly addressed at the Mid- Term Review of February 2013 and the ensuing May 2013 restructuring, which introduced streamlined administrative procedures and implementation mechanisms. These have resulted in a much improved performance, as exemplified by CY13 disbursements being now already 50% higher than at the corresponding period in CY12. 15. Procurement and Financial Management have been rated Moderately Satisfactory for the past three years (six ISRs) and Financial Management (FM) has recently been upgraded to Satisfactory for the first time since effectiveness, signaling a strong FM performance despite the increased volume of transactions. Both the financial audit and the concurrent audit (which reviews the results and eligibility of transfer at field level) are current and unqualified. Safeguard compliance has been satisfactory and rated accordingly for the last two years and the Project is in substantial compliance with its key loan covenants. 16. Rationale for Additional Financing. In view of the positive results of PRODERS, the Government intends to scale up the operation to some of the departments with the highest incidence of rural poverty, in order to reduce the number of rural poor and extreme poor. The Government requested that this scale-up be processed as AF, rather than a new operation, for two main reasons: (i) PRODERS activities are an excellent tool to address the proposed project activities and mechanisms would basically replicate what PRODERS is already doing and (ii) the quicker processing time of an AF could allow for an expedited loan ratification, thus allowing the AF to contribute to the Government objective of reducing extreme poverty starting already in 2014. 17. Alternatives considered. A larger, stand-alone operation to cover other regions of Paraguay was considered. However, the Government and the Bank later agreed that an additional financing would be the best option to provide continuity to the current approach while minimizing the effectiveness delays that have characterized the portfolio in recent years. III. Proposed Changes 18. Project Development Objective. In order to match the Government own formulation of the PDO, the original PDO "To improve the quality of life of Small-Scale Farmers and Indigenous Communities in the Project Area in a sustainable manner, through the support of actions to strengthen community organization and self-governance, improve natural resources management and enhance the socio-economic condition of saidfarmers and communities." will be modified to read as follows: "To improve in a sustainableway the socio-economic condition of Small-Scale Farmers and Indigenous Communities in the ProjectArea, through the support of actions to strengthen their community organization, self-governance, and access to markets and value chains." This change improves the measurability of the PDO, and intends to stress an increased focus on access to markets. 3 19. Changes to components. The following changes will be introduced to components: (i) Component 1: a new Sub-component 1(d) will support the design and implementation of a financial education program aiming to increase Project stakeholders' knowledge of financial and commercial matters to improve their ability to optimize the monetary benefits from their agricultural production and marketing, which is crucial for their economic growth. (ii) Component 3: activities of the component will focus completely on community subproject without any INDERT subprojects 5 ; (iii) Component 4: Animal Health activities financed under the original loan will be oriented towards strengthening the Project's support for small producers, rather than in the national-level activities to control Foot and Mouth Disease 20. Other changes introduced. Based on lessons learned from the implementation of the original Project, the AF will introduce the following changes to the approach and/or the operational arrangements (more details under the Appraisal Summary section ahead): (i) selection of target areas will be based on poverty mapping rather than "microcatchment areas" as in the original Project; (ii) supported investment plans will have a stronger market orientation than the original Project and will strengthen linkages with inclusive value chains; (iii) the Monitoring and Evaluation (M&E) system will be strengthened to handle the expected increased amount of data of the larger Project; and (iv) minor adjustments are proposed to the results framework in order to: accommodate the revised PDO and scaled up activities and reduce the number of indicators for easier and more effective M&E (see Annex 1, Results Framework). 21. Implementation arrangements. No major changes from the original Project are being proposed in terms of design, approach and implementation arrangements. No new safeguards are triggered, fiduciary arrangements remain the same, and risks identified under the original Project continue to remain relevant. 