The World Bank Implementation Status & Results Report STATE OWNED ENTERPRISES RELATED FISCAL MANAGEMENT PROJECT (P160796) STATE OWNED ENTERPRISES RELATED FISCAL MANAGEMENT PROJECT (P160796) AFRICA | Cabo Verde | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2018 | Seq No: 2 | ARCHIVED on 03-Jun-2019 | ISR37387 | Implementing Agencies: Ministry of Finance, Republic of Cabo Verde Key Dates Key Project Dates Bank Approval Date: 04-Jun-2018 Effectiveness Date: 22-Oct-2018 Planned Mid Term Review Date: 01-Dec-2020 Actual Mid-Term Review Date: -- Original Closing Date: 31-Jul-2023 Revised Closing Date: 31-Jul-2023 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective is to strengthen SOE related fiscal management. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Component 1: Results-Based Financing:(Cost $16.00 M) Component 2: Technical Assistance:(Cost $3.50 M) Component 3: Project Management:(Cost $0.50 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions The project was signed on 22 June and became effective on 22 October 2018. The overall progress noted in the achievement of targets set for PDO indicators and intermediate results is Satisfactory. The objective of the State-Owned Enterprises Related Fiscal Management Project for Cabo Verde is to strengthen SOE related fiscal management. Some progress has been noted on the three PDO indicators compared to the baseline. Transfers from the Government budget to SOEs for their operations, including lending subsidies, capital injections and guarantees for loans represented 8,78 percent of GDP in 2017 and 9,57 percent of GDP in 2018 compared to the baseline of 10,90 percent of GDP. The increase in 2018 resulted from capitalization and guarantees given to TACV. The operating margin of TACV has also improved. The operational costs represented 175 percent of operating revenues as reported in the 2017 audited annual financial statements of TACV. The operating margin was estimated to 137 percent in the 2018 unaudited financial statements, which represents an 6/3/2019 Page 1 of 6 The World Bank Implementation Status & Results Report STATE OWNED ENTERPRISES RELATED FISCAL MANAGEMENT PROJECT (P160796) improvement of 38 points. However, the annual public revenues from SOEs in tax payments, dividends and divestment proceeds are estimated to 2,8 % of GDP as of end of 2018 and are still below the target of 6%. Some intermediate results related to the component 2 on technical assistance have also been achieved. A new law for debt management including contingent liabilities was approved by the Parliament in December 2018 and a comprehensive report on the SOE portfolio including analysis of financial and operational performance was published on the Ministry of Finance’s web site for 2017 and the 2018 SOE report is being prepared and should be disclosed by early September. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance High High Substantial Macroeconomic Substantial Substantial Substantial Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Moderate Moderate Moderate Institutional Capacity for Implementation and Sustainability Substantial Substantial Substantial Fiduciary Moderate Moderate Moderate Environment and Social Substantial Substantial Substantial Stakeholders Substantial Substantial Substantial Other Substantial -- -- Overall Substantial Substantial Substantial Results PDO Indicators by Objectives / Outcomes Strengthen SOE related fiscal management IN00710238 ►Reduced public financing to SOEs - including transfers from the budget and capitalization (% of GDP) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 10.90 3.10 9.57 6.00 Date 29-Dec-2017 31-Dec-2017 29-Mar-2019 31-Mar-2022 IN00710239 ►Improved operating margin of TACV (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 144.00 144.00 137.00 80.00 6/3/2019 Page 2 of 6 The World Bank Implementation Status & Results Report STATE OWNED ENTERPRISES RELATED FISCAL MANAGEMENT PROJECT (P160796) Date 29-Dec-2017 31-Dec-2017 29-Mar-2019 31-Mar-2022 IN00710240 ►Annual public revenues from SOEs (Millions USD - in tax payments, dividends, concession payments, divestment proceeds) (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 5.00 16,225,543.00 5.14 10.00 Date 31-Dec-2017 31-Dec-2017 29-Mar-2019 20-Jul-2022 Intermediate Results Indicators by Components Component 2: Technical Assistance IN00710241 ►IRI1: Comprehensive SOE policy adopted (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Current (2016) SOE The government framework law outlines adopts a policy on general rules for SOEs including clear Value No policy adopted No policy adopted corporate governance of performance targets SOEs and government and transparency oversight and reporting obligations of SOEs Date 29-Dec-2017 01-Nov-2018 31-Dec-2018 31-Mar-2022 IN00710242 ►IRI2: Implementation and utilization of the SOE financial database (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Database with UASE operates general complete financial and excel sheet with basic Database up and operational Value Database up and running aggregated information running performance on six (6) largest SOEs information on the entire SOE portfolio Date 29-Dec-2017 01-Nov-2018 29-Mar-2019 31-Mar-2022 IN00710243 ►IRI3: Strengthened legal framework for debt management with a greater emphasis on contingent liabilities (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target new law for debt maangement including A clear legal Fragmented debt new draft debt law due in contingent liabilities framework that is Value management legislative 2019 approved by the respected by SOEs framework Parliament in and Government December 2018 Date 29-Dec-2017 01-Nov-2018 29-Mar-2019 31-Mar-2022 IN00710244 ►IRI4: Review of SOE Portfolio and structuring oversight/holding of SOEs (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 6/3/2019 Page 3 of 6 The World Bank Implementation Status & Results Report STATE OWNED ENTERPRISES RELATED FISCAL MANAGEMENT PROJECT (P160796) Some individual Greater clarity on performance reviews SOEs that need to be Value carried out as part of No SOE review No SOE review restructured, sold or performance agreement partially privatized preparations Date 29-Dec-2017 01-Nov-2018 01-Nov-2018 31-Mar-2022 IN00710245 ►IRI5: Fiscal risk monitoring reports on SOE portfolio published (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Comprehensive reports on all SOEs published on MoF’s web site including analysis of financial and operational Annual report on Yes - 2017 Fiscal Risk Yes - 2017 Fiscal Risk performance Value contingent liabilities from Report issued in June Report issued in June (including, 6 lar 2018 2018 benchmarking) and all financial transfers with the state (including all transfers, arrears, implicit subsidies, etc.) Date 31-Dec-2017 01-Nov-2018 01-Nov-2018 31-Dec-2022 IN00710246 ►IRI6: Citizen Feedback on SOE Reform Process (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Information available on citizens' opinion on Surveys to be carried how well government No information on citizen Value No citizen feedback out two years into the has planned for, opinion reforms communicated and implemented SOE sector reforms. Date 31-Dec-2017 01-Nov-2018 01-Nov-2018 15-Sep-2023 Disbursement Linked Indicators IN00710247 ►DLI 1 TACV has adopted and announced a Retrenchment Plan acceptable to the Bank (Yes/No, Output, 3,000,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) Fiscal Year 2022 Value No Yes Yes -- Date -- 18-Apr-2018 18-Apr-2018 -- IN00710248 ►DLI 2 TACV has established Grievance mechanism acceptable to the Bank (Yes/No, Process, 3,000,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) Fiscal Year 2022 6/3/2019 Page 4 of 6 The World Bank Implementation Status & Results Report STATE OWNED ENTERPRISES RELATED FISCAL MANAGEMENT PROJECT (P160796) Value No Yes Yes -- Date -- 28-Jun-2018 28-Jun-2018 -- IN00710249 ►DLI 3 Staff targeted by the Retrenchment Plan has been retrenched (Number, Intermediate Outcome, 8,000,000.00, 48.73%) Baseline Actual (Previous) Actual (Current) Fiscal Year 2022 Value 0.00 0.00 123.00 -- Date -- 01-Nov-2018 29-Mar-2019 -- Comments: 38 staff received packages and a further 74 received early retirement packages. IN00710250 ►DLI 4 Detailed annual SOE reports prepared by UASE (Number, Output, 2,000,000.00, 20.00%) Baseline Actual (Previous) Actual (Current) Fiscal Year 2022 Value 0.00 0.00 1.00 5.00 Date -- 01-Nov-2018 31-Dec-2018 -- Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P160796 IDA-62510 Effective USD 20.00 20.00 0.00 10.64 8.43 56% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P160796 IDA-62510 Effective 04-Jun-2018 22-Jun-2018 22-Oct-2018 31-Jul-2023 31-Jul-2023 Cumulative Disbursements 6/3/2019 Page 5 of 6 The World Bank Implementation Status & Results Report STATE OWNED ENTERPRISES RELATED FISCAL MANAGEMENT PROJECT (P160796) Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 6/3/2019 Page 6 of 6