For Official Use Only CLR Review Independent Evaluation Group 1. CAS Data Country: Republic of North Macedonia CPS Year: FY15 CPS Period: FY15 – December 2018 CLR Period: FY15 – December 2018 Date of this review: April 8, 2019 2. Ratings CLR Rating IEG Rating Development Outcome: Moderately Satisfactory Moderately Satisfactory WBG Performance: Good Good 3. Executive Summary i. This independent review of the World Bank Group’s (WBG) Completion and Learning Review (CLR) covers the period of the Country Partnership Strategy (CPS), FY15-FY18, as extended by the Performance and Learning Review (PLR), dated November 7, 2017, which updated aspects of the original CPS. ii. The Republic of North Macedonia (North Macedonia) is an upper middle-income country with a Gross National Income (GNI) per capita of $4,880 in 2017. It is a small, land-locked country; and a population of 2.1 million, with investment and exports as the main drivers of growth since 2009. GDP growth averaged 2.3 percent during the CPS period (2015-18) - above the average growth during the previous four years (2.1 percent) - despite a decline in growth during the 2015–17 political crisis. 1 The crisis undermined confidence in the economy and led to the slowdown of both growth and job creation. The poverty rate was 22 percent in 2016 (30 percent rural and 17 percent urban), having declined since 2010 (from 27 percent). The country’s Human Development Index increased from 0.754 percent in 2015 to 0.757 in 2018, ranking 80th among 189 countries in 2018. Inequality (the GINI Index) was 35.6 in 2014, higher than in similar European countries. iii. The World Bank Group’s (WBG) CPS had two pillars (or focus areas): (i) growth and competitiveness, and (ii) skills and inclusion. The CPS was broadly aligned with the Government’s 2014-2018 program, which sought increased growth and employment, international integration, reduced corruption and more efficient law enforcement, better inter- ethnic relations, and investments in education, innovation and technology. Specifically, the CPS supported the growth and employment, infrastructure, social protection, and education pillars of the Government’s program and the government’s efforts to stabilize public debt. The European Union (EU) accession agenda was a cross-cutting theme in the CPS. At the PLR stage, the CPS maintained its overall focus, albeit with some changes in emphasis, and was aligned with the new Government program (2017-20) that focused on growth, jobs, and social protection, among other areas. 1 The political crisis followed the April 2014 presidential and parliamentary election, which the main opposition party disputed and escalated in early 2015. The crisis concluded with the formation of a new coalition Government in June 2017. CLR Reviewed by: Peer Reviewed by: CLR Review Manager/Coordinator Mauricio Carrizosa Jorge Garcia Garcia Jeff Chelsky IEGEC Consultant IEGEC Consultant Manager, IEGEC Albert Martinez Lourdes Pagaran IEGEC Consultant CLRR Coordinator, IEGEC CLR Review For Official Use Only Independent Evaluation Group 2 iv. At the beginning of the CPS period, total IBRD commitments were $349.4 million, with nine Investment Project Financing (IPF) operations and one Development Policy Financing (DPF) operation. During the CPS period, total new IBRD commitments were $223.4 million, lower than the planned CPS volume of $400.0 million. The new lending portfolio consisted of four new IPF operations and reflected a shift in focus from the inherited portfolio. Compared to the pre-existing portfolio, the new lending portfolio allocated more for transport (72 percent from 30 percent) and municipal services (from 12 to 21 percent); and less for social protection (from 15 to 7 percent); and none to other sectors in the pre-existing portfolio, including energy, skills development, competitiveness, and cadaster services. Trust Funds (TFs) amounting to $42 million provided complementary financing to IBRD lending. v. IEG rates the CPS development outcome as Moderately Satisfactory. Of the seven CPS objectives, five were Achieved or Mostly Achieved and two were Partially Achieved or Not Achieved. On Focus Area I (growth and competitiveness), there was good progress in improving public finance and road infrastructure, and increasing the availability of clean energy. However, progress on improving the investment climate was limited. On Focus Area II (skills and inclusion), there was substantial progress on improving the efficiency of the social protection system. There was also good progress in improving access to water and sanitation connections. However, there was no progress on focusing the education system on skills for the labor market. vi. IEG rates WBG performance as Good. The CPS addressed well-identified development challenges. The CPS was selective, its objectives addressed critical constraints and were consistent with the twin corporate goals. The planned interventions (lending and ASA) and use of instruments were generally appropriate to achieve CPS objectives. There was a division of labor between the Bank and IFC, but joint work was limited. The World Bank Group forged partnerships with other development partners, mainly the EU. The results framework reflected reasonably well the link between the government’s strategy, CPS objectives and Bank Group interventions. The CPS identified relevant risks with appropriate mitigation measures; however, it did not anticipate the depth and length of the 2015-17 political crisis. New lending and IFC investments slowed down during the crisis. The World Bank delivered higher than planned ASA outputs that enhanced its preparedness for future operations and provided advice to the new government. Due to the World Bank’s proactive portfolio management, active and closed portfolio performed well, with no major fiduciary or safeguards issues, despite implementation challenges from the crisis. INT received two complaints but did not launch any investigations. vii. The CLR provided seven lessons and three key lessons are summarized as follows. First, work in a complex political environment requires flexibility, proactive portfolio monitoring, and close engagement and dialogue with the Government. Second, to be a politically independent actor, the WBG needs to gain broad acceptance by engaging with the Government as well as representatives of opposition parties and civil society. Third, linking the CPS to the EU accession agenda helps accelerate accession. viii. IEG adds the following lessons: • During a political crisis, increased use of ASA to compensate for decline in lending and sound portfolio management can help sustain the World Bank Group’s engagement and impact. As a result of the 2015-17 crisis in North Macedonia, the Bank Group postponed new lending operations but scaled up its ASA work. The ASA work provided the analytical underpinnings for new operations and provided policy advice to the new government. The focus on portfolio management contributed to sustained improvements in the World Bank’s active portfolio and yielded better results at exit. • World Bank Group’s support for the accession agenda can advance reforms and yield better development outcomes. Thus far, accession support (e.g., on energy) helped achieve the CPS development outcomes. The recent resolution of North Macedonia’s dispute with Greece will allow negotiations to move forward and thus open a new window of opportunity for the Bank Group to further anchor its support to the EU accession development agenda. CLR Review For Official Use Only Independent Evaluation Group 3 Going forward, the Bank Group engagement may entail even closer coordination with development partners, notably the EU, to provide needed financing and analytical support. 4. Strategic Focus Relevance of the WBG Strategy: 1. Congruence with Country Context and Country Program. The CPS objectives were congruent with the Government’s 2014-2018 Program and fiscal adjustment plans. Objectives were specifically aligned with the program’s pillars covering growth and employment, infrastructure, social protection, and education. In addition, the CPS objective to improve fiscal and public financial management addressed North Macedonia’s expansion of public debt in the aftermath of the 2009 global crisis. The CPS objectives also addressed other significant development constraints, including the country’s remaining challenges on its investment climate (e.g., access to finance), lagging road infrastructure, energy intensity, the disconnect between education outcomes and private sector needs, the scope for improvement in the targeting and efficiency of the social safety net, and gaps in access to basic services. 2. Relevance of Design. The proposed program interventions could be expected to contribute towards the achievement of most CPS objectives. The CPS envisaged a combination of IPF, DPF, and ASA to achieve its objectives. Two DPF operations were to support fiscal reforms and competitiveness. IPF operations and IFC investments covered other areas (investment climate, infrastructure, social protection, education, and basic services), with IFC focusing on the investment climate and energy infrastructure. The planned World Bank ASA and IFC AS covered all areas of engagement, and included integrative tasks (poverty, gender). Many ASA outputs had a regional scope, covering six countries 2 in the Western Balkans (WBLKs). Given North Macedonia’s focus on accession to the European Union (EU), the CPS planned to forge partnerships with key European institutions, primarily the EU and also with the European Commission (EC), and the European Bank for Reconstruction and Development (EBRD). Two key assumptions underpinned the CPS. First, political stability would improve during the CPS period, following the refusal of the main opposition party to participate in Parliament after the 2014 election. Second, continued progress would be made toward EU accession. The 2015-17 political crisis, delayed government programs, private investment, and CPS implementation. It was resolved in with the inauguration of a new coalition government in 2017. Accession prospects have been a key anchor of the reform agenda and of North Macedonia’s investment climate, as well as a source of concessional funds. 