World Bank Documentdocuments1.worldbank.org/curated/en/589721468327549230/... · 2016. 7. 12. ·...

Document of The World Bank

FOR OFFICIAL USE ONLY

Report No: ICR00001092

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-40760 IBRD-73080)

ON A

LOAN

IN THE AMOUNT OF US$ 10.26 MILLION

TO THE

REPUBLIC OF PERU

FOR A

IRRIGATION SUBSECTOR SUPPLEMENTAL PROJECT

December 23, 2009

Sustainable Development Department Ecuador, Peru, Bolivia and Venezuela Country Management Unit Latin America and the Caribbean Region

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

(Exchange Rate Effective November 18, 2009)

Currency Unit = Nuevos Soles 1.00 Nuevos Soles = US$ 0.35 US$ 1.00 = 2.86 Nuevos Soles

FISCAL YEAR

ABBREVIATIONS AND ACRONYMS ANA National Water Authority - Autoridad Nacional de

Agua ATDR Technical Administrators of Irrigation District -

Administrdor Técnico de Distrito de Riego CAS Country Assistance Strategy CPS Country Partnership Strategy CR Irrigation Commission - Comisión de Regantes EMP Environmental Management Plan GDP Gross Domestic Product GOP Government of Peru ICR Implementation Completion Report IRH Intendencia de Recursos Hídricos INRENA National Institute for Natural Resources ISDS Integrated Safeguard Datasheet JBIC Japan Bank for International Cooperation JICA Japan International Cooperation Agency LA Loan Agreement MEF Ministry of Economy and Finance MINAG Ministry of Agriculture M&E Monitoring and Evaluation OED Operations Evaluations Department O&M Operation and Maintenance PDO Project Development Objective PMP Pest Management Plan PSI Irrigation Subsector Project - Proyecto Subsectorial de

Irrigación PSI I First Irrigation Subsector Project - Proyecto

Subsectorial de Irrigación I PSI II Irrigation Subsector Supplemental Project - Proyecto

Subsectorial de Irrigación II SAT Safeguards Advisory Team SNIP National System for Public Investments - Sistema

Nacional de Inversión Pública UCC Training and Communication Unit WUA Water Users Association –Junta de Usuarios WUO Water Users Organization – Organización de Usuarios

Vice President:Pamela Cox

Country Director:Carlos Felipe Jaramillo

Sector Manager:Karin Kemper

Project Team Leader:Marie-Laure Lajaunie

ICR Team Leader:Marie-Laure Lajaunie /Erwin de Nys

REPUBLIC OF PERU Implementation Completion and Results Report

CONTENTS

DATA SHEET A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph

MAIN REPORT A. Basic Information........................................................................................................................iB. Key Dates ....................................................................................................................................iC. Ratings Summary ........................................................................................................................iE. Bank Staff ...................................................................................................................................iiF. Results Framework Analysis ......................................................................................................iiG. Ratings of Project Performance in ISRs ....................................................................................vH. Restructuring (if any) ................................................................................................................viI. Disbursement Profile .................................................................................................................vi1. Project Context, Development Objectives and Design...............................................................12. Key Factors Affecting Implementation and Outcomes...............................................................93. Assessment of Outcomes ..........................................................................................................184. Assessment of Risk to Development Outcome.........................................................................255. Assessment of Bank and Borrower Performance .....................................................................276. Lessons Learned........................................................................................................................307. Comments on Issues Raised by Borrower/Implementing Agencies/Partners...........................30Annex 1. Project Costs and Financing..........................................................................................32Annex 2. Outputs by Component..................................................................................................33Annex 3. Economic and Financial Analysis .................................................................................46Annex 4. Bank Lending and Implementation Support/Supervision Processes.............................54Annex 5. Beneficiary Survey Results ...........................................................................................55Annex 6. Stakeholder Workshop Report and Results...................................................................56Annex 7. Summary of Borrower’s ICR and/or Comments on Draft ICR .....................................57Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders .......................................70Annex 9. List of Supporting Documents ......................................................................................74Annex 10. “Sustainability” Indicator ............................................................................................ 75Annex 11. Maps ............................................................................................................................ 80

i

A. Basic Information

Country: Peru Project Name: Irrigation Subsector Project

Project ID: P008037 L/C/TF Number(s): IBRD-40760,IBRD-73080

ICR Date: 01/20/2010 ICR Type: Core ICR

Lending Instrument: SIL Borrower: GOVERNMENT OF PERU

Original Total Commitment:

USD 85.0M Disbursed Amount: USD 94.7M

Revised Amount: USD 94.8M

Environmental Category: B

Implementing Agencies: PSI and IRENA

Cofinanciers and Other External Partners: B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: 07/14/1993 Effectiveness: 02/05/1997 06/26/1997

Appraisal: 06/27/1994 Restructuring(s):

04/23/1998 06/14/2005 06/15/2005 06/28/2007 08/12/2008

Approval: 07/25/1996 Mid-term Review: 04/23/1998

Closing: 06/30/2002 06/30/2009 C. Ratings Summary C.1 Performance Rating by ICR

Outcomes: Satisfactory

Risk to Development Outcome: Substantial

Bank Performance: Moderately Satisfactory

Borrower Performance: Moderately Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings

Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory

Quality of Supervision: Moderately SatisfactoryImplementing Agency/Agencies:

Satisfactory

ii

Overall Bank Performance:

Moderately SatisfactoryOverall Borrower Performance:

Moderately Satisfactory

C.3 Quality at Entry and Implementation Performance Indicators

Implementation Performance

Indicators QAG Assessments

(if any) Rating

Potential Problem Project at any time (Yes/No):

No Quality at Entry (QEA):

None

Problem Project at any time (Yes/No):

Yes Quality of Supervision (QSA):

None

DO rating before Closing/Inactive status:

Satisfactory

D. Sector and Theme Codes

Original Actual

Sector Code (as % of total Bank financing)

Agricultural extension and research 8 9

Central government administration 2 7

Irrigation and drainage 90 84

Theme Code (as % of total Bank financing)

Participation and civic engagement 20 16

Rural policies and institutions 40 21

Rural services and infrastructure 40 63 E. Bank Staff

Positions At ICR At Approval

Vice President: Pamela Cox Pamela Cox

Country Director: Carlos Felipe Jaramillo Marcelo Giugale

Sector Manager: Karin Erika Kemper Abel Mejia

Project Team Leader: Marie-Laure Lajaunie Peter Koenig

ICR Team Leader: Marie-Laure Lajaunie

ICR Primary Author: Marie-Laure Lajaunie F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document) 1. The objectives are: (a) to develop the capacity for decentralized management of irrigation systems by Water User Associations; (b) to reduce the role of the public sector

iii

in irrigation; and (c) to ensure cost recovery of capital investment and operation and maintenance of irrigation systems. Revised Project Development Objectives (as approved by original approving authority) The project's objective is to increase the productivity of irrigated agriculture in the Borrower's coastal and sierra territory in order to improve the well being of farmers and contribute to poverty alleviation. (a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Number of farmers families benefiting from part A of the project Value quantitative or Qualitative)

0 19,000

Date achieved 06/14/2005 06/30/2009 Comments (incl. % achievement)

Indicator 2 : Number of WUOs meeting eligibility criteria Value quantitative or Qualitative)

33 49


Indicator 3 : Average rate of cost recovery of operation and maintenance for all WUOs included in the Project

Value quantitative or Qualitative)

78%

81% for the coastal area and 20% for the three pilots in the Sierra.


Indicator 4 : Number of farmers families benefiting from Part B of the Project. Value quantitative or Qualitative)

0 508


iv

Indicator 5 : Financial contribution from farmers under Component A (US$ million) Value quantitative or Qualitative)

0 1.30


Indicator 6 : Contribution from farmers under Component B (US$ million) Value quantitative or Qualitative)

0 2.69


Indicator 7 : Number of new water licenses Value quantitative or Qualitative)

0 160,000


(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised

Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Length of canals improved (km) Value (quantitative or Qualitative)

0 76


Indicator 2 : Number of hectares benefiting from Part B of the Project Value (quantitative or Qualitative)

0 1,882


Indicator 3 : Number of irrigation plots with water license.

v

Value (quantitative or Qualitative)

0 244,000


G. Ratings of Project Performance in ISRs

No. Date ISR Archived

DO IP Actual

Disbursements (USD millions)

1 12/04/1996 Satisfactory Satisfactory 0.00 2 04/22/1997 Satisfactory Satisfactory 0.00 3 11/24/1997 Unsatisfactory Unsatisfactory 1.50 4 05/15/1998 Satisfactory Unsatisfactory 2.11 5 11/16/1998 Satisfactory Satisfactory 4.21 6 01/25/1999 Unsatisfactory Unsatisfactory 9.86 7 04/27/1999 Satisfactory Unsatisfactory 21.21 8 09/20/1999 Satisfactory Satisfactory 22.33 9 12/20/1999 Satisfactory Satisfactory 25.83

10 01/28/2000 Satisfactory Satisfactory 25.83 11 05/15/2000 Satisfactory Satisfactory 30.22 12 10/16/2000 Unsatisfactory Unsatisfactory 39.67 13 02/06/2001 Unsatisfactory Unsatisfactory 42.22 14 06/21/2001 Satisfactory Satisfactory 46.30 15 10/25/2001 Satisfactory Satisfactory 49.77 16 02/25/2002 Satisfactory Satisfactory 53.15 17 05/19/2002 Satisfactory Satisfactory 57.80 18 09/05/2002 Satisfactory Satisfactory 59.68 19 02/10/2003 Satisfactory Satisfactory 66.08 20 06/13/2003 Satisfactory Satisfactory 68.93 21 10/24/2003 Satisfactory Satisfactory 72.42 22 05/04/2004 Satisfactory Satisfactory 80.77 23 06/29/2004 Satisfactory Satisfactory 82.29 24 06/22/2005 Satisfactory Satisfactory 84.50 25 11/14/2005 Satisfactory Satisfactory 84.50 26 04/24/2006 Satisfactory Satisfactory 86.84 27 08/03/2006 Satisfactory Satisfactory 87.41 28 02/13/2007 Satisfactory Moderately Satisfactory 89.29 29 03/29/2007 Moderately Satisfactory Moderately Satisfactory 89.57

30 10/22/2007 Moderately SatisfactoryModerately

Unsatisfactory 90.48

31 05/30/2008 Satisfactory Satisfactory 92.54 32 12/18/2008 Satisfactory Satisfactory 93.69

vi

33 06/17/2009 Satisfactory Satisfactory 94.08 H. Restructuring (if any)

Restructuring Date(s)

Board Approved

PDO Change

ISR Ratings at Restructuring

Amount Disbursed at

Restructuring in USD millions

Reason for Restructuring & Key Changes Made

DO IP

04/23/1998 S S 1.50 06/14/2005 S S 84.50 06/15/2005 S MS 84.50 06/28/2007 MS MU 90.02 08/12/2008 S S 92.87

I. Disbursement Profile

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1. Project Context, Development Objectives and Design 1.1 Context at Appraisal 1. Between 2001 and 2005, at the time of Project approval, Peru had enjoyed strong economic growth and sound macro-economic policies, with a Gross Domestic Product (GDP) increasing on average by five percent a year. However, growth had not translated into significant reduction in poverty. Poverty rate remained at almost half the country’s population, most severe in rural areas where 30 per cent of the population lives and was 20 per cent higher in the Sierra (highlands) and Selva (jungle) than in the coastal area. More than 60 per cent of those living in the coastal rural area (the Project area), were considered poor. 2. The agriculture sector had been a major contributor to Peru’s economic dynamism; it employed nearly one-third of the workforce, contributed close to 10 per cent of GDP and about 7 per cent of total exports. Irrigated agriculture accounted for about one third of cultivated land and two thirds of agricultural output. Total equipped irrigated areas covered about 1.7 million hectares (ha), of which about 1.2 million ha was in the coastal area. 3. While 70 per cent of the agricultural workforce was located in the Sierra, it was mostly agriculture in the coastal area – that is totally dependent on irrigation – which generated most of agricultural GDP and exports. The coastal area was where most people lived and economic activities were generated, it had easy access to export markets. Soils are very fertile in the coastal area and when supplied with adequate water, they can produce more than two harvests per year. The coastal area accounts for 70 per cent of irrigated areas, supplied by some 53 rivers, flowing west from the Andes to the coast.

Table 1. Agricultural land and production units in Peru

Zone Agricultural production

units

Total cultivated (ha)

Rainfed (ha) Area with irrigation

infrastructure (ha)

Percentage of total irrigation infrastructure

Coastal area 250,000 900,000 0 1,190,000 68% Sierra 1,200,000 2,830,000 2,230,000 453,000 26% Selva 290,000 1,770,000 1,520,000 109,000 6% Total 1,740,000 5,500,000 3,750,000 1,752,000 100%

Source: Irrig. and Drain. 57:300-310 (2008)

4. It is in the coastal area that public administration is the most present and where large investments in irrigation had been made and that agriculture had high economic importance, and therefore where a suitable organization for irrigation management was of strategic importance for the country. The operation and maintenance (O&M) of the large public irrigation systems that had been built and managed by the Government were transferred overnight to 64 Water Users Associations (Juntas de Regantes - WUAs) and 664 Irrigation Commissions (Comisiones

2

de Regantes-CRs)3 in 1989, without a program to build their capacity. Most WUAs lacked managerial capacity, basic tools to manage an irrigation system, and financial resources for adequate O&M. They did not invest in rehabilitation or improvement of the irrigation schemes which continued to suffer considerable deterioration. 5. Irrigation infrastructure was deficient: only 20 per cent of canals were lined, 90 per cent of intakes were rudimentary and there was a general absence of measurement instruments. Less than 5 per cent of the irrigated land was equipped with improved on-farm irrigation systems, such as drip and sprinklers. Of a total equipped irrigated area of 1.2 million ha, only about 700,000 ha to 800,000 ha were cultivated, depending on water availability. Of these, about 50 per cent received satisfactory water supply. For the other half, supplies varied from unsatisfactory to acceptable, subject to annual precipitation in the highlands. 6. In response to these challenges, the Government of Peru (GOP) launched in 1997 the Irrigation Subsector Project (PSI I) with a total cost of US$172 million and a Bank loan of US$85 million. The objectives of the project were to: (a) develop the capacities of WUAs, for a decentralized and efficient management of irrigation systems; (b) to reduce the role of the public sector in irrigation; and (c) to ensure the recovery of O&M and partial investment costs. 7. PSI I closed on June 30, 2004 and was rated by the Implementation Completion Report (ICR) and Operations Evaluation Department (OED) as satisfactory in relation to achievement of objectives and components4. However, project targets were only partially accomplished, because only 72 per cent of the initially foreseen funds were available due to: (a) reallocation of about US$30 million of the loan for emergency rehabilitation of primary irrigation infrastructure damaged by El Niño in 1998; and (b) the non-availability of the originally planned Japan Bank for International Cooperation (JBIC) loan of US$60 million. While the project improved significantly the performance of most WUAs5, it was considered that about 50 per cent of them still required intensive training. Also, farmers who benefited from on-farm irrigation improvements required more training to reap the full economic benefits of infrastructure improvements. In addition, while the project achieved its targets in terms of infrastructure improvements, there was further need for it.

8. On October 2005, a Supplemental Project (PSI II), the Project for which this evaluation is conducted, was approved to consolidate achievements made under the original project (PSI I), most importantly to continue strengthening the capacity of WUAs and provide training to farmers who benefited from on-farm irrigation improvements. Supplemental financing was considered crucial to ensure the sustainability and economic viability of PSI I. The supplemental operation had a total cost of US$21.7 million and a Bank loan of US$10.3 million. The closing date was initially December 31, 2007, but later was extended to June 30, 2009.

3 Water Users Organizations (WUOs) include both the Water Users’ Associations (Juntas de Usuarios – WUAs) and the Irrigation Commissions that compose them (Comisiones de Regantes – CRs). CRs manage the irrigation network at a lower level than the WUAs. 4 Reference: “Implementation Completion Report (ICR) on a loan in the amount of US$ 85 million to the Government of Peru for an Irrigation Subsector Project” – Report 29838, World Bank, 2004. 5 As a result of the project, tariff revenues in the coastal area increased from US$7 million in 1999 to US$19 million in 2005, the number of WUAs considered “eligible” and “sustainable” increased from 2 to 33 and 10 respectively. For a definition of “eligible”, see footnote #6. For a definition of “sustainable” see footnote #2 and Annex 10.

3

9. PSI II was expected to contribute to the following strategic elements of the 2002-2006 Country Assistance Strategy (CAS-Report #24205, 2002): Institutional reforms would be reinforced by WUOs strengthening as a means to decentralize irrigation management and support services provided by the Ministry of Agriculture (MINAG). The Project would have a direct impact on the productive lives of the poor, as more than 70 per cent of potential beneficiaries were small farmers (less than 3 ha). Also, infrastructure rehabilitation and users collective actions by users would reduce environmental damages caused by inadequate irrigation. Finally, partnerships with civil society would be enhanced through the involvement of private service providers (training, extension services, marketing), as well as beneficiaries / WUAs participation.

1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved)

10. The original Project Development Objective (PDO) as defined in the main text of the Project Appraisal Document (PAD) was: “to increase the production and productivity of irrigated agriculture in the coastal area of Peru in order to improve farmers’ well being and contribute to poverty alleviation.” According to the PAD, the PDO was expected to be achieved through the promotion of the development of the financial and management capacity of WUOs, improved use of the water resources, and increase in soil use efficiency.

11. The original key indicators and their targets as approved in the Loan Agreement (LA) are listed in Table 2 below, and mostly refer to Project component outcomes.

Table 2: Key outcome indicators in the Loan Agreement

Indicator Target Number of Water Users Associations (WUA) meeting eligibility criteria6 (1) 47 Average O&M cost recovery rate for all WUA included in the Project (2) 81% Number of farmer families benefiting from off-farm irrigation improvements (1) 32,000 Number of farmer families benefiting from on-farm irrigation improvements (3) 700 Number of hectares benefiting from on-farm irrigation improvements (3) 3,000 Farmers’ financial contribution to off-farm irrigation improvements (2) US$1.9 million

Farmers’ financial contribution to on-farm irrigation improvements (3) US$2.7million Number of water licenses issued (4) 190.000

Source: Loan Agreement. Notes: (1) Outcome related to component C1,

(2) Outcome related to component A (and C1) (3) Outcome related to component B (and C2) (4) Outcome related to component D

12. In addition to the indicators included in the LA, the PAD listed the following PDO related indicators (without target)7.

6 ‘WUA Eligibility Criteria’ means the eligibility criteria established in order for WUAs to benefit from components A and B of the Project; i.e.: (a) a technical manager has been appointed for the relevant WUA; (b) a realistic budget reflected in water tariffs has been adopted allowing efficient operation and maintenance; (c) the advanced water tariff payment system has been adopted; and (d) at least 75 per cent of said tariff has been paid in advance. 7 No targets were set for those indicators, most probably because they are impact-level indicators and, therefore, difficult to estimate.

4

Table 3: Key PDO related indicators in the PAD

Performance indicator Target Average increase in beneficiaries’ income (%) No target Average increase in beneficiaries’ production value per ha (%) No target Average increase in production value per volume of water delivery (%) No target Production value per amount of PSI subsidy. No target Number of WUAs that reached “sustainable level”2 No target

Source: PAD.

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification

13. The Project had two first-order restructurings. One in June 2007, to extend the Project area to the Sierra, the second one in August 2008, to revisit outcome indicators and targets. 14. The original PDO was changed to extend the Project area to the Sierra whose development was a priority of the new Government. This first-order restructuring was made in order to pilot, in the Sierra, the Project integrated approach to inform the design of a follow-up World Bank-financed irrigation project in the Sierra. The revised PDO is to: “increase the productivity of irrigated agriculture in Peru’s Coast and Sierra in order to improve the well being of farmers and contribute to poverty alleviation”. At the same time, the word “production” was dropped from the PDO, as it was already captured in the word “productivity”. 15. Targets indicated in the LA were modified twice. The first, in June 2007, was to reflect Project extension to three pilot areas in the Sierra. The second, in August 2008, was in relation to restructuring of costs to ensure that uncommitted funds were put to productive use, thereby fully disbursing the loan by Project closing. The final set of indicators and their targets, as stated in the legal documents, are shown in Table 4. Additional PDO related indicators included in the PAD were also modified during implementation. These additional indicators had no target and are listed in Table 5 below.

Table 4: Revised key outcome indicators as per the second amendment to the LA

Targets Performance indicators Coast Sierra Total

Number of Water Users Associations (WUA) meeting eligibility criteria.

49 0 49

Average O&M cost recovery rate for all WUA included in the Project.