22. Institutional arrangements. Under the AF, the Project will maintain the same institutional arrangements as the original Project. The Ministry of Agriculture and Livestock (MAG), through its National Directorate for the Coordination and Administration of Projects (DINCAP), will continue to implement the Project through a Project Management Unit (PMU), comprised of a small core team supervising several area offices (organized by departments), in turn responsible for local field staff. In order to improve efficiency and geographical coverage, some of the field level activities could be entrusted to third-party providers (MAG's Department of Agricultural Extension, Non-Governmental Organizations, Consulting Firms, etc.). Table 1: Project outcome indicators Outcomes Original Current Changes Revised Target Targets* with AF Project Targets Individual beneficiaries 100,000 56,000 +200,000 256,000 Beneficiary smallholders families 12,600 9,150 +29,850 39,000 Beneficiary Indigenous families 6,000 2,500 +13,000 15,500 Community Development S/P** 600 480 +2,020 2,500 Indigenous Communities S/P** 60 45 +130 175 * As restructured further to Mid-Term Review of February 2013 ** S/P = Subproject INDERT subprojects did not materialize under the Original Project. 4 23. AF expected outcomes. The nature of activities financed and outputs expected from scaled-up project activities are summarized in Table 1 above (details are in Annex 1, results framework). 24. Project financing. Revised project financing is presented in Table 2 below. Revised costing is presented in table A3.1 in Annex 3. Table 2: IBRD Financing s by component (000 USD) Original Current Additional Revised Component Cost Cost* Financing IBRD Financing 1: Community Organization 1,900 900 3,500 4,400 3.2% 2: Rural Extension 8,700 9,000 27,000 36,000 26.2% 3: Rural Development Fund 19,500 21,500 60,000 81,500 59.2% 4: Animal Health Improvement 2,900 2,900 0 2,900 2.1% 5: Project Management 3,200 3,200 7,100 10,300 7.5% 6 Unallocated 1,300 0 2,150 2,150 1.6% 7 Front-End Fee n.a. n.a. 250 250 0.2% Total 37,500 37,500 100,000 137,500 100% * Based on actual and projected costs as of Nov 1, 2013, including reallocation of funds expected for 2014. IV. Appraisal Summary 25. Technical. Technical aspects of the Project remain virtually unchanged under the AF, which will build on lessons from the implementation to date. The following are some new technical aspects that will be introduced under the proposed AF: (a) Targeting based on poverty indicators rather than micro-catchment areas. Selection of intervention areas and beneficiaries will be based on already existing poverty mapping (Census 2010) and on registries of social programs' beneficiaries. In each department, the targeting method will be able to discriminate at the district (distrito) and sub-district (compalia) levels: areas with higher concentration of poor smallholder would constitute priority Target Areas. This approach will improve the poverty focus of the program and limit an excessive dispersion of the intervention. (b) Stronger focus on Rural Business Plans rather than generic community development plans. The AF will aim at strengthening the market orientation of farm- level investments, in line with the government strategy that considers market inclusion as the main way out of poverty for poor rural producers. Productive investments will need to be based on credible linkages with market agents (intermediaries, processing plants, supermarkets, public procurement system, etc.). The Project will support producers in identifying, and becoming actors of, inclusive value chains. (c) Simplified project procedures. The AF will continue the path of procedural simplification initiated with the restructuring of 2013, by piloting innovative tools such as the electronic signature (at least for transaction between the Project, the banks, and Hacienda) and the simplification of the paperwork at field level. (d) Financial education program. The AF will support the design and implementation of a new financial education program as Sub-component 1(d), in order to increase knowledge 5 amongst Project stakeholders about financial and commercial matters that would improve their ability to produce and market their production, optimizing the monetary benefits of their efforts (e) Animal health activities geared towards small producers. Activities of Component 4 will be oriented towards strengthening the Project's capacity to cater for small livestock producers, a service which is crucially missing in Paraguay according to the latest assessment of the World Animal Health Organization (OIE). (f) Strengthened Monitoring and Evaluation system. Strong delays in the implementation of a solid M&E system have been a weakness of PRODERS for a long period of time. The AF will strengthen the M&E and will require that all financed subprojects