Progress Report
For the MENA Transition Fund
MAIN REPORT
As of June 30, 2015
Table of Contents
Acronyms and Abbreviations
Section I: Introduction
A)Financial Status
B)Portfolio Performance
Section II: Overall Financial Status
A)Transition Fund Financial Status
B)Overall Use of Allocated Funds
C)Funding Allocation
Section III. Overall Portfolio Performance
A)Performance Ratings
B)Disbursements
C)Additional Funds Leveraged
Section IV. Aggregate Results at the Fund-Level
Annex 1: Project Performance Ratings and Definitions
Acronyms and Abbreviations
AfDBAfrican Development Bank
AFESD Arab Fund for Economic and Social Development
AMF Arab Monetary Fund
CU Coordination Unit
DPDeauville Partnership
EBRD European Bank for Reconstruction and Development
EIB European Investment Bank
IFC International Finance Corporation
IFI International Financial Institution
IMF International Monetary Fund
ISA Implementation Support Agency
IsDBIslamic Development Bank
MENA Middle East and North Africa
MSMEsMicro, Small and Medium-Sized Enterprises
MTRMid-Term Review
OECD Organisation for Economic Co‐operation and Development
OFID OPEC Fund for International Development
SC Steering Committee
TC Transition Country
WB World Bank
Section I: Introduction
The Middle East and North Africa (MENA) Transition Fund has been operational since December 11, 2012 to finance technical assistance to support Arab countries in transition implement reforms.[1]This progress report provides an update on the operational performance status of the Transition Fund. The report covers the period from January 1, 2015 to June 30, 2015. Section II provides an overview of the financial status of the Fund; Section III presents progress to date of the Transition Fund portfolio and highlights key emerging trends at the Fund-level;and Section IV presents results achieved. The Annex to this report (a separate document) provides detailed project-specific progress reports as provided by the Implementation Support Agencies (ISAs). Below are summary highlights on the financial status,portfolio performance, aggregate results and project-related updates.
A)Financial Status
- Total donor pledges: $212.9 million
- Cash received: $200.9 million
- Outstanding contributions: $12 million
- Total funding decisions: $190.5 million
- Funds available: $11.2 million
B)Portfolio Performance
- 60% of projects are in the satisfactory range, a decrease from 75% in the last progress update
- 19% of projects are in the unsatisfactory range, an increase from 13% in the last progress update
- 21% of projects are not yet effective, an increase since the last update given the recent May approvals
- Disbursements have increased $7 million since the last progress update totaling $21.8 million
- Additional funds leveraged increased by about $1.5 million since the last update totaling $21.7 million
C)Aggregate Results
- Persons with access to financial products and services increased from 13,530,000 to 15,051,000
- Outstanding microfinance loan portfolio increased from $541 million to $551 million
- Individuals trained to improve employability or self-employment increased from 4,241 to 5,341
D)Project Updates
- The Yemen WB Civil Society and Government Partnership Project has closed. The undisbursed balance of funds will be transferred back to the Trustee.
- The Tunisia OECD Strengthening Employability of Youth Project has fully disbursedbut the project is still active as IsDB’s components are still under implementation.
- EIB has requested another closing date extension for the Morocco Mobile Banking project
Section II: Overall Financial Status[2]
A)Transition Fund Financial Status
Since the inception of the Transition Fund, thirteen donors have committed to contribute $212.9 million to the Transition Fund. Of this amount,US$200.9 million has been received and US$190.5 million has been allocated for projects and the Trustee and Coordination Unit budgets. Including investment income, the total amount available for allocation is US$11.2 million.In addition, there is US$12 million in outstanding donor contributions (see Table 2.1). Figure2.2 outlines the status of donor contributions as of June 30, 2015. Only the United Arab Emirates and the United States have scheduled payments due ($2 million and $10 million respectively). All other donors have fully paid-in their pledges.
B)Overall Use of Allocated Funds
Out of the total allocated amount of $190.5 million, $174.5 million or 92% relates to projects in direct costs, $13.3 million or 7% was for ISA indirect costs and $2.7 million or 1% for administrative costs of the Coordination Unit (CU) and Trustee. Figure 2.3 outlines the Transition Fund’s utilization of funds.