81 20 -

Number of farmer families benefiting from off-farm irrigation improvements

17,800 1,200 19,000

Number of farmer families benefiting from on-farm irrigation improvements

484 24 508

Number of hectares benefiting from on-farm irrigation improvements

1,822 60 1,882

Farmers’ financial contribution to off-farm irrigation improvements

1.80 0.16 1.96

5

Farmers’ financial contribution to on-farm irrigation improvements

2.66 0.032 2.69

Number of water licenses issued 95,000 65,000 160,000 Number of irrigation plots with water licenses 95,000 149,000 244,000

Table 5: Revised key PDO related indicators in the PAD

Performance indicator Target Average increase in beneficiaries’ income (%) No target Average increase in beneficiaries’ production value per ha (%) No target Average increases in main crops yields No target Number of WUAs that reached “sustainable level” No target

1.4 Main Beneficiaries

16. Project beneficiaries, as anticipated at appraisal, were: (a) 300,000 farmers in the coastal area, integrated in 664 CRs and 64 WUAs; (b) 9,000 directors, technicians and other employees of WUAs and (c) 64 Technical Administrators of Irrigation District (ATDR)8. Project extension to three pilot areas in the Sierra increased the number of beneficiaries by 700 farmers and 3 WUAs. More than two thirds of the farmers expected to benefit from the Project had landholdings of less than 3 ha and were considered poor. 17. The causal links between the Project investments and the benefits expected to flow to beneficiaries are as follows: Farmers benefit from:

(a) off-farm and on-farm improvements of irrigation due to increased water availability and timing of delivery;

(b) capacity building activities expected to improve farmers’ irrigation and agricultural practices and marketing strategies. (infrastructure improvements combined with capacity building is key to increasing yields and crop quality as well as allowing conversion to the production of higher value crops for exports and urban markets; thereby improving the overall performance and sustainability of irrigation and agricultural production)

(c) formalization of agriculture water rights because it secures water supplies in an increasingly water scarce environment; and encourages on-farm investments, such as irrigation improvement and conversion to production of higher value crops.

(d) WUAs and CRs benefit from off-farm irrigation infrastructure improvements and capacity enhancement that is expected to improve irrigation scheme management and sustainability. They also benefit from formalization of water rights because it facilitates easier water distribution and management of water resources.

8 ATDR were responsible, among other things, for monitoring the performance of WUAs and for the approval of water tariff.

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1.5 Original Components 18. Component A. Rehabilitation and modernization of off-farm irrigation systems (US$ 5.26 million). This component supported eligible WUAs to improve water supply service to farmers through financing infrastructure improvements of the collective irrigation system. To be eligible, WUAs had to achieve eligibility conditions (see footnote #4) and be one of the 20 coastal WUAs selected at appraisal (see Annex 2). Each subproject could not exceed US$250,000. Beneficiaries were required to finance engineering studies and co-finance civil works at 30-35 per cent. 19. Component B. Incentive Program for On-farm Irrigation Technology Improvement (US$ 6.63 million). This component provided financial incentives to eligible farmers’ groups to encourage adoption of improved on-farm irrigation technologies such as drip, sprinkler or improved gravity irrigation systems. To be eligible, farmers’ groups had to include at least 6 members and a total irrigated area of 24 ha. The component was to operate in the same WUAs as component A. Each subproject could not exceed US$ 250,000 and the maximum irrigable area per individual farmer was 30 ha. Project subsidies per land owner could not exceed US$12,000 for pressurized and US$6,000 for gravity systems. Farmers were selected by competition for the allocation of incentives:

a. Beneficiaries farming less than 10 ha were required to co-finance at least 30 per cent for pressurized irrigation and 20 per cent for improved gravity systems;

b. Beneficiaries farming more than 10 ha had to co-finance at least 50 per cent for pressurized and 40 per cent for improved gravity systems.

20. Component C. Capacity Building of Water Users’ Groups and Farmers (US$ 3.97 million)

21. Subcomponent C.1 Capacity, Building of WUAs. The subcomponent financed training and equipment to strengthen WUAs technical, financial and administrative capacity to increase sustainability and quality of management. The component operated in the 64 WUAs of the coastal area, albeit with different intensity in accordance with the degree of capacity already achieved. 22. Subcomponent C.2 Capacity Building of Farmers. The subcomponent, which operated in the same areas as component B under both this Project and PSI I carried out two types of activities:

(a) Actions prior to irrigation improvements: raising awareness of component B; promoting formation of farmers’ groups; providing assistance in preparation of subproject feasibility studies and business plan; and training of agribusiness operators.

(b) Actions subsequent to irrigation improvements: such as extension activities aimed at other farmers to achieve a multiplying effect in promoting the adoption of modern irrigation technology and associated crop practices.

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23. Component D. Support to Water Resources Management (US$ 4.78 million). This consisted of three subcomponents executed by the Water Resources Bureau (Intendencia de Recursos Hidricos -IRH-INRENA) of MINAG.

24. Subcomponent D.1 Formalization of Water Rights with the objectives of ensuring that beneficiaries have legal security on the use of irrigation and promoting private investments in irrigation. 25. Subcomponent D.2 Implementation of the National Agricultural Water Rights Registry System financed the implementation, in IRH-INRENA, of the National Agricultural Water Rights Registry.

26. Subcomponent D.3 Support to implementation of the Water Resources Strategy. financed activities aimed at: (a) developing specific and tested solutions for conflict resolutions; (b) developing a proposal for institutional arrangements for water resources management on a watershed basis; and (c) supporting further development of Water Law under discussion in Congress during Project preparation.

27. Component E. Project Coordination and Monitoring (US$ 1.38 million).

1.6 Revised Components

28. Changes to Project components were not significant. During the first restructuring, in June 2007, when Project activities were extended to the Sierra, eligibility criteria and cost-sharing rules for subprojects (components A and B) in the Sierra were made less demanding than for subprojects in the coastal area. This is because the socio-economic conditions in the Sierra are much more difficult than in the coastal area, with a poverty incidence 20 per cent higher (see para. 1). More specifically, Table 6 below compares cost-sharing rules and eligibility criteria between the coastal area and the Sierra.

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Table 6: Cost sharing rules and Eligibility criteria in the coastal area and Sierra

Coastal area Sierra Cost Sharing Rules Component A (off-farm irrigation improvements)

30% during first year of implementation and 35%

thereafter

20%

Component B (on-farm irrigation improvements)

Pressurized irrigation 30% if improved area < 10 ha and 50% if

> 10 ha Gravity irrigation 20% if

improved area < 10 ha and 40% if > 10 ha.

20%

Eligibility Criteria Component A (i) a technical manager has been

appointed for the relevant WUA; (ii) a realistic budget reflected in water tariffs has been adopted

allowing efficient O&M and (c) the advanced water tariff payment has been adopted and (d) at least 75% of said tariff has been paid

in advance.

(i) WUO is legally established in accordance with applicable Peruvian laws; and (ii) WUO

has enforceable operating regulations and effective administrative capacity.

Component B Farmers group of at least 6 members and a total irrigated area

of at least 24 ha.

Farmers group of any size were eligible

1.7 Other significant changes 29. Implementation schedule and closing date. A 6-month extension to June 30 2009 was approved on June 2008, due to the slow implementation of components A and B, due to reasons explained in paragraphs 34, 37-39 and 41. 30. Reallocation of loan proceeds and change in component costs. Reallocation of the loan proceeds was done as part of the second amendment to the LA in July 2008. It increased funding for technical assistance to promote on-farm irrigation improvements and formalization of water rights, by decreasing funding for components A and B. Table 7 compares the original allocation (as described in the LA) and the revised allocation at completion. Annex 1 includes a table with the original component costs as described in the PAD and the revised component costs after both restructurings.

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Table 7: Reallocation of loan proceeds (US$)

Categories Original After Amendments Civil works under part A of the Project (Community works)

2,500,000 2,144,000

Goods 1,100,000 592,000 Consultant’ Services and Audits 4,160,000 5,731,000 Goods, Works and Services for Matching Grants (component B)

1,840,000 1,063,000

Operating costs 660,000 730,000 TOTAL 10,260,000 10,260,000

31. Additional financing from the Government. MEF approved in February 2009, additional resources of US$ 731,288 equivalent to implement subprojects under component A, for which studies were completed and farmers’ contributions available. 2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry Assessment of Project Design 32. The PDO was clear and reflected essential priorities for rural and social development in Peru, as identified by GOP “Carta Verde” (2004), the National Irrigation Strategy (NIS - 2003), and the Bank’s Country Partnership Strategy for Peru (CPS, Report No. 24205-PE, August 19 2004). However, with hindsight, it should have focused on the institutional strengthening of WUAs, instead of higher level objectives, such as increased agricultural productivity, for the following reasons:

(a) The objectives of PSI I were basically related to institutional strengthening and capacity building (see para 6) and the main reason for its supplemental Project, PSI II, was to further strengthen the capacity of WUAs and farmers to ensure long-term sustainability and reap the full economic benefits of investments (see para 8).

(b) Components related to infrastructure improvements, were small in scope and were actually designed as incentives for management improvements9 in the case of Component A (modernization of off-farm irrigation) and “demonstration” subprojects in the case of Component B (on-farm irrigation improvements).

(c) The Project cannot really be held accountable for increased productivity and production because these are longer-term outcomes that depend on efforts beyond the Project’s scope and beyond the control of Project management. Also, identifying the Project contribution to these outcomes (in particular from its soft

9 The eligibility criteria for Component A (see footnote #6) proved to be a powerful tool to accelerate capacity improvement of WUAs.

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components which were the core of the Project) would require a rigorous impact evaluation, which was not foreseen during Project preparation.

33. While Project design was relatively complex due to the diverse components, it basically adopted the same approach and relied on the same implementing agency as PSI I, which had been a satisfactory operation (see para 7).

(a) PSI II followed the demand-driven, integrated approach to irrigation modernization, which proved successful in increasing the capacity of WUAs to become technically and financially autonomous, as well as increasing agricultural production and productivity under PSI I (see para 7 and ICR report #29838), and was in line with international good practices. It combined both structural and non structural components, all of them already included in PSI I, with the exception of the formalization of water rights. The formalization of water rights further strengthened the approach because it promoted farmers’ investments in irrigation and the switch to higher-value crops. The approach was designed to improve cost-effectiveness of public investments, taking advantage of the synergies between components, so that overall Project impact is greater than the sum of its parts. Paragraph 17 above describes the causal relationships between components and PDO.

(b) An important feature of Project design was to have eligibility criteria for off-farm irrigation improvements related to the performance of WUAs. This proved to be a powerful incentive to improve WUAs performance under PSI I and was confirmed by PSI II. Under PSI II, this was indeed the main objective of component A (see para 32.b).

(c) Implementation arrangements were well designed. The main implementing agency (PSI) had already successfully carried out a similar project (PSI I). In addition to PSI, IRH-INRENA, the institution responsible for Water Resources Management in the country, was made responsible for the technical implementation of component D, while all fiduciary responsibilities were maintained within PSI, due to the little experience of IRH-INRENA in those themes.

34. Changes in Project design from PSI I and II that affected Project implementation and outcomes concern components A and B and, more specifically, the cost-sharing rules, the eligibility criteria and competitive grant process for component B and the responsibility and procedures for the formulation of subproject pre-feasibility studies. Those changes, combined with the fact that PSI II, unlike PSI I, worked with the poorer and weaker WUAs of the coastal area, resulted in an unrealistic Project implementation schedule and targets that had been set based on PSI I experience. These changes in the design of components A and B resulted in substantial delays in the execution of subprojects during Project implementation and in not reaching some of these components’ targets.

(a) Cost-sharing rules. Farmers’ groups (component B) and WUAs (component A) had difficulty in gathering the financial contribution necessary to implement

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irrigation infrastructure investments. Minimum financial contribution was substantially raised from PSI I to PSI II, despite the fact that PSI II worked in poorer WUAs than PSI I10. In the case of component A, WUAs contribution to subproject financing was raised from 20 per cent under PSI I to 35 per cent under PSI II, as required by the Ministry of Finance (MEF). In the case of component B, the minimum contribution from farmers was raised from 20 per cent in PSI I to 30 per cent for areas smaller than 10 ha and, 50 per cent for areas larger than 10 ha.

(b) Eligibility criteria for component B. Under PSI I, individual farmers could benefit from on-farm irrigation improvements (component B). In the case of PSI II, only farmers’ groups of at least 6 members and with a total irrigated area of minimum 24 ha could benefit. This change in design was introduced due to regulations of GOP that stipulated that public funds could not be used to finance private infrastructure/individual investments. These conditions discouraged many interested small and medium farmers, especially when they could not find neighboring producers equally interested in the Project. This is one of the main reasons why implementation of component B was slow and its original targets not met.

(c) New administrative procedures for the preparation and approval of subprojects.In PSI II, new procedures (National System for Public Investment – Sistema Nacional de Inversion Publica-SNIP process) for the preparation and approval of subprojects were introduced. These procedures included an additional pre-feasibility study stage (perfil de proyecto), responsibility of WUAs and farmers’ groups. While these new procedures improved the quality of subprojects, they caused significant delays for three reasons: (a) there was an extra study to prepare and an extra approval step to pass; (b) beneficiaries had to mobilize financial resources for the study without guarantee that it would lead to subproject implementation; and (c) initially, WUAs and local consultants lacked experience in the preparation of pre-feasibility studies. Initially, studies prepared were of poor quality, generating several rounds of revisions, before they could be approved.

Assessment of Risks

35. Risks were correctly identified with the exception of those associated with the changes in Project design from PSI I to PSI II for components A and B (see para 34). While the risk of not achieving the required financial contribution was identified during Project preparation, it was considered moderate. During implementation, this risk turned out to be substantial and resulted in significant delays in the implementation of components A and B and in the non achievement of their original targets. During Project preparation, the risks of delays associated with the

10 The financial capacity of WUAs initially selected to benefit from PSI II was weaker than that of the WUAs which benefited under PSI I. Indeed, PSI II focused on WUAs that required more time and technical support to reach the eligibility criteria, including the water tariff collection efficiency criteria, an indicator of their financial capacity.

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introduction of the SNIP process for the preparation and approval of subprojects and with the requirement to form groups of farmers to benefit from component B were not anticipated.

Government commitment and stakeholder involvement. 36. Government’s commitment and stakeholder involvement were adequate. As mentioned above, the Project adopted a demand-driven approach to infrastructure improvement (component A and B), as well as to the formalization of water rights (component D). The national water resources management diagnostic and strategy supported by the Project were also conducted in a highly participatory way, involving stakeholders’ inputs at various stages of the preparation process.

2.2 Implementation 37. Project implementation was slower than expected for the following reasons:

(a) Factors outside the control of government or implementing agencies 38. Oil price increases. The price of oil increased continuously during Project implementation, reaching, in August 2008, almost three times the value it had at appraisal. This, combined with the long time required to prepare subprojects (on average a year in the case of component B), meant that subproject cost estimates in the feasibility studies were often lower than at the time of construction. As a result, a number of subprojects were dropped because farmers’ groups/WUAs were not willing, or could not mobilize the additional funds required, for their construction.

39. PSI carried out emergency interventions in irrigation perimeters affected by the earthquake of August 2007 in Pisco. While these activities were not directly financed by the Project, they caused delays in achieving Project targets, because staff and other resources were mobilized to respond to this emergency.

(b) Factors generally subject to government control

40. Delays in receiving funds for Component B. The LA was signed in October 2005, too late for the Project to be included in Government General Budget for 2006. Only in May 2006, did PSI get a specific budget allocation for Project implementation. The implementation of component B was therefore delayed by about six months because, unlike other components, it did not get any advances of national funds.

41. Project extension to the Sierra and formalization of agricultural water rights. As per Government request, the Project was extended to the Sierra. New targets and component costs were estimated based on the experience in the coastal area. Yet, the time and cost of formalizing water rights in the Sierra were much higher than at the coast because: (a) in the Sierra, many water rights were issued to a community of farmers while in the coastal area all water rights had been issued to individual farmers, and issuing a water right to a community is more complex and (b) in the Sierra, land is not cultivated in winter, reducing the time when field work can be

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carried out, while in the coastal area, the land is cultivated year-round. A second Project restructuring adjusted component targets and cost to reflect those points.

(c) Factors generally subjects to implementing agencies control 42. New administrative procedures for the formulation and approval of subprojects. As mentioned above, each subproject under components A and B had to follow the new SNIP procedures, including the preparation of an additional pre-feasibility study. Initially, WUAs and local consultants lacked experience in the preparation of these pre-feasibility studies. They were of poor quality, generating several rounds of revisions before they could be approved. In response to this problem, PSI organized several workshops aimed at strengthening the capacity of WUAs and local consultants in the preparation of those studies, which reduced significantly the time required for subproject preparation and improved overall subprojects quality.

43. Farmers and WUAs had difficulty in mobilizing their financial contribution to subprojects. As mentioned above, farmers and WUAs faced difficulty in mobilizing their financial contribution to subprojects. PSI took the following measures, in accordance with the World Bank Project team, to alleviate these problems: (a) it expanded the number of WUAs that could benefit from component A and B, by (i) allowing the WUAs that benefitted from PSI I to participate in the Project and (ii) relaxing the condition that only farmers’ groups belonging to a WUA eligible for component A could benefit from component B; (b) it supported WUAs and farmers in requesting financial support from various financial institutions such as Peruvian banks, COFIDE (Development Finance Corporation) and micro-credit NGOs; (c) it coordinated with regional and local governments so that they guarantee the loan contracted by WUAs and farmers’ groups to finance their part of the subproject; and (d) it promoted the association between farmers’ groups and agro-export firms to help farmers groups mobilize their financial contributions.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization M&E Design 44. The M&E system was designed adequately to monitor and evaluate component outcomes with, in general, clear Project component indicators and targets (see Table 9 for the final list of outcome indicators and targets per component) as well as data sources and collection methods (with the exception of one indicator for component A: “number of farmers families benefitting from the component”)11. The same is true for expected inputs and outputs of each component.

45. Evaluation of Project impacts, which in the case of this Project refers to the stated PDO (increased production and productivity), is difficult from a methodological standpoint, data intensive and costly because it requires isolating the effects of the Project from those of other factors and this type of study is usually not carried out for Bank projects. In the absence of such a study, it is difficult to judge, with accuracy, to what extent the Project led to increased

11 It is indeed impossible to set a meaningful target for this indicator because the number of beneficiaries depends on the location of the subproject (the more upstream the subproject, the higher the number of beneficiaries) which becomes known only during implementation, as a result of demand-driven process.

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production and productivity. These problems were partially overcome with: (a) an impact evaluation of PSI I carried out by IEG12, whose results are briefly described in paragraphs 74-76 and 83-84, and (b) a separate study conducted by PSI13, as part of its final Project evaluation report, based on a representative sample of subprojects, which is the data source of Table 8 and Annex 3. This study, however, did not consider control groups and was carried between 1 to 3 years after the subprojects were completed, not enough, in most cases, to appreciate the full impacts of the subprojects on agricultural production, productivity and farmers incomes. For those reasons, its findings should be considered as general trends and not definite results.

M&E Implementation 46. The M&E system was effective in tracking implementation progress of each component. During implementation, the outcome, output and input indicators for each component were collected regularly and were of good quality, allowing identification of delays in the implementation of components A and B and undertaking remedial measures (see para 42 and 43).

47. During several supervision missions, the Bank recommended collecting impact-related indicators for each subproject of components A and B during Project implementation, and prepared a template for doing so. However, those impact-related indicators were only collected at Project closing, as part of the Borrower’s final Project evaluation report, and for a representative sample of subprojects13.

48. Although Project results have been disseminated relatively well to international audiences14, efforts to disseminate quantitative results and lessons learned from the Project within Peru were limited in scope.

12 “An Impact Evaluation of a Multicomponent Irrigation Project on Farm Households in Peru”, IEG, 2009. While the study refers to PSI I, the activities undertaken by PSI II under components A and B are basically the same, therefore the estimated impacts of those components are also valid for PSI II. 13 “Informe de Cierre, PSI, October 2009. 14 The Project results were presented in international journals (e.g. Developing Capacity in Water Users Organizations: the case of Peru, Irrig. and Drain. 57:300-310, 2008) and at various international events, including the Bank-sponsored Water Week in 2009.

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2.4 Safeguard and Fiduciary Compliance Environment and social safeguards

49. Compliance with environmental and social safeguards was moderately satisfactory.

Project design

50. The Project was classified as category B and triggered three environmental safeguards, notably, OP 4.01 (Environmental Assessment); OP 4.09 (Pest Management) and OP 4.11 (Physical Cultural Resources), for which an Environment Management Plan (EMP) and a Pest Management Plan (PMP) were prepared and disclosed before appraisal. While the Project was a supplemental Project with similar components as PSI I, its design and safeguards classification should have been reviewed and endorsed by the Region’s Safeguards Advisory Team (SAT) before its approval by the Board in 2005. This had not been the case and SAT endorsed the category B classification in November 2005.

Project implementation

51. The safeguards classification and instruments were completely reviewed as part of the first Project restructuring because the Project extended its activities to three pilot areas in the Sierra. As a result, three additional safeguards were triggered by components A and B: OP 4.04 (Natural Habitats), OP 4.37 (Safety of Dams) and OD 4.20 (Indigenous Peoples). Project category B was maintained. Social assessments were prepared for the three pilot valleys and an Indigenous People Plan (IPP) was prepared for the Colca Valley where indigenous people were present. The EMP, PMP and ISDS were revised. The PMP prepared has been considered good practice by the Bank. All safeguards documents were consulted with potential beneficiaries and civil society and disclosed before approval of the restructuring package by the Board.

52. After the first Project restructuring in 2007, PSI hired a full time environmental specialist to ensure subproject compliance with environmental and social safeguards. He produced a number of simple guidelines for the preparation and supervision of subprojects (components A and B) and their compliance with the EMP, various materials related to good agricultural practices and integrated pest management. He also gave, with the help of short-term consultants, numerous training sessions to PSI staff and farmers’ groups on those themes, as stated in the PMP. Those activities were mostly financed as part of component C2.