should include quantifiable indicators, to be regularly monitored by the PMU. 26. Safeguards. The Project is classified as "B" and there is no revision to the classification as the AF encompasses the same eligible activities. No additional safeguards are triggered and the same five safeguard policies triggered by the original Project remain: Environmental Assessment (OP/BP/GP 4.01), Natural Habitats (OP/BP 4.04), Pest Management (OP 4.09), Forests (OP/BP 4.36) and Indigenous Peoples (OP 4.10). Under the original Project, environmental and social safeguard compliance and performance have been consistently rated satisfactory since mid-2011. The Project safeguard documents, originally prepared and disclosed in 2007, have been updated to reflect the expanded Project Area. The revised Environmental and Social Management Framework was publicly disclosed in Paraguay and in the Bank's external website on October 31, 2013. The revised Indigenous Peoples Planning Framework was publicly disclosed in Paraguay and in the Bank's external website on November 1, 2013. 27. Financial Management. Financial Management (FM) arrangements for the AF are expected to rely widely on the arrangements in place for the original Project, with the MAG's National Directorate for the Coordination and Administration of Projects (DINCAP) responsible for the financial management and disbursements functions of the project. FM performance for the Project has been recently upgraded to Satisfactory based on the following: (i) progress achieved in the simplification of transactions recording procedures which contributed to improved and updated record keeping; (ii) unqualified financial statements audit reports consistently received by the Bank on time; (iii) satisfactory outcomes of the concurrent audit reports over the Community Driven Development component along with follow up of internal control recommendations and; (iv) timely and accurate project financial reporting through interim financial reports (IFRs). The Bank's FM supervision will continue through on-site missions; desk review of IFRs, quarterly concurrent audit reports over the Sustainable Rural Development Fund, and annual financial statements audits; as well as ad hoc support as needed. The Disbursement Table is presented in Annex 3. 28. Procurement. Procurement will be carried out in accordance with: (i) the "Guidelines: Procurement under IBRD Loans and IDA Credits" dated January 2011; (ii) the "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated January 2011, and (iii) the provisions of the Loan Agreement. Procurement arrangements will be the same in place for the original Project. 6 29. Economic and financial analysis. The economic and financial analysis carried out at appraisal of the original Project remains valid.6 The overall economic internal rate of return of the project was estimated to be 17%. This estimate is conservative since it does not take into account some benefits accrued from the Project that are extremely difficult to quantify such as: (i) biodiversity conservation and decreased soil erosion; (ii) increased well-being as a result of more food availability and improved housing; and (iii) the long-term effects of strengthened community organization and self-management. a. Project's development impact. Farmers' net income with and without the project were estimated on the basis of illustrative farm models. Net incremental income could vary from 24% to over 100% depending on the farmers' initial conditions, the cropping pattern and the farmers' own dynamics to go beyond the rehabilitation stage and adopt practices of sustainable production. According to the analysis carried out, all farm models are expected to ensure incomes above the rural poverty line, in addition to the benefits derived from improved natural resources management, increased food availability and better housing and sanitation conditions. Results from implementation of PRODERS show indeed that the project has contributed to lift out of extreme poverty 2/3 of its beneficiaries, reducing the incidence of extreme poor among its beneficiaries from 75 percent to 25 percent in three years, compared to baseline data. b. Rationale for Public financing. The new Government has made the fight against extreme poverty its national priority. Poor farmers generally face greater risks in adopting productivity enhancing technologies and in making the investments necessary to improve their livelihoods and socio-economic inclusion. The use of public funds, through one-time incentives (grants), to mitigate those risks and reduce the up-front transaction costs necessary for poor farmers to make those investments is expected to induce positive externalities which would ultimately result in increased growth and poverty reduction for the country. In addition, the inclusion of financial education and the availability of investment funds should help the development of a financial market catering poor producers, currently at embryonic stage in Paraguay. c. World Bank's value added. The Bank has been supporting rural development and poverty reduction in Paraguay for many years. Its global knowledge and the knowledge of the Paraguayan context, allow the Bank to maximize the value for money of the project. Particularly, the instrument of additional financing used on a well-established project with sound fiduciary rules and performance would allow the Government to quickly mobilize financial resources to poor rural households in a transparent and effective manner. 