C)Funding Allocation
The SC has met six times to approve 62 projects for a total of $187.8 million in direct and indirect costs and once to discuss and approve the MTR and the results framework (refer to Table 2.4).
Table 2.4: List of Approved Projects with Direct and Indirect Funding Allocated
Country / # / Project Name / Amount ($) / ISAEgypt / 1 / MSME Support Programme and the Social Fund for Development / 2,936,080 / EBRD
2 / Support to MSME in Organic Clusters / 2,000,000 / AfDB
3 / Logismed soft project 1 / 1,565,403 / EIB
4 / Green Growth: Industrial Waste Management and SME Entrepreneurship Hub / 2,000,000 / AfDB
5 / Energy/Social Safety Nets Sector Reforms Technical Assistance Project / 7,097,200 / WB
6 / Regional Integration through Trade and Transport Corridors 1 / 4,230,000 / EIB
7 / Promoting financial inclusion via mobile financial services 1 / 891,000 / EIB
8 / Strengthening the Rule of Law / 4,121,000 / AfDB/OECD
9 / Support to Parliament: Building Capacity and Mainstreaming Inclusive Growth / 2,920,000 / AfDB
10 / Clearing & Settlement Depositary System for Government Securities / 3,851,900 / EBRD
11 / Inclusive Regulations for Microfinance Project / 4,505,000 / WB
12 / EASE Fostered Investment Policy, Legal and Institutional Framework / 7,043,400 / OECD/WB
13 / Leveraging Regulatory Reform to Advance Financial Inclusion1 / 950,000 / IFC
14 / Promoting Women’s Participation in Parliaments and Policy-making1 / 633,333 / OECD
Subtotal / 14 / 44,744,316
Jordan / 1 / Reliable Water Quality for Jordan / 1,545,000 / EBRD
2 / National Unified Registry & Outreach Worker Program for Social Assistance / 10,000,000 / WB
3 / Support to Building Active Labor Market Program / 5,000,000 / WB
4 / Regional Integration through Trade and Transport Corridors 1 / 2,630,000 / EIB
5 / SME Growth Program / 3,850,000 / EIB
6 / Enhancing Governance for MSME Development / 3,235,000 / WB
7 / Promoting financial inclusion via mobile financial services 1 / 426,000 / EIB
8 / Development of SMEs Exports Through Virtual Market Place 1 / 1,000,000 / WB
9 / Jordan Competitiveness and Investment Technical Assistance / 1,650,000 / OECD/WB
10 / Integrated Inspection Management System / 2,642,105 / IFC
11 / National Center for Innovation, Higher Council for Science and Technology / 2,600,430 / EBRD
12 / Leveraging Regulatory Reforms to Advance Financial Inclusion1 / 750,000 / IFC
13 / Promoting Women’s Participation in Parliaments and Policy-making1 / 633,333 / OECD
Subtotal / 13 / 35,961,868
Libya / 1 / SME Strategy Development / 2,616,000 / OECD
2 / Leading the Way: A Leadership Capacity Building Pilot Project / 3,500,000 / AfDB
3 / Finance and Private Sector Development Technical Assistance / 3,437,400 / WB
4 / Electricity Sector Reform Programmatic Technical Assistance / 2,000,000 / WB
Subtotal / 4 / 11,553,400
Morocco / 1 / New Governance Framework Implementation Support Project / 4,500,000 / WB
2 / Strengthening Micro-Entrepreneurship for Disadvantaged Youth / 5,500,000 / WB
3 / Logismed soft project 1 / 1,565,403 / EIB
4 / Microfinance Development Project / 5,560,000 / WB
5 / Local Government Support Program / 5,045,000 / WB
6 / Regional Integration through Trade & Transport Corridors 1 / 3,550,000 / EIB
7 / Regional Affordable Housing Project 1 / 2,110,460 / AMF/WB
8 / Promoting financial inclusion via mobile financial services 1 / 392,000 / EIB
9 / Development of SMEs Exports Through Virtual Market Place 1 / 1,000,000 / WB
10 / Accessing Overseas Job Opportunities for Moroccan Youth Project / 1,975,000 / WB
11 / Improving Connectivity in the Maghreb / 3,292,529 / OECD/WB
12 / Promoting Women’s Participation in Parliaments and Policy-making1 / 633,333 / OECD
Subtotal / 12 / 35,123,725
Country / # / Project Name / Amount ($) / ISA
Tunisia / 1 / Logismed soft project 1 / 1,565,000 / EIB
2 / Set-up of Tunisia Investment Authority / 1,550,000 / IFC/OECD
3 / Operationalizing Public Private Partnerships / 2,300,000 / AfDB/OECD