3 Selectivity 3. The CPS was selective in terms of focus areas, objectives (albeit some objectives are compounded) and indicators and number of projects. In terms of focus areas, the CPS supported four of the eight pillars of the government’s strategic priorities. The selected areas also build on the WBG’s prior engagements (competitiveness, roads, basis infrastructure, and social protection) and planned ASA. CPS objectives were limited in number (7) and fairly specific (e.g., education focused on labor market skills). Selected indicators were aligned with WBG operations and/or ASA work. During the CPS period, average project size increased to $50 million from $32 million in the preexisting portfolio. The actual number of projects was reduced to four, from the planned eight at the PLR stage, as a result of the political crisis. Alignment 4. The CPS objectives were broadly aligned with the twin goals of poverty reduction and shared prosperity. The first focus area (growth and competitiveness) sought to increase growth through improved fiscal policies, private investment, and infrastructure. The second focus area (skills and inclusion) covered education, social protection, and access to basic services. The first focus area is 2 Albania, Bosnia and Herzegovina, Kosovo, Republic of North Macedonia, Montenegro, and Serbia. 3 Candidates to the EU benefit from concessional funds through the EC Instrument for Pre-accession Assistance (IPA). CLR Review For Official Use Only Independent Evaluation Group 4 relevant to the growth agenda while the second focus area contributes to the inclusiveness agenda. Both reflect the CPS’ assumption that poverty reduction and shared prosperity need private sector led growth and investment, leading to more jobs, as well as investment in skills, and assurance of adequate social protection and equal access to economic opportunities. 5. Development Outcome Overview of Achievement by Objective: 5. This assessment follows the IEG-WBG Shared Approach on Country Engagement and considers the degree to which CPS objectives (designated as outcomes in the PLR results matrix) were achieved relative to the CPS results framework as revised at the PLR stage. Focus Area I: Growth and Competitiveness. 6. Focus Area I had four objectives: (i) Improved fiscal and public financial management; (ii) Better conditions for private investment and links to FDI; (iii) Road infrastructure improved; and (iv) More clean energy available. 7. Objective 1: Improved fiscal and public financial management (PFM). The World Bank supported this objective through two projects and several ASA outputs. Projects were the FY08 Regional and Local Roads Program Support Project and the FY15 National and Regional Roads Rehabilitation Project. 4 Key ASA outputs included the FY16 Macedonia Public Expenditure Review; the FY18 Public Finance Review TA; assistance through the WBG’s Debt and Risk Management Program beginning in 2017; FY17 policy notes on PFM, efficiency of public spending, and debt sustainability; the FY18 Organic Budget Law TA; the FY18 Public Sector Reform Support; and TF support on Accounting and Reporting (PULSAR 5 and EU REPARIS 6). This objective had four indicators: • Fiscal deficit of the general government declines in line with medium-term budget framework: Baseline: 4.2 percent of GDP (2014); Target: below 3 percent of GDP (2018). The fiscal deficit is estimated at 1.8% in 2018. Achieved. • Quarterly reports on consolidated public and publicly guaranteed debt published on the MoF website: Baseline: No (Q2 2014); Target: Yes (Q3 2014). Consolidated quarterly reports are regularly published on the Ministry of Finance (MoF) website since the 3rd quarter of 2014. Achieved. • Organic budget law approved: Baseline: No (2017); Target: Yes (2018). Law has not yet been approved. Not Achieved. • Road Enterprise makes investments using Road Asset Management System (RAMS): Baseline: No (2014); Target: Yes (2018). RAMS has been completed but not used in road preservation works, Not Achieved. 8. The four indicators cover relevant and significant dimensions of the dual objective, with the first one indicating a significant fiscal outcome and the second reflecting realized improvements in debt reporting, a critical PFM dimension. With two targets rated Achieved, including the important fiscal deficit outcome, and two Not Achieved, IEG rates Objective 1 as Mostly Achieved. 4 The FY08 project included a financial management plan that satisfied “simultaneously the objective of a unified system for financial management of FYR Macedonia’s road sector investments, and also the need to comply with the typical fiduciary requirements of the World Bank and other IFIs” (PAD, par, 50), Similarly, the FY15 project highlighted the value added the project brought on financial management, among other areas (PAD para. 15). 5 Public Sector Accounting and Reporting Program. 6 Road to Europe Program of Accounting Reform and Institutional Strengthening CLR Review For Official Use Only Independent Evaluation Group 5 9. Objective 2: Better conditions for private investment and links to FDI. This objective was supported through the FY14 Competitiveness DPL2. Key ASA outputs included the FY17 Policy Notes on Competitiveness of Private Sector and Transition to Innovation Driven Economy, the FY19 Investment Readiness Impact Evaluation, the Competitive Industries and Innovation Support Program (TF), the Investment Readiness Impact Evaluation (EU REPARIS), the Local and Regional Competitiveness in Tourism (TFs), and IFC AS covering automotive backward linkages (with the Bank), road concessions, and hydro power. This objective had six indicators. However, two of the indicators were compound indicators, resulting in 10 indicators in total: • Private investment facilitated in the real sector through IFC interventions: Baseline: EUR80 million (2014); Target: EUR180 million (2017). About USD 244 million of private investment was facilitated in the real sector through the IFC Renewable Energy Advisory Program in Small Hydro Power. Achieved. • Number of people and MSMEs with improved access to financial services: Baseline: 1,751 (2015); Target: 7,100 (2019). The DOTS database shows a decline in the number of MSME loans outstanding (in IFC client institutions) from 4,647 in 2015 to 2,491 in 2016. Not Achieved. • Volume of outstanding MSME loan portfolio of IFC clients: Baseline: $54.2 million (2015); Target: $588.6 million (2019). IEG could not verify the baseline or data provided in the CLR. The DOTS database shows a decline in the volume to MSME loans outstanding (in IFC client institutions) from $207 million in 2015 to $181 million in 2016. Not Achieved. • Number of days to obtain construction permit: Baseline: Average 181.1; Manufacturing 43; Services 243.1 (BEEPS) (2013); Target: Average 83; Manufacturing 25; Services 100 (2018). BEEPS 2017-2018 is not available for North Macedonia to assess progress. Additional information from Doing Business data shows that 96 days and 11 procedures were required in 2017 to obtain construction permits compared to 90 days and 12 procedures in 2014. Data for Manufacturing and Services were not available. Therefore, two indicators are Not Verified and one is Partially Achieved. • Improved local business and export sophistication: The Business Sophistication score declined from 3.65 (2013 baseline) to 3.4, against a target of 4.0 (Not Achieved) the “Innovation” indicator improved from 3.2 to 3.4, against a target of 4.0 (Partially Achieved); and the share of high and medium tech products in the country’s exports increased from 57 percent in 2016 to 57.4 percent in 2017, against a target of 60 percent (Partially Achieved). • Jobs created by greenfield FDI with state incentives (in and outside Technological Industrial Development Zones). Baseline: 12,000 (2016) Target: 13,000 (2018). No data was available that could measure progress from 2016 to 2018. Not Verified. 10. The indicators above do not sufficiently measure the dual objective of better conditions for private investment and links to FDI. The indicators do not cover FDI or provide an indication of overall conditions for private investment. Although the ease of doing business improved, the limited scope and progress in five of the 10 indicators above suggests that the WBG’s contribution was correspondingly limited. IEG rates Objective 2 as Partially Achieved. 11. Objective 3: Road infrastructure improved. The World Bank supported this objective through the FY08 Regional and Local Roads Program Support Project, the FY15 National and Regional Road Rehabilitation project, and an FY17 Policy Note on Transport. IFC provided support through its Regional PPP Advisory Program. This objective had one indicator. • Percentage of national and regional roads network in good and fair condition increased: Baseline: 79% (2014); Target: 81% (2018). The share of roads in good or fair condition out of the total of classified roads was 87% as of May 2018. Achieved. 12. The indicator reflects the road infrastructure objective. IEG rates Objective 3 as Achieved. CLR Review For Official Use Only Independent Evaluation Group 6 13. Objective 4: More clean energy available. This objective was supported through the FY06 Energy Community of South East Europe Program (APL3), the FY17 Policy Note on Energy, the FY16 Municipal Efficiency Energy Promotion TA, the FY19 WBLKs Biomass Heating Sector Study, and TF support on Infrastructure Sharing (WBLKs). IFC provided support through the FY12 IFC Renewable Energy Macedonia Small Hydro Advisory Project. This objective had one indicator: • Additional annual renewable clean energy generation: Baseline: 0 GWh (2014); Target: 105 GWh (Bank) + 100 GWh (IFC) (2018). 150 renewable energy plants with a capacity of 150 MW were constructed, translating into 336.2 GWh of new renewable energy to be produced per year. Achieved. 14. The indicator reflects the clean energy objective. IEG rates Objective 4 as Achieved. 15. IEG rates Focus Area I as Moderately Satisfactory. There was good progress in improving public finance and road infrastructure, and increasing the availability of clean energy. However, there was limited progress on improving investment climate. 16. Focus Area II: Skills and Inclusion 17. Focus Area II had three objectives: (i) tertiary and vocational education system more focused on skills for labor market, (ii) social protection system more efficient and compatible with employment, and (iii) access to basic and municipal services enhanced. 