30. Closing date. The new closing date of the Project will be December 29, 2017. The closing date of the Original Loan is December 28, 2013 and this Project Paper will extend it to December 31, 2015. 31. Policy exceptions. There are no exceptions to Bank policies. 6 The full Economic Analysis is available in the project files. 7 PRODERS; Monitoring and Evaluation Report at September 30, 2013. 7 Annex 1: Results Framework and Monitoring PARAGUAY Additional Financing to the Sustainable Agriculture and Rural Development Project Revision of the Results Framework Current (PAD8) Proposed Comment/Rationalefor Change PDO To improve the quality of life of Small- REVISED The PDO was revised to be more Scale Farmers and Indigenous To improve in a sustainable way the socio- accurate and reflect the market Communities in the Project Area in a economic condition of Small-Scale Farmers view. sustainable manner, through: and Indigenous Communities in the Project 1. the support of actions to Area, through the support of actions to strengthen community 1. strengthen their community organization and self-governance organization, self-goverance, 2. improve natural resources 2. and access to markets and access management to value chains. 3. enhance the socio-economic condition of said farmers and communities. PDO indicators [# core indicator] s Current (PAD) Proposedchange * CDGs, MDCs and MSCs or DROPPED oAs Already mentioned in component 1. established, strengthened and participating (Change of target areas) in the management of rural sustainable Management committee of producers and development in 800%of the selected micro- Indigenous communities established, catchments and indigenous communities in strengthened and participating in the the project area with participation of management of rural sustainable women and rural youth in decision-making development in 80 of the poorest zones of (appropriate level of participation to be the project area, with participation of agreed by the organizations). women and rural youth in decision-making (appropriate level of participation to be agreed by the organizations). At least 50( of the target farms increase CHANGE TARGET VALUES Redefined at a more ambitious level their agricultural incomes by 300%. Of At least 70% of the target farms increase (under previous version, % lifted these, at least 20% obtain an agricultural their agricultural incomes by 30. above poverty line would have been income above the poverty line, satisfactory) The incidence of poverty (measured in CHANGED Rephrased UBN) reduced by 500d in the assisted At least 50 incidence of poverty reduced small-scale farmers and indigenous in the assisted small-scale farmers and communities. indigenous communities Production of crops for domestic DROPPED Included in other indicators already consumption increased by 20o in 5m0 of the poorest beneficiary families. Productivity of land (by hectare) increased CONTINUED Approach will include action towards by an average of 25 in beneficiary f both: increasing un-utilized area per through the application of productive farm and yield per hectare. Indicator practices promoted by the project. for2 inPDO # Number of project beneficiaries, of NEW Basic core indicator which: Women, Youth, Indigenous peoples (of which W/Y) p_o_oetcDOPE nlddi teridctr _led Change is with respect to the PDO of the original Loan Agreement. 8 67% of beneficiary households with access DROPPED Already an indicator in component 3 of to at least one additional basic service the project. aimed at home improvements. 20% of indigenous communities without DROPPED This result is beyond the control of the formal land titles at project start acquire Project. titles and 50% of small-scale farmers without title receive assistance toward acquiring titles. Greater awareness among 50% of project DROPPED Irrelevant beneficiaries of land degradation and the potential contribution of sustainable natural resources and land management to improved livelihoods in the project area. NEW It is crucial to measure the new activity Associative management capacity of the AE, access to markets and increased: 80% Community Development inclusive vale chains trough business Groups and 50% of indigenous community plans and financial/marketing groups with investment proposals oriented education. to