53. The PMP was implemented for subprojects under component B starting in 2007. The IPP for the Colca valley included measures that were included in the methodology followed by PSI to implement subprojects in the area. PSI did not approve any subproject (components A and B) that did not follow the Peruvian SNIP procedures with regard to environmental assessment (which were considered adequate by the Bank) and included the preparation of an environmental management plan for each subproject whose cost and activities were included in the final design of the subprojects.

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Procurement

54. The management of procurement processes by PSI was satisfactory. Three ex-post procurement reviews were conducted during Project implementation. The ex-post reports and the Supervision Mission Aide Memoires included recommendations that helped improve the management of procurement processes, including: (a) the expansion of the procurement plan format to incorporate key information relevant for planning and monitoring purposes; (b) consideration of the Procurement Special Provisions, included in the LA, to avoid procedures incompatible with Bank Guidelines; (c) avoid the inclusion of requirements not explicitly specified in the Bank Guidelines for bidding documents; (d) obtaining no objection, when required, prior to the procurement action; (e) improvement of archiving capacity; and (f) constant training of procurement staff. These recommendations were included in the action plans of the ex-post reports which were complied with during Project implementation.

Financial Management

55. Financial Management was moderately satisfactory.

56. PSI was experienced with the World Bank financial management procedures as it had already implemented PSI I and undertook its responsibilities for the management of funds, within its own structure and procedures. Flow of funds included transfer of funds from PSI to beneficiaries’ bank accounts to implement subprojects (components A and B) and to INRENA to implement component D. Those transfers of funds required that a robust financial management system be designed and maintained throughout the life of the Project.

57. PSI submitted in a timely manner the Project financial monitoring and audit reports. However, it faced difficulties putting in place and operating effectively adequate financial management arrangements. Main shortcomings included: (a) the capacity of the financial staff, (b) some deficiencies in the internal controls, (c) inadequate accounting policies and procedures, and (d) a weak financial information system that could have jeopardized the reliability of the financial information required to manage the Project and monitor its implementation. For those reasons, the Project required close supervision from the Bank financial management team as well as continuous technical assistance.

58. Important improvements were achieved in the following areas: (a) the internal control system for control of funds transferred to the subprojects and INRENA was improved; (b) the accounting policies and procedures to provide timely and reliable information required to manage and monitor the implementation of the sub-projects was improved; (c) the capacity of administrative staff was strengthened in order to be able to set-up adequate arrangements and controls; and (d) the basis to enhance the financial information system to support the transaction recording, monitoring, and reporting of Project administrative and financial information were set-up. However, a key success factor looking forward to the next Project in the Sierra would be the presence of highly qualified staff to ensure the maintenance and effective operation of those arrangements, which can effectively support Project implementation.

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2.5 Post-completion Operation/Next Phase Post-completion operation of investments financed by the Project 59. The capacity of WUAs to achieve self-sufficiency in technical, financial and administrative aspects has increased significantly during Project implementation (see para 68) and, generally, the sustainability of infrastructure improvements (component A) due to inadequate O&M is not a concern.

60. However, many WUAs need further strengthening and, in fact, most WUAs should receive continuous support in order to continue improving/maintaining the performance of water service delivery. Three main mechanisms are in place to strengthen the capacity of WUAs, but they are either incipient or have an uncertain future:

(a) The Project promoted the creation, within the WUAs, of a Training and Communication Unit (UCC), with a small budget and dedicated staff, responsible for continuous capacity building of WUAs and trained local irrigation authorities (ATDR) in the monitoring of WUAs, in particular their annual O&M plans and training programs. In practice, however, this mechanism is still incipient and need; to be consolidated with further support because (a) UCCs have only been created in 34 WUAs (53 per cent of WUAs in the coastal area), mostly in the stronger WUAs, and they are not always sufficiently financed and (b) the capacity of ATDRs is uneven. Their recent transfer to the National Water Authority (ANA) should improve this situation because they will not depend on regional budgets and priorities and ANA has the power to sanction.

(b) In addition to the UCCs that have been supported by the Project, the Peruvian National Board of WUAs, created in 1984, has recently engaged in promoting and developing capacity development of WUAs, by creating its own incipient capacity building unit.

(c) Finally, PSI continues supporting irrigation modernization, including strengthening of WUAs, but this support is still dependent on the implementation of projects/programs financed by MINAG and donor agencies, putting at risk the sustainability of PSI support to WUAs in the longer term. Currently two PSI projects provide capacity building to WUAs in the coastal area: (a) a JICA Project, approved in 2006 that follows the same approach as PSI II and works only in the best 15 WUAs of the coastal area and (b) PROCOMAT, a capacity building project for WUAs and farmers focused on the areas not supported by the JICA project. PROCOMAT is closing in December 2009 and a new, similar project should follow. The other projects implemented by PSI, concern the promotion of on-farm irrigation improvements or increasing irrigation water supply through regulation of rivers and construction of water intakes (component A and B type of projects).

61. The O&M of improved on-farm irrigation systems (component B) is the responsibility of farmers. The risk that this O&M is inadequate is low because farmers should have the capacity

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to properly maintain the O&M systems (they received training from PSI and the material providers) and farmers were highly motivated in installing the improved technologies as they financed the feasibility studies and a large share of investments. Finally, subproject designs have been revised by the PSI team whose expertise in this field is strong and the risks that those systems would fail because the poor design is therefore low.

Extension of PSI activities to the Sierra region of Peru. 62. Other than the pilot projects carried out under PSI II in the Sierra, PSI only worked in the coastal area. A follow-up World Bank financed operation is under preparation to extend PSI activities to the Sierra region, following a similar integrated approach as the one implemented in the coastal area. This follow-up operation will provide an opportunity for the Bank team to continue dialogue with the Government on the means to insure continuous and appropriate support to WUAs in the coastal and Sierra areas. The follow-up project will build on the experience in the sierra region under the Project and include the lessons learned as outlined in this ICR.

3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation 63. Project design (PDO and components) remains highly relevant for Peru because it is consistent with GOP’s current development priorities and with current Bank country and sector assistance strategies.

(a) MINAG’s Agriculture Multiannual Sectoral Strategic Plan for 2007-2011 establishes six strategic objectives, two of which are supported by the Project:

1. Strategic objective on Water Management: (i) construction and rehabilitation of irrigation infrastructure to guarantee water availability and optimal use; (ii) installation of improved on-farm irrigation systems; (iii) formalization of water rights; and (iv) promotion of the efficient use of water in the coastal area.

2. Strategic objective on Market Access: (i) strengthen farmers’ productive and entrepreneurial capacity; and (ii) promote the shift to market oriented agricultural crops.

(b) Project design also responds directly to two of the three pillars of the Country Partnership Strategy (CPS – Report #37913, Dec 2006) agreed between the Bank and Peru covering the period 2007-11, namely Economic Growth (accelerating growth and widening its base, making growth environmentally sustainable) and Social Development (strengthening human capital).

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64. In addition, responding to recent GOP priorities to alleviate poverty in the Sierra, the PDO and Project components were adjusted15 to allow the implementation of pilot subprojects in three WUAs of the Sierra and, thereby, help design a follow-up operation that would scale-up PSI activities to the poorer Sierra region.

65. Finally, Project design is relevant and consistent with the stated PDO, in particular the integrated approach to irrigation improvement that had already proved successful in increasing the productivity of irrigation under PSI I and building the capacity of WUAs (see para 7).

3.2 Achievement of Project Development Objectives

66. The Project achieved its stated PDO. It has indeed contributed to increase the production and productivity of irrigated agriculture in the Project area, as demonstrated by PSI’s final Project evaluation report13 the results of which are included in Table 8 below.

Table 8: Effects of the Project on Agricultural Production and Productivity

Indicators Incremental Values

%increase

from baseline

Average increase in beneficiaries’ annual income (US$/family) - Component A - Component B and C2

183 7,172

5

153 Average increase in beneficiaries’ annual production value per ha (US$/ha)

- Component A - Component B and C2

54 2,326

3.5 155

Average increase in yield of main crops (%)

- Component A

• traditional crops 0-5

• vegetables 0-3

• fruit trees 0-5

- Component B and C2

• traditional crops 28

• vegetables 28-57

• fruit trees 14-33 Note: Estimates based on a sample of 28 subprojects carried out in 2007-2008, representing 9,289 ha and 3,063 farmers - Average increases in production value and farmers’ income are in constant prices.

67. Increases in production, land productivity and incomes are significant in the Project area, but cannot be compared to targets (none were set). Also, only the effects of Components A, on one hand, and B & C2, on the other, could be measured. The effects of the institutional strengthening of WUAs (component C1) and of the formalization of water rights (component D) on increased production and productivity could not be estimated, as they would be very difficult to capture from a methodological standpoint. It should be noted that this study did not consider control groups and was carried out 1 to 3 years after the subprojects were completed, not enough

15 Amendment to the Loan Agreement of 28 June 2007.

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in most cases, to appreciate the full impacts of the subprojects on agricultural production, productivity and farmers’ incomes. For those reasons, its findings should be considered as general trends and not definitive results. It should also be noted that both components A and B&C2 generated substantial impacts in terms of production and productivity. Indeed, the benefits of component A are spread over a much larger irrigated area than those of component B16 which compensate for its smaller impacts per ha (see the financial and economic analyses in Annex 3).

68. The Project exceeded its outcome targets related to strengthening the capacity of WUAs as demonstrated below:

(a) Collection efficiency of water tariff during the same period increased from 78 to 85 per cent since 2008. Target was exceeded.

(b) Revenues collected from the water tariff increased by 42 per cent between 2005 and 2008, from US$19 million in 2005 to US$27 million in 2008. No target was set.

(c) The number of WUAs that reached the eligibility criteria for Component A increased by 48 per cent, from 33 to 49 WUAs between 2005 and 2009. This is 77 per cent of all WUAs in the coastal area. Target was exceeded.

(d) The number of WUAs that reached the “sustainability level” increased from 10 in 2005 to 41 in 2009. This is 64 per cent of all WUAs in the coastal area. No target was set.

69. The Project did promote the adoption of on-farm irrigation innovation, but did not reach the targets related to this outcome (see Table 9 below). The reasons for not reaching the targets are explained in para. 34, 37-39 and 41 above.

70. The Project almost achieved both of its outcome targets for the formalization of water rights (see Table 9 below). The reasons for not achieving the target related to the number of water licenses issued are due to Project extension in the Sierra where the formalization of water rights is much more complex than in the coastal area (see para 41 for a more detailed explanation).

16 Subprojects of component A (off-farm irrigation modernization) and B (on-farm irrigation improvements) in the coastal area benefit an average approximately 1360 ha (382 families) and 36.7 ha (10 families), respectively.

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Table 9: Outcome indicators per project component

Outcome Indicators Baseline Weighted

target4Actual value

at Project Closing

%Achievement

Related to components A and C1 (objective: strengthened capacity of WUAs) Number of Water Users Associations (WUA) meeting “eligibility” criteria1.

33 47 49 103%

Number of WUAs that reached “sustainable” level2

10 No target 41 NA

Revenues collected from the water tariff (US$ million)

19 No target 27 NA

Average O&M cost recovery rate for all WUA included in the Project (%)

78 81 84.5 104%

Farmers’ financial contribution to off-farm irrigation improvements

0 2 1.49 77%

Contribution from WUAs to component cost (%)

30-35% on an increasing scale

31% Target

reached Number of farmer families benefiting from off-farm irrigation improvements3 0 29,672 11,062 37%

Related to components B and C2 (objective: adoption of modern on-farm irrigation techniques promoted)

Number of farmer families benefiting from on-farm irrigation improvements

0 673 476 71%

Number of hectares benefiting from on-farm irrigation improvements

0 2745 1,468 53%

Farmers’ financial contribution to on-farm irrigation improvements

0 3 2.05 76%

Total beneficiaries contribution to component cost (% of component cost)

20 to 50% depending on the type of subproject

42% Target

reached Related to component D (objective: water rights formalized) Number of water licenses issued 0 191,418 162,559 85% Number of irrigation plots with water licenses

0 206,892 246,917 119%

Note:1. See footnote #6 for the definition of “eligibility” criteria 2. See footnote #2 and Annex 10 for the definition of “sustainability” 3. See footnote #11 for a discussion on the relevance of this indicator 4. See footnote #1 for an explanation about weighted targets

3.3 Efficiency Rating: Substantial 71. An ex-post cost-benefit analysis was carried out on a representative sample of 28 subprojects financial by the Project. This analysis estimates the Project economic internal rate of return (EIRR) at 20.5 per cent, corresponding to a net present value (NPV) of US$ 14.7 million and the financial internal rate of return (FIRR) at 16.7 per cent, corresponding to a NPV of US$ 7.2 million. Despite the data limitations mentioned in Annex 3, such as the limited number of years after subproject completion to appreciate impacts and the absence of control groups, these

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results demonstrate good returns on investments from both a financial and economic point of view.

72. The EIRR and FIRR calculated at Project closing are lower than those estimated during Project preparation, which were 24.5 per cent and 25.5 per cent respectively. The lower internal rates of returns are explained by the fact that the improved irrigated area by components A and B, for which Project benefits are estimated, is much smaller than anticipated, while the overall cost of irrigation improvements (components A, B, C and part of E combined) is similar to what was expected at appraisal. In other words, the unit cost of irrigation modernization (US$/ha) is much higher than anticipated for two reasons: (a) the slow implementation of infrastructure subprojects requiring much more sensibilization and technical assistance than anticipated due to cumbersome procedures (see para 34, 37-39) and (b) higher costs of materials and civil works due to increases in oil prices (see para 38).

3.4 Justification of Overall Outcome Rating Rating: Satisfactory 73. The outcome of the Project is rated satisfactory based on its continued high relevance, the satisfactory rating given to its efficacy since it achieved the intended objective and the substantial rating given to its efficiency since the Project achieved an acceptable rate of return of 20.5 per cent.

3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development

74. Impacts on economic well being and agricultural performance. An impact evaluation of PSI I carried out by IEG12 shows that the Project had positive impacts on the economic well being and agricultural performance of beneficiaries: off farm irrigation improvements and WUAs capacity building increased labor demand and increased wage income. Beneficiaries hired 27 per cent more agricultural workers than the control group, and reflecting this, wage income (which on average amounts to 20 per cent of the total income per capita) for farm households in localities that benefited from those components increased by 47 per cent per capita relative to farm households in control localities.

75. Impact on poverty. The value of output per capita, income per capita and agricultural profit per capita increased for poor farmers relative to the poor in comparable localities where the program was not offered. In terms of broader economic welfare, poor farmers in beneficiary localities work significantly less as manual laborers and earn more non-wage income per capita, likely derived from agricultural activity on their own farm, than poor farm households in control localities. This finding is consistent with positive impacts on production, agricultural income and agricultural profit.

76. The formalization of water rights under Component D, the PROFODUA (Program for the Formalization of Water Use Rights), is reported to have resulted in greater equity in the distribution of water rights and a strengthened position of less powerful stakeholders like women

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and small producers. The program also embraced other key complementary aspects such as land property registration and the issuance of national identity cards for the more vulnerable population groups. These statements on the benefits of the program, however, have not been quantified or monitored during Project implementation.

77. Gender aspects. Project design did not foresee any gender dimension or set any specific gender targets. During implementation, however, two Gender Pilots were carried out in the Sierra region. Those pilots included a gender diagnosis that helped understand the different factors that determine the degree of participation of women and men in water management both at the level of the WUAs/CRs and in the fields. Capacity building activities were also carried out to improve women’s position within WUAs/CRs and their performance as agricultural producers. Lessons learned from both pilots are being used to incorporate a gender perspective in the forthcoming PSI Sierra project with the objective to respond to the specific conditions and needs of rural women in the Sierra.

(b) Institutional Change/Strengthening 78. One of the most important benefits of the Project has been the strengthening of WUAs through the combined action of components A and C1, as well as component D (see para 68). WUAs have also been empowered through their strong involvement in the process of selecting, designing, executing and financing irrigation subprojects.

79. ATDRs were also strengthened (mainly through component C1). They were trained to support and monitor WUAs in their efforts to achieve self-sufficiency in technical, financial and administrative aspects. With the promulgation of the new water law, ATDRs were recently transferred from the regional governments to the National Water Authority (ANA). They should keep their regulatory and support functions vis-à-vis WUAs as stated in the draft application decree of the water law.

80. The Project also contributed to the strengthening of IRH, and its recent transformation into the National Water Authority (ANA), the institution responsible for water resources management (WRM). More broadly, the Project helped define the new institutional and legal framework for WRM in Peru. IRH was strengthened through the implementation of the water rights program, the preparation of the national water strategy, the preparation of the Water Resources Modernization Program, part of which is now being implemented by the Bank, the strengthening of the legal framework for WRM which raised the status, power and budget of IRH as it became an Authority.

(c) Other Unintended Outcomes and Impacts (positive or negative)

81. On-farm irrigation improvements carried out by PSI I and PSI II had a demonstrative impact that contributed to the spectacular development of drip irrigation in the country, which increased from 7,700 ha in 199817 to 100,000 ha in 200918. Inspired by PSI I and II, the

17 Source: FAO Aquastat. 18 Source: PSI.

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Government launched in 2006 the program Riego Tecnificado, which, up to now, has finalized technical studies for the conversion of 6,000 ha to improved on-farm irrigation technologies.

82. A pool of engineers specialized in the design and supervision of drip irrigation, has been developed, as well as a group of equipment suppliers. These professionals and entrepreneurs are contributing to the promotion and expansion of improved on-farm irrigation technologies throughout the coastal area.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops 83. In July of 2009 the Independent Evaluation Group (IEG) of the Bank carried out the study An Impact Evaluation of a Multicomponent Irrigation Project on Farm Households in Peru, which, based on qualitative and quantitative surveys administered to beneficiaries, other farmers, PSI staff and others, investigated the impacts of the Project on agricultural productivity and economic welfare. These impacts correspond to PSI I. However, regarding components A and B, the study can be considered representative of the impacts of PSI II, since in both phases, activities were similar and there was no repetition of structural activities in the same area. As far as Component C is concerned, the impacts represent the joint effect of both phases, since it is not possible to isolate the effects of PSI I from PSI II.

84. The main conclusions of the IEG study can be summarized as follows:

(a) The impacts of components A, B and C2 increased labor demand, increased wage income and promoted changes in types of crops produced. Beneficiaries hired 27 percent more agricultural workers than the control group, and reflecting this, wage income for farm households in treatment localities increased by 47 percent per capita relative to farm households in control localities. The infrastructure component made a greater positive impact on the poor than the non-poor, although both groups hire more manual labor to work on their farms. About 40 percent of persons interviewed perceived the institutional strengthening component as the most successful in the program. A primary reason is that the training imparted created a culture of respect and compliance with the irrigation distribution schedule, helped ensure that fees were used for the O&M of water infrastructure, and raised awareness among water users of the importance of their economic contributions to further develop and maintain water facilities.

(b) On-farm irrigation improvement affected farmers in at least three ways. First, this component increased the proportion of agricultural output that was sold in the market (versus self-consumed) by 12 percent compared to control farmers; second, it increased the probability of growing permanent crops by 15 percent; and third, it improved production and productivity when off-farm irrigation infrastructure was also improved. The results for farmer extension and training are also positive on at least three dimensions; first, clear productivity increases; second, increases in the amount of output sold in the market; and third, increases in the production of export crops.

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(c) Impacts of the program differ depending on the initial wealth condition of farm households. Poor farmers are more likely to specialize in cultivating staple crops when off-farm components are implemented, while non-poor farmers are more likely to increase their production of industrial crops. The on-farm irrigation technology investments led poor farmers to increase their production of permanent crops, however, they had no changes in productivity. Lastly, farmer extension led to crop switching towards more export crops and increases in permanent crop cultivation, particularly for poor farmers.

4. Assessment of Risk to Development Outcome Rating: Substantial 85. The overall risk that Project development outcomes (WUAs performance) and impacts (increased productivity of irrigation) will not be maintained is substantial without appropriate, continuous support to WUAs.

External risks 86. Risks associated with increased water demand and climate change are moderate. In the last decades, water demand in the coastal area increased sharply due to sustained population and economic growth and irrigation development. Meanwhile, climate change has begun to affect the supply of water coming from glaciers. In the long term, climate change will most likely result in increased peak discharges and decreased average discharges of rivers. Combined, these changes may reduce the availability and increase the cost of water used for irrigation which could negatively impact land productivity of irrigation (water productivity would most likely be increased). The Project reduced the vulnerability of irrigation schemes to climate change and water scarcity risks:

(a) Traditionally, peak discharges in rivers cause damages on irrigation intakes (as demonstrated by El Nino events). The Project improved many of them, designing and constructing robust structures resistant to destructive floods.

(b) Irrigation schemes are also better prepared to face increased water scarcity because the capacity of WUAs and farmers to manage irrigation systems was improved (component C1) and farmers’ water rights were formalized, thereby legally securing their share of the resource (component D).

87. Risks associated with a drop in agricultural prices are moderate. A dramatic drop of agricultural prices would negatively affect Project outcomes and impacts, but the probability of such event occurring is small. Also, up to a certain extent, farmers can respond to price changes by growing crops demanded by the market, because irrigation networks improved by the Project were designed with great flexibility, allowing irrigation of almost all kinds of crops.