18. Objective 5: Tertiary and vocational education system more focused on skills for labor market. This objective was supported through the FY14 Skills Development and Innovation Support project, an FY17 Policy Note on Education, and a Western BalkansFY18 Education Engagement TA. This objective had two indicators: • Share of public universities accredited with new quality assurance measures consistent with EU norms: Baseline: 0 (2014); Target: 60 percent (2018). There was no progress in this indicator. Not Achieved. • Percentage increase in the number of secondary Technical and Vocational Education and Training (TVET) students benefiting from practical training in SMEs and large firms: Baseline: 11,543 students (2016); Target: 20 percent increase (2018). There was no progress in this indicator. Not Achieved. 19. The first indicator does not reflect the TVET objective and the second indicator was not achieved. IEG rates Objective 5 as Not Achieved. 20. Objective 6: Social protection system more efficient and compatible with employment. This objective was supported through two projects and several ASA. The projects were the FY09 Conditional Cash Transfers Project and the FY19 Social Service Improvement Project. Key ASA support included the FY15 WBLKs Poverty Assessment TA; the FY15 Integrating Distributional Analysis; and the FY17 Policy Notes on Jobs and Labor Market, Poverty, Inequality and Shared Prosperity, Social Assistance, and Gender Policy. This objective had three indicators: • Share of the poorest quintile receiving social assistance: Baseline: 65.6% (2011); Target: over 70% (2018). Although the share within the poorest quintile receiving social assistance could not be verified, the share of social assistance going to the poorest quintile improved, from 65.8 percent in May 2014 to 77.7 percent in June 2018. Total social assistance amounts increased by 25 percent between 2014 and 2018, well above inflation (2.3). Since the share increased, the real amounts to the poor also increased. Achieved. • Share of Social Financial Assistance beneficiaries with children ages 15-18 registered for conditional cash transfers: Baseline: 76% (women: 47%) (2014); Target: over 80% (women: at least 47 percent) (2018). 86 percent of children aged 15-18 that benefited from social financial assistance have been registered for conditional cash transfers (CCT) as of June 2018. The share of women was 48 percent. Achieved. CLR Review For Official Use Only Independent Evaluation Group 7 • Share of recipients of social assistance who work formally: Baseline: 1.46% (women - 0.99%) (2014); Target: 5% (women – 3%) (2018). The CLR reports that 6.89 percent of recipients work formally. However, IEG could not verify the share of women recipients. Mostly Achieved. 21. The first two indicators reflect increased targeting accuracy of the social protection system, which is a dimension of efficiency. IEG rates objective 6 as Mostly Achieved. 22. Objective 7: Access to basic and municipal services enhanced. This objective was supported through the Municipal Services Improvement Projects 1 (FY09) and 2 (FY16). The objective had two indicators: • Additional households with improved piped water connections: Baseline: 0 (2014); Target: 30,000 (2018). 16,308 additional households benefited from improved piped water connections as of June 2018. Partially Achieved. • Additional households with improved solid waste services: Baseline: 0 (2014); Target: 60,000 (2018). 524,216 people in urban areas were provided with access to regular solid waste collection as of December 2018, which, represents about 146,000 households. Achieved. 23. Additional information provided by the region indicates that 414,000 people benefited from improved local infrastructure. On balance, IEG rates Objective 7 as Mostly Achieved. 24. Focus Area II is rated as Moderately Satisfactory. There was substantial progress on improving the efficiency of the social protection system. There was also good progress in improving access to water and sanitation connections. However, there was no progress on focusing the education system on skills for the labor market. Overall Assessment and Rating 25. IEG rates the CPS development outcome as Moderately Satisfactory. Of the seven objectives, five were Achieved or Mostly Achieved and two were Partially Achieved or Not Achieved. On Focus Area I (Growth and Competitiveness), there was good progress in improving public finance and road infrastructure and increasing the availability of clean energy. However, progress on improving investment climate was limited. On Focus Area II (Skills and Inclusion), there was substantial progress on improving the efficiency of the social protection system. There was also good progress in improving access to water and sanitation connections. However, there was no progress on focusing the education system on skills for the labor market. Objectives CLR Rating IEG Rating Focus Area I: Growth and Competitiveness. Not Rated Moderately Satisfactory Objective 1: Improved fiscal and public financial Mostly Achieved Mostly Achieved management. Objective 2: Better conditions for private investment Partially Achieved Partially Achieved and links to FDI. Objective 3: Road infrastructure improved. Achieved Achieved Objective 4: More clean energy available. Achieved Achieved Focus Area II: Skills and Inclusion. Not Rated Moderately Satisfactory Objective 5: Tertiary and vocational education Not Achieved Not Achieved system more focused on skills for labor market. Objective 6: Social protection system more efficient Achieved Mostly Achieved and compatible with employment. Objective 7: Access to basic and municipal services Achieved Mostly Achieved enhanced. CLR Review For Official Use Only Independent Evaluation Group 8 6. WBG Performance Lending and Investments 26. At the beginning of the CPS period, total IBRD commitments were $349.4 million, with nine IPF operations, including three Additional Financing, and one DPF operation. During the CPS period, total new commitments of $223.4 million were below the planned $400.0 million, reflecting delays in the development of new operations due to the 2015-17 political crisis. The new lending portfolio consisted of four IPF operations, reflecting a shift in focus from the inherited portfolio. Compared to the pre-existing portfolio, the new financing portfolio allocated more for transport (72 percent from 30 percent) and for municipal services (from 12 percent to 21 percent); and less for social protection (from 15 percent to 7 percent); and none to other sectors in the pre-existing portfolio, including energy, skills development, competitiveness, and cadaster services. In addition to IBRD lending, TF commitments were $ 42 million, including $34.9 million from the EU IPA TFs for Municipal Services Improvement (rural component) and Local and Regional Competitiveness in Tourism. 27. During the CPS period, North Macedonia’s portfolio at exit performed well compared to the World Bank and ECA averages. All four projects validated by IEG (or 100%) were rated Moderately Satisfactory or better, above the averages for ECA (83 percent) and the Bank (78 percent). In terms of commitments, North Macedonia also performed well, with all four projects rated Moderately Satisfactory or better compared to the averages for ECA (91 percent) and World Bank (86 percent). However, North Macedonia’s closed portfolio had a lower percentage of moderate or lower risk to development outcome (RDO) ratings (26 percent and 40 percent in value and number of operations, respectively), compared to the averages for ECA (60 percent and 52 percent), and Bank-wide (48 percent and 42 percent). The overall high RDO rating for North Macedonia’s portfolio at exit was due to two operations that had significant to high risks of not being sustained in the future. 28. Overall, North Macedonia’s active World Bank portfolio also performed well, notwithstanding the 2015-17 crisis that significantly affected some projects. Only one project (3 percent) was at risk during the CPS period compared to ECA (20 percent) and the World Bank (24 percent). In terms of commitments, North Macedonia’s portfolio at risk was 6 percent compared to ECA (17 percent) and the World Bank (22 percent). According to the CLR, good portfolio performance reflects the Bank Group’s strengthened efforts at portfolio management, including special focus on procurement, support to technical staff in project implementation units, and regular portfolio briefings with the Ministry of Finance. 29. During the CPS period, IFC made net commitments of $19.8 million in long term loans to one company in the financial sector and another in the industry sector. IFC investments declined markedly compared to plans as the crisis reduced investment demand and created excess bank liquidity. The financial sector investment supported the third largest bank whose growth strategy focused on the SME segment. The industry sector investment supported IFC’s efforts to develop local supply chains in the automotive industry. Average outstanding commitments under the short- term trade finance guarantee amounted to $1.5 million. 30. During the CPS period, IEG validated (EvNote) two IFC Expanded Project Supervision Report (XPSR). IEG rated a commercial banking project Mostly Unsuccessful for Development Effectiveness since the project materially fell short of targets. IEG rated a second commercial banking project Mostly Successful for Development Outcome. 31. During the CPS period, MIGA underwrote political risk guarantees to two financial institutions amounting to $156.4 million. Advisory Services and Analytics products (ASA) 32. The World Bank delivered more ASA outputs compared to what was envisaged in the original CPS and revised at the PLR stage, to compensate for the drop in lending following the political crisis. The scaled- up ASA provided the basis for new operations and provide advice to the CLR Review For Official Use Only Independent Evaluation Group 9 new government. Most ASA topics were closely aligned with CPS objectives and cross-cutting issues. The CPS planned for 11 tasks, but the World Bank delivered 33 ASA comprising 11 Economic Sector Work (ESW) and 22 Technical Assistance (TA) outputs. Key ASA outputs were on public expenditure, debt issues, public sector reform, and energy efficiency; and addressed cross- cutting topics, notably gender and poverty. The regional perspective was covered in several Western Balkans reports, including on growth and shared prosperity, transport connectivity and trade logistics, and education. Outputs with donor financing strengthened coverage of CPS areas, including labor markets, energy efficiency and municipal services. Many reports, notably the 2017 Policy Notes, are not available to the public in the World Bank’s Open Knowledge Repository. 