business plans to access markets and inclusive value chains. Intermediate Results indicators Current (PAD) Proposedchange* Capacity Building and rural extension 295 technicians trained and operating in CHANGE OF TARGET VALUE Changed only to reflect scaled-up the project area 345 technicians trained and operating in the activities. Up to now they have 130 project area (295 from original project and technicians trained. from 50 AF) Environmental education program CHANGE OF TARGET VALUE Changed only to reflect scaled-up ipeetdand reaching about 8.000 .. activities implemented aEnvironmental education program implemented and reaching about 24,000 (8,000 from original project and 16,000 from AF) By PY10, Subcomponent has formalized: 61 Microcatchment Development DROPPED Micro-catchments discontinued under Committees. AF. Limited to Original Project, not AF. 420 Community Development Groups DROPPED Measured in next component. 2,000 Community Development Groups (420 from original project and 1,580 from AF) 45 Indigenous Community Groups DROPPED Measured in next component. 130 Indigenous Community Groups (45 from original project and 85 from AF) 27 Municipal Steering Committees DROPPED Municipal activities were canceled at restructuring National Coordination Committee DROPPED Not established under the original established project. By PY10, the following types of plans as instruments for extension and financing purposes have been prepared and implemented in the project area: 61 Microcatchment Development Plans. DROPPED Micro-catchments discontinued under AF. Limited to Original Project, not AF. 9 9,150 Farm Investment Proposals CHANGE OF TARGET VALUE Changed only to reflect scaled-up 30,000 Families /farms with Investment activities Proposals (9,150 from original project and 30,050 from AF) 480 Community Investment Proposals CHANGE TARGET VALUE Is measured in next component. 2,000 Community Investment Proposals financed and implemented (480 from original project and 1,520 from AF) F 45 Indigenous Communities Development CHANGE TARGET VALUE Is measured in next component. Plans 130 Indigenous Communities Development Plans financed and implemented (45 from original project and 85 from AF) 600 producers trained as promoters in CONTINUED/NEW Incorporated the new skills for sustainable production. 2,500 producers trained as promoters in improved commercial orientation of producers. sustainable production and financial/commercial matters. 80% of beneficiary trained have adopted CONTINUED diversification and new sustainable technologies to increase production and productivity. 1.200 other producers trained in DROPPED Redundant/unclear sustainable production practices. 1.800 indigenous beneficiaries trained by DROPPED Numbers can be disaggregated in extension agents indigenous, young and women beneficiaries. At least 80% of small-scale farmers and DROPPED Irrelevant for monitoring 80% of the 73 indigenous communities assisted regularly by rural extension agents by PYO5 87 rural extension agents working in the DROPPED Irrelevant for monitoring project area. Organizational Development and Investments in subprojects By PY10, investments financed in micro- catchment and indigenous communities will include: 480 Community Investment Proposals CHANGE OF TARGET VALUE AND Changed to include results from REPHRASED component 2 and 3. 2000 Community Investment Proposals financed and implemented (480 from original project and 1,520 from AF) F 45 Indigenous Communities Development CHANGE OF TARGET VALUE AND Changed to include results from Plans REPHRASED component 2 and 3. 130 Indigenous Communities Development Plans financed and implemented (45 from original project and 85 from AF) 65% of beneficiary households with DROPPED Already included under other subprojects to improve rural homes indicators. 12.000 hectares under sustainable DROOPED Already included under other productive practices. indicators. 5.000 ha under forestry practices CHANGE OF TARGET VALUE 6.000 ha under good forestry practices NEW The Project needs to improve its At least 80% of subprojects complete disbursement execution in order to disbursements and investments targets achieve the AF outcomes in a timely established in their management plan manner. 10 NEW Subproject need to have specifically At least 80% of subprojects achieve 80% of quantified SMART indicators their intended results from the investment plan (64% composite target) NEW Put in place to monitor sustainability At least 4 of subprojects are functional two years after their closing date Component 4. Animal Health Improvement Subcomponent 4.1 Strengthening of SENACSA o SIGOR local units connected CONTINUED o SIGOR on line coverage o Biotery Lab o Residues Lab * Indicate if the indicator is Dropped, Continued, New, Revised, or if there is a change in the end of project target value 11 REVISED PROJECT RESULTS FRAMEWORK Project Development Objective (PDO): Click here to enter the revised PDO of your operation Baseline Cumulative Target Values 12 Original Progress Co PDO Level Results Indicators9 , UOM 10 Project To Date 201x 201y 201w 201z Frequency Data Source/ Responsibility for mm 13Methodology Data Collection Start (2013) ents (2008) Pilot micro- Yearly M&E office with catchments and socioeconomic data collected indigenous surveys through independent At least 50% of the target farms .. 