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Internal risks 88. The capacity of WUAs to achieve self-sufficiency in technical, financial and administrative aspects has increased significantly during Project implementation (see para 68) and the risks that those achievements are not sustained is substantial without appropriate, continuous capacity building support.

89. For most of the 41 coastal WUAs which attained a good degree of sustainability the risk of management deterioration is substantial without stronger UCCs (see para 68). As mentioned in para 60, the Project promoted the creation, within the WUAs, of a Training and Communication Unit (UCC), with a small budget and dedicated staff, responsible for continuous capacity building of WUAs. However, these UCCs are still incipient and need to be consolidated with further support because UCCs have been created in only 34 WUAs and they are not sufficiently financed. PSI continues supporting the strengthening of those WUAs (and their UCCs) through JBIC and PROCOMAT projects. The problem is that PSI support to WUAs capacity building is, up to now, dependent on Government or donor funded projects, and its support is therefore not necessarily sustainable.

90. For the other poorer 23 WUAs (accounting for 34 per cent of WUAs in the coastal area), that mostly did not benefit from components A and B because they did not reach eligibility level, there is a substantial risk that improved WUA performance is not sustained without adequate, continuous support. This needs to be addressed through a clear commitment and with specific support mechanisms adapted to these poorer WUAs. As mentioned in para 59-62, three mechanisms are in place today to build the capacity of WUAs, but they are incipient or their future is uncertain:

(a) UCCs, but they have only been established in the best WUAs and should be complemented by external support, especially in the case of the least performing WUAs;

(b) The Peruvian National Board of WUAs, created in 1984, has recently engaged in promoting and developing capacity development of WUAs, creating its own incipient capacity development unit;

(c) PSI continues providing support to these poorer WUAs through PROCOMAT, which will close soon, but should be followed by another project. As mentioned above, an issue is that PSI support to WUAs capacity building is, up to now, dependent on Government or donor funded projects, and is therefore not necessarily a sustainable mechanism in the longer term.

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5. Assessment of Bank and Borrower Performance

5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry

Rating: Moderately Satisfactory 91. Bank performance in identification, preparation assistance and appraisal of the Project was moderately satisfactory. Project design was based on a correct diagnosis of the subsector and country context, and was in line with GOP priorities and the Bank’s CAS. PSI II was a supplemental project prepared to consolidate achievements made under PSI I and the same Bank team was in charge of supervising PSI I and preparing PSI II, which facilitated design and integration of lessons learned. The Project integrated approach to irrigation modernization was in line with international good practices. The Bank team foresaw correctly future government requests of studies related to water resources and included a subcomponent aimed at supporting those. Therefore, PSI II played an important role in updating the Water Resources Strategy, the preparation of the new Water Law and the formulation of the Bank-financed Water Resources Management Modernization project, approved by the Board in July 2009.

92. Notwithstanding, the Bank team was overly optimistic in evaluating the co-financing capacity of beneficiaries, farmers’ willingness and ability to form groups and beneficiaries capacity to prepare satisfactory pre-feasibility studies, (making it more difficult for WUAs and farmers to qualify for components A and B as compared to PSI I, while WUAs and farmers in PSI II area are weaker and poorer than in PSI I) which caused implementation delays and the non achievement of targets set for components A and B and (see para 34). With regard to the PDO, the Bank team should have recommended lower level objectives, focused on the institutional strengthening of WUAs, instead of impacts such as increased productivity which are difficult to attribute and therefore measure (see para 32). Also, while the Project environmental category was confirmed early during Project implementation, it was not approved by SAT before approval by the Board in June 2005 (see para 50). (b) Quality of Supervision

Rating: Moderately Satisfactory

93. Bank supervision missions were regular and instrumental in identifying problems, such as the causes of implementation delays (para 34, 38-41), and in agreeing with the implementing agencies on mitigation measures, such as the needs for workshops to train local consultants in the formulation of pre-feasibility studies according to new SNIP procedures (para 42-43). Supervision reports realistically rated Project’s performance in terms of achievement of its development objective and physical implementation. Supervision mission left detailed Aide Memoire to the Borrower and implementing agencies with clear recommendations. Because one of the implementing agencies, IRH, was less familiar with Bank procedures, special attention was paid to financing management and procurement aspects and staff training in these issues. However, despite detailed Aide-memoire, supervision missions failed convincing the Government of addressing the causes for implementation delays by relaxing the conditions

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related to at least one of the following: (a) the need to constitute group to benefit from component B, (b) the cost sharing ratio for components A and B, (c) the need for beneficiaries to prepare pre-feasibility studies and (d) the competitive grant system for component B.

94. The Bank team formally restructured the Project twice in order to better respond to new Government priorities (i.e. irrigation development in the Sierra) and adjust performance targets to take into account delays in Project implementation. It rightly reassessed the need to trigger additional social and environmental safeguards (e.g. Indigenous People) when the Project expanded to the Sierra. With hindsight, the Bank team should have seized these restructuring opportunities to convince GOP to reformulate the PDO, so that it would focus on the institutional strengthening of WUAs.

95. The Bank team mobilized Trust Fund financing to: (a) carry out the Project Base line study, (b) design an Irrigation Benchmarking System (to better appreciate the relative performance of WUAs), (c) promote the position/role of women within WUAs/CRs in the 3 pilots in the Sierra (Cajamarca, Mantaro and Colca-Arequipa), and (d) to improve the insertion of small-scale farms in successful agro-supply chains in the Sierra (e.g. milk and dairy chain).

(c) Justification of Rating for Overall Bank Performance

Rating: Moderately Satisfactory 96. The Bank’s overall performance is considered moderately satisfactory as both the Bank performance during Project preparation and supervision were moderately satisfactory19.

5.2 Borrower Performance (a) Government Performance

Rating: Moderately Satisfactory 97. Government performance during Project preparation was moderately satisfactory. It participated actively in Project preparation. Ownership of the Project concept and approach by GOP is reflected in the fact that this approach had already been applied under PSI I and was subsequently applied to a JBIC financed project in the coastal area and to a World Bank financed Project in the Sierra.

98. Government performance during Project implementation was moderately satisfactory. GOP maintained its commitment throughout Project implementation:

(a) Its financial contribution to the Project was adequate and mostly timely;

(b) After years of discussion, the Water Law was approved in 2009 and the National Water Authority (ANA) was created in 2008. The National Water Right Registry (RADA) was also legally established during Project implementation;

19 For further details about rating methodology, see ICR guidelines, OPCS, 2006, Annex A.

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(c) In a context of frequent changes in project coordinators, the Government assured Project stability by maintaining the same Project director of the overall implementing agency, PSI, as well as the Project coordinator of the other agency, IRH, and most technical staff of both agencies;

(d) Two amendments of the Loan Agreement were processed, albeit with delays on June 2007 and August 2008.

99. However, GOP did not show much flexibility in relaxing some of the conditions that were the main reasons for Project implementation delays and for not achieving the targets set for components A and B (see para 34). Also, it is not clear that it will put in place a mechanism/institution that will provide continuous/sustainable capacity building to WUAs in the coastal area (see para 89-90).

(b) Implementing Agency or Agencies Performance

Rating: Satisfactory 100. The performance of PSI as the Project’s main implementing agency and coordinating agency, and of IRH in charge of component D was satisfactory. They were committed to the Project and they established good relationships with the beneficiaries through the successful application of its demand-responsive and participatory approaches. PSI and IRH were instrumental in adjusting it to some changing circumstances (e.g. extension to the Sierra). They reacted correctly to unexpected difficulties like complications for formalizing water rights in the Sierra. They identified correctly the reasons for the slow rhythm of implementation of components A and B (the weakest point of Project implementation) and undertook corrective measures that substantially improved the pace of implementation, but could not catch-up with original targets. IRH, with the Project support, was very proactive in undertaking important studies related to the Water Resources Strategy, preparation of the Water Law, and the preparation of three new projects for Water Resources Management, Drainage and Small Dams, respectively. PSI carried out the Pre-feasibility Study of the new Sierra Irrigation project. Both agencies collaborated closely with the Bank on these studies. While PSI and IRH carried out procurement activities in a satisfactory manner, an extra effort should still be made to improve the procurement planning capacity of both agencies.

(c) Justification of Rating for Overall Borrower Performance

Rating: Moderately Satisfactory 101. The Borrower’s overall performance is considered moderately satisfactory19.

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6. Lessons Learned 102. For irrigation projects aiming to build the capacity of WUOs and producers’ groups, it is important to focus the PDO on the changes that can be expected in those groups (e.g. financial, technical, organizational) through the intervention of the Project, and thus avoid setting higher-level development goals (e.g. increased agricultural productivity). This should be reflected in the M&E system and indicators. To measure the Project’s contribution to a higher-level objective, a separate impact evaluation study is necessary, and it is preferable, in this case, to have a clear impact evaluation strategy at Project design, including a baseline and control groups of non-beneficiaries.

103. The issue of capacity is critical and the scale of need is enormous, but appreciation of the problem is low. WUOs need to improve their capacity to plan, organize and manage their irrigation infrastructure and agricultural production systems, especially in a context of rapidly changing institutional and legal frameworks, and agricultural markets. In order to have a sustainable capacity building system that can count on reliable and realistic funding, it is recommended to address the potential role of different players (e.g. National Water Users Board, PSI, National Water Authority, NGOs, universities etc.) in its design, methodologies, funding sources (water users, NGOs, public and private sector, international cooperation) and other support mechanisms. Also, regional and local entities are expected to play an important role in enabling WUOs to enhance their capacities and effectiveness.

104. The participation of water users in subprojects (i.e. in the process of selecting, designing, executing and financing) is essential to ensure a sustainable O&M of the off-farm and on-farm irrigation infrastructure. However, as shown by the Project, there is a risk of overestimating their capacity to financially and technically contribute, which should be carefully estimated and verified at Project design, by taking into account the heterogeneous contexts of WUOs (e.g. regulated versus unregulated WUOs, coast versus sierra, etc.).

105. A competitive grant mechanism for selecting on-farm irrigation sub-projects has the risk of being slow and cumbersome, as shown by the Project, especially when the demand for on-farm technology improvement is small. To avoid slow project implementation, an alternative mechanism would be to select subprojects that meet a clear and widely disseminated set of criteria, on a first-come, first-served basis.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies

106. The Borrower provided comments to the ICR which are included in Annex 8. It mentioned that the analysis made of the Project performance is thorough and adequate. It did not raise any particular issue.

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(b) Cofinanciers NA. (c) Other partners and stakeholders (e.g. NGOs/private sector/civil society)

NA.

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Annex 1. Project Costs and Financing

(a) Project Cost by Component (in USD Million equivalent)

Components Appraisal Estimate (USD millions)

Actual/Latest Estimate (USD

millions)

Percentage of Appraisal

A. Rehabilitation and Improvement of Irrigation Systems

5.26 4.87 93

B. Incentive Program for Irrigation Technology Improvement

6.63 4.88 74

C. Institutional Strengthening and Capacity Building

3.97 4.57 115

D. Support to Water Resources Management

4.78 7.16* 150

E. Project Coordination and Monitoring

1.38 1.60 1.16

Total Project Costs 22.02 23.08 105 *Includes 3.95 US$ million from FRI funds

(b) Financing

Source of Funds Appraisal Estimate(USD millions)

Actual/Latest Estimate

(USD millions)

Percentage of Appraisal

Borrower 6.68 9.21 138 International Bank for Reconstruction and Development

10.26 10.24 100

Local Farmer Organizations 5.08 3.74 74 Total 22.02 23.08 105

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Annex 2. Outputs by Component Component A. Rehabilitation and modernization of off-farm irrigation systems – (US$ 4.87 million, 93 percent of appraisal estimate) Area of Intervention. Component A was initially expected to operate in 20 of the 64 WUAs of the coastal area, once they had reached the eligibility criteria20. Most of these 20 WUAs had not benefited from component A under PSI I, and were among the weakest WUAs of the coastal area in terms of financial, technical and organizational capacity. During Project implementation, in response to the difficulty to generate subprojects in those WUAs, it was decided to expand the area of intervention to all the 64 coastal WUAs, as long as they met the eligibility criteria. In addition, the first amendment to the Loan Agreement extended the Project area to three WUAs in the Sierra. In the end, a total of 21 WUAs benefited from component A, 18 in the coastal area and 3 in the sierra. Table 2.1 shows the area of intervention of component A.

Table 2.1 Area of intervention of component A

WUAs that benefited from component A WUAs selected at Appraisal Selected at appraisal Others

La Joya Antigua La Joya Antigua Chira Santa Rita de Siguas Santa Rita de Siguas Medio y Bajo Piura Jequetepeque Regulado Jequetepeque Regulado Chicama Tumbes Tumbes Chancay-Lambayeque Motupe Motupe Camaná La Leche Mala-Omas Zaña Punta Bombón Chao Chao Chonta-Cajamarca (Sierra) Nepeña Nepeña Mantaro (Sierra) Chancay-Huaral Chancay-Huaral Colca-Arequipa (Sierra) Pampa de Majes Pampa de Majes Alto Piura IRCHIM Santa Chillón Supe La Achirana La Achirana Ocoña, Tambo Tambo Ensenada Mejía

The average area per farm that benefited from component A was small: 3.4 ha in the coast and 0.9 ha in the Sierra.

20 ‘WUO Eligibility Criteria’ means the eligibility criteria established in order for WUO to benefit from components A and B of the Project; i.e.: (i) a technical manager has been appointed for the relevant WUO; (ii) a realistic budget reflected in water tariffs has been adopted allowing efficient operation and maintenance; (iii) the advanced water tariff payment system has been adopted; and (iv) at least 75% of said tariff has been paid in advance.

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Outcomes. As can be seen in Table 2.2, three outcome targets were used to assess the performance of component A. The first two targets relate to the participation of beneficiaries to subproject cost and the other to the number of farmers’ families that benefited from the component.

Table 2.2 Component A. Outcomes and Outputs

Targets at appraisal

Weighted Targets1 Actual Results

Total % actual/weighted

Target Outcome Indicators Number of families that benefited from component A2

32,0002 29,6722 11,062 37%

Contribution from WUAs to component cost (US$ million)

1.90

1.933 1.49

77%

Contribution from WUAs to component cost (% of component cost)

30-35% 30-35% 31% 100%

Irrigated area improved (ha)

NA NA 37,325 NA

Output indicators Subprojects (number) NA NA 31 NA Improved canals (km) 76 40 53% Infrastructures (number) 40 368 920% Amount of subsidy per ha (US$)4

105 91 87%

1. Original and revised targets have been weighted in proportion to the share of actual loan disbursements made in the periods before and after approval of the revisions. 2. It is impossible to set a meaningful target for this indicator because the number of beneficiaries depends on the subprojects locations, which are only known during implementation as a result of a demand driven process. 3. WUAs contribution followed an increasing scale (from 30 to 35%). At appraisal, WUAs contribution target was set at about 30%. After Amendment 2, target was set considering a contribution of 35% (except for some small investments in the Sierra for which contribution was 20%). 4. It is impossible to set a meaningful target for this indicator because the number of beneficiaries depends on the subprojects locations, which are only known during implementation as a result of a demand driven process.

Beneficiaries’ participation in subproject costs was good, averaging 31% of component cost, broadly in line with subproject cost sharing rules of 30-35%. It represents a total value of US$1.49 million or 77% of target. The lower than expected total value of beneficiaries contribution is due to a lower than expected total cost of the component. The outcome target related to the number of beneficiaries was not reached. Three factors explain this shortcoming:

(a) It is almost impossible to set a meaningful target for the number of beneficiaries because it depends on the location of the subproject (the more upstream the

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subproject, the higher the number of beneficiaries) which becomes only known during implementation, as a result of a demand-driven process.

(b) The actual demand for subprojects was lower than expected because WUAs had

difficulty meeting their financial contribution to subprojects (30% of subproject cost the first year of Project implementation and 35% thereafter in the Coastal area; and 20% in the Sierra). This was particularly true for the poorest WUAs who generally get their water supply from unregulated rivers and have a water service and financial revenue limited to a few months per year21. In fact, out of 65 agreements signed between PSI and WUAs for the preparation of subprojects, more than 50% were canceled because WUAs could not gather their financial contribution. Hence, the level of effort deployed by component C1 to generate interest and to help WUAs develop subprojects was much higher than anticipated, and some funds had to be reallocated from component A to component C1. In the end, only 31 subprojects were actually implemented.

(c) The time required to prepare and implement a subproject was longer than

expected, due to: (i) the WUAs’ difficulty in collecting financial contributions and (ii) the WUAs difficulty in preparing good feasibility studies and technical design. The WUAs were responsible for the preparation of the feasibility studies and technical design of the subprojects. This certainly contributed to strengthening the capacity of WUAs, but at the same time, low-cost engineers were usually contracted and the resulting studies were of poor quality. This required detailed reviews and corrections by PSI staff, a process that significantly increased the time necessary to complete a subproject.

In order to alleviate the problems mentioned above, PSI has (a) extended the area of intervention of the component (see area of intervention above); (b) assisted WUAs in mobilizing support from national financial institutions; (c) encouraged regional and local governments to guarantee loans made to WUAs; and (d) organized workshops and training sessions for WUAs and local consultants on the preparation of feasibility studies and technical design. This helped speed-up implementation, but not enough to catch-up with targets. Contribution of Component A to the institutional strengthening of WUAs. An important result of Component A was its contribution to the strengthening of WUAs. This was done in three ways:

(a) Component A was designed as an incentive for WUAs to strengthen their performance. Indeed, in order to be eligible for component A, WUAs had to meet a number of eligibility criteria related to their performance22. This provided a strong incentive for WUAs to apply the lessons learned from component C1.

21 WUAs with unregulated river systems have much less financial resources because water users only pay during the few irrigation months (there is no irrigation during the rainy months) and the water tariff is based on the consumed irrigation water, through a tariff per irrigation turn or per hectare. Those “unregulated WUAs” have had difficulties to collect the financial contribution required for component A. 22 To be eligible, WUA had to: (a) have a technical manager, (b) a budget that allowed appropriate O&M of infrastructure, reflected in water tariff and (c) at least 75% of the water tariff was paid before water was delivered.

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Component C1, on the other hand, provided capacity building to WUAs to improve their overall performance and, in particular, helped them meet the eligibility criteria for component A.

(b) Subprojects had to be carried out following the community works procedures that

obliged WUAs to behave in an entrepreneurial manner, strengthening its capacity to implement civil works as well as its overall management capacity.

(c) Finally, WUAs were responsible for subproject feasibility studies and technical

design which, as mentioned above, strengthened their capacity, but at the same time, delayed considerably the implementation of the subprojects.

Contribution of Component A to the PDO. The component made a significant contribution to the PDO, as: (a) average income of farmers’ households who benefited from this component increased by 5% in real terms, or US$183 per year (at baseline, the average farmers household income that benefited from component A was US$3,647 per year) and (b) average productivity of the land that benefited from the component increased by 4% in real terms, or US$54/ha (at baseline, the average productivity of the farm that benefited from component A was US$ 1,530 per ha and per year). Increased household income and land productivity are explained by: (a) a moderate shift to higher value crops (overall, the cropped area under traditional crops decreased by 1%, while the area under vegetables increased by 14% and the area under fruit trees increased by 1%) and (b) increases in yields (vegetables: 0 to 3%; fruit trees: 0 to 5%; traditional crops: 0 to 5% with the exception of rice and sugarcane whose yields decreased by 8% and 3% respectively). The increase in total cropped area was insignificant. Despite higher unit costs than anticipated, the increase in land productivity led to an overall component EIRR of 16% and FIRR of 15.4% (see Annex 3). It should be noted however that the data on yields and therefore the component’s impacts on land productivity and farmers’ income, as well as component FIRR and EIRR should be considered with caution because only few years were available to measure impacts (one to three years), and, as there was no control group available, the evaluation is based on yields before and after subproject implementation. Therefore, these results should be considered as general trends and not definite results.

Component B. Incentive Program for On-Farm Irrigation Technology Improvement –(US$ 4.88 million, 74 percent of appraisal estimate) Area of Intervention. Table 2.3 shows the area of intervention of component B, originally designed to operate in the same 20 WUAs as component A. This condition was relaxed in order to speed-up the generation of subprojects, and the area of intervention was increased by an additional 8 WUAs (3 pilot WUAs in the Sierra as a result of first Project restructuring and 5

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WUAs in the coastal area: Yura, Viru, Ica, Chincha and Pisco, the last 3 as a consequence of Písco´s earthquake of 2007). In the end, subprojects were implemented in 17 WUAs.

Table 2.3 Area of intervention of component B

WUAs that benefited from component B WUAs selected at Appraisal Selected at appraisal Others

La Joya Antigua Virú Santa Rita de Siguas Yura Jequetepeque Regulado Jequetepeque Regulado Pisco Tumbes Chincha Motupe Motupe Ica La Leche La Leche Chonta-Cajamarca (Sierra) Zaña Mantaro (Sierra) Chao Colca-Arequipa (Sierra) Nepeña Nepeña Chancay-Huaral Chancay-Huaral Pampa de Majes Alto Piura Alto Piura IRCHIM Santa Chillón Supe La Achirana Ocoña, Ocoña Tambo Tambo Ensenada Mejía Ensenada Mejía

The average area per farm that benefited from component B was of 3.7 ha in the Coastal area and 0.7 ha in the Sierra. The average farmers’ group included 10 members in the Coastal area and 11 members in the Sierra.