33. During the CPS period, IFC approved one AS project amounting to $1.8 million to support the development of local supply chains in the automotive sector. The project was terminated and was replaced with a regional supply chains project which would enable North Macedonia enterprises access to a larger pool of investors. 34. During the CPS period, IEG validated (EvNote) one IFC Project Completion Report for Advisory Services for an energy project. The EvNote rated the Development Effectiveness of the project as Mostly Unsuccessful due to non-achievement of expected outcomes and impact. Results Framework 35. The results framework reflected reasonably well the links between the government’s strategy, the CPS objectives and indicators, and the supporting World Bank Group’s interventions. Generally, indicators were measurable, with baselines, targets and their associated dates (albeit some were provided at the PLR stage and four were not available). CPS objectives were also well supported by WBG interventions. For example, Objective 1 (improved fiscal management) addressed the rapid build-up of debt in the aftermath of the 2009 global crisis and shortcomings on public financial management. The fiscal deficit and approval of a new organic budget law were appropriate indicators that reflected progress towards this objective, and the FY16 Public Expenditure Review provided appropriate support through its analyses of debt sustainability and the budget process. At the PLR stage, associated baseline and target dates were added for most of the indicators and some indicators were added or dropped to capture increased WBG engagement in some areas of public finance, access to finance and competitiveness, and to reflect implementation delays. However, there were some shortcomings: Objective 2 (on private investment), where IFC’s transactional indicators do not appropriately reflect the country-wide objective; and Objective 5, where the first indicator does not capture the focus on TVET objective. Partnerships and Development Partner Coordination 36. The CPS envisaged strong coordination with partners, primarily with the European Union. It also coordinated its activities with other partners including the European Bank for Reconstruction and Development, the European Investment Bank (EIB), the Council of Europe Development Bank (CEB), and the European Commission. Coordination issues included assurance of complementarity of projects and advisory services to jointly reinforce the EU accession process; cooperation through parallel/joint financing (with the EBRD on roads rehabilitation and with the EU on municipal services), consideration of EU acquis requirements 7, and capacity to absorb IPA funds. The CLR notes that the EU was the key partner of the World Bank to advance the accession cross-cutting theme and to help North Macedonia absorb available IPA funds through two World Bank projects, and to support the government on municipal services, public administration reform, education, competitiveness, and labor markets. The World Bank also coordinated its activities with the U.S. Agency for International Development (USAID) and the Swiss State Secretariat for Economic Affairs (SECO), under the Municipal Services Improvement Project. 7 Acquis Communautaire is the accumulated body of European Union (EU) law and obligations. CLR Review For Official Use Only Independent Evaluation Group 10 Safeguards and Fiduciary Issues 37. During the CPS period, three projects (in transport, social development, and energy and extractives) triggered environmental and social safeguards. The CLR reports that safeguards policy requirements were complied with, despite implementation delays and coordination difficulties experienced in the application of the Involuntary Resettlement policy. In the case of the Energy Community of South East Europe Adaptable Program Loan (P082337), the reported problems relate to the poor management of the land acquisition process, inadequate coordination and poor dialogue between the stakeholders, which caused the affected population to resist the project and block access to the construction sites. In the case of the Regional and Local Roads Program Support project (P107840), implementation challenges included poor road side maintenance, hazardous slope, and absence of measures to protect the infrastructure. The projects' ICRs and ICRRs confirmed the general compliance with the policy requirements. The ICRs and ICRRs further noted that all these issues were mitigated at projects' completion. No Inspection Panel investigation was recorded during the CPS. 38. During the review period, INT received one complaint on a social protection project and one related to an IFC operation. INT did not launch any investigations. Ownership and Flexibility 39. The alignment of the CPS objectives with the government’s 2014-18 program ensured government commitment to implement the CPS program. In addition, the CPS consultations with the government, civil society, the private sector, academia and other development partners was informed by the findings of a March 2015 Opinion Survey and by consultations with the government, civil society, the private sector, academia and other development partners. However, the government’s commitment wavered in some areas during the 2015-17 political crisis. The CLR notes, for example, that the political crisis affected the ability of the government to interact with stakeholders in higher education, stalling the reform program in this area. The World Bank responded to changes in commitment by reducing lending, intensifying portfolio management and increasing ASA. As result, the number of projects approved during the CPS period declined from 8 to 4 projects while ASA outputs increased from 11 planned to 33 actual outputs. Nevertheless, with continued engagement, and as the crisis subsided, financing activities picked up pace again in FY19. The World Bank also demonstrated flexibility in other areas, including timely response to government demands for scaled up ASA (e.g., the policy notes to the new government) and for additional financing to the Municipal Services Improvement Project. WBG Internal Cooperation 40. Bank and IFC activities largely reflected a division of labor between the two institutions, with limited joint work. The CPS envisaged a division of labor between the two institutions, with IFC working on the supply of credit to SMEs and the World Bank addressing the demand side. However, the CPS also anticipated joint IFC/Bank implementation of the Balkans Renewable Energy Program. During implementation, the CLR notes that both institutions worked jointly on trade logistics (risk- based border inspections), tourism, and automotive backward linkages pilot program 8. Two of the seven CPS objectives (private investment and clean energy) were covered by both the World Bank and IFC, reflecting primarily division of labor. On Objective 2 (private investment) IFC provided support through its MSMEs portfolio and ASA on automotive backward linkages ((jointly with the World Bank), road concessions, and hydro power. The World Bank supported policy reforms through its Competitiveness DPL and several other ASA outputs. On Objective 4 (Clean Energy) (IFC provided support for investment in renewable energy though its renewable Energy Macedonia Small Hydro Advisory Project and the World Bank provided ASA on energy. 8 The program seeks to stimulate linkages between local small and medium enterprises and large foreign companies operating in a country. CLR Review For Official Use Only Independent Evaluation Group 11 Risk Identification and Mitigation 41. The CPS and PLR identified seven major risk factors that could affect the program’s implementation: a deteriorating Euro economy, political instability (particularly due to unemployment and the slow pace of EU accession), natural disasters (mainly floods and earthquakes), changing priorities which could delay implementation, resistance to high profile operations, capacity constraints, and data constraints (notably on poverty and shared prosperity). The PLR assessed the overall risk as Moderate, albeit Substantial on political, capacity, and environmental/social risks. Intended mitigation strategies included changes in the volume or composition of financial support, Bank advice on disaster risk management, social and environmental safeguards (and technical assistance and implementation. The CLR argues that although the Bank did not anticipate the depth and length of the 2015-17 political crisis, it attenuated its effect on implementation through portfolio management, support to technical staff, stakeholder engagement, and ASA. Nevertheless, the crisis contributed to the decline in IFC lending (e.g., with lower demand for credit during 2017) from $80- 100 million to $20 million, and to the delay in the planned fiscal and competitiveness DPLs to FY19. Overall Assessment and Rating 42. IEG rates WBG performance as Good. The CPS addressed well-identified development challenges and benefited from alignment with the Government’s 2014-18 economic program, consultation with multiple stakeholders, and from the findings of a 2015 opinion survey. The CPS was selective, and the objectives addressed critical constraints and were consistent with the twin corporate goals. The planned interventions (lending and ASA) and use of instruments were generally appropriate to achieve CPS objectives. There was a division of labor between the Bank and IFC, but with limited joint work. The World Bank Group forged partnerships with other development partners, mainly with the EU and also with other EU institutions, USAID and SECO. The results framework reflected reasonably well the link between the government’s strategy, objectives and Bank Group interventions. Although the CPS identified relevant risks with appropriate mitigation measures, it did not anticipate the depth and length of the 2015-17 political crisis. 