500% and communities: evaluation team increase their agricultural incomes Number by 30%. Of these, at least 20% of 11.000 20% of yearly reports Every two obtain an agricultural income above families target years the poverty line. farms Project area: mid environmental Direccion de Censo term evaluation surveys y Estadistica and final Agropecuaria del evaluation report MAG Pilot micro- Yearly M&E office with catchments and socioeconomic data collected indigenous surveys through independent At least 50% incidence of poverty Poverty communities: evaluation team (measured in UBN) reduced in the 11.000 reduced yearly reports Every two assisted small-scale farmers and b50% years indigenous communities yo Project area: mid environmental Direccion de Censo term evaluation surveys y Estadistica 00communities: and final yaltealutonta Agropecuaria del evaluation report MAG Pilot micro- Yearly M&E office with data Productivity of land (by hectare) catchments and socioeconomic collected through increased by an average of25 0% in of 25%o of indigenous surveys independent evaluation beneficiary f through the application hecare target reormts: eryta farms of productive practices promoted by the project. Project area: mid Socioeconomic M&E office ihrough term evaluation and and independent evaluation Please indicate whether the indicator is a Core Sector Indicator (for additional guidance - please see http://cogreingdirators 10 UOM = Unit of Measurement. SFor new indicators introduced as part of the additional financing, the progress to date column is used to reflect the baseline value. STarget values should be entered for the years data will be available, not necessarily annually. Target values should normally be cumulative. If targets refer to annual values, please indicate this in the indicator name and in the "Comments" column. 12 final evaluation environmental team report surveys Pilot micro- Yearly M&E office with data catchments and socioeconomic collected through Associative management capacity indigenous surveys independent evaluation increased: 80% Community Numb 80% of communities: yearly team Development Groups and 50% of of total reports indigenous community groups with business 0 40% 40% sub- investment proposals oriented to plans sub- Project area: mid Socioeconomic M&E office through business plans to access markets and projects term evaluation and and independent evaluation final evaluation environmental team inclusive value chains. report surveys Number Registro Nacional Beneficiaries 1 of 0 56.000 256.000 de Agricultura people Familiar (RENAF) 13All projects are encouraged to identify and measure the number of project beneficiaries. The adoption and reporting on this indicator is required for investment projects which have an approval date of July 1, 2009 or later (for additional guidance - please see http://coreindicators). 13 Annex 2 Operational Risk Assessment Framework (ORAF) Paraguay: Additional Financing to the Sustainable Agriculture and Rural Development (P088799) Stage: Board Stakeholder Risk Rating Low Risk Description: Risk Management: A. Lack of consultations, A. During both preparation and implementation of PRODERS, consultations with representative of participation, and ownership of indigenous peoples and small farmers have led to broad support for the Project. PRODERS is a indigenous communities assisted demand-driven project that operates on the basis of regular consultations with local stakeholders. by the project could jeopardize the project effectiveness B. The component Community Organization Development is specifically designed to foster the participation of poor producers and indigenous people. C. The project's IPPF has so far been, and it is expected to continue to be, a key factor of PRODERS' success with indigenous people ad it is expected to. The IPPF has been updated to cover the Project expanded area. Resp: Both Status: Stage: Recurrent: Due Frequency Date: 14 Capacity Rating Substantial Risk Description: Risk Management: A. MAG processes and capacities for A. MAG FM capacities have been strengthened under Component 5 through the establishment of administrative & financial the MAG sub-UAF at the National Directorate for Coordination and Administration of Projects functions need strengthening. (DINCAP, for its Spanish acronym). Also, MAG has adopted competitive recruitment of staff to re-activate the Sub-UAF, accompanied by a capacity building program to support such unit, and