Outcomes. As can been seen in table 2.4, five indicators and targets measure the performance of component B. The first two targets relate to the contribution of farmers to subproject costs, the second two targets relate to the number of households and irrigated area that benefited from the component and the last target relates to the amount of subsidy per ha improved.

Table 2.4 Component B. Outcomes and Outputs

Targets at Appraisal

weighted Target

Actual Outputs Value Indicator

Value % actual / weighted target

Outcome indicators Number of Beneficiaries Households

700 673 476 71%

Irrigated Area Improved (Ha) 3,000 2,745 1,468 53%

Total beneficiaries contribution to component cost (US$ million)

2.7 2.7 2.05 76%

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Total beneficiaries contribution to component cost (% of component cost)

20 to 50% depending on the size of the irrigated area, the type of technology and whether the subproject is the coastal area or Sierra

42% Target reached

Amount of subsidy per ha improved (US$/ha) 1,280 1,928 150%

Annual incremental Production value per amount of PSI subsidy (US$/US$)

NA 1.2

Input indicators

Subprojects (number)2324 Pressurized (drips and sprinklers) Improved Gravity systems Total

NA NA

39 948

Farmer contributions to subproject costs were good as they averaged 42% of component cost, exceeding the appraisal target set at 39%. However, they only represented a total value of US$2.05 million or 76% of weighted target, which is due to the lower than expected total cost of the component. Component B did not meet its original targets in terms of number of beneficiaries and improved irrigated area. This is mainly due to three factors:

(a) A lower than expected demand for component B due to very demanding eligibility conditions:

(b) Farmers’ groups had to cover 42% of subproject cost, equivalent to an average of US$1,393 US$ per ha. This is a large sum of money for many small and medium farmers, especially in a context of lack of credit. Furthermore, in addition to their financial contribution to irrigation subprojects, farmers were often required to make substantial investments to switch production to higher-value crops. Such additional investments were estimated at US$ 4,000 per ha.

(c) Only farmers groups of at least 6 farmers and with a total irrigated area of at least 24 ha were eligible for component B. However, constituting a group of farmers with neighboring plots, all interested in improving their on-farm irrigation systems at the same time, has proved very difficult and time consuming. For that reason, a lot of farmers interested in participating were not able to do so.

As a result of these difficulties, of the 82 subprojects that were selected through the competitive grants process only 34 (41%) materialized.

24 Component B financed two types of on-farm irrigation improvements: improved gravity systems (through multi-gates pipes) and pressurized systems (drip and sprinkler). Farmers clearly preferred drip irrigation. Notwithstanding its lower cost, improved gravity systems represented only 19% of the 48 subprojects implemented.

39

(a) The time required to prepare and implement a subproject was longer than expected25, due to the following factors:

(b) The difficulty in collecting farmers’ financial contribution (see above); (c) The continued increase of the price of oil and its derivates, reaching in August

2008 almost three times its value at the time of appraisal; (d) The competitive grant procedures for selecting beneficiaries, which proved to be

excessively rigid and slow; (e) Subproject studies were the responsibility of beneficiaries, who usually contracted

low cost engineers. This resulted in studies of poor quality that needed to be reviewed and corrected extensively by PSI staff, causing delays and increasing costs; and

(f) The LA was signed on October 2005, too late to include the project in the General Budget of Peru for 2006. While other components received national funds in advance, component B only got a budget in June 2006.

In order to alleviate these difficulties, PSI expanded the area of interventions of component B; supported farmers’ group in mobilizing financial support from various national financial institutions, encouraged regional and municipal governments to guarantee the loans contracted by farmers’ groups and promoted the association between farmers’ groups and agro-export firms to help farmers mobilize their financial contribution. This has significantly speeded up subprojects preparation and implementation, but was not enough to catch-up with targets. Contribution of Component B to the PDO. Component B made a significant contribution to the PDO, as: (a) average income of farmers’ households who benefited from this component increased by 150% in real terms or an additional US$7,172 per year (the average farmers household income that benefited from component B at baseline was US$4,683 per year) and (b) average productivity of the land that benefitted from the component increased by 155% or US$2,326/ha/year in real terms (the average productivity of the land that benefited from Component B was 1,470 US$/ha/year before the subprojects). Component B increased household income and land productivity through the following two channels (a) a strong shift from traditional crops, whose cropped area decreased by 22%, to higher-value crops, mainly fruit trees, whose cropped area increased by 58%, and vegetables, whose cropped area increased by 40%; and (b) a general increase in yields, not only for vegetables (40% increase for paprika, 36% for asparagus) and fruit trees (33% for avocado, 25% for lucuma), but also for the small area still dedicated to traditional crops (28% for maize). Despite higher unit costs than anticipated (cost per ha was on average 50% more than those estimated at appraisal), the significant increase in land productivity led to an overall EIRR of 51% and FIRR of 37% for the component. As for component A, it should be noted that the data on yields, impact on land productivity and farmers’ income, FIRR and EIRR should be considered with caution because only few years were available to measure impacts (one to three years), and, as there was no control group

25 The average time between the formation of interest groups and the execution of a sub-project turned out to be more than one year.

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available the evaluation is based on yields before and after subprojects implementation. Therefore, these results should be considered as general trends and not definite results. An additional benefit of Component B is its demonstrative effects on medium and small farmers. Component B (both under PSI-I and PSI-II) contributed to the rapid expansion of drip irrigation seen in Peru over the last decade, expanding from some 8,000 hectares in 199826 to more than 100,000 hectares in 200927.

Component C. Capacity building of WUAs and Farmers (US$ 4.57 million, 115 percent of appraisal estimate) Subcomponent C.1 Capacity Building of WUAs

Area of Intervention. Component C1 provided capacity building programs to each of the 64 WUAs of the coastal area. Component outputs and outcomes. As can be seen in Table 2.5, this subcomponent exceeded all its targets: (a) 49 WUA met the eligibility criteria for component A, exceeding target by 103%; (b) the total value of tariff collected is 27 US$ million, 128% of appraisal target; (c) irrigation tariff collection efficiency is 85%, 113% of appraisal target and (d) 85% of the tariff collected is used for the O&M of irrigation systems, 113% of appraisal targets.

26 Source: FAO Aquastat. 27 PSI estimation based on custom registers about imported equipment

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Table 2.5 Subcomponent C.1. Outputs

Weighted Target

Values reached at Project Closing

Indicator Targets Appraisal

Total Total % of Target WUA meeting eligibility criteria for Component A*

47 47 49 103%

WUA reaching “sustainability level”**

41

Irrigation tariff collected (US$ million)

21 27

Irrigation tariff collection efficiency (%)

75 81 85 104%

Number of training and Communication Units created d in WUA

34

Number of water users that participated in awareness/training program

69,230

Number of WUA management and employees trained

15,383

Number of technicians from ATDRs trained

114

* A WUA is eligible when it has: (a) a technical manager, (b) a budget that allows appropriate O&M of infrastructure, reflected in water tariff and (c) at least 75% of the water tariff was paid before water was delivered . ** Sustainable is measured with a set of parameters grouped in 4 categories: (a) administrative/ management capacity; (b) technical capacity; (c) operational and logistical capacity and (d) financial capacity. See Annex 10 for more details on the definition of “sustainability”.

The subcomponent successfully consolidated the improvements achieved under PSI I in relation to the strengthening of WUAs. It improved the culture of payment for water service and of financing participation in infrastructure improvements that was introduced under PSI I. It also improved WUAs management tools and processes (e.g. elaboration of annual O&M plans and budgets, tariff recovery systems, evaluation of available water resources and planning of the irrigation season, use of information systems, etc.). As a result, out of 64 WUAs, 49 have reached eligibility level for component A and 41 have reached the “sustainability” level. Generally, WUAs qualified “non sustainable” are located in valleys where rivers are not regulated, and, therefore, have limited incomes through irrigation tariff. While the subcomponent exceeded its targets, there is a need for continuous capacity building of WUAs and for putting in place a permanent and formal monitoring and benchmarking system of WUAs. The improvement of the performance of “non sustainable” WUAs, still requires additional efforts. Some projects28 are working in that sense, but they have a limited

28 JICA, PROCOMAT.

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implementation period. Component C1 foresaw the following mechanism to ensure permanent support to WUAs: (a) the creation, within the WUAs, of Training and Communication Units (UCC for its Spanish acronym) responsible for the continuous capacity building of WUAs and, (b) the training of local irrigation authorities (ATDR for its Spanish acronym) in the monitoring of WUAs, in particular their annual O&M plans and training programs. In practice, however, these mechanisms are still insufficient and need to be consolidated with further support because UCCs have only been created in 34 WUAs and are not always sufficiently financed. It is therefore recommended that the GOP establish permanent mechanisms for the capacity building of WUAs and monitoring and benchmarking of their performance. Subcomponent C.2 Capacity Building of Farmers in on-farm irrigation improvements

Area of intervention. This sub-component promoted improved on-farm irrigation technologies in 43 WUAs in the coast and 3 WUAs in the sierra and was, this way, instrumental to the execution of component B. Outputs and Outcomes of Component C2.

The main outputs of this subcomponent are shown in Table 2.6

Table 2.6 Outputs of subcomponent C.2

Activity Appraisal targets

Number at project closing

Awareness Program – promotion of component B and creation of farmers groups

• Events 385 838 • Participating farmers 16,000 14,838

Interest groups created • Groups 382 • Farmers 5,437 • Area (ha) 18,311

Management groups created • Groups 100 175 • Farmers 2,485 • Area (ha) 8,170

Technical Assistance (implementation of business plans and O&M of new on-farm irrigation systems) including business plans

• Farmers 1000 1,358 Extension Program, including pest management

• Events 260 409 • Farmers 8000 5,826

Due to the difficulty encountered generating on-farm irrigation improvement subprojects (see section on component B above), the level of effort deployed by component C2 was much higher than anticipated, and some funds had to be reallocated from component B to component C2. Component C2 through its initial awareness activities and field demonstrations to farmers, created 382 interest groups (including 5,437 farmers and covering 18,311 ha), i.e. groups of farmers expressing their interest in improved on-farm irrigation systems. Out of this, 175

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farmers’ groups evolved into management groups (including 2,485 farmers and 8,170 ha), i.e. groups formed by farmers in neighboring plots, with a firmer commitment to implementing an on-farm irrigation improvement subproject and a collective business plan. Eventually, 48 of those benefited directly from component B (including 476 farmers and 1,468 ha) and 82 groups (including 833 farmers and 1,169 ha) benefited from on-farm irrigation improvement financed by the regional government of Arequipa. This process involved supporting farmers groups in the preparation of feasibility studies and technical design, including the preparation of a viable business plan. In addition to generate subprojects for component B, component C2:

(a) Provided technical assistance to farmers that benefited from component B, including the supervision of farmers’ groups business plans implemented by the agro-business operators, the supervision of the technical assistance on the O&M of the new on-farm irrigation systems provided by the firm that installed the system;

(b) Carried out an agricultural extension program, aimed at disseminating on-farm irrigation technologies and good agricultural practices related to pest management, using beneficiaries of component B as demonstration plots. This included the systematization of agriculture results obtained after the implementation of the subprojects and comparison with the baseline, and the organization of field trips (giras agronomicas) and field days (dias de campo).

Component D. Support to Water Resources Management. (US$ 7.16 million, 150 percent of appraisal estimate) Subcomponent D.1 Formalization of Water Rights.

As can be seen in Table 2.7 below, two targets were used to measure subcomponent performance: the number of agricultural water licenses (i.e. permanent water rights for irrigated areas) issued and, after amendment 1 of the loan agreement which extended the Project area to the Sierra, the number of irrigation plots with a license. A second indicator was formally introduced after Project extension in the Sierra to better reflect the increased level of efforts required to issue an agricultural water right in this region. For the same reason, the target for the number of water licenses was decreased.

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Table 2.7 Subcomponent D.1 Outcomes and Outputs

Appraisal target

Weighted Target Actual Value

Total Total % achievement / weighted target

Number of new water licenses issued

190,000 191,418 162,559 85%

Number of irrigation plots with a water license

190,000 206,892 246,917 119%

Irrigated area with formalized water license (Ha)

150,375

While the Project reached its target related to the number of irrigation plots with a water license, it issued only 85 per cent of the target number of water rights. This is explained by Project extension to the Sierra. The time and cost of formalizing water rights in the Sierra proved much higher than in the coast, because:

(a) In the Sierra, many water rights are issued to a community of farmers, while in the coast all water rights had been issued to individual farmers. Issuing a water right to a community is more complex and time consuming as it involves identifying the irrigation plots of all farmers within the community. As a result, in the Sierra, the number of plots with a license is higher than the number of licenses; in the Coast, the number of licenses can be higher than the number of plots because some plots have two licenses, one for surface water and another for groundwater.

(b) In the Sierra, land is not cultivated in winter, reducing the time when field work can be carried out, while in the Coast, the land is cultivated year-round.

Thanks to the formalization of water rights, WUAs now have an updated registry of irrigators at the level of the irrigation committee (comite de regantes), along with their irrigated area and their water rights, which helped improve water distribution and billing and collection of water charges. In addition, the formalization of water rights is expected to encourage farmers’ investment in their plots and provide a powerful tool to improve water resources management at the basin level. Subcomponent D.2 National Water Rights Registry (RADA)

Table 2.8 Subcomponent D.2 Outputs

Appraisal Target Output Central Unit of National Water Rights Registry

175%

completed Regional Units of the National Water Rights Registry

10 26

Water rights registered 390,000 355,819

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The national water rights registry (RADA) was created with its central unit in Lima (ANA headquarters) and 26 regional units located in the ALA (Administracion local de Aguas) and approximately 360,000 water rights were registered in its database (about 90% of appraisal target). The national water registry is considered completed at 75 per cent, because, while the hardware and software were purchased, RADA is running and the necessary minimum staff was recruited and trained, the central unit of the registry is still located in a temporary office in ANA headquarters. RADA is an essential tool for the administration of water rights and their use for improving irrigation and water resources management. Subcomponent D.3 Support to the implementation of the Water Resources Strategy.

Subcomponent D.3 provided technical assistance for: (a) updating the national Water Resources Management diagnostic and the National Water Resources Management Strategy, pending approval; (b) supporting the preparation of the new Water Resources Law, which was approved in March 2009 and (c) the pre-feasibility and feasibility studies of a Water Resources Management Modernization Program whose first phase is being supported by a World Bank financed Project29 and an Inter-American Development financed Project, both approved in July 2009. This program will support, in pilot basins, the establishment of river basin organizations (the new institutional arrangements for water resources management at the basin level) and the formulation of integrated, participatory, river basin plans using the shared vision planning methodology, a proven tool for conflict resolution. Through the above mentioned activities, Component D provided technical assistance to the National Water Resources Institute (IRH) which was upgraded to a National Water Authority (ANA) in 2008, with increased power, responsibilities, autonomy and financial resources.

29 Reference: Project Appraisal Document for the Peru Water Resources Management Modernization Project. Report 47689-PE. World Bank, 2009.

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Annex 3. Economic and Financial Analysis 1. Main findings An ex-post cost-benefit analysis was performed on a representative sample of 28 subprojects. This analysis estimates the Project economic internal rate of return (EIRR) at 20.5 per cent, corresponding to a net present value of US$ 14.7 million, and the financial internal rate of return (FIRR) at 16.7 per cent, corresponding to a net present value of US$7.2 million. Despite the data limitations mentioned further below these results demonstrate good returns on investments from both financial and economic points of view. The EIRR and FIRR calculated at Project closing are lower than those estimated at appraisal, which were 24.5 per cent and 25.5 per cent respectively. The lower internal rates of return are explained by the fact that the irrigated area improved by components A and B, from which Project benefits are estimated, is much smaller than anticipated, while the overall cost of irrigation improvements (components A, B, C and part of E combined) is similar to what was expected at appraisal. In other words, the unit cost of irrigation modernization (US$/ha) is much higher than anticipated. This is primariloy due to: (a) the slow implementation of infrastructure subprojects, which required much more awareness building and technical assistance than anticipated and (b) higher costs of materials and civil works due to increases in oil prices. The difference between the EIRR and FIRR at Project closing is explained by the following factors: (a) the absence of taxes on agricultural produces; and (b) the significant taxes on capital costs, incremental O&M expenditures and crop production costs. (i.e., investment costs and agricultural inputs were subject to a 19 per cent value added tax) and the low economic value of unskilled labor and energy (estimated at only 41 per cent and 66 per cent of their financial values respectively).

Table 3.1: Results of the Economic Cost-Benefit Analysis of the Sample of Subprojects

Component A Component B Total Project Economic Analysis At Project Appraisal EIRR NA NA 24.5% NPV (Million US$) NA NA NA At Project Closing EIRR 16.4% 50.8 20.5

NPV (Million US$) 4.1 14.8 14.7 Financial Analysis At Project Appraisal FIRR NA NA 25.1% NPV (Million US$) NA NA NA At Project Closing FIRR 15.4% 37.4% 16.7% NPV (Million US$) 2.3 9.5 7.2

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2. Main assumptions and brief methodological explanation The financial and economic analyses were carried out considering a period of 20 years and a discount rate of 11%.

Sample subprojects

The financial and economic analyses were carried out on a representative sample of subprojects (see Tables 3.2, 3.3 and 3.4 below).

Table 3.2 Sample used for the economic and financial analyses in comparison

Component A Component B Number % of total Number % of total

Subprojects 9 29% 19 39%Irrigated area 8,631 23% 658 45% Number of beneficiaries 2,896 26% 167 44% Investment costs (US$) 1,489,366 31% 1,907,274 39%

Table 3.3 Component A. Sample of subprojects

Subproject Investment Cost (US$)

Irrigated area (ha)

Number of families

Mejoramiento Canal Captuy Grande 66,478 141 99 Revestimiento Canal Popo Alto 172,668 527 148 Revestimiento Canal Granados 216,799 2479 498 Revestimiento Canal Hacendados 102,088 444 175 Mejoramiento Canal Zanjón 223,420 945 340 Mejoramiento Canal Díaz 231,012 1,127 533 Mejoramiento Canal San Nicolás 240,568 1,364 627 Mejoramiento Canal Chacarerio 132,876 464 281 Mejoramiento Canal Frejol 103,457 1,140 195 Total 1,489,366 8,631 2,896

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Table 3.4 Component B. Sample of subprojects

Subproject Investment

Cost (US$) Irrigated area (ha)

Number of families

Larea Nepeña Ancash 76,742 21.85 6Huambacho Nepeña Ancash 96,096 26.99 6La Esperanza Granados Huaral Lima 175,611 57.95 8La Venta Baja Santiago Ica 192,261 63.73 10 Santa Dominguita Santiago Ica 227,381 85.91 17 La Zaranda Pítipo Lambayeque 56,559 14.30 10 Huaca Larga Virú La libertad 52,140 15.57 7Pampas de Chérrepe San Pedro de Lloc La Libertad 44,370 20.35 7Cerro Colorado-Loma Roja Pacanga La Libertad 44,370 17.20 7San Juan Sur Chancay Lima 49,766 39.37 6Santiago Ica 133,760 40.13 13 La Curva Boquerón Tambo Arequipa 34,500 24.63 9Campo Herrera Chulucanas Piura 138,545 29.64 8La Ladrillera Jayanca Lambayeque 123,474 38.15 13 Los Corralones Chepén La Libertad 102,469 47.85 13 Nuevo Horizonte San Pedro de Lloc La Libertad 113,595 35.74 6Innovadores Jequetepeque La Libertad 113,967 35.12 8Iberia Tambo Arequipa 28,823 17.51 5Quiscos Yura Arequipa 102,845 25.60 8Total 1,907,274 657.59 167

Field visits were conducted in each subproject to collect the information required to estimate main crop budgets and cropped areas for the “with” and “without” Project scenarios. Incremental net agricultural benefits for each subproject were estimated from these data. It should be noted that, in the absence of control group, the situation “before” the subproject was implemented was taken as a “proxy” for the “without” project scenario. This limitation can affect the analysis positively or negatively depending on the years considered. Another data limitation is that the “with” subproject scenarios were calculated from one to three years after subproject completion, which is not a sufficient time to appreciate full impacts of investments, especially in the case of new permanent crops. This data limitation underestimates Project benefits. Quantified Project benefits are the increase value of agricultural production resulting from: (a) increased yields and (b) shift to the production of higher value crops. It should be noted that the Project did not lead to an increase in the cropped area. Detailed net benefits for the main crops for each sample subproject are available in the Project file. Increases in yields and shift to the production of higher value crops were particularly marked in the case of on-farm irrigation improvements (Component B):

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• the cropped area under traditional crops decreased by 22% while the cropped area under higher-value crops, such as fruit trees and vegetables, increased by 58% and 35% respectively; and

• yield increases for all types of crops: vegetables (40% increase for paprika, 36% for asparagus); fruit trees (33% for avocado, 25% for lucuma) and traditional crops (28% for maize).