43. Implementation of new lending and IFC investments slowed down during the 2015-17 political crisis. In contrast to lending, the Bank delivered higher than planned ASA outputs that increased its preparedness for future operations and provided advice to the new government. Active and closed portfolio performed well overall with no major fiduciary or safeguards issues, despite implementation challenges from the crisis. According to the CLR, the Bank Group took a proactive stance in portfolio management including focus on procurement, support for technical staff in projects, briefings with the Ministry of Finance, and stakeholder outreach and collaboration. INT received two complaints but did not launch any investigations. 7. Assessment of CLR Quality 44. The CLR presents a careful and informative assessment of the CPS development outcomes and World Bank Group performance. It provides evidence on the extent to which outcomes were achieved and brings in additional evidence to supplement CPS indicators. The CLR also presents a well-considered assessment of CPS design and implementation and its alignment with the corporate goals. However, it is unclear in some cases how the lessons relate to CLR findings. 8. Findings and Lessons 45. The CLR provided seven lessons and three key lessons are summarized as follows. First, work in a complex political environment requires flexibility, proactive portfolio monitoring, and close engagement and dialogue with the Government. Second, to be a politically independent actor, the WBG t needs to gain broad acceptance by engaging with the Government as well as representatives of opposition parties and civil society. Third, linking the CPS to the EU accession agenda helps accelerate accession. CLR Review For Official Use Only Independent Evaluation Group 12 46. IEG adds the following lessons: • During a political crisis, increased use of ASA to compensate for decline in lending and sound portfolio management can help sustain the World Bank Groups engagement and impact. As a result of the 2015-17 crisis in North Macedonia, the Bank Group postponed new lending operations and scaled up its ASA work. The ASA work provided the analytical underpinnings for new operations and provided policy advice to the new government. The focus on portfolio management contributed to sustained improvements in the World Bank’s active portfolio and yielded better results at exit. • World Bank Group’s support for the accession agenda can advance reforms and yield better development outcomes. Thus far, accession support (e.g., on energy) helped achieve the CPS development outcomes. The recent resolution of North Macedonia’s dispute with Greece will allow negotiations to move forward and thus open a new window of opportunity for the WBG to further anchor its support to the EU accession development agenda. Going forward, the Bank Group engagement may entail even closer coordination with development partners, notably the EU, to provide needed financing and analytical support. Annexes CLR Review 13 Independent Evaluation Group Annex Table 1: Summary of Achievements of CPS Objectives – Republic of North Macedonia Annex Table 2: Planned and Actual Lending for the Republic of North Macedonia, FY15-FY19 ($, millions) Annex Table 3: Advisory Services and Analytics Work for the Republic of North Macedonia, FY15-FY19 Annex Table 4: The Republic of North Macedonia Grants and Trust Funds Active in FY15-FY19 ($, millions) Annex Table 5: IEG Project Ratings for the Republic of North Macedonia, FY15-FY19 ($, millions) Annex Table 6: IEG Project Ratings for the Republic of North Macedonia and Comparators, FY15-FY19 Annex Table 7: Portfolio Status for the Republic of North Macedonia and Comparators, FY15-FY19 Annex Table 8: Disbursement Ratio for the Republic of North Macedonia, FY15-FY19 Annex Table 9: Net Disbursements and Charges for the Republic of North Macedonia, FY15-FY19 ($, millions) Annex Table 10: Total Net Disbursements of Official Development Assistance for the Republic of North Macedonia ($, millions) Annex Table 11: Economic and Social Indicators for the Republic of North Macedonia Annex Table 12: List of IFC Investments in the Republic of North Macedonia ($, millions) Annex Table 13: List of IFC Advisory Services in the Republic of North Macedonia ($, millions) Annex Table 14: IFC net commitment activity in the Republic of North Macedonia, FY15 - FY18 ($, millions) Annex Table 15: List of MIGA Projects Active in the Republic of North Macedonia, FY15-18 ($, millions) CLR Review Annexes Independent Evaluation Group 15 Annex Table 1: Summary of Achievements of CPS Objectives – Republic of North Macedonia CPS FY15-FY18: Focus Area I: Actual Results IEG Comments Growth and Competitiveness 1. CPS Objective: Improved fiscal and public financial management Indicator 1: Fiscal deficit The WBG supported the preparation of the Before the PLR, the declines in line with medium- Macedonia Public Expenditure Review (PER, indicator’s baseline was: term budget framework: project P147200, FY16) and of a Public 4.1 percent of GDP (2014). Finance Review (PFR) (P165084, FY18). In Years added at PLR for the addition, North Macedonia joined the WBG baseline/target. Baseline: 4.2 percent of GDP Debt and Risk Management Program (2014) (P162741, FY17) in December 2016 (see Target: below 3 percent of GDP WBG information and the concept note) which (2018) supported the preparation of an action plan for debt management reforms. As indicated in the CLR, the estimated fiscal deficit of the General Government was 1.8% of GDP in 2018, excluding the Public Enterprise for State Roads (PESR) debt, according to North Macedonia’s Ministry of Finance. Achieved Indicator 2: Quarterly reports on The Public Expenditure Policy Based The 2018 IMF Fiscal consolidated public and publicly Guarantee (P133791, FY14, see IEG ICRR: Transparency Evaluation guaranteed debt published on MS) supported this indicator. North Macedonia for North Macedonia (see the MoF website: benefited from the WBG Debt and Risk document) indicates that Major Management Program (P162741, FY17) in quarterly public debt Outcome December 2016 (see WBG information and reports, which includes Measures Baseline: No (2014) the concept note). information on general Target: Yes (Q3 2014) government and As reported in the CLR, consolidated quarterly government guaranteed reports are regularly published on the Ministry debt, are published within of Finance (MoF) website since the 3rd quarter one month of the end of the of 2014. The Statistical Review information quarter. from the MoF’s website presents this data since the 1st quarter of 2014. Achieved Indicator 3: Organic budget law The WBG supported technical assistance on Indicator added at PLR. approved: Organic Budget Law (P168027, FY18, see Concept Note). Additional information provided by the country Baseline: No (2017) The 2018 IMF Fiscal Transparency Evaluation team indicates that the first Target: Yes (2018) for North Macedonia (see document) reports draft of the Organic Budget there have been some reforms on the Budget Law was with the Ministry Law, aimed at improving the quality and of Finance, awaiting their transparency of the budget and of medium- comments, as of January term budgeting procedures. The North 2019. Macedonian Public Financial Management Reform Program 2018-2021 (see document) reports that the Organic budget Law should be reviewed to be in line with the improvements in public financial management systems and that a new Organic Budget Law was planned for CLR Review Annexes Independent Evaluation Group 16 CPS FY15-FY18: Focus Area I: Actual Results IEG Comments Growth and Competitiveness 2018. However, as reported in the CLR, the Law was not yet approved. Not Achieved Indicator 4: Road Enterprise The National and Regional Road Years added at PLR for the makes investments using Road Rehabilitation project (P148023, FY15) baseline/target. Asset Management System supported this indicator. (RAMS): The June 2018 ISR: S reports that all activities to modernize road asset management have Baseline : No (2014) been completed, which provide the necessary Target : Yes (2018) tools for the Public Enterprise of States Roads (PESR) to operate as a more efficient road manager. However, the December 2018 ISR: S reports that no five-year rolling program for national and regional roads preservation works had been prepared based on RAMS. Finally, the Strategic Country Diagnosis (SCD) indicates that the asset management system, to prioritize interventions, is not being used systematically and will require better data collection. The CLR also indicates that complete institutionalization of the RAMS is pending. Not Achieved 2. CPS Objective: Better conditions for private investment and links to FDI Indicator 1: Private investment As reported in the CLR, about USD 244 Years added at PLR for the facilitated in the real sector million of private investment was facilitated in baseline/target. through IFC interventions: the real sector through the IFC Renewable Energy Advisory Program in Small Hydro Power (project 575587, FY16, see AS Baseline : EUR80 million (2014) completion report). Target : EUR180 million (2017) Achieved Indicator 2: Number of people The CLR reports that 1,900 people were Indicator added at PLR. and MSMEs with improved registered in one inactive client bank as of access to financial services: 2016 and 3,500 as of 2017 for another active North Macedonia’s ranking client bank according to IFC Reach database. in the World Economic The Reach database shows a decline in the Forum Global Baseline: 1,751 (2015) number of MSME loans outstanding (in IFC Competitiveness ranking Target: 7,100 (2019) client institutions) from 4,647 in 2015 to 2,491 improved from 56/140 in in 2016. 