strengthening of DINCAP FM staffing to support Project implementation. B. Funds Flow: High bureaucratic B. MAG is expected to present to Hacienda a proposal to concretely reduce paperwork for transfer requirements needed as a to producer groups and IP. The project will upgrade its FM system to allow for electronic prerequisite for transferring money management of financial and administrative transactions and to link them to the M&E system. to communities, which may both hinder the timely implementation of the program and create inefficiencies in the work of field personnel. Also, lack of coordination between DINCAP, the PMU, and Hacienda may cause delays in funds transfers. C. Historically low disbursement rate C. Simplification and changes to the payments mechanism and documentation of eligible expenditures to the Bank procedures under the Subprojects Grants component agreed with the PMU have allowed a significant increase in disbursements and flow of funds to beneficiaries in 2013 (30 percent of the loan, despite restrictions imposed during the political transition). Adjustments to the project operational manual are already in effect to improve disbursement performance. ). An adequate level of accountability and control over funds transferred under Component 3 is maintained through concurrent audits of eligibility of beneficiaries, procurement processes, uses of funds and documentation of expenses at subprojects level. However, close coordination and effort is required to be developed by DINCAP, the PMU and the Treasury Office, Direcci6nde Tesoro Publico at the Ministry of Finance to reduce more the timeframe for transferring funds to subprojects beneficiaries. A streamlined flowchart of actions, roles, and responsibilities will be included in the revised Operational Manual. 15 D. Most of the procurement would be D. Continue implementing: (i) an oversight mechanism over CDD subprojects through a done through CDD procurement concurrent audit and (ii) a Human Resources firm to select individual consultants. procedures or through the hiring of high number of individual consultants, which may cause accountability and monitoring issues. E. Inadequate knowledge in E. Establish in the Project Operational Manual a clear description of roles and responsibilities, UOC/DINCAP of WB related to procurement processes between UOC/DINCAP and UEP. procurement guidelines may create delays and issues in the implementation of procurement processes. F. Lack of human resources on F. PRODERS procurement team will be strengthened in anticipation of the increased volume of procurement. activities. Resp: Both Status: Not Stage: Both Recurrent: Due Frequency Yet Date: Due Governance Rating Substantial Risk Description: Risk Management: A. The high number of transaction in A. The Project's framework for good governance includes institutional strengthening and decentralized setting carries an inherent improvement of financial and other management systems which have proven very useful high level of governance risk. during PRODERS: these include the recruitment of an HR firm to manage the selection and evaluation of all key project personnel; undertaking a concurrent audit of all field-level transactions; strengthening the project administrative capacity B. In Paraguay effectiveness delay have B. It is expected that the ratification of the additional financial loan would be granted shortly ranged from 12 to 18 months for the last four projects and a similar delay would 16 reduce the impact of the additional financing in the first two years, risking to create a gap with the ongoing PRODERS. Resp: Both Status: Stage: Both Recurrent: Due Frequency Date:: Design Rating Substantial Risk Description: Risk Management: A. Risk that the volume of transaction A. The Government has put in place, and will continue, adequate staffing and organization for the of the AF may overwhelm the PMU. The Administrative Operational Manual (AOM), to be updated as part of the updated Proj ect administration and finance Operational manual due by Effectiveness, includes internal control procedures, PMU staffing unit. & organization, job descriptions, FMRs & financial statement formats, specific FDRS procedures, description of FDRS management specific staffing, project audit terms of reference and concurrent audit of the communities subproject component. Resp: Client Status: Stage: Recurrent: Due Frequency Date: Social and Environmental Rating Low Risk Description: Risk Management: A. Social: changes in the project A. The sound application of the Project's IPPF, will be continued under the AF, ensuring that IP views strategy might lead Indigenous and concerns are taken into account when designing specific interventions. No changes are foreseen Peoples to retire their support for in the strategic orientation of the project concerning IPs. The Government program against extreme the project poverty is expected to