Table 3.5. Changes in Yields and Cropped Areas – Component B

Area (Ha) Yields (kg/ha)

Crops Before subprojects

After Subprojects

%changeBefore subprojectsAfter Subprojects% change

Traditional Maize 211 58.3 28 5,667 7,267 128 Rice 42.14 0 0 Cotton 6.15 0 0 Total 259.29 58.3 22

Vegetable Onions 35.74 65.38 183 Artichokes 35.12 67.14 191 18,000 23,000 128 Oregano 25.6 2.6 100 2,100 3,300 157 Paprika 17.2 17.2 100 5,000 7,000 140 Asparagus 205.13 271.49 132 5,680 7,728 136 Total 283.05 381.43 135

Fruit Passion Fruit 0 38.15 Avocado 32.62 37.62 115 9,000 12,000 133 Others 10 16.82 168 Mandarin 30.96 39.72 128 Lucama 5 5 100 8,000 10,000 125 Pomegranate 33.98 40.13 118 17,500 20,000 114 Total 112.56 177.44 158

Pasture Alfalfa 2.58 2.58 100

TOTAL 657.48 619.75

Off-farm irrigation improvements (component A) produced:

• a small shift towards the production of higher value crops with a 1% decrease in the production of traditional crops, a 14 per cent increase in vegetable crops and a 1 per cent increase in fruit trees, and

• a small increase in yields for all types of crops, with the exception of maize whose yields increased by 36 per cent and rice and sugarcane whose yields decreased by 8 per cent and 3 per cent respectively.

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Table 3.6. Changes in Yields and Cropped Area – Component A

Area (ha) Yields

Crop Before

subproject After

subproject % change

Before subproject (kg/ha)

After subproject (kg/ha) Change (%)

Traditional Rice 3793 4630,8 122 9562 8795 92 Sugar cane 810,58 567,64 70 111939 108681 97 Cotton 894,44 108,2 12 1745 1745 100 Maize 119,83 75,2 63 5346 7266 136 Beans 59 59 100 1600 1680 105 Yucca 48,27 47,95 99 15742 15762 100 Sweet Potatoes 36,48 38,46 105 28000 28000 100 Potatoes 456,94 542 119 20913 21992 105 Pan llevar 0 92 Total 6218,6 6161,2

Vegetable Ají paprika 24,2 26,25 108 3.900 4.000 103 Water Melon 36,55 38,68 106 30.000 30.000 100 Zapallo 28,55 30,15 106 24.000 24.000 100 Asparagus 32,7 34,5 106 9.800 10.000 102 Garlic 81,21 91 112 11.617 12.000 103 Onion 88,53 69 78 27.937 28.667 103 Others 10,07 55 546 4.476 4.589 103 Total 301,81 344,58 114

Fruits Avocado 449,5 460,3 102 10.611 10.604 100 Mandarin 566,4 566,4 100 29.610 30.000 101 Mango 456 456 100 11.168 11.726 105 Apple 212 212 100 12.785 13.424 105 Grape 198 198 100 7.945 7.945 100 Others 9,26 9,26 100 28.000 29.400 105 Total 1.891,2 1.901,9 101

Pasture Alfalfa 10 10 100 24.500 25.725 105 Total

Others 17,1 5,0 29

TOTAL 8.438,7 8.422,7

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Quantified Project costs. Additional agricultural production is made possible by the combination of several Project interventions: (a) the rehabilitation and modernization of off-farm and on-farm irrigation infrastructure; (b) capacity building to improve irrigation management; and (c) support to agricultural production and marketing. All costs of these components have been included in the analysis. Other investments have a less direct impact on output in the Project area, such as overall Project implementation support. For these components benefits are more widely spread, so only a portion of the related costs was taken into account. The costs and benefits related to the formalization of water rights (Component D) were excluded from the analysis on the basis that they would be extremely difficult to quantify.

Based on the above the following investment and incremental O&M costs have been included in the overall Project financial and economic analyses: (a) cost of feasibility studies, technical designs, works and supervision of works linked to the rehabilitation and modernization of collective and on-farm irrigation infrastructure; (b) replacement costs of the infrastructure mentioned above; (c) additional crop production and harvesting costs related to increased agricultural production; (d) cost of capacity building of WUOs, farmers’ groups and farmers; and (e) 74 per cent of Project management costs, excluding the share related to water rights formalization. The financial and economic analysis of components A and B, when taken separately, only consider costs (a), (b) and (c) above.

Adjusting financial prices to economic values. The adjustment of financial prices to economic values was done using specific conversion factors provided by the Ministry of Finance. This concerns such items as unskilled labor and energy, for which the conversion factors are 0.41 and 0.66 respectively. In these cases, the specific conversion factors were applied directly to domestic market prices to obtain the economic value of the item. For the social price of the currency, a multiplying factor of 1.08 was established; for skill labor a coefficient of 0.9.

For the items for which no specific conversion factor was readily available the adjustments made to convert market prices to economic values included the elimination of the value added tax, the only direct tax affecting farming. The production of crops considered in the analysis does not benefit from subsidies.

Table 3.7. Component A. Financial analysis. Cash flow (000US$)

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Cost 447 605 1.505 1.246 1.066 - - - - - Benefits -374 -10.400 -7.401 3.721 4.767 4.767 4.767 4.767 4.767 4.767 Cash flow -821 -11.005 -8.906 2.475 3.701 4.767 4.7674.767 4.767 4.767 Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 Cost - - - - - - - - - Benefits 4.767 4.767 4.767 4.767 4.767 4.767 4.767 4.767 4.767 Cash flow 4.767 4.767 4.767 4.767 4.767 4.767 4.767 4.767 4.767

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Table 3.8. Component B. Financial analysis. Cash flow (000US$)

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Cost 0 155 1.148 1.021 2.552 0 46 344 306 0 Benefits 0 0 -955 -502 816 2.892 3.236 3.356 3.385 3.414 Cash flow 0 -155 -2.103 -1.523 -1.736 2.892 3.190 3.012 3.079 3.414 Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 Cost 0 46 344 306 0 0 46 344 306 Benefits 3.414 3.414 3.414 3.414 3.414 3.414 3.414 3.414 3.414 Cash flow 3.414 3.368 3.070 3.108 3.414 3.414 3.368 3.070 3.108

Table 3.9. Project overall. Financial analysis. Cash flow (000US$)

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Cost 2.365 2.732 3.766 2.893 3.742 0 46 344 306 0 Benefits -374 -10.400 -8.357 3.220 5.583 7.659 8.003 8.123 8.152 8.181 Cash flow -2.739 -13.132 -12.123 327 1.841 7.659 7.957 7.779 7.846 8.181 Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 Cost 0 46 344 306 0 0 46 344 306 Benefits 8.181 8.181 8.181 8.181 8.181 8.181 8.181 8.181 8.181 Cash flow 8.181 8.135 7.837 7.875 8.181 8.181 8.135 7.837. 7.875

Table 3.10 Component A. Economical analysis. Cash flow (000US$)

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Cost 362 490 1.219 1.009 864 Benefits -629 -17.473 -12.697 6.575 8.342 8.342 8.342 8.342 8.342 8.342 Cash flow -991 -17.963 -13.916 5.566 7.478 8.342 8.342 8.342 8.342 8.342 Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 Cost Benefits 8.342 8.342 8.342 8.342 8.342 8.342 8.342 8.342 8.342 Cash flow 8.342 8.342 8.342 8.342 8.342 8.342 8.342 8.342 8.342

Table 3.11 Component B. Economical analysis. Cash flow (000US$)

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Cost 0 125 930 827 2.067 0 30 226 201 0 Benefits 0 0 -1.405 -657 1.541 4.395 4.3954.395 4.395 4.395 Cash flow 0 -125 -2.335 -1.484 -526 4.395 4.365 4.169 4.194 4.395 Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 Cost 0 30 226 201 0 0 30 226 201 Benefits 4.395 4.395 4.395 4.395 4.395 4.395 4.395 4.395 4.395 Cash flow 4.395 4.365 4.169 4.194 4.395 4.395 4.365 4.169 4.194

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Table 3.12 Project overall. Economical analysis. Cash flow (000US$)

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Cost 2.088 2.390 3.151 2.399 3.042 0 30 226 201 0 Benefits -629 -17.473 -14.102 5.918 9.882 12.737 12.737 12.737 12.737 12.737 Cash flow -2.717 -19.863 -17.253 3.519 6.840 12.737 12.707 12.511 12.536 12.737 Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 Cost 0 30 226 201 0 0 30 226 201 Benefits 12.737 12.737 12.737 12.737 12.737 12.737 12.737 12.737 12.737 Cash flow 12.737 12.707 12.511 12.536 12.737 12.737 12.707 12.511 12.537

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Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members

Names Title Unit Responsibility/ Specialty

Soledad Aguilar Consultant LCSEN Safeguards Keisgner De Jesus Alfaro Senior Procurement Specialist LCSPT Procurement Maribel M. Cherres WedemeyerLanguage Program Assistant LCSSO Team Assistant Maria Elizabeth Dasso Sr. Social Development & Civil LCSSO Safeguards Erwin De Nys Water Resources Spec. LCSEN Irrigation Nicolas Drossos E T Consultant LCSFM Financial Management

Francisco Grajales Cravioto Junior Professional Associate LCSEN NA Yurie Tanimichi Hoberg Senior Agriculture Economist LCSAR Economist Nelly Ikeda Financial Management Analyst LCSFM Financial Management

Peter Koenig Consultant LCSEN TTL, Water Spec. Abdelaziz Lagnaoui Senior Pest Management Specialist ENV Safeguards Marie-Laure Lajaunie Sr Water Resources Spec. LCSEN TTL, Water Spec. Lourdes Consuelo Linares Sr Financial Management Specialist LCSFM Financial Management

Abel Mejia Sector Manager ETWWA Manager Isabella Micali Drossos Sr Counsel LEGLA Lawyer Douglas C. Olson Lead Water Resource Specialist LCSEN TTL, Water Spec. Fernando Pizarro Consultant LCSEN Irrigation Francisco Rodriguez E T Consultant LCSPT Procurement Luis M. Schwarz Senior Finance Officer LOAFC Financial Management

Evelyn Villatoro Senior Procurement Specialist EAPCO Procurement

(b) Staff Time and Cost Staff Time and Cost (Bank Budget Only)

Stage of Project Cycle No. of staff weeks USD Thousands (including

travel and consultant costs) Lending

FY05 4.07 29.37 Total: 4.07 29.37 Supervision/ICR

FY06 16.02 93.90 FY07 29.56 108.89 FY08 33.11 137.47 FY09 31.00 121.06 FY10 9.00 42.57

Total: 118.69 491.23

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Annex 5. Beneficiary Survey Results None was done.

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Annex 6. Stakeholder Workshop Report and Results (if any)

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Annex 7. Summary of Borrower’s ICR and/or Comments on Draft ICR 1. Contexto del Proyecto, Desarrollo De Los Objetivos y Diseño.

1.1. Contexto en la Valoración. El Perú es un país mega diverso que abarca una gran variedad de ecosistemas (climas, especies animales y vegetales) que lo diferencian del resto del mundo y le asignan ventajas competitivas sobre los demás países de la Costa del Pacifico, que junto a otros factores, condiciona las opciones tecnológicas a utilizar para el productor agrario. Por lo tanto, el sector agrario puede ser caracterizado bajo dos aspectos: 1. Disponibilidad de recursos naturales enfatizado en la superficie para uso agrícola y

dotación del recurso hídrico. 2. Tipología productiva que resulta de la combinación del nivel tecnológico y de

gestión para el aprovechamiento de estos recursos naturales. Nuestro país posee una superficie de 128.5 millones de hectáreas, del cual aproximadamente 15 millones de Ha (12% del territorio) corresponde a la región costa, de cuya extensión 700 mil Ha representa la superficie agrícola cultivada, con importantes ventajas por contar con buena infraestructura de transporte y productiva, lo cual ha facilitado el desarrollo del mercado de la agroexportación.

1.2. Objetivos Originales.

El objetivo del Proyecto es incrementar la producción y productividad de la agricultura de riego en el territorio costero del Prestatario, con el fin de mejorar el bienestar de los agricultores y contribuir a la mitigación de la pobreza.

1.3. Objetivos Revisados.

Los objetivos iniciales se modificaron, en razón a la ampliación de las metas físicas a 03 valles ubicados en la región sierra del país, no previstos inicialmente; asimismo, debido a la incorporación del componente de apoyo a la gestión de los Recursos Hídricos, cuya principal actividad es la formalización de los derechos de uso de agua y registro en una base única de datos.

1.4. Principales Beneficiarios.

De acuerdo al contrato de préstamo y estudio definitivo, el proyecto se diseñó para beneficiar a los usuarios de riego siguientes:

Mejoras en los Sistemas de Riego y Optimizar la Eficiencia en su Uso.

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Se estableció un ámbito de beneficiarios constituido por aproximadamente 19,000 agricultores agrupados en 20 juntas de usuarios, en una extensión de 51,175 Ha, de los cuales alrededor del 98% corresponde a la región costa y el 2% a la región sierra.

Implementación y Capacitación en Sistema de Riego Tecnificado. A través del proyecto se determinó la implementación de 40 sistemas de riego tecnificado a nivel parcelario, que beneficiará a 508 agricultores en una extensión de 1,882 Ha. tanto en la región costa como en una parte mínima en la región sierra del país.

Ordenamiento y Formalización de la Gestión de los Recursos Hídricos.

El proyecto consideró entre sus metas el reordenamiento y formalización para el adecuado manejo de los recursos hídricos, para lo cual se determinó la formalización y entrega de licencias para el uso de agua para riego a 160,000 agricultores (95,000 en la región costa y 65,000 en la región sierra), asimismo se estableció la formalización de 244,000 predios (95,000 en la costa y 149,000 en la región sierra) en beneficio de igual número de agricultores.

1.5 Componentes Originales.

Componente A: REHABILITACIÓN Y MEJORAMIENTO DE LOS SISTEMAS DE RIEGO.

Se orientó a la ejecución de obras de mejoramiento y rehabilitación de las redes de riego existentes incluyendo bocatomas, canales principales y secundarios con sus obras de arte, defensas ribereñas respectivas y otras obras menores, con la finalidad de mejorar las condiciones existentes de la infraestructura hidráulica, que incrementará su capacidad de captación o conducción mediante un diseño acorde con los requerimientos y necesidades actuales.

Componente B: RIEGO TECNIFICADO.

Consiste en implementar sistemas de riego tecnificado a nivel parcelario, a efecto de promover la adopción de técnicas modernas de riego que permitan incrementar la eficiencia de aplicación del agua y su consiguiente ahorro, el uso más intenso de la tierra disponible, el incremento de la producción y por ende mejorar el ingreso de los pequeños y medianos agricultores vinculados y agrupados por sistemas comunes de riego.

Componente C: FORTALECIMIENTO INSTITUCIONAL Y DESARROLLO DE CAPACIDADES DE RIEGO.

Sub Componente C1: Fortalecimiento institucional de las JUs.

Este sub componente actuará como un medio de aprendizaje en todas las Juntas de Usuarios de la Costa, aunque con un grado diferente de intensidad. Para las JUs que ya han conseguido la elegibilidad, se diseñará un programa de actividades mínimas

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destinadas a consolidar lo ya conseguido, con lo cual la capacitación proporcionada por el proyecto se daría por concluida. En todo caso se considera que capacitaciones futuras serán asumidas por las propias Junta de Usuarios, a través de su unidad de capacitación.

Sub Componente C2: Asistencia Técnica en Riego Tecnificado. La difusión en riego y asistencia técnica tiene como objetivo fomentar el uso de técnicas modernas en riego, así como articular la oferta y demanda de este tipo de servicios, promoviendo la asociación de los agricultores, con el fin de lograr mayor producción y productividad. Si bien la difusión en riego se ofrece de manera gratuita (más con fines de difusión), la asistencia técnica es pagada por el agricultor, con lo cual se desarrolla la oferta de este tipo de servicios.

Componente D: APOYO A LA GESTIÓN DE RECURSOS HÍDRICOS

Consiste en incrementar el número de productores (190,000 con este programa) con derechos de agua con el cual puedan registrarse adecuadamente en su Junta de Usuarios o Comité de Regantes lo que permitirá a éstos últimos tener una mejor información para su gestión y a los productores una seguridad jurídica que pueda ser utilizada en accesos a financiamientos. La actividad incluye el proceso mismo de la formalización y el reforzamiento de la infraestructura que permita el registro de un mínimo de 400,000 predios.

1.6. Componentes Revisados.

El proyecto comprende desarrollar actividades elementales y complementarios en diferentes

valles de la costa y una mínima parte en la región sierra, conforme los detalles siguientes:

El Componente A. Mejoramiento de Infraestructura de Riego; adicional a las obras programadas en los valles de la Costa, se consideró la ejecución de 04 obras comunitarias en la región Sierra: 01 en Chonta - Cajamarca, 01 en Mantaro - Junín y 02 en el valle de Colca - Chivay en Arequipa; su financiamiento se estimó en US.$ 320,000 a razón de aproximadamente US$ 80,000 por obra.

El Componente B. Riego Tecnificado; se consideró la implementación de un aproximado de 60 ha con sistemas de riego tecnificado en la Sierra, tentativamente 20 ha en Chonta-Cajamarca, 20 ha en Mantaro-Junín y las restantes 20 ha en Colca-Arequipa con un aporte del proyecto de US$ 162,000 a razón de US$ 2,700 por ha. Se utilizó la misma estrategia de ejecución, mediante concursos públicos para riego tecnificado.

En el Sub-Componente C.1. Fortalecimiento institucional de las organizaciones de usuarios de agua; se continuó con su propia estrategia y metodología de intervención. Sin embargo, dadas las notorias diferencias entre las organizaciones de usuarios de la Costa con las de la región de la Sierra, este sub-componente se concentró básicamente en el fortalecimiento institucional de dichas organizaciones en lo que respecta a organización, adecuación y uso de los instrumentos de gestión; se desarrollo intensa

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capacitación-sensibilización en materia de normas legales relacionadas con la gestión del recurso hídrico.

En el Sub-Componente C.2. Asistencia Técnica a los Agricultores de Riego; el PERAT a nivel de costa y ampliación de metas en la región sierra, se concentra en los agricultores beneficiados con el Programa de Incentivos de Riego Tecnificado.

En el componente D. Apoyo a la Gestión de los Recursos Hídricos; Consideró la formalización de 25,000 derechos de uso de agua en el nuevo ámbito propuesto en la primera enmienda, dirigido a la región sierra, específicamente en los valles de Mantaro en Junín, Chonta en Cajamarca y Colca en Arequipa.

1.7. Otros cambios significativos.

A diferencia de las modificaciones en los componentes antes descritos, que modificó

significativamente el ámbito, presupuesto, metas físicas y otros; no se registró otra modificación que haya tenido relevancia para el proyecto.

2. Factores que afectan la implementación y resultados 2.1. Formulación, Diseño y Calidad del Proyecto.

El proyecto se diseñó y elaboró con la suficiente característica y consistencia técnica, dentro de los estándares establecidos conforme a los lineamientos del organismo cooperante y exigencias del SNIP por parte del Estado. Así también, el proyecto consideró importantes ingredientes extraídos de las experiencias de otros proyectos antes concluidos.

2.2. Implementación. Se obtuvieron importantes resultados conforme lo replanteado en las enmiendas validadas por el Banco Mundial; no obstante, haberse presentado algunas dificultades durante el inicio de la fase de ejecución, como la demora en la transferencia de los recursos presupuestales, significando retrasos en el inicio del proyecto; igualmente se presentó dificultades por parte de los beneficiarios en la disposición de la contrapartida; así también, los usuarios tampoco presentaron en su debido tiempo los expedientes o perfiles, no obstante algunos de ellos contenían deficiencias, que la UCPSI asumió las correcciones y viabilización, específicamente para el caso de los Componentes A y B.

Implementación del Componente A:

Se ejecutó 31 obras que benefició a 11,062 familias con una extensión de 37,325 ha en tierras de cultivos. Durante el proceso de ejecución se dio a conocer que una de las principales limitaciones para la implementación de este componente, fue la demora por parte de las JUs en contribuir con el 34% en lo que correspondió a su aporte como contraparte y en la elaboración de sus expedientes técnicos; en otros casos no consiguen

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reunir sus recursos y renuncian a ejecutar las obras que inicialmente se consideró. Experiencia que fue evaluado durante la fase de diseño e implementación para el PSI-Sierra.

Implementación del Componente B:

Sobre las actividades comprometidas, en algunos casos, igualmente registró retrasos debido a demoras por parte de los propios beneficiarios, al no entregar oportunamente sus expedientes, e incluso en varios casos se tuvieron que efectuar algunas correcciones a expedientes técnicos presentados, por detectarse inconsistencias en su contenido; asimismo, durante la ejecución se presentó otra dificultad no previsto relacionado al incremento del costo de las obras como consecuencia del aumento del precio de elementos derivados del petróleo y otros; otro de los motivos de los retrasos fue por la falta de entrega oportuna de los materiales adquiridos para la implementación de los sistemas de riego.

Implementación del Sub Componente C.1:

Se logró la elegibilidad de 49 juntas de usuarios; así también, en las organizaciones intervenidas se alcanzó un incremento en el nivel de recaudación de la tarifa agraria por el orden del 84.5%. Teniendo en cuenta que los recursos se agotó en abril del 2008, y con la finalidad de no interrumpir las actividades de este Sub Componente, se requirió la reprogramación de un adicional proveniente del Tesoro Público a través de la OPA - MINAG. Así también, en 34 JUs se constituyó Unidades de Capacitación y Comunicación (UCC), cuyas labores debe garantizar la capacitación permanente en las organizaciones de usuarios, y se desarrolló 409 eventos de extensión que permitió beneficiar a 5,826 agricultores.