4 / Developing Leadership Capacity / 1,600,000 / AfDB
5 / Social Protection Reforms Support Project / 5,055,000 / WB
6 / Tunisian Energy Reform Plan / 3,836,000 / OFID
7 / Strengthening Youth Employability during Transition to a Green Economy / 4,475,000 / IsDB/OECD
8 / Regional Integration through Trade and Transport Corridors 1 / 3,800,000 / EIB
9 / Enhancing Domestic Resource Mobilisation through Effective Tax System Design and Improved Transparency and International Cooperation / 4,401,800 / AfDB/OECD
10 / Regional Affordable Housing Project - Tunisia activities 1 / 2,110,460 / AMF/WB
11 / Development of SMEs Exports Through Virtual Market Place 1 / 1,000,000 / WB
12 / Support to the Program of Holistic Social Business Movement in Tunisia / 2,560,000 / AfDB
13 / Enhancing governance and economic growth in Tunisia: promoting transparency and integrity in public procurement / 2,528,900 / AfDB
Subtotal / 13 / 36,782,160
Yemen / 1 / Enterprise Revitalization and Employment Project / 4,640,000 / WB
2 / Civil Society & Government Partnership Project / 1,718,700 / WB
3 / Preparation & Implementation Support Project for a Special Industrial Zone / 3,239,000 / IsDB
4 / Accountability Enhancement Project / 6,480,500 / WB
5 / Reinforcing the rule of law: Developing the capacities of the judiciary / 3,000,000 / AFESD/OECD
6 / Education for Employment Project / 4,582,000 / IFC/IsDB
Subtotal / 6 / 23,660,200
TOTAL / 62 / 2 / 187,825,669
1 These are part of seven regional projects
2 The total number of projects approved, if the regional projects are not considered by country, is 49
Egypt received the highest amount of funding at 24% while Jordan, Morocco and Tunisia have received roughly equal funding of about 19% each. Yemen and Libya received 13% and 6% (see Figure 2.5). The World Bank remains the ISA with the largest allocation of $91.2 million, followed by EIB with $24.5 million and AfDB with $24.1 million (refer to Table 2.6).
Section III. Overall Portfolio Performance
A)Performance Ratings
Since the December 2014 progress update, the number of projects rated Satisfactory (S) or Moderately Satisfactory (MS) have decreased both on achievement of objectives and on implementation progress,representing about 60% of the overall portfolio (as compared to 75% in the previous report). This decrease can be attributed to the nine new projects approved in May 2015 which are yet to become effective.However, the number of projects rated Moderately Unsatisfactory (MU) or Unsatisfactory (U)on both achievement of objectives and implementation progress have also increased to about 19% of the portfolio (as compared to 15% in the previous report).
The reasons cited in the previous progress report for lack of performance are largely still accurate, i.e. fluctuating political and security-related country environments, capacity constraints in procurement processes,and delays in starting project implementation (i.e. delays in setting up project implementation unitsand in signing legal agreements with government counterparts, among others). Thirteen projects approved during the last three SC meetings are still not effective and therefore not rated (NA). Table 3.1 provides a breakdown of ratings in June 2014, December 2014 and June 2015 and Figures 3.2 and 3.3 provide a graphic comparison of each rating against the three reporting periods. The definition of each rating is available in Annex 1 of this report.
B)Disbursements
Project disbursements have increased from 9% or $14.8 million of direct costs to 12% or $21.8 million i.e. an increase of $7 million over the last six months (see Figure3.4). Overall, disbursements have increased across the board in all Transition Countries although Egypt and Morocco are slower-disbursing than other countries(see Table 3.5). Table 3.6 provides a breakdown of direct cost disbursements by project. On the whole however, disbursements in general are lagging due to reasons cited above.