2015-2016 (see report) to 45/138 in 2016-2017 (see Not Achieved. report) for the “ease of access to loans” and from 52/140 to 60/138 for the “affordability of financial services” indicator between the same dates. The 2018 World Economic Forum Global CLR Review Annexes Independent Evaluation Group 17 CPS FY15-FY18: Focus Area I: Actual Results IEG Comments Growth and Competitiveness Competitiveness ranking does not permit comparison as indicators have changed. Indicator 3: Volume of The CLR reports that the volume of Indicator added at PLR. outstanding MSME loan portfolio outstanding MSME loan portfolio of IFC clients of IFC clients: reached USD 178 million in on inactive client bank as of calendar year 2016 and USD 230 million as of calendar year 2017 for another Baseline: $54.2 million (2015) active client bank according to IFC Reach Target: $588.6 million (2019) Database for the IFC project NLB Tutunska Banka (project 54259, FY09. The Reach database shows a decline in the volume to MSME loans outstanding (in IFC client institutions) from $207 million in 2015 to $181 million in 2016. Not Achieved. Indicator 4: Number of days to The First and Second Competitiveness Years added at PLR for the obtain construction permit: Development Policy Operation – DPO baseline/target. (P126038, FY13 and P130847, FY 14, IEG ICRR: S) supported this objective through The Business Environment Baseline: Average 181.1; prior actions oriented at attracting greenfield and Enterprise Manufacturing 43; Services 243.1 investment such as the establishment of a Performance Survey (BEEPS) (2013) one-stop shop for construction permits. (BEEPS) data for 2013 (baseline) is slightly As reported by the Country Team, BEEPS different: Manufacturing 44; Target : Average 83; Manufacturing 2017-2018 is not available for North Services 234.5 25; Services 100 (2018) Macedonia to assess progress. According to Doing Business, 96 days and 11 procedures are required in 2017 to obtain construction permits (see Doing Business 2018 report) compared to 90 days and 12 procedures in 2014 (see 2014 Doing Business report). Doing Business also indicates that North Macedonia’s competitive ranking in dealing with construction permits improved from 63/189 to 26/180 between 2014 (see 2014 report) and 2018 (see 2018 report). Partially Achieved Indicator 5: Improved local The First Second Competitiveness DPO At PLR, this indicator was business and export (P126038, FY13 and P130847, FY 14, IEG changed from the original: sophistication: ICRR: S) supported this objective in addition Improved local business to the Local and Regional Competitiveness Sophistication: Project (P154263, FY16, December 2018 ISR: Baseline: Sophistication 3.65; MU) and the Competitive Industries and Baseline: Sophistication Innovation 3.2 (Global Innovation Support Program (see October 3.65; Innovation 2016 Aide Memoire and program page). Competitiveness Report 2013, pillars 11 &12), CLR Review Annexes Independent Evaluation Group 18 CPS FY15-FY18: Focus Area I: Actual Results IEG Comments Growth and Competitiveness share of medium and high tech In 2017, the WBG completed the report 3.2 (Global exports in the total exports – 57% Positioning FYR Macedonia for the Global Competitiveness Report (2016). Economy: the Impact of Reforms and 2013, pillars 11 &12) Investment Promotion in the Automotive Target: Sophistication 4.0; Components Manufacturing Sector which Innovation 4.0 (2018) Target: Sophistication 4.0; indicates that the share of high and medium Innovation 4.0, tech products in the country’s export basket share of medium and high tech increased from 39% to 57% between 2011 exports in the total exports – 60% and 2016. The CLR reports that this current (2018). share is 57.4% (2017 data from UN Comtrade using Eurostat definition of medium- and high- tech exports), missing the CPS target. As reported in the CLR, North Macedonia’s ranking in the World Economic Forum Global Competitiveness ranking: - slightly decreased from 72/140 in 2015-2016 (score of 3.9/7,see report) to 75/138 in 2016- The 2018 World Economic 2017 (score of 3.8/7, see report) for Business Forum Global Sophistication indicator Competitiveness ranking - slightly improved from 58/140 (score of does not permit comparison 3.4/7) to 51/138 for the “Innovation” indicator for North Macedonia as (score of 3.4/7) between the same dates. indicators used in the Recorded progress missed the CPS targets. Report have changed. Partially Achieved Indicator 6: Jobs created by The First Second Competitiveness DPO Indicator added at PLR. greenfield FDI with state (P126038, FY13 and P130847, FY 14, IEG incentives (in and outside ICRR: S) and the Competitive Industries and The WBG also supported TIDZs): Innovation Support Program (see October the preparation of the FYR 2016 Aide Memoire and program page) Macedonia Supplier supported the government’s investment Development Pilot Program Baseline: 12,000 (2016) program and strengthened governance of the Toolkit: Materials and Target: 13,000 (2018) Technological Industrial Development Zones Lessons Learned (see (TIDZs) and implement foreign direct report) published in 2017 investment (FDI) attraction reforms. and which reports on program implementation The CLR reports that the target was achieved, aimed at increasing the with 20,000 jobs created by greenfield FDI sophistication of local with state incentives. The increase from SMES, integrating them 12,000 to 20,000 jobs could not be verified. into the global and regional supply chains of large Not Verified foreign companies located inside and outside TIDZs. 3. CPS Objective: Road infrastructure improved Indicator 1: Percentage of The National and Regional Road At PLR, the baseline and national and regional roads Rehabilitation project (P148023, FY15) target were changed from: network in good and fair supported this indicator. Baseline: 64 percent (2015) condition increased: Target: 74 percent (2018) The June 2018 ISR: S reports that the share of roads in good or fair condition out of the Baseline: 79% (2014) CLR Review Annexes Independent Evaluation Group 19 CPS FY15-FY18: Focus Area I: Actual Results IEG Comments Growth and Competitiveness Target: 81% (2018) total of classified roads was 87% as of May and the following indicator 2018. was dropped: Number of Achieved. people with better access to transportation through new PPPs: Baseline: 0 (2014) - Target: 300,000 (2018) 4. CPS Objective: More clean energy available Indicator 1: Additional annual The CLR reports that the target was achieved, At PLR, the following renewable clean energy with 336GWh of annual renewable clean indicator was dropped: generation: energy generation achieved, using data from Total projected lifetime the IFC Renewable Energy Macedonia energy savings of new EE Advisory Project (575587, FY12). The project’s measures implemented Baseline: 0 GWh (2014) Completion Report indicates that the EUR 219 under Bank-supported Current: None million financing in renewable energy assets in programs: North Macedonia permitted the construction of Baseline: 0 (2014) 150 renewable energy plants with a capacity of Target: 600 GWh (2018) Target: 105 GWh (Bank) + 100 150 MW which translated into the benefit of GWh (IFC) (2018) 336,273 MWh (or 336.2 GWh) of new As reported in the CLR and renewable energy to be produced per year. the country team, no IBRD Achieved intervention contributed to this Indicator, although the the WBG supported technical assistance through the Municipal Energy Efficiency Promotion (P150863, FY16, see the produced Guidance Note of February 2016). CPS FY15-FY18: Focus Area II: Actual Results IEG Comments Skills and Inclusion 5. CPS Objective: Tertiary and vocational education system more focused on skills for labor market Indicator 1: Share of public The Skills Development and Innovation Years added at PLR for the universities accredited with new Support project (P128378, FY14) supported baseline /target. quality assurance measures this indicator. consistent with EU norms: The December 2018 ISR: MS reports, as of The ISR: MS also reports October 2018, no progress in relation to the that the national quality share of public universities accredited which assurance agency (NQAA) Baseline: 0 (2014) utilize new quality assurance and accreditation for higher education has Major Target : 60 percent (2018) measures develop din accordance with EU not been established. The Outcome norms and practices. country team indicated that Measures Not Achieved the Higher Education Law was approved in June 2018 and that it stipulates the establishment of a NQAA, responsible for accreditation and evaluation of the Higher Education Institutions and that in December 2018, the CLR Review Annexes Independent Evaluation Group 20 CPS FY15-FY18: Focus Area II: Actual Results IEG Comments Skills and Inclusion Government adopted a Decision for the establishment of the NQAA (see decision). Indicator 2: Percentage The Skills Development and Innovation At PLR, the indicator was Support project (P128378, FY14) supported revised from: “Share of increase in the number of this indicator. The December 2018 ISR: MS secondary TVET students secondary TVET students reports, as of October 2018, a 36.30% receiving practical training benefiting from practical training increase in the number of secondary technical in firms: in SMEs and large firms: and vocational education training (TVET) Baseline: 28 percent students benefiting from practical training in (2014) Baseline: 11,543 students (2016) SME and large sized firms. It also shows that project baseline was already 36.30% as of Target: 48 percent (2018)” Target: 20 percent increase (2018) April 2018 and, hence, that no progress has been recorded (see IEG comment). The December 2018 ISR: Not Achieved MS indicates that the baseline was determined previously, when the TVET Center did not use standardized questionnaire for data collection and that standardized data collection was introduced in 2015/2016 which led to a change in the baseline value to 36.60% or 11,543 students. 