Implementación del Subcomponente C.2:

Las actividades comprendieron haber desarrollado 838 eventos de sensibilización, logrando la participación de 14,838 agricultores. A lo largo del proceso de ejecución del proyecto, se conformo 175 grupos de gestión empresarial. Respecto a las actividades de extensión se cumplió con realizar 409 eventos extensión en riego tecnificado, lográndose la participación de 5,826 agricultores participantes; así también se capacitó a 1,358 agricultores como asistentes técnicos.

Implementación del Componente D: Las metas del componente consideró la entrega de 160,000 licencias de derechos de uso de agua, es decir 95,000 en organizaciones de usuarios de la región Costa y 65,000 licencias para usuarios ubicados en la Sierra; además de efectuar la formalización de 244,000 predios, 95,000 en la Costa y 149,000 en la Sierra. Al 30 de junio del 2009 se logró efectivizar la entrega de 162,559 licencias (96,306 en la Costa y 66,253 en la Sierra), también se logró la formalización de 246,917 predios. Los resultados se logró debido a la asignación de los recursos presupuestales considerados en la enmienda 2, posibilitando el cumplimiento y superación de las metas comprometidas.

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2.3. Monitoreo y Evaluación. El monitoreo y evaluación a cargo de la UCPSI, se cumplió adecuadamente; igualmente por parte de la Intendencia de Recursos Hídricos – INRENA, actualmente Autoridad Nacional del Agua – ANA en lo referente al Componente D. Parte de las actividades significó facilitar información a las misiones del Banco Mundial las veces que efectuó supervisión, también generó 02 enmiendas, que cuentan con la respectiva aprobación del Banco y se hizo con la finalidad de incorporar otros ámbitos distintos al aprobado inicialmente (se amplió a los valles de Mantaro-Junín, Chonta-Cajamarca y Colca-Arequipa).

2.4 Cumplimiento de las Salvaguardas.

Se elaboró, difundió y capacitó al personal involucrado y beneficiarios del proyecto sobre el contenido de 02 tipos de cartillas, conteniendo medidas para prevenir o minimizar los posibles efectos de impacto ambiental que pudieran generar como consecuencia de la ejecución de las obras de los Componentes A y B, contenidas en un Plan de Manejo Ambiental, de acuerdo a los detalles siguientes: Componente A: Se elaboró la cartilla denominada “Aspectos ambientales a considerarse en la elaboración de los perfiles y expedientes técnicos de los subproyectos - Componente A”, que precisan aspectos para su aplicación en las obras a ejecutar, en sus diversas etapas: planificación, construcción y operación y mantenimiento de los sistemas de riego a rehabilitar y mejorar, de tal manera que los potenciales impactos ambientales adversos sean mitigados, atenuados y/o anulados. Componente B: Se elaboró la cartilla denominada “Aspectos ambientales a considerarse en la elaboración de los perfiles y expedientes técnicos de los subproyectos - Componente B”, que precisan aspectos sobre el cuidado del medio ambiente en el proceso de ejecución de los subproyectos, en sus diversas etapas: planificación, construcción y operación y mantenimiento; de modo que los potenciales impactos ambientales adversos, sean mitigados, atenuados y/o anulados. También se consideró medidas para el manejo de plagas, uso de fertilizantes y otros (insecticidas), de acuerdo a los tipos de cultivos.

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2.5. Siguiente Fase de la Operación.

Los beneficiarios participaron activamente en la ejecución de sus proyectos, específicamente en: financiamiento, formulación de sus estudios o expedientes técnicos y además en algunos casos participaron con su mano de obra. La capitalización de sus esfuerzo más las experiencias y conocimientos obtenidos a través de los diferentes eventos de capacitación y sensibilización garantizan que durante la fase de operación del proyecto se espera: (i) que utilicen adecuadamente la infraestructura implementada, además la operación y mantenimiento; y, (ii) difundan los conocimientos y experiencias impartidas durante la ejecución del proyecto; para tal caso la autoridad sectorial local en coordinación con las juntas de usuarios coordinaran su cumplimiento.

3. Contribuición a los Resultados 3.1 Relevancia de los objetivos, diseño e implementación.

Los objetivos alcanzados a través del proyecto, se encuentran dentro de los lineamientos y prioridades de la política sectorial del actual gobierno, bajo el título de “Plan Estratégico Sectorial Multianual de Agricultura 2007 – 2011”, específicamente en lo siguiente:

a). Incrementar la eficiencia de la gestión del agua y el uso sostenible de los recursos

hídricos; a través de los mecanismos siguientes: 9 Impulsar la construcción y rehabilitación de la infraestructura de riego,

asegurando la disponibilidad y óptima utilización del recurso hídrico. 9 Promover la modernización de la agricultura a través de la instalación de

sistemas de riego tecnificado. b). Impulsar el desarrollo de innovación y transferencia de tecnología en riego y

cultivo: 9 Promover la generación y adaptación de tecnologías innovadoras de

carácter estratégico en función a la demanda de los mercados interno y externo, considerando los cambios climáticos, tipo de suelos y otros.

9 Promover el desarrollo del mercado de servicios para la innovación tecnológica de manera descentralizada y liderado por los productores.

3.2 Logros de los objetivos del Proyecto.

A. Objetivos El proyecto cumplió en forma satisfactoria con su finalidad, propósito y objetivos específicos establecidos, que se sustenta en el incremento en el uso extensivo e intensivo de las tierras agrícolas, expresados en el incremento de su producción y productividad agrícola, contribuyendo en la mejora de la economía y fortalecimiento de los agricultores.

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B. Resultados por componentes

a. Cumplimiento del Objetivo: Rehabilitación y Mejoramiento de los Sistemas

de Riego. A nivel de la región Costa, se ejecutó 27 obras, como la ejecución de 35.71 Km. de canales de riego mejorados y rehabilitados, se ejecutó 315 obras de arte como actividades complementarias, y se concluyó la ejecución de dos bocatomas; metas que permitió beneficiar a 10,327 familias en una extensión de 36,691 Ha de tierras de uso agrícola. A nivel de la región Sierra, se ejecutaron 04 obras de canales de riego, permitiendo una meta física de 4.30 Km. de mejoramiento de canales y la ejecución de 45 obras de arte; obras ejecutadas en los valles de Chonta (Cajamarca), Mantaro (Junín) y Colca (Arequipa); resultados que benefició a 735 familias con una extensión de 634 Ha de tierras de uso agrícola. Los resultados totales comprendió, la ejecución entre mejoramiento y rehabilitación de 40.01 Km. de canales de riego, mejoramiento de 02 bocatomas y la ejecución de 360 obras de arte complementarios de los sistemas de riego; resultados obtenidos con una inversión total de US$. 4’356.280, que benefició directamente a 11,062 familias a través de la habilitación y mejoras de sus sistemas de riego para el aprovechamiento de 37,325 Km. de tierras de uso agrícola, ubicados en diferentes valles de 10 regiones del país. Resultados obtenidos con el aporte de los usuarios por un total de US$. 1’488,955 que representa el 34% respecto a la inversión total, el 66% equivalente a 2’867,325 como aporte nacional y endeudamiento externo.

b. Cumplimiento del Objetivo: Riego Tecnificado. A nivel de la región Costa, se implementó 39 sistemas de riego tecnificado, en beneficio de 375 agricultores en una extensión de 1,400.65 Ha de tierras de uso agrícola, el valor de la inversión por parte de los beneficiarios ascendente a US$ 1’992,499 y la inversión por parte del Tesoro Público más financiamiento externo fue US$ 2’507,665. En la región Sierra se implementó 09 sistemas de riego tecnificado en una extensión de 67.75 Ha de tierras de uso agrícola, en benefició a 101 agricultores; resultados que se obtuvo con una inversión por parte de los beneficiarios US$. 57,602 y por el estado y fuente cooperante US $. 217,424. En general se implemento 48 sistemas de riego tecnificado en 17 organizaciones de usuarios, ubicados en 09 regiones a nivel nacional; resultados que mejora la eficiencia en el manejo del agua y mejoras en las prácticas de cultivos en una extensión de 1,468.40 Ha, que beneficia de manera directa a 476 familias. Dichas metas se logró con una inversión total de US$. 4’775,190, el aporte de los usuarios representó el 43% (US$. 2’050,101) y la inversión por parte del Banco Mundial y contrapartida nacional US$. 2’725,088, representó el 57% de la inversión total.

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Cumplimiento del Objetivo: Fortalecimiento Institucional y Desarrollo de Capacidades. C1: Fortalecimiento Institucional de las Juntas de Usuarios.

Se logró el fortalecimiento y sostenibilidad institucional de 41 juntas de usuarios, se alcanzó como meta la elegibilidad de 49 juntas de usuarios, se estableció e implementó 34 unidades de capacitación, se desarrolló 565 eventos de capacitación que permitió capacitar a 69,230 personas de diferentes juntas de usuarios comprendidas en el proyecto, además se entrenó a 15,383 personas que se encuentran aptas para continuar con las replicas en otras organizaciones de usuarios; asimismo, otro de los aspectos importantes fue mejorar las condiciones de recaudación de la tarifa agraria que alcanzó un 84.5% en la eficiencia en la recaudación (antes era el 81%), es decir se alcanzó un nivel de recaudación de 27.8 millones de US$, como ingreso anual por concepto de la tarifa agraria.

Resultados obtenidos con una inversión total de US.$. 2’553,831, como fondo de contrapartida nacional correspondió a US$ 492,728 y la inversión de la fuente cooperante ascendió a US$. 2’061,103.

C2: Asistencia Técnica en Riego Tecnificado El objetivo fue el desarrollo de capacidades en los agricultores y operadores de las juntas de usuarios en sistemas de riego tecnificado y aplicación de métodos modernos en cultivos, se otorgó asistencia técnica a 1,358 agricultores, se desarrolló 838 eventos de sensibilización, que permitió obtener como resultado 14,838 agricultores sensibilizados; así también, se desarrolló 409 eventos de extensión en riego y cultivos, con la activa participación de 5,826 agricultores capacitados; como resultado de las capacitaciones se logró conformar 175 grupos de gestión empresarial, cuyos beneficiarios tiene la suficiente capacidad y experiencia para acceder a la actividad empresarial. La inversión total fue US$ 2’041,079, del cual la contrapartida nacional representó US$ 568,954 y lo que correspondió al financiamiento externo US$ 1’472,125 (28% fondo nacional y 72% fuente externa); inversión que contribuyó en la modernización y fortalecimiento de las organizaciones de usuarios.

Cumplimiento del Objetivo: Apoyo a la Gestión de los Recursos Hídricos.

A nivel de la región Costa se cumplió con la entrega de 96,306 licencias de derechos de uso de agua y se formalizó 86,724 predios. En la región Sierra se entregó 66,253 licencias y se formalizó la situación de 160,193 predios, específicamente en los valles de Arequipa, Cajamarca y Mantaro. Se implementó 26 Unidades Registrales de Derechos de Agua denominado SISCON RADA en los valles donde se registró y otorgó las licencias.

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La inversión total fue US$. 7’173,182; esta compuesto por tres fuentes de financiamiento: recursos del TP US$ 499,043; de la Intendencia de Recursos Hídricos, actualmente Autoridad Nacional del Agua – ANA por US$ 3’935,297 e inversión del BIRF por US$ 2’738,842.

Administración y Monitoreo del Proyecto.

El desempeño del responsable de la administración y monitoreo del proyecto, se califica como satisfactorio; la UCPSI cumplió satisfactoriamente con las actividades establecidos en el estudio de factibilidad, planes operativos anuales, así como la presentación de los informes de progresos entre otros.

3.3 Otros Resultados de Impactos.

a). Impactos de la Pobreza, Aspectos del Género y Desarrollo Social. La tecnificación de los sistemas de riego y cultivo han permitido incorporar a un

mercado atractivo un número importante de agricultores en los diferentes valles donde se ejecutaron los proyectos, quienes a partir de las nuevas tecnologías están mejorando sus niveles de producción en calidad y cantidad.

b). Cambio y Fortalecimiento Institucional. Disposiciones legales normativas emitidas durante la ejecución del proyecto:

¾Decreto de Urgencia Nº 054 2009 – Medidas, mantenimiento infraestructura de riego.

¾Ley Nº 29338 – Nueva Ley de Recursos Hídricos. ¾Decreto Legislativo Nº 997 – Ley Orgánica del Ministerio de Agricultura. ¾Ley Nº 28585 – Ley que crea el Programa de Riego Tecnificado. ¾Decreto Supremo Nº 004-2006-AG Reglamento de la Ley de Riego Tecnificado. ¾Directiva General Nº 001-IRH-INRENA-2008, Directiva de Supervisión a las

OUs. c). Otros resultados o impactos (Positivo o Negativo). El proyecto logró establecer 382 grupos expectante de interés conformados por

aproximadamente 5,437 agricultores, en condiciones que a futuro se constituyan en Grupos de Gestión Empresarial – GGE, aptos formar empresas, cadenas productivas u otras actividades productivas agropecuarias.

4 Evaluación del Riesgo del Desarrollo de los Impactos del Proyecto

La sostenibilidad del proyecto se puede calificar como probable, en razón a las dos cualidades del proyecto, las metas físicas alcanzadas y la mejora organizacional de las juntas de usuarios a partir del desarrollo de sus capacidades; más aun teniendo en cuenta la activa participación de los propios beneficiarios, tanto con su aporte económico, aporte con la mano de obra, específicamente en los componentes A y B y los diferentes eventos de capacitación y sensibilización desarrollados durante la ejecución del proyecto.

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Respecto a los proyectos del Componente A, las organizaciones de usuarios tienen, por norma, la responsabilidad de la operación y mantenimiento de la infraestructura menor de riego, conforme lo establece la nueva Ley de Recursos Hídricos (Ley N° 29338); igualmente para el caso de los resultados obtenidos en el Componente B, se encuentran bajo la reglamentación de la Ley del Programa de Riego Tecnificado ( Ley N° 28585 ) y su reglamento.

5 Evaluación del Banco y Prestatario Desempeño. 5.1 Funcionamiento del Banco

El desempeño del banco fue satisfactorio. El proceso de identificación fue diligente y consistente con los objetivos y estrategia del Banco Mundial para con el Perú y con el Plan de Desarrollo del Gobierno, en relación con la agricultura en la Costa y Sierra. a). Garantía del Banco en la Seguridad de los Desembolsos.

La implementación del proyecto se realizó en un plazo conforme lo determinado en el proyecto, cumpliéndose las condiciones establecidas en el contrato de préstamo. Asimismo, la UCPSI durante la fase previa y ejecución del proyecto actuó con la debida diligencia, adecuándose con celeridad a los cambios producidos y las decisiones acordadas entre el Gobierno y el Banco.

b). Calidad de la Supervisión

El proceso de supervisión por parte del Banco fue amplio, oportuno y efectivo; durante la vigencia del proyecto se llevó a cabo misiones de supervisión, comprendidos entre octubre 2005 hasta el mes de mayo del 2009.

5.2 Desempeño del Prestatario. a). Desempeño del Gobierno. Se considera satisfactorio la participación del Gobierno, a través del MINAG – UCPS/ IRH,

durante la fase de formulación, ejecución e implementación del proyecto; no obstante se dejó constancia que hubieron algunas demoras durante la implementación, que no correspondió a la responsabilidad del prestatario.

b). Desempeño del Organismo Responsable de la Ejecución. El desempeño de la UCPSI y la Autoridad Nacional del Agua – ANA (ex Intendencia de

Recursos Hídricos) fue satisfactorio, conforme las exigencias establecidos en el Contrato de Préstamo; teniendo en cuenta que en todo momento se actuó con la suficiente diligencia ante las circunstancias normales o contingencias relacionadas con los aspectos técnicos, legales, administrativos, presupuestal u otros de relevancia para el proyecto; desempeño reflejados en las metas alcanzadas.

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c). Justificación del Desempeño del Prestatario. La participación del Gobierno y responsables de la ejecución del proyecto, cumplieron apropiadamente en todas sus fases, conforme las responsabilidades y competencias, bajo las mismas condiciones y experiencias cumplidas durante el Contrato de Préstamo 4076-PE-BM.

6 Lecciones Aprendidas.

1º La necesidad de incorporar como parte de la ejecución del proyecto a los propios beneficiarios sea como co-ejecutores y/o co-financiadores es importante, en razón que está demostrado que los sistemas y procesos sólo pueden ser sostenibles si los actores forman parte de la inversión, son directo beneficiarios de algún propósito o pasan a ser dueños de ellos. Esta afirmación se desprende del hecho que el diseño que el PSI consideró el aporte financiero de las organizaciones de usuarios en los costos de las obras de rehabilitación y mejoramiento de los sistemas de riego, instalación de sistemas de riego tecnificado y la participación del personal en general en el fortalecimiento de las organizaciones de usuarios, inédito respecto de otros proyectos similares que no han sido sostenibles en el tiempo.

Existe alta probabilidad que los logros obtenidos se mantengan e inclusive se fortalezcan porque existe la clara percepción de los beneficiarios respecto a la confiabilidad de las obras ejecutadas y por haber tenido participación y conocimientos directo sobre la forma como se han ejecutado las actividades del proyecto.

2º El diseño de este tipo de proyectos debe basarse en un diagnóstico exhaustivo de la

problemática incidiendo principalmente en la caracterización técnica, económica, educacional, cultural y social de los actores o beneficiarios (grupo meta). Esta condición resulta importante para poder diseñar la estrategia y metodología más adecuada.

3º La definición clara y precisa de la interdependencia que debe haber entre sus

componentes y el ámbito de actuación del proyecto, de modo que converjan sobre dicho ámbito y obedezcan a un mismo objetivo común. Esto es una condición necesaria porque de esta manera se logran establecer sinergias entre los componentes y se evita que cada uno de ellos actúe en forma independiente y se perciban como proyectos separados del resto.

4º El logro de una fuerte identificación y sinergia entre el personal del proyecto con la

población objetivo es una condición muy favorable para conseguir sus objetivos, resultados y metas, que pueden ser obtenidas mediante el trabajo conjunto entre ejecutores y beneficiarios.

5º La supervisión periódica de agentes especializados externos, es importante para que de

manera imparcial evalúe y oriente el avance del mismo. Si bien, un proyecto puede ser eficiente en su ejecución, existen aspectos y situaciones que pueden limitar su marcha normal y que desde dentro de la organización no pueden ser solucionados. En estos casos

69

resulta trascendental la participación de dichas misiones que permiten dar soluciones rápidas y expeditivas los problemas presentados.

6º La necesidad que los proyectos incorporen, durante su formulación y ejecución, sea con

mecanismos de coordinación y/o de participación, a aquellas instituciones públicas y privadas que directamente tienen relación con los fines y sus beneficiarios.

7º La recomendación para que futuros proyectos de estas características trabajen con mayor

incidencia a nivel de usuarios, es pertinente dado que la cultura tradicional dominante de estos actores constituye una debilidad para la sostenibilidad de sus logros y resultados. Es necesario reforzar el cambio de actitud de los beneficiarios no solo con procesos de sensibilización sino también con otros mecanismos de comunicación y difusión masiva.

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Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders

OPINION INFORME DE CIERRE: CONTRATO DE PRESTAMO N° 7308–PE PROGRAMA SUBSECTORIAL DE IRRIGACIONES

Cabe señalar que el contenido del proyecto de Informe de Cierre del Contrato de Préstamo N° 7308 –PE, elaborado por el equipo de supervisión del proyecto Banco Mundial, presenta un análisis amplio y adecuado de los impactos y alcances obtenidos por el Proyecto en evaluación. Por tal motivo, las opiniones que se presentan a continuación, refuerzan lo indicado en dicho Informe. Las opiniones son: 1°. Debe precisarse que durante el periodo de vigencia del proyecto, se cumplieron 12 misiones

de supervisión por parte del BIRF, las que fueron objetivas y diligentes. 2°. Los resultados de la evaluación económica del proyecto durante su formulación fue 24.12% y

la tasa de rendimiento financiero 23%. 3°. El resultado final de la inversión por componentes fue:

Componentes Invers. Estim

Invers. Final %

Componente A 5.95 4.99 84 Componente B 5.63 5.43 96 Componente C 4.98 4.57 92 Subcomponente C1 2.56 2.55 99.6 Subcomponente C2 2.42 2.02 83 Componente D 5.02 7.19 143 Componente E 1.57 1.61 102 Total 23.14 23.79 103

Nota: En millónes de US$. 4°. Los resultados finales de la ejecución física por componentes fue:

a. Componente A: Se mejoró y rehabilitó 40.01 Km. de canales de riego que benefició a 11,062 familias en una extensión de 37,325 hectáreas; asimismo se ejecutaron 360 obras de arte y 02 de mejoramiento de bocatomas; en un total de 31 obras concluidas.

b. Componente B: Se implementó 48 sistemas de riego que benefició a 476 familias en una extensión de 1468.40 hectáreas.

c. Componente C con 02 Subcomponentes; el Subcomponente C1: Consolidó a 49 juntas de usuarios como elegibles y 41 sostenibles; la eficiencia en la recaudación de la tarifa agraria se incrementó en 3.4%, que significa un incremento en la recaudación de 3.5 millones de dólares por año; asimismo se implementó 34 unidades de capacitación; se capacitó a 69,230 usuarios de riego, se desarrolló 565 talleres de capacitación y 15,200 eventos de sensibilización.