Table 3.6: Direct Costs Disbursed by Project
TC / Project Name / SC Approval Date / Direct Cost (US$) / Disb.(US$) / % Disb
Egypt / MSME Support Programme and Social Fund for Development / 2/20/2013 / 2,744,000 / 459,619 / 17
Support to MSME in Organic Clusters / 2/20/2013 / 1,940,000 / 397,700 / 21
Logismed soft project 1 / 2/20/2013 / 1,423,094 / 49,666 / 3
Green Growth: Industrial Waste Management and SME Hub / 5/15/2013 / 1,940,000 / 252,500 / 13
Energy/Social Safety Nets Sector Reforms Technical Assistance / 5/15/2013 / 6,500,000 / 376,370 / 6
Regional Integration through Trade & Transport Corridors1 / 5/15/2013 / 4,000,000 / - / -
Promoting financial inclusion via mobile financial services 1 / 12/5/2013 / 835,000 / - / -
Strengthening the Rule of Law / 6/11/2014 / 3,906,000 / 247,312 / 6
Support to Parliament: Building Capacity and Inclusive Growth / 6/11/2014 / 2,740,000 / - / -
Clearing & Settlement Depositary System for Gov’t Securities / 6/11/2014 / 3,510,000 / 15,000 / 0.4
Inclusive Regulations for Microfinance Project / 6/11/2014 / 4,000,000 / 500,000 / 13
EASE & Fostered Investment Policy, Legal and Institutional Framework / 5/18/2015 / 6,484,000 / - / -
Leveraging Regulatory Reform to Advance Financial Inclusion1 / 5/18/2015 / 902,500 / - / -
Promoting Women’s Participation in Parliaments and Policy-making1 / 5/18/2015 / 593,433 / - / -
Subtotal / 41,518,027 / 2,298,167 / 6
Jordan / Reliable Water Quality for Jordan / 12/11/2012 / 1,440,000 / 229,228 / 16
National Unified Registry & Outreach Worker Program / 2/20/2013 / 9,500,000 / 1,000,000 / 11
Support to Building Active Labor Market Program / 5/15/2013 / 4,750,000 / 826,660 / 17
Regional Integration through Trade & Transport Corridors1 / 5/15/2013 / 2,500,000 / 400,000 / 16
SME Growth Program / 7/22/2013 / 3,650,000 / 580,000 / 16
Enhancing Governance for MSME Development / 12/5/2013 / 3,000,000 / 531,007 / 18
Promoting financial inclusion via mobile financial services1 / 12/5/2013 / 370,000 / - / -
Development of SMEs Exports through Virtual Market Place1 / 2/11/2014 / 975,000 / 282,506 / 29
Jordan Competitiveness & Investment Technical Assistance / 6/11/2014 / 1,550,000 / 411,719 / 27
Integrated Inspection Management System / 6/11/2014 / 2,290,000 / 89,990 / 4
National Center for Innovation, Higher Council for Science Technology / 5/18/2015 / 2,430,310 / - / -
Leveraging Regulatory Reforms to Advance Financial Inclusion1 / 5/18/2015 / 712,500 / - / -
Promoting Women’s Participation in Parliaments and Policy-making1 / 5/18/2015 / 593,433 / - / -
Subtotal / 33,761,243 / 4,351,111 / 13
Libya / SME Strategy Development / 5/15/2013 / 2,440,000 / 1,195,916 / 49
Leading the Way: Leadership Capacity Building / 12/31/2013 / 3,260,000 / - / -
Finance & Private Sector Development TA / 12/5/2013 / 3,300,000 / 611,240 / 19
Electricity Sector Reform Programmatic TA / 6/11/2014 / 1,960,000 / 80,190 / 4
Subtotal / 10,960,000 / 1,887,345 / 17
Morocco / New Governance Framework Implementation Support Project / 2/20/2013 / 4,000,000 / 948,248 / 24
Strengthening Micro-Entrepreneurship for Youth / 2/20/2013 / 5,000,000 / 718,242 / 14
Logismed soft project 1 / 2/20/2013 / 1,423,094 / 49,666 / 3
Microfinance Development Project / 2/20/2013 / 4,900,000 / 491,866 / 10
Local Government Support Program / 5/15/2013 / 4,550,000 / 614,832 / 14
Regional Integration through Trade & Transport Corridors 1 / 5/15/2013 / 3,350,000 / 50,000 / 1
Promoting financial inclusion via mobile financial services 1 / 12/5/2013 / 350,000 / 110,000 / 31
Regional Affordable Housing Project 1 / 12/31/2013 / 2,000,000 / 551,302 / 27
Development of SMEs Exports through Virtual Market Place 1 / 2/11/2014 / 975,000 / 282,506 / 29
Accessing Overseas Job Opportunities for Moroccan Youth / 6/11/2014 / 1,750,000 / - / -
Improving Connectivity in the Maghreb / 5/18/2015 / 3,080,000 / - / -
Promoting Women’s Participation in Parliaments and Policy-making1 / 5/18/2015 / 593,433 / - / -
Subtotal / 31,971,527 / 3,816,662 / 12
TC / Project Name / SC Approval Date / Direct Cost (US$) / Disb.
