| Project Detail |
Proposed Development Objective(s)
The Project Development Objective (PDO) is “to increase agriculture productivity and access to markets for small
and medium farmers and agri-food small and medium enterprises in the Participating Project Regions.”
Component 1: Improving the quality of agriculture support services and policies (US$42 million equivalent from
IDA)
40. The objective of this component is to increase the productivity of agriculture for both crop production
and sedentary livestock systems, including aquaculture and fisheries, and to improve the safety of food products,
by strengthening agriculture support services and policies. This component will strengthen human and
institutional capacity for service delivery and policy development for key actors in the sector. Key outcomes would include (i) improved access to, and delivery of, quality extension and advisory services; (ii) improved access to,
and delivery of, quality veterinary and phytosanitary services; and (iii) improved policy and regulatory
environment conducive to the development of the sector. All extension and advisory activities are designed to
integrate climate-smart agriculture options, as a way to increase producer’s awareness of climate risks, and to
improve their capacity to mainstream climate adaptation and mitigation actions. This component will be
implemented by MAGEL, by the Ministry of Environment and Sustainable Development for fisheries and
aquaculture-related activities, and in collaboration with the Agence de Promotion du Conseil Agricole (APCA) for
Subcomponent 1.1.
41. Subcomponent 1.1: Strengthening crop and livestock extension services (US$7 million equivalent from
IDA). The objective of the subcomponent is to build capacity of the national extension and advisory service to
more effectively play its role in increasing producers knowledge and capacities. The subcomponent will support
the implementation of the strategy for the National Extension and Advisory Services System in agriculture
(Système National de Conseil Agricole, SNCA) endorsed by the Government of Niger in August 2017. The project
will provide targeted support to the operationalization of the APCA, the operational coordinating and
programming body of the SNCA, and to advisory services providers. Delivery mechanisms will be adapted for each
production system at the regional level. When a region is designated as conflict-affected where government
services have difficulty in access, credible service providers will be subcontracted to deliver services. Training of
advisory service providers will focus on the use of CSA varieties and practices, including inter alia introducing
drought and heat tolerant seeds, agroforestry practices, drip irrigation, and solar-pump irrigation schemes.
42. Subcomponent 1.2: Support to veterinary and phytosanitary services (US$28 million equivalent from
IDA). The objective of the subcomponent is to increase the availability of, and access to, specialized high-quality
public and private veterinary and phytosanitary services to producers, and other value chain actors, in order to
contribute to crop and animal productivity enhancement, to mitigate increased plant and animal disease risks
linked to climate change and to strengthen food quality and safety. The project will support activities aimed at (i)
enhancing surveillance systems for emerging and re-emerging crop priority diseases; (ii) controlling priority crop
diseases and pests; (iii) controlling priority productivity-impacting livestock diseases; (iv) preventing major fish
diseases (especially Tilapia Lake Virus) through targeted surveillance and awareness campaigns with respect to
live fish imports; and (v) the promotion of food safety through enhanced quality control of inputs, feed, and food
products.
43. Subcomponent 1.3: Strengthening the policy, legal, and regulatory framework and developing
mechanisms for preventing and responding to severe crises and emergencies in the agriculture sector (US$7
million equivalent from IDA). Under this subcomponent, the project will support the transformation and the
strengthening of the effectiveness and efficiency of the Agricultural Policy Support Unit (APSU) of MAGEL. There
is already in the Studies and Planning Directorate a small unit which will be transformed by Ministerial Order
(Arrêté Ministériel) into the APSU. The project will provide support to the unit to develop its analytical and policy
reform competencies. As women’s economic empowerment is a determinant of agricultural productivity
enhancement, the APSU will lead the development of a Gender Policy and gender-sensitive planning and
budgeting for the ministry. The project will support the APSU in undertaking policy analyses and making
recommendations for removing policy, regulatory, and institutional constraints that negatively affect investments
and entrepreneurship in the agri-food sector.
44. This subcomponent will also: (i) support MAGEL’s capacity to respond to crises by providing equipment,
training and resources for specialized studies and communication campaigns; (ii) support the consolidation and
operationalization of crisis prevention and management tools related to agriculture; and support training to better understand climate change risks, analyze climate information, and integrate climate adaptation and
mitigation practices into agricultural programs.
Component 2: Increasing investments in agricultural production, processing, and market access (US$45 million
equivalent from IDA)
45. The objective of this component is to increase private investments by the various players in the agri-food
sector in agricultural production, processing and market access. To this end, the project will support (i) the
development of productive partnerships,21 (ii) improvement of access to finance for the agri-food sector, including
at the level of production, processing, storage, transportation, and marketing both for domestic and export
markets, and (iii) the strengthening of the supply of agriculture credit. The component will be implemented by
MAGEL, in collaboration with the PFIs, the National Selection Committee, and the Ministry of Finance.
46. The principles of intervention under this component will be: (i) synergy with other World Bank and IFC
projects; (ii) focus on agri-food value chains in the project areas that offer the best economic opportunities at the
national and international levels; (iii) focus on women and youth; and (iv) integration into investments of the
climate adaptation and mitigation options promoted under Component 1.
47. Subcomponent 2.1: Developing Productive Partnerships (US$6 million equivalent from IDA). To improve
access to markets and value chain coordination, the project will finance (i) the establishment of a productive
partnership program for producers and SMEs in agri-food value chains presenting good economic opportunities;
and (ii) communication and financial literacy campaigns. The project will:
(a) finance the following set of activities for the establishment of the productive partnership program:
(i) the identification of off-takers for agriculture, livestock, and aquaculture products with good
prospects at the national, regional, and potentially international level; (ii) support producers and
SMEs to enter into commercial agreements with those off-takers; (iii) build the capacities of those
producers and SMEs to respond to the demand of these off-takers and to improve the quality of
their production; (iv) develop sustainable business models and business plans that could allow
sustainable growth of those SMEs and producers association involved in productive partnerships
(for commercial farming, processing and commercialization); and (v) providing technical support
services to implement the business plans. These activities will be implemented by different firms
specialized in the agri-food sector, business development services, and incubators at the national,
regional or international level. Those firms will be selected through a competitive bidding process.
Beneficiaries’ selection will be done through a call for proposals (see annex 2 for details). The
Project Implementation Manual (PIM) will provide the details of the productive partnership
program; and
(b) finance (i) communication campaigns; (ii) financial literacy programs; and (iii) training of trainers
in financial management/literacy in the project regions. This will be done through specialized firms
with proven expertise in these different areas.
48. Subcomponent 2.2: Increasing Access to Finance (US$28 million equivalent from IDA). To address the
limited availability of finance in the agri-food sector, the project will support the establishment of a cost-sharing
financing (CSF) program based on matching grants and systematic involvement of financial institutions. The CSF will allow producers, producer groups, and SMEs in the agri-food sector, that have benefitted from the productive
partnership program, or that have other pre-identified off-takers or markets, to access financing for working
capital and viable medium-term investments. Investments will be systematically accompanied by technical
assistance to improve the beneficiaries management and technical skills as described under subcomponent 2.1.
49. Two types of grants will be provided under the CSF program under Window #1 and Window #2 (see below)
to facilitate access to finance to increase investment in the agri-food sector and catalyze the emergence