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El Subcomponente C2: Posibilitó haber realizado 838 eventos de sensibilización con 14,838 agricultores sensibilizados, se capacitó a 1,358 agricultores para conformar unidades productivas; se conformó 175 grupos de gestión empresarial; y, desarrolló 409 eventos de extensión en sistemas de riego en beneficio de 5,826 agricultores.

d. Componente D: Se entregó 163,455 licencias de derecho de uso de agua; se formalizaron 248,327 predios; se conformaron 4,345 bloques de riego y se conformó 26 unidades registrales de derechos de uso de agua a nivel nacional.

5°. La inversión final por fuente de financiamiento (en millones de US$):

Fte. Fto. Reprog. Ejecut. %Prestatario: 7.407 9.524 129

BIRF 10.260 10.247 99.9 Organizaciones de Usuarios: 5.474 4.021 73

Total 23.141 23.792 103 6°. En términos generales el proyecto representa una rentabilidad que crea las condiciones para

posibilitar el bienestar económico de manera directa a los agricultores beneficiarios agrupados en 22 juntas de usuarios del Componente A y 17 juntas de usuarios del Componente B; que de acuerdo a las proyecciones el nivel de producción y productividad se incrementaría en un 15%, puesto que se incrementa e intensifica el uso adecuado de las tierras de cultivos; además que se logra un 85% de eficiencia en la conducción del agua de riego. Resultados que se demuestra a través del 16.7% de la rentabilidad financiera y 20.5% la rentabilidad económica del proyecto en general.

7°. Durante la ejecución del proyecto, se emite la Ley Nº 28585 que crea el Programa de Riego

Tecnificado, mediante el cual se fortaleció los niveles de gestión del Programa Subsectorial de Irrigaciones - PSI, con dicha norma se fortifica y consolida su condición de promotor en la ejecución de proyectos de riego tecnificado a través de los Gobiernos Regionales y Locales; la acotada norma le atribuye la condición de Ente Rector del programa.

8°. Los retrasos durante la ejecución del proyecto, se debió básicamente a tres factores: 1)

limitaciones de los beneficiarios en conseguir recursos financieros para aportar su contrapartida y el incremento del precio del petróleo que aumento los costos de inversión de los proyectos de riego tecnificado; 2) La elaboración de los estudios de pre inversión y definitivos fueron asumidos por los propios usuarios y beneficiarios y en muchos casos se tuvieron que reformular; lo que ocasionó retrasos en la ejecución, 3) Demasiado tiempo para tramitar la aprobación de las dos enmiendas.

9º Adicionalmente se puede considerar lo siguiente:

• Considerar en la formulación de futuros estudios personal especializado que se dedique a la gestión de acceso al crédito de los posibles beneficiarios de los PIPs del componente de Riego tecnificado.

• Aplicar, en lo posible, la modalidad de ejecución de “Obras Comunitarias” para los PIP’s de rehabilitación y mejoramiento de infraestructura de riego, dado que los costos de inversión y plazos de ejecución se reducen y las OUA’s adquieren experiencia en su administración y gestión, generándose nuevas capacidades en ellas.

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• En riego tecnificado, la modalidad y estrategia de ejecución debe ser flexible, como por ejemplo el sistema “Llave en Mano” a través de concursos públicos, permitiendo la libre elección de los grupos de gestión respecto del costo máximo de los PIP’s, monto de los incentivos, número de beneficiarios por grupo de riego tecnificado, tipo de riego tecnificado. Considerar establecer la modalidad de ventanilla única (abierta).

• Los mecanismos de control de los indicadores establecidos deben estar claramente definidos a fin de llevar un adecuado seguimiento del proyecto y evaluación expost.

• El Manual de Operaciones del Proyecto debe ser de conocimiento de los actores, incluyendo a los beneficiarios. Por tanto, el documento debe ser elaborado en forma sencilla y práctica para que sea entendible y aplicable.

Componente A: Rehabilitación y Mejoramiento de la Infraestructura de Riego Componente B: Riego Tecnificado

Componente A Componente B Indicador de Resultados

Unid. Med. Meta

Reprogramada

Resultados al Cierre

2009

Meta Reprogramada

Resultados al Cierre

2009 Familias beneficiadas Familias 19,000 11,062 508 476Área beneficiada (ha) Ha 51,175.00 37,325.00 1,882.00 1,468.40Aporte de los beneficiarios US$ mill. 2.38 1.71 2.69 2.31Inversión PSI (TP. + EE.) US$ mill. 3.57 3.29 2.93 3.11Longitud canales mejorados. Km 76 40.01 - -Construcción Obras de Arte Unid. 72 360 - -Mejoramiento Bocatoma Unid. 4 2 - -Perfiles con Viabilidad Perf. 43 56 40 75Expedientes Aprobados Exped. 43 39 40 54Convenios suscritos Convenios 43 39 40 48Obras en ejecución Obras 0 0 0 0Obras ejecutadas Obras 43 31 40 48

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Componente C: Fortalecimiento Institucional y Desarrollo de Capacidades Sub Comp. C2: Fortalecimiento Institucional de Juntas de Usuarios.

Indicador de Resultado Unid. Med.

Meta Reprog.

Result. Al Cierre 2009

Juntas de Usuarios Elegibles Jus 49 49 Juntas de Usuarios Sostenibles Jus 40 41 Recaudación anual tarifa vigente US$ mill. 24.4 27.8 Nivel de recaudación de la tarifa % 81 84.5 Unidades de Capacitación UC 40 34 Personal capacitado Personas 60,000 69,230 Personal entrenado Personas 8,000 15.383 Talleres de Capacitación , Evaluación y Difusión de Resultados

Taller 600 565

Eventos de sensibilización Evento 15,000 15,200

Sub Comp. C2: Desarrollo de Capacidades de Riego de Agricultores. Agricultores sensibilizados Personas 16,000 14,838Eventos de sensibilización Eventos 385 838 Grupos de gestión empresarial conformados Grupos 100 175 Agricultores con Asistencia Técnica Personas 1,000 1,358Eventos de extensión Eventos 260 409 Agricultores participan en extensión Personas 8,000 5,826

Componente D: Apoyo a la Gestión de los Recursos Hídricos.

Indicador de Resultado Unid. Med.

Meta Reprog.

Result. Al Cierre 2009

Bloques conformados y aprobados Bloques 480 4,345 Licencias Entregadas: 160,000 163455 Costa Licencias 95,000 96,306 Sierra Licencias 65,000 67,149 Predios Formalizados: 244,000 248,327 Costa Predios 95,000 86,724 Sierra Predios 149,000 161,603 Unidades Regístrales de Derechos de Agua Unid. 10 26 Regiones que validan Estrategia de Gestión Integral de R. H. Unid. 10 10 Perfil del Programa de Modernización de la Gestión del Recursos Hídricos Perf. 1 1 Diagnostico Estudio 1 1 Informe borrador Informe 1 1 Informe Final Informe 1 1

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Annex 9. List of Supporting Documents

• Informe de Cierre, PSI, 2009

• An Impact Evaluation of a Multicomponent Irrigation Project on Farm Households in

Peru, IEG, World Bank, 2009

• Project Aide-Memoires and Implementation Supervision Reports

• Irrigation Subsector Project, Staff Appraisal Report, 1996, Report Number: 13542-PE

• Loan Agreement, 2005

• Irrigation Subsector Project, Supplemental Loan Document, 2005, Report Number:

32353-PE

• Developing Capacity in Water Users Organizations: The Case of Peru, Irrig. and Drain.

57:300-310, 2008

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Annex 10. “Sustainability” Indicator SOSTENIBILIDAD DE LAS JUS Para evaluar el nivel de gestión alcanzado por las juntas de usuarios se aplica los indicadores que se indican en los cuadros siguientes, agrupados en cuatro grupos de capacidades con un peso de 25% cada una: el nivel de gestión gerencial o institucional, la tecnológica, la capacidad operativa o logística y la capacidad financiera, que a su vez tiene a su interior otros indicadores menores también con sus propios pesos. .

76

INDICADORES DE CAPACIDAD DE GERENCIA / TOMA DE DECISIONES

JUNTA DE USUARIOS:

PesoVALOR OBTENIDOVALOR

IDEALVALORREALIndicador

25

Descripción del indicadorIdeal Real Índice Valor

Ponderado

Disponibilidad de agua en el sistema de riego (oferta de agua) 1.00

Seguimiento al plan anual de trabajo ( JU y CRs) 1.00

Seguimiento ejecución contable ( JU y CRs) 1.00

Seguimiento ejecución presupuestal del gasto 1.00

Recaudación diaria de tarifa ( JU) 1.00

Seguimiento ejecución del PCR 1.00

Seguimiento de los planes de distribución de agua 1.00

Seguimiento ejecución del plan de mantenimiento (físico-financiero) 1.00

cuantificación de pérdida de agua en el SP y CR 1.00

Implementación y Uso delsistema de monitoreo yevaluación para tomardecisiones

5.00

i=Nªindicadores usados/ Nª Indicadores total 1.00

0.00

Cumplimiento del PlanAnual de trabajo(Aprobado) (planesoperativos anuales)

5.00 Nª Actividades Ejecutadas / Nª Actividades Programadas 1.00 0.00

Cumplimiento de acuerdosde JD 6.25 I = N ª de Acuerdos Adoptados / N ª Acuerdos Totales 1.00 0.00

N ª de Actividades de Comunicación ejecutadas / Nº Actividades de ComunicaciónProgramadas

0.50Implementación delsistema de comunicacióndifusión

3.75

Nª Actividades de Capacitación Ejecutadas / Nª Actividades de Capacitación Programadas 0.50

0.00

Resolución de conflictos 5.00 N ª de Reclamos Resueltos / Nª total de reclamos presentados 1.00 0.00

TOTAL 25.000.00

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INDICADORES CAPACIDAD TECNOLÓGICA

JUNTA DE USUARIOS

Peso VALOR OBTENIVALORIDEAL

VALORREAL

Indicador Descripción del indicadorIdeal Real Índice Valor

Ponde

Longitud de canales revestidos / Longitud total de canales que requieren revestir más los tramosrevestidos

0.25

Longitud de drenes mejorados, rehabilitados / Longitud total de drenes 0.25

Numero de estructuras de medición operativas / Número estructuras de medición necesarias 0.25

Desarrollo de laInfraestructura de servicio deriego y drenaje

5

Numero de compuertas operativas / Numero compuertas necesarias 0.25

0.00

Área con DIS / Área total bajo riego 0.30

Área ejecutada / Área programada 0.30Implementación del PCR 6.25

Volumen ejecutado con PCR / Volumen programado PCR 0.40

0.00

Volumen ejecutado PDA / Volumen programado PDA 0.20

numero de bloque o CR con PDA / Numero total de bloques o CR (JU) 0.20

Numero de canales con roles de riego / Numero de canales totales 0.20

Numero de predios con roles de riego / Numero de predios totales 0.20

Aplicación Planes deDistribución de agua -PDA enlos sistemas de riego

7.5

volumen facturado en CR / Volumen distribuido (CR) 0.20

0.00

Numero de Bloques o comisiones que miden eficiencia/ numero total de bloques o comisiones deregantes 0.25

Volumen entregado en bloque o C.R./ volumen entregado en bocatoma 0.25

Volumen entregado en parcela./ volumen entregado en bloque o CR 0.25

Determinación Eficienciasoperativas del sistema(conducción y distribución )

6.25

Volumen por uso consuntivo en bloques / Volumen de agua entregado en bloques 0.25

0.00

TOTAL 25 0.00

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INDICADORES CAPACIDAD OPERATIVA Y LOGÍSTICA

VALORIDEAL

VALORREAL Peso

VALOR OBTENIDOIndicador

25

Descripción del indicador

Ideal Real Índice ValorPonderado

Cuenta con una estructura orgánica aprobada por la ATDR (mínima) para su funcionamiento (aquí definir el numerode personal técnico y administrativo) 0.25

Número de personal de planta implementado/ Numero total de planta aprobado por la Estructura Orgánica 0.25Número de personal técnico de planta implementado/ numero total de personal técnico de planta aprobado por laestruc. Orgánica 0.25

Implementación dela EstructuraOrgánica

10.00

Número de personal administrativo de planta implementado/ numero total de personal administrativo de plantaaprobado por la estruc. Orgánica 0.25

0.00

Número de equipos operativos (Correntómetro, medidores portátiles, etc.)/Número de equipos requeridos 0.15

Número de vehículos operativos (camioneta, camiones, motocicletas) /Número de vehículos requeridos 0.15

Número de equipos de computo operativos(computadoras, impresoras) / Número de equipos de computo requerido 0.15Número de equipos de comunicación operativos (radios, base, Handy, etc.) /Número de equipos de comunicaciónrequeridos 0.15

Disponibilidad deLocal, Maquinaria,Vehículo, y Equipo

5.00

Tiene locales adecuados a la dimensión de la organización (incluye JU + CR) 0.40

0.00

Nº de Bloques con padrón de usuarios automatizado / Número total de bloques 0.10

Nº de Bloques con Inventario de la infraestructura de riego automatizado / Nº bloques Total 0.10

Nº de Bloques con plan de Mantenimiento automatizado / Nº Bloques Total 0.10

Nº de Bloques con sistema de control hidrométrico automatizado / Nº Bloques Total 0.10

Nº de Bloques con distribución de agua automatizada / Nº Bloques Total 0.10

Nº de Bloques con PCR automatizado / Nº Bloques Total 0.10

Nº de Bloques con Recaudación de la tarifa de agua automatizada / Nº de Bloques Total 0.10

Nº de CR con sistema de control contable automatizado / Nº Total de CR (Incluye JU) 0.10

Nº de CR con ejecución presupuestal Automatizado/ Nº Total de CR ( Incluye JU) 0.10

Automatización delos procesos deoperación yadministración

10.00

Número total de instrumentos automatizados/ Número total de instrumentos 0.10

0.00

T O T A L 25.00 0.00

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JUNTA DE USUARIOS

INDICADORES CAPACIDAD DE FINANCIAMIENTO

JUNTA DE USUARIOS

Peso VALOR OBTENIDOVALORIDEAL

VALORREAL

Indicador

25

Descripción del indicadorIdeal Real Índice Valor

Ponderado

Valor Tarifa aprobada / Valor Tarifa real (*) 0.25

Recaudación tarifa vigente / monto puesto en cobranza de la tarifa vigente 0.25

Monto recaudado de tarifas atrasadas /monto programado a recuperar de tarifasatrasadas 0.25

TARIFA DE AGUA 10.00

Recaudación de la tarifa vigente / presupuesto aprobado(monto puesto a cobrar dela tarifa vigente, tarifas anteriores, y otros) 0.25

0.00 0.00

Presupuesto ejecutado(11.1 + 11.2 + 11.3 + 11.5 +11.8+11.9)(O&M)/presupuestoaprobado( 11.1 + 11.2 + 11.3 + 11.5 +11.8+11.9)(O&M) 0.20

Presupuesto ejecutado(11.5 +11.9)(Inversión)/presupuesto aprobado(11.5 +11.9)0.20

Presupuesto ejecutado(11.7 )(funcionamiento de JU) / presupuesto aprobado0.20

Presupuesto ejecutado(11.6)(capacitación)/presupuesto aprobado0.20

Presupuesto yEjecución(operación,conservación ymantenimiento,administrativo ycapacitación).

10.00

Transferencia del 5%(11.12)/5%(11.12) del prepuesto aprobado 0.20

0.00 0.00

Canon de Agua/10% del CIJU 0.50Transferencias 5.00

Amortización / % establecido del CIJU 0.500.00 0.00

TOTAL 25.00 0.00

(*) Es la tarifa que corresponde al presupuesto real de necesidades de la organización elaborado por la Gerencia Técnico

IQUITOSTUMBESZarumilla

Cancas

El Alto

Talara

PIURA

SultanaPaita

La Tina

Ayabaca

ChulucanasHuancabamba

Bayovar

Olmos

JaenBagua

Oracuzar

Jumbilla

CHACHA-POYAS

MOYOBAMBA

TarapotoCutervo

Yauyos

HUANCAYO

Colcabamba

HUANCAVELICA

San Vicente de Cañete

Chincha Alta

PiscoSan Martin

ICA

CastrovirreynaAYACUCHO

Palpa

LangaLIMA

Huarmey

HUÁNUCO

Pativilca

Huacho

GoyllarisquizgaCERRO DE

PASCO

Oxapampa

La MercedSatipo

Palca

ChancayYangas

Matucana

La Oroya

HUARAZ

Caraz

Casma

Recuay

Tingo María

PUCALLPA

Mendoza

Magdalena

Otuzco

Santiagode Chuco

Cajabamba

Bolivar Juanjui

TocacheNuevo

Chongoyape

CAJAMARCA

CHICLAYO

Pacasmayo

Santa TeresaPillcopata

PaucartamboCUSCO

ABANCAY

Andahuaylas

Chalhuanca

PuquioNazca

San Juan Acari

Chala

Yauri Azángaro

Camaná

Pta. ColoradaAREQUIPA

Yura

PUERTOMALDONADO

Huancane

Juliaca

PUNO

MazoCruz

MOQUEGUAMollendo

IloTarata

MicullaTACNA

Boca del Rio

Arica

Cerro Azul

CALLAO

Chicama

Pimentel

Mancora

Villa Rica

Yurimaguas

SanIgnacio

Matarani

Quillabamba

Ollantaytambo

TRUJILLO

P E R U

IRRIGATIONSUB-SECTOR PROJECT

AREAS OF INTERVENTION FORPSI ADDITIONAL FINANCING

This map was produced by the Map Design Unit of The World Bank.The boundaries, colors, denominations and any other information shownon this map do not imply, on the part of The World Bank Group, anyjudgment on the legal status of any territory, or any endorsement oracceptance of such boundaries.

0 50 100 200 250

KILOMETERS

150

P A S C O

L I M A

J U N I N

I C A

HUÁNUCO

L A L I B E R TA D

S A N M A R T I N

A N C A S H

U C A Y A L Í

LAMBAYEQUE

AM

AZ

ON

AS

C U S C O

A P U R I M A C

A Y A C U C H O

HUANCAVELICA

A R E Q U I PA

M A D R E D E D I O S

P U N O

MOQUEGUA

T A C N A

P I U R A

TUMBES

CAJAMARCA

L O R E T O

Marañon

Rio

Marañon

Santiago

Past

azaRio

Rio

Rio

Rio

Putumayo

Rio Caqueta

Rio Napo

Rio

Amazonas

Rio Yavari

Rio

Uca

yali

Rio

Huallaga

Rio

Apurim

ac

RioU

rubamba

RioMadrede Dios

Rio

Inambari

P A C I F I C

O C E A N

TiticacaLake

Rio

Desaguadero

2°

4°

6°

70°72°74°

18°

16°

14°

12°

10°

8°

6°

4°

2°

0°

72°

74°78°80°0°

8°

10°

12°

14°

16°

18°

80° 78° 76°

76°

70°

APRIL 2

00

5

IBRD 3

39

57

BO

LI

VI

A

B R A Z I L

E C U A D O R

COLOMBIA

C H I L E

PERU

DEPARTMENT CAPITALS

OTHER SELECTED CITIES

RIVERS

DEPARTMENT BOUNDARIES

INTERNATIONAL BOUNDARIES

PROJECT INTERVENTION DEPARTMENTS

Departments and WUOs (tentative)COMPONENTS A, B, CTUMBES• TumbesPIURA• Alto PiuraLAMBAYEQUE• Motuoe• La Leche• ZañaLA LIBERTAD• Chao• JequetepequeANCASH• Nepeña• Irchim• SantaLIMA• Chancay Huaral• ChillonICA• Ica• La AchiranaAREQUIPA• Pampa de Majes• La Joya Antigua• Tambo• Ensenada mejia• Santa Rita de Siguas• Ocoña

COMPONENT D1PIURA• Medio y Bajo Piura• Alto PiuraLAMBAYEQUE• Motuoe, Olmos• La Leche• ZañaLA LIBERTAD• Chicama• JequetepequeANCASH• Santa• Casma• HuarmeyLIMA• Huaral• CañeteICA• Ica• Palpa• NazcaAREQUIPA• Acari• Bella Unión• Yauca• Chili No Regulado

COMPONENT C1TUMBES• TumbesPIURA• Medio y Bajo Piura• Alto Piura• San Lorenzo• Sechura, ChiraLAMBAYEQUE• Chancay Lambayeque• Motuoe, Olmos• La Leche• ZañaLA LIBERTAD• Chao, Guadalupito• Chicama, Alto Chicama• Jequetepeque• Alto Jequetepeque• Moche, ViruANCASH• Nepeña, Irchim• Huarmey, Supe• Casma, SantaLIMA• Chancay Huaral• Huaura, Chillon• Huaral, Rimac• Cañete, Lurín• Mala Omas• Pativilca, Supe, FortalezaICA• Ica, Palpa, La Achirana• Nazca, Pisco, ChinchaAREQUIPA• Bella Union, Ampato• Majes, Acarí, Yuramayo• Camana, Punta Bombon• Chili Regulado• Pampa de Majes• La Joya Antigua y Nueva• Tambo, Ampato• Ensenada Mejia• Santa Rita de Siguas• Ocoña, Vitor, YaucaMOQUEGUA• Tambo, Ensenada, Torata• Pta. Bombon, MoqueguaTACNA• Torata, Tacna• Locumba, Sama• La Yarada

World Bank Documentdocuments1.worldbank.org/curated/en/589721468327549230/... · 2016. 7. 12. ·...

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Transcript of World Bank Documentdocuments1.worldbank.org/curated/en/589721468327549230/... · 2016. 7. 12. ·...