(US$) / % Disb.
Tunisia / Logismed soft project 1 / 2/20/2013 / 1,423,000 / 49,666 / 3
Set-up of Tunisia Investment Authority / 2/20/2013 / 1,499,600 / 779,350 / 52
Operationalizing Public Private Partnerships / 2/20/2013 / 2,149,600 / 544,819 / 25
Developing Leadership Capacity / 4/1/2013 / 1,475,000 / 140,000 / 9
Social Protection Reforms Support Project / 5/15/2013 / 4,700,000 / 900,000 / 19
Tunisian Energy Reform Plan / 6/7/2013 / 3,488,000 / - / -
Strengthening Youth Employability to a Green Economy / 7/22/2013 / 4,337,000 / 695,815 / 16
Regional Integration through Trade & Transport Corridors 1 / 12/5/2013 / 3,600,000 / 150,000 / 4
Enhancing Resource Mobilisation through Tax Systems / 12/5/2013 / 4,219,300 / 1,127,296 / 27
Regional Affordable Housing Project 1 / 12/31/2013 / 2,000,000 / 551,302 / 27
Development of SMEs Exports through Virtual Market Place 1 / 2/11/2014 / 975,000 / 282,506 / 29
Support to the Program of Holistic Social Business Movement / 6/11/2014 / 2,460,000 / - / -
Enhancing governance and economic growth in Tunisia: promoting transparency and integrity in public procurement / 5/18/2015 / 2,298,900 / - / -
Subtotal / 34,625,400 / 5,220,754 / 15
Yemen / Enterprise Revitalization and Employment Project / 1/17/2013 / 4,149,000 / 2,174,371 / 52
Civil Society & Government Partnership Project / 2/20/2013 / 1,500,000 / 569,265 / 38
Preparation & Implementation for a Special Industrial Zone / 5/15/2013 / 2,950,000 / 59,000 / 2
Accountability Enhancement Project / 12/5/2013 / 6,000,000 / 799,613 / 13
Reinforcing the rule of law: Developing judiciary capacities / 12/31/2013 / 2,774,000 / 538,801 / 19
Education for Employment Project / 6/11/2014 / 4,332,000 / 87,078 / 2
Subtotal / 21,705,000 / 4,228,128 / 19
TOTAL / 174,541,197 / 21,802,167 / 12
C)Additional Funds Leveraged[3]
Additional funds leveraged since the last update increased by about $1.5 million (see Table 3.7). Both the Morocco Regional Connectivity and Tunisia EnhancingGovernanceand Economic Growth include additional financing from Transition Countries and Recipient Entities. EBRD remains the ISA with the highest funds leveraged (40%), followed by the AfDB (26%) and the IsDB (22%).
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Section IV. Aggregate Results at the Fund-Level
Since the December 2014 update, significant results have not been achieved given that most indicators report results on an annual basis. A more robust reporting can be expected in December 2015. Table 4.1 presents the aggregate results achieved by June 2015.