strengthen the focus on IP. Resp: Client Status: Stage: Recurrent: Due Frequency Date: Program and Donor Rating Moderate Risk Description: Risk Management: A. Risk if overlapping with several A. All these project and PRODERS are managed by MAG's Directorate for the Coordination and other projects, such as IDB's Administration of Projects (DINCAP) which coordinates all rural development and agriculture 17 Modernization of Agricultural projects co-financed with external funds and coordinate the flow of information between them. Public Management project; GTZ- Through DINCAP, PMUs of rural projects intervening in the same areas will liaise with each executed Caazapa Rural other, in order to strengthen synergies, avoid contradictions and overlapping, and improve Development Project; IFAD's coverage of areas and beneficiaries. Paraguay Rural Project; and KfW's Sustainable Management of Natural Resources Project. Resp: MAG Status: Stage: Recurrent: Due recurrent Frequency Date: Delivery Monitoring and Sustainability Rating Moderate Risk Description: Risk Management: A. A larger project can make difficult A. Capacity building in coordination, communication and management have been undertaken and the coordination between PMU and will be continued. The number of ZCUs and their staffing will be increased to cater for the Zone Coordination Units ZCUs. larger Project Area. B. The larger volume of data B. The Project will upgrade the MIS to take into account the expanded Project Activities and generated by the expanded project expected increase in the volume of transactions and beneficiaries. Given the delays that have may overwhelm the staff characterized the original MIS, improving the system will be a priority area for the PMU. managing the Management Information System, and the system itself. Resp: Client Status: Stage: Recurrent: Due Frequency Date: Resp: Status: Stage: Recurrent: Due Frequency Date: 18 ANNEX 3: Revised Estimate of Project Costs PARAGUAY Additional Financing to the Sustainable Agriculture and Rural Development Project Table A3.1: Project Financing Plan US$ % US$ % US$ % US$ % 1: Community Organization 3,500,000 3.50 500,000 8.0 0 4,000,000 3.4 2: Rural Extension 27,000,000 27.00 4.,500,000 75.0 0 31,500,000 27.2 3: Rural Development Fund 60,000,000 60.00 0 10,000,000 100 70,000,000 60.3 4:Animal Health Improvement 0 0 0 0 5: Project Management 7,100,000 7.10 1,000,000 17.0 8,100,000 7.0 6: Unallocated 2,150,000 2.15 2,150,000 1.9 7: Front-End Fee 250,000 0.25 250,000 0.2 TOTAL 100,000,000 100 6,000,000 100 10,000,000 100 116,000,000 100 Table A3.2: Disbursement Categories of the Additional Loan Category Amount of the Loan Percentage of Expenditures to Allocated be financed (expressed in USD) (inclusive of Taxes) (1) Goods, works non-consulting services, consultants' services, Operating Costs and Training for Part 1 of the Project (2) Goods, works, non-consulting services, consultants' services, 27,000,000 1000 Operating Costs and Training for Part 2 of the Project (3) Community Grants 60,000,000 100% (4) Goods, works, non-consulting services, consultants' services and 0 100% Training for Part 4 of the Project (5) Goods, works, non-consulting services, consultants' services, Operating Costs and Training for Part 5 of the Project (6) Unallocated 2,150,000 (7) Front-End Fee Amount payable pursuant to Section 2.03 of the Loan Agreement in 250,000 accordance with Section 2.07 (b) of the General Conditions TOTAL AMOUNT 100,000,000 19 IBRD 40506 62W 60W 58W 56W 54W ) 18S 5- PARAGUAY 2 Capitån Pablo Lagerenza- 20S Puerto 20S Celro Leon TO Bahia Negra A (1,000 m) General Eugenio ARAGUAY { aray Fortin Madrejon Fuerte Olimpo Fortin Carlos PA Z L A. Lopez Puerto r sP T alm as o1 in n ante Rivarola Marisca2$ oEstigarribia erto do P.Pen.a l V i a Filadelfia o Puerto Pinasco & Pedro Juan Caballero o Yau- ý_ýYby Leonda Escobar CONCEPCION Partin Avalos Pao Concepcion CaCit2 General n-PRESJDEN TE Koaz Partis Teniente ~ --- ~--~ San Lima 24S Rojas T n entSalto del 24S CANENDIYU Guaira This mapwas produced hythes4ap Bank Unitof TheWortd Design PEDRO Theboundaries,colors, denomimatins and ang other formationga shown on thismap do not imply o tepart of The World Bank Group, ny judgment on the legal status f territory, r any endorsement or acceptance of such boundaries 62W 60W Sa HayesoEstansId, ltaquoyry ayC - -DLE , CAAGUAZU q PARAGUAY ASUNCIN aacup coro ADDITIO NAL FINANCING ta a'an C e CudadEst TO THE SUSTAINABLE 6S Aba 26S AGRICULTURE AND RURAL GUARo ®Caa DEVELOPMENT PROJECT aan PIar San Ygnacio San Pedro t del Parana PROJECT DEPARTMENTS' Desmochado ADDITIONAL FINANCING - - -• Encarnacion BOTH ADDITIONAL FINANCING AND ORIGINAL PROJECT 28S2S o CITIES AND TOWNS MAIN ROADS 285 ® DEPARTMENT CAPITALS RAILROADS ARGENTINA ® NATIONAL CAPITAL DEPARTMENT RIVERS BOUNDARIES 0 50 100 150 Kilometers PAN-AMERICAN HIGHWAY - - NTRNATINAL B 8 0 50 100 Miles 58W 554W NOVEMBER 2013