6. CPS Objective: Social protection system more efficient and compatible with employment Indicator 1: Share of the poorest The Conditional Cash Transfers Project Years added at PLR for the quintile receiving social (P103974, FY09) supported this indicator. baseline /target. assistance: The CLR reports that 77.7% of the poorest quintile was receiving social assistance – As per the Project similarly, the July 2018 ISR: S reports that Appraisal Document Baseline: 65.6% (2011) overall safety nets’ targeting accuracy (PAD), the project’s key Target: over 70% (2018) increased from 60.8% to 77.70% between performance indicator February 2014 and June 2018. “Overall safety nets’ Achieved targeting accuracy maintained or improved after year 4” was measured as the percentage of safety nets transfers going to the poorest quintile. Indicator 2: Share of Social The Conditional Cash Transfers Project At PLR, as the old baseline Financial Assistance (P103974, FY09) supported this indicator. and target values for the beneficiaries with children ages As reported in the CLR, as per the July 2018 share of female 15-18 registered for conditional ISR: S, 85.91% of the share of social financial beneficiaries were cash transfers: assistance beneficiary children aged 15-18 incorrect, the baseline and have been registered for conditional cash target were changed from: transfers (CCT) as of June 2018. The share of Baseline: 76% (women: 47%) women was 48.10%. Baseline: 76% (women: (2014) Achieved 73%) (2014) CLR Review Annexes Independent Evaluation Group 21 CPS FY15-FY18: Focus Area II: Actual Results IEG Comments Skills and Inclusion Target: over 80% (women: to Target: over 80% (women: maintain or increase this share of 75%) (2018) female beneficiaries) (2018) Indicator 3: Share of recipients of The Conditional Cash Transfers Project Years added at PLR for the social assistance who work (P103974, FY09) supported this indicator. baseline /target. formally: The CLR reports that 6.89% of the recipients of social assistance work formally (of which The July 2018 ISR: S does 2.54% are women) using the database of the not report this information; Baseline: 1.46% (women - 0.99%) National Employment Agency (NEA) which it only reports that the CCT (2014) has been provided by the NEA. Additional subsidized employment Target: 5% (women – 3%) (2018) information from the region indicates that the program take-up has Ithe share of recipients of social assistance increased and helped 315 who work formally was 6.89%. However, IEG young underprivileged could not verify the share of women recipients. persons to get on the job Mostly Achieved training and their first job. 7. CPS Objective: Access to basic and municipal services enhanced Indicator 1: Additional The Municipal Services Improvement Project 1 Years added at PLR for the households with improved piped (P096481, FY09) and 2 (P154464, FY16) baseline /target. water connections: supported this indicator. The March 2019 ISR: S of P096481 reports The March 2019 ISR of that 16,308 additional households benefited P096481 also reports that Baseline: 0 (2014) from improved piped water connections as of 414,773 individuals were Target: 30,000 (2018) June 2018. beneficiaries of improved Partially Achieved local road infrastructure. Indicator 2: Additional The Municipal Services Improvement Project Years added at PLR for the households with improved solid (P096481, FY09) supported this indicator. baseline /target. waste services: The March 2019 ISR: S of P096481 reports that, 524,216 people in urban areas were The Country Team provided with access to regular solid waste indicated that the average Baseline : 0 (2014) collection as of December 2018, which, number of people per Target : 60,000 (2018) according to estimates from the national household in North statistics, represents about 146,000 Macedonia is 3.58, households (see IEG comment). according to the latest Achieved census of 2002 (see state statistics report). CLR Review Annexes Independent Evaluation Group 22 Annex Table 2: Planned and Actual Lending for the Republic of North Macedonia, FY15-FY19 ($, millions) Approved Proposed Approval Closing Proposed Proposed Project ID Project name IBRD FY FY FY Amount Amount Amount CPS PLR Project Planned Under CPS/PLR Dropped Small Hydro Water Storage 2015 60 Dropped Solid Waste Water 2015 20 Dropped ICT Based Jobs 2015 10 Moved to Macedonia Public Finance DPL 2015 70 80 2019 National and Regional Roads P148023 2015 2015 2020 70 71 71.0 Rehabilitation Moved to Macedonia Energy Efficiency Fund 2016 20 20 2019 Dropped Macedonia Competitiveness DPL3 2016 70 Road Upgrading and Development P149955 2017 2016 2021 80 91 90.9 Project MUNICIPAL SERVICES P154464 2016 2016 2022 28 28.0 IMPROVEMENT 2 Dropped Social Protection Reform 2017 TBD Regional Trade and Transport Proposed 2019 TBD Facilitation P162246 Social Services Improvement Project 2019 2019 2025 35 33.4 Total Planned 400.0 325.0 223.4 Approved Proposed Approval Closing Proposed Proposed Project ID Project name IBRD FY FY FY Amount Amount Amount Project Unplanned Under CPS/PLR Total Unplanned Approved Proposed Approval Closing Proposed Proposed Project ID Project name IBRD FY FY FY Amount Amount Amount CPS PLR On-going Projects During the CPS/PLR Period P083126 REG & REAL ESTATE (CRL) 2005 2016 14 P082337 ECSEE APL #3 (FYR MACEDONIA) 2006 2017 25 REGIONAL AND LOCAL RDS PROG P107840 2008 2016 105.2 SUPPORT PROJ P103974 CCT 2009 2019 25 P096481 MUNICIPAL DEVELOPMENT 2009 2020 25 AF-REAL ESTATE CADASTRE & P119688 2010 2015 12.1 REGISTRATION P AF-ENERGY INFRASTRUCTURE P096217 2011 2017 19.1 IMPROVEMENT P129996 AF - MUNI SERV IMPR 2012 50 P130847 MK Competitiveness DPL 2 2014 2015 50 Skills Development & Innovation P128378 2014 2020 24 Support Total On-going 349.4 Source: Macedonia CPS, WB Business Intelligence Table 2a.4, 2a.7, and 2b.1 as of 01/23/2019. * Ratings of parent project; ** Rating as part of a DPL series. CLR Review Annexes Independent Evaluation Group 23 Annex Table 3: Advisory Services and Analytics Work for the Republic of North Macedonia, FY15-FY19 Fiscal Project ID Economic and Sector Work Report Type Global Practice Year Accounting and Auditing ROSC Accounting and Auditing P128942 FY15 Governance Macedonia Assessment (ROSC) P145041* Integrating distributional analysis FY15 Other Poverty Study Poverty and Equity P145042* Regional work FY15 Other Poverty Study Poverty and Equity Mainstreaming gender in P144276* FY15 Sector or Thematic Study/Note Poverty and Equity CPSs/CPSPR P144277* Gender diagnostics FY15 Sector or Thematic Study/Note Poverty and Equity P144278* Gender in the portfolio FY15 Sector or Thematic Study/Note Poverty and Equity P144396* Addressing gender knowledge gaps FY15 Sector or Thematic Study/Note Poverty and Equity South East Europe Regular Macroeconomics, Trade P150699* FY16 Sector or Thematic Study/Note Economic Report (SEE RER) and Investment Regional Balkans Infrastructure P143125* FY16 Sector or Thematic Study/Note Transport Study on Transport Update Public Expenditure Review Macroeconomics, Trade P147200 Macedonia Public Finance Review FY16 (PER) and Investment Macroeconomics, Trade P159722* Western Balkans SCD Synthesis FY17 Sector or Thematic Study/Note and Investment Fiscal Project ID Technical Assistance Output Type Global Practice Year P147029 Macedonia ICT TA FY15 Technical Assistance Transport Western Balkans Poverty P132666* FY15 Technical Assistance Poverty and Equity Assessment Western Balkans Poverty P143093* FY15 Technical Assistance Poverty and Equity Assessment P133412* Western Balkans Gender Monitoring FY15 Technical Assistance Poverty and Equity Finance, ML/FT risk assessment of P150480 FY16 Technical Assistance Competitiveness and Macedonia Innovation Municipal Energy Efficiency P150863 FY16 Technical Assistance Energy & Extractives Promotion Land and Gender – Improving data Social, Urban, Rural and P147100* availability and use in the Western FY16 Technical Assistance Resilience Global Balkans Practice P158072* Western Balkans Poverty FY 16 FY16 Technical Assistance Poverty and Equity Promoting Gender Equality P156428* FY16 Technical Assistance Poverty and Equity Western Balkans P156426* Western Balkans Poverty FY 16-17 FY17 Technical Assistance Poverty and Equity Western Balkans Regular Economic Macroeconomics, Trade P161212* FY17 Technical Assistance Report 10-11 and Investment Western Balkans Trade Logistics P153254* FY17 Technical Assistance Trade & Competitiveness Impact Evaluation Western Balkans Gender Program P161577* FY17 Technical Assistance Poverty and Equity FY17 Western Balkans Regular Economic Macroeconomics, Trade P164576* FY18 Technical Assistance Report S12-13 and Investment Directions for the energy sector in P133231* FY18 Technical Assistance Energy & Extractives the Western Balkan Western Balkans Education P165698* FY18 Technical Assistance Education Engagement CLR Review Annexes Independent Evaluation Group 24 P164996* Western Balkans Gender FY18 FY18 Technical Assistance Poverty and Equity FYR Macedonia Public Finance Macroeconomics, Trade P165084 FY18 Technical Assistance Review and Investment FYR Macedonia Public Sector P166513 FY18 Technical Assistance Governance Reform Support Internal Audit Training of Trainers P160419* FY19 Technical Assistance Governance (IATOT) W-Balkans Biomass Heating Sector P148325* FY19 Technical Assistance Energy & Extractives Study Investment Readiness Impact P158222* FY19 Technical Assistance Other Evaluation Source: WB Business Intelligence 01/23/2019. * Regional ASAs. Annex Table 4: The Republic of North Macedonia Grants and Trust Funds Active in FY15-FY19 ($, millions) Approval Closing Approved Project ID Project name TF ID FY FY Amount Macedonia Government Debt and Risk Management P162741 TF A4048 2018 2022 0.1 Program P163920*** Public Sector Accounting and Reporting TF083455 2018 2022 0.2 P168027 Organic Budget Law TA TF A7985 2018 2020 0.5 P160419*** Internal Audit Training of Trainers (IATOT) TF A3567 2017 2019 0.3 P162776*** Balkans Digital Highway TF A4055 2017 2019 0.4 P160951 Enhancing the implementation of Public Procurement TF A3682 2017 2019 0.3 P154263 Local and Regional Competitiveness TF A1779 2016 2020 17.2 P154263 Local and Regional Competitiveness TF A1780 2016 2020 1.4 P153865*** Venture Capital and Investment Readiness TF 18736 2015 2019 3.7 P150342 ADDITIONAL FINANCING - MSIP (EU-IPA) TF 18812 2015 2019 17.7 P153254*** Western Balkans Trade Logistics IE TF 18714 2105 2017 0.1 P148325*** W-Balkans Biomass Heating Sector Study TF 17297 2014 2019 0.1 P147928*** EU-REPARIS TF 82726 2014 2019 5.0 P150863 Municipal Energy Efficiency Promotion TF 17385 2014 2016 0.3 P144659 Public Accounting Certification Training TF 15604 2014 2016 0.2 P154263 Local and Regional Competitiveness Project TF 14914 2013 2016 1.5 Total 49.1 Source: WB Client Connection as of 01/23/2019. * IEG validates RETF that are 5M and above; ** Rating of parent project; *** Regional projects. CLR Review Annexes Independent Evaluation Group 25 Annex Table 5: IEG Project Ratings for the Republic of North Macedonia, FY15-FY19 ($, millions) Exit Project Total IEG Risk to Project name IEG Outcome FY ID Evaluated DO HIGHLY 2015 P083126 REG & REAL ESTATE (CRL) 24.8 LOW SATISFACTORY 2015 P130847 MK Competitiveness DPL 2 