Table 4.1: Aggregate Results Reported by June 2015
Level of Expected Results / Pillar Indicator / Type of Results Expected / Unit of Measure / Baseline / Results Achieved2013 / 2014 / First Half 2015
Fund Development Objective: To improve the lives of citizens in transition countries and to support the transformation currently underway by providing grants for technical cooperation to strengthen governance and public institution and to foster sustainable and inclusive economic growth by advancing country-led policy institutional reforms
Pillar 1 Development Objective: Increased sustainable growth
Outcome 1.1 / Businesses, including MSMEs demonstrated increased performance after receipt of support/advisory services / Improved business environment / Number / 0 / 0 / 0 / 0
Output 1.1.1 / Businesses received business support/advisory services or financial investment (includes MSMEs) / Businesses supported to promote private sector development / Number / 59 / 189 / 204 / 204
Outcome 1.2 / Persons with access to financial products and services / Improved access to finance for individuals / Number / TBD / 0 / 13,530,000 / 15,051,000
Outcome 1.3 / Outstanding microfinance loan portfolio / Improved access to finance for vulnerable populations and micro-entrepreneurs / Millions USD / 550 / 0 / 541 / 551
Outcome 1.4 / Business loans provided or guaranteed / Improved access to finance for businesses / Number / 3,000 / NA / 3,575 / 3,575
Outcome 1.5 / Reduction in cost of accessing finance to consumers / Improved affordability of finance for individuals and businesses / Percentage / TBD / NA / 0 / 0
Output 1.6.1 / Projects and programs promoting green growth designed and implemented / Green growth initiatives launched / Number / 0 / 0 / 2 / 2
Pillar 2 Development Objective/Impact: Improved inclusive development
Outcome 2.1 / New employment opportunities created / Improved employment opportunities / Number / 325 / 0 / 0 / 0
Level of Expected Results / Pillar Indicator / Type of Results Expected / Unit of Measure / Baseline / Results Achieved
2013 / 2014 / First Half 2015
Output 2.1.1 / Individuals trained to improve employability or self-employment / Increased job or entrepreneurship training / Number / 2,700 / 639 / 4,241 / 5,341
Outcome 2.2 / Programs and projects designed and implemented to promote more efficient and equitable allocation of government resources / Improved effectiveness of social safety net and other programs targeting the most vulnerable / Number / 0 / 1 / 5 / 5
Outcome 2.3 / Household beneficiaries of social safety net and related programs targeting the most vulnerable / Increased access to social safety net and other programs to the most vulnerable / Number / 235,000 / 0 / 735,000 / 735,000
Pillar 3 Development Objective/Impact: Enhanced economic governance
Outcome 3.1 / Efficiency of transactions conducted in financial markets / Improved good governance in the public sector / Percent / TBD / 0 / 0 / 0
Output 3.1.1 / CSOs, women or youth groups engaged and empowered by the local government / Specific/special stakeholder groups engaged and empowered / Number / 250 / 0 / 10,075 / 10,575
Output 3.1.2 / Government bodies, institutions and local government units received support services / Government bodies and institutions including Local governments supported / Number / 1,000 / 0 / 1,187 / 1,187
Pillar 4 Development Objective/Impact: Improved competitiveness and integration
Outcome 4.1 / Trade transactions conducted using new products or services / Increased trade growth / Number / 0 / 0 / 0 / 0
Outcome 4.2 / Logistics Performance Index ranking improved / Improved trade logistics / Score / 2.98 (Egypt)
3.03 (Morocco) 3.17 (Tunisia) / NA / NA / 2.97 (Egypt)TBD (Morocco) 2.55 (Tunisia)
Cross Pillar 5 Development Objective/Impact: Results produced in the form of documents produced and endorsed, decrees issued, structures established and public sector staff trained across the four pillars
Output 5.1.1 / Studies, assessments, reports, action plans, roadmaps, models of good practices or frameworks endorsed / Documents produced and endorsed / Number / 0 / 0 / 1 / 2
Outputs 5.1.2 / Regulations or laws endorsed or entities, units or systems established / Decrees issued or structures established / Number / 1 / 0 / 2.5 / 4.5
Outputs 5.1.3 / Public sector staff trained in various aspects of topic/sector / Staff trained / Number / 0 / 10 / 366 / 470
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