100.5 SATISFACTORY SIGNIFICANT REGIONAL AND LOCAL RDS PROG 2016 P107840 91.5 SATISFACTORY SIGNIFICANT SUPPORT PROJ 2017 P082337 ECSEE APL #3 (FYR MACEDONIA) 43.5 SATISFACTORY MODERATE Total 260.4 Source: WB Business Intelligence Key IEG Ratings as of 01/23/2019. Annex Table 6: IEG Project Ratings for the Republic of North Macedonia and Comparators, FY15-FY19 RDO % RDO % Total Total Outcome Outcome Moderate or Moderate or ECA Evaluated Evaluated % Sat % Sat Lower Lower ($M) (No) ($M) (No) Sat ($) Sat (No) Republic of North Macedonia 260.4 5 100 100 26 40 ECA 15,163.6 113 91 83 60 52 World Bank 76,792.6 802 86 78 48 42 Source: WB Business Intelligence as of 01/23/2019 and IEG staff calculations. CLR Review Annexes Independent Evaluation Group 26 Annex Table 7: Portfolio Status for the Republic of North Macedonia and Comparators, FY15-FY19 Fiscal Year 2015 2016 2017 2018 2019 Ave FY15-FY19 Republic of North Macedonia # Proj 6 6 6 6 6 6 # Proj At Risk 0 0 1 0 0 0 % Proj At Risk 0 0 17 0 0 3 Net Comm Amt ($M) 344.3 314.0 314.0 311.9 322.4 321.3 Comm At Risk ($M) 0.0 0.0 90.9 0.0 0.0 18.2 % Commit at Risk 0.0 0.0 29 0.0 0.0 6 ECA # Proj 207 197 202 204 206 203 # Proj At Risk 30 40 34 45 51 40 % Proj At Risk 14 20 17 22 25 20 Net Comm Amt ($M) 26,192.1 27,213.5 25,219.5 26,524.9 26,116.0 26,253.2 Comm At Risk ($M) 3,507.2 4,288.2 5,460.1 4,138.4 4,941.4 4,467.1 % Commit at Risk 13 16 22 16 19 17 World Bank # Proj 1,402 1,398 1,459 1,497 1,490 1,449 # Proj At Risk 339 336 344 348 364 346 % Proj At Risk 24 24 24 23 24 24 Net Comm Amt ($M) 191,907.8 207,350.0 212,502.9 229,965.6 226,516.1 213,648.5 Comm At Risk ($M) 44,430.7 42,715.1 50,837.9 48,148.8 51,141.5 47,454.8 % Commit at Risk 23 21 24 21 23 22 Source: WB Business Intelligence as of 01/23/2019. Annex Table 8: Disbursement Ratio for the Republic of North Macedonia, FY15-FY19 Fiscal Year 2015 2016 2017 2018 2019 Overall Result Republic of North Macedonia Disbursement Ratio (%) 24 21 12 19 8 16 Inv Disb in FY ($M) 30 31 32 43 14 150 Inv Tot Undisb Begin FY ($M) 125 147 263 231 183 949 ECA Disbursement Ratio (%) 23 17 21 22 13 19 Inv Disb in FY ($M) 2,665 2,276 2,859 2,928 1,573 12,301 Inv Tot Undisb Begin FY ($M) 11,343 13,032 13,779 13,370 12,516 64,040 World Bank Disbursement Ratio (%) 22 19 20 20 10 18 Inv Disb in FY ($M) 21,854 21,154 22,128 22,594 10,973 98,703 Inv Tot Undisb Begin FY ($M) 100,346 108,604 108,151 110,623 113,583 541,307 Source: WB Business Intelligence as of 01/23/2019. CLR Review Annexes Independent Evaluation Group 27 Annex Table 9: Net Disbursements and Charges for the Republic of North Macedonia, FY15-FY19 ($, millions) Repay Period Disb. Amt. Net Amt. Charges Fees Net Transfers Amt. FY15 78.5 45.0 33.5 5.2 2.5 25.8 FY16 37.7 45.8 -8.2 6.8 2.5 -17.4 FY17 28.7 46.9 -18.2 7.1 2.3 -27.7 FY18 33.9 50.3 -16.5 7.4 2.3 -26.1 FY19 8.1 25.8 -17.7 3.6 1.1 -22.4 Report Total 186.9 213.9 -27.0 30.2 10.8 -67.9 Source: WB Client Connection as of 01/23/2019. Annex Table 10: Total Net Disbursements of Official Development Assistance for the Republic of North Macedonia ($, millions) Development Partners 2015 2016 2017 Australia 0.01 0.01 0 Austria 1.84 2.6 2.26 Belgium .. .. 0 Canada 0.43 0.03 0.01 Czech Republic 0.36 1.09 1.46 Denmark .. 0.04 0.03 Finland 0.11 0.11 0.1 France 2.35 2.43 1.79 Germany 1.31 -1.37 -2.43 Greece 0.25 0.05 0.06 Hungary 0.11 0.21 0.14 Ireland 0.02 0.02 .. Italy -0.77 -0.85 -0.91 Japan -2.71 -3.9 -3.85 Korea .. 0.06 .. Luxembourg 0 0.12 0.15 Netherlands .. 0.05 0.32 Norway 2.39 1.88 1.84 Poland 0.06 0.07 0.07 Portugal 0.02 0.03 0.02 Slovak Republic 0.11 0.18 0.22 Slovenia 2.53 3 3.54 Spain -0.18 -0.36 -0.35 Sweden -1.52 0.42 0.26 Switzerland 16.82 22.07 20.51 United Kingdom 3.28 2.48 2.52 United States 19.5 21.4 24.7 CLR Review Annexes Independent Evaluation Group 28 Development Partners 2015 2016 2017 DAC Countries, Total 46.4 51.9 52.4 Bulgaria 0.1 0.2 0.1 Croatia .. .. 0.0 Estonia 0.0 0.0 .. Kazakhstan .. .. 0.1 Lithuania 0.0 0.0 0.0 Malta 0.0 .. .. Romania 0.2 0.3 0.2 Russia .. 0.4 .. Turkey 25.6 19.0 13.2 Non-DAC Countries, Total 25.9 19.9 13.5 EU Institutions 136.0 99.7 81.2 Regional Development Banks, Total 4.9 -0.5 6.3 Council of Europe Development Bank [CEB] 4.9 -0.5 6.3 United Nations, Total 2.6 4.0 3.8 International Atomic Energy Agency [IAEA] 0.1 0.6 0.3 IFAD -0.5 -0.4 -0.6 International Labour Organisation [ILO] 0.2 0.1 0.2 UNDP 0.6 0.6 0.3 UNFPA 0.4 0.3 0.3 UNHCR 0.4 1.4 1.4 UNICEF 1.0 0.6 1.0 World Health Organisation [WHO] 0.5 0.8 0.8 World Bank Group, Total -12.9 -14.1 -14.8 World Bank, Total -12.9 -14.1 -14.8 International Development Association [IDA] -12.9 -14.1 -14.8 Other Multilateral, Total 11.5 7.6 7.6 Global Environment Facility [GEF] 1.1 .. 0.2 Global Fund 4.1 1.2 0.8 OSCE 6.3 6.4 6.6 Multilateral Agencies, Total 142.0 96.6 84.0 Development Partners, Total 214.3 168.3 150.0 Source: OECD Stat database as of 01/23/2019. Note: Data available through 2017 only. CLR Review Annexes Independent Evaluation Group 29 Annex Table 11: Economic and Social Indicators for the Republic of North Macedonia Republic of World North ECA Series Name Bank Macedonia 2015 2016 2017 Average 2015-2017 Growth and Inflation GDP growth (annual %) 3.8 2.9 0.0 2.3 2.1 2.8 GDP per capita growth (annual %) 3.8 2.8 -0.1 2.2 1.7 1.6 GNI per capita, PPP (current international $) 13,330 14,150 14,590 14,023 31,255 16,261 GNI per capita, Atlas method (current $) 5,100 4,990 4,880 4,990 23,442 10,429 Inflation, consumer prices (annual %) -0.3 -0.2 1.3 0.3 0.8 1.7 Composition of GDP (%) Agriculture, value added (% of GDP) 10 9 9 9 2 4 Industry, value added (% of GDP) 24 25 23 24 23 26 Services, etc., value added (% of GDP) 54 53 54 54 65 65 Gross fixed capital formation (% of GDP) 24 24 23 24 20 23 Gross domestic savings (% of GDP) 14 18 18 17 24 25 External Accounts Exports of goods and services (% of GDP) 49 50 55 51 42 29 Imports of goods and services (% of GDP) 65 65 69 66 39 28 Current account balance (% of GDP) -2 -3 -1 -2 .. .. External debt stocks (% of GNI) 70 71 79 73 .. .. Total debt service (% of GNI) 11 8 .. 10 .. .. Total reserves in months of imports 4 4 4 4 8 13 Fiscal Accounts* General government revenue (% of GDP) 29 28 29 29 .. .. General government total expenditure (% of GDP) 32 31 32 32 .. .. General government net lending/borrowing (% of -3 -3 -3 -3 .. .. GDP) General government gross debt (% of GDP) 38 40 39 39 .. .. Health Life expectancy at birth, total (years) 76 76 .. 76 77 72 Immunization, DPT (% of children ages 12-23 91 95 91 92 93 85 months) People using at least basic sanitation services (% 91 .. .. 91 96 68 of pop) People using at least basic drinking water 97 .. .. 97 98 88 services (% of pop) Mortality rate, infant (per 1,000 live births) 11 11 12 11 8 30 Education School enrollment, preprimary (% gross) 36 .. .. 36 74 49 School enrollment, primary (% gross) 94 .. .. 94 102 104 School enrollment, secondary (% gross) 82 .. .. 82 106 76 Population, total (Millions) 2 2 2 2 9,116 7,444 Population growth (annual %) 0.1 0.1 0.1 0.1 0.5 1.2 CLR Review Annexes Independent Evaluation Group 30 Republic of World North ECA Series Name Bank Macedonia 2015 2016 2017 Average 2015-2017 Urban population (% of total) 57 58 58 58 72 54 Poverty Poverty headcount ratio at $1.90 a day (2011 .. .. .. .. 2 10 PPP) (% of pop) Poverty headcount ratio at national poverty lines 22 22 .. 22 .. .. (% of pop) Source: WB Development Data Platform as of 01/23/2019. *International Monetary Fund, World Economic Outlook Database, October 2018. Note: Data available through 2017 only. The Country Team provided additional data, however IEG could not verify this information with publicly available data. Annex Table 12: List of IFC Investments in the Republic of North Macedonia ($, millions) Investments Committed in FY15-18 Project Cmt Project Project Net Net Primary Sector Name Net Comm ID FY Status Size Loan Equity 34389 2015 Active Finance & Insurance 27.3 11.0 - 11.0 36116 2015 Closed Industrial & Consumer Products 8.6 8.8 - 8.8 Sub-Total 35.9 19.7 - 19.7 Investments Committed pre-FY15 but active during FY15-18 Project CMT Project Project Net Net Primary Sector Name Net Comm ID FY Status Size Loan Equity 30600 2013 Active Finance & Insurance 2.0 11.5 - 11.5 28115 2009 Active Finance & Insurance - 5.3 - 5.3 8173 1998 Active Industrial & Consumer Products 1.8 0.8 - 0.8 8972 1998 Active Information 50.0 25.0 - 25.0 Sub-Total 53.8 42.5 - 42.5 TOTAL 89.6 62.2 - 62.2 Source: IFC-MIS Extract as of 10/30/18 CLR Review Annexes Independent Evaluation Group 31 Annex Table 13: List of IFC Advisory Services in the Republic of North Macedonia ($, millions) Advisory Services Approved in FY15-18 Impl Impl Primary Total Funds Project ID Project Name Project Status Start FY End FY Business Line Managed by IFC Macedonia Automotive 600782 2016 2019 TERMINATED TAC 1.80 Backwards Linkages Sub-Total 1.80 Advisory Services Approved pre-FY15 but active during FY15-18 Project Impl Impl Primary Total Funds Project Name Project Status ID Start FY End FY Business Line Managed by IFC Macedonia Corridor 8 Road 599403 2013 2017 CLOSED CAS 1.43 Concession Renewable Energy Macedonia 575587 2012 2016 CLOSED INR 1.52 Small Hydro Power 29202 HPP Cebren 2010 2015 CLOSED CAS 1.05 Sub-Total 4.0 TOTAL 5.8 Source: IFC AS Portal Data as of 11/30/18 Annex Table 14: IFC net commitment activity in the Republic of North Macedonia, FY15 - FY18 ($, millions) 2015 2016 2017 2018 Total Long-term Investment Commitment Financial Markets 11.0 - - - 11.0 Manufacturing 8.9 0.0 - - 8.9 - Total IFC Long Term Investment 19.8 0.0 - - 19.8 Commitment Total Short-term Finance/Trade Finance / 2.0 0.6 - - 2.5 Average Outstanding Balance (GTFP) Source: IFC MIS as of 12/18/18 Note: IFC began reporting average outstanding short-term commitments (not total commitments) in FY15 and no longer aggregates short-term commitments with long-term commitments. IEG uses net commitment number for IFC's long-term investment. For trade finance guarantees under GTFP, average commitment numbers have been used. Annex Table 15: List of MIGA Projects Active in the Republic of North Macedonia, FY15-18 ($, millions) Max Gross Contract Enterprise Project Status Sector Issuance ProCredit Group Central Bank Mandatory Reserves Coverage Active Banking 12.5 NBG Central Bank Mandatory Reserves Coverage in Active Banking 143.9 Macedonia Total 156.4 Source: MIGA 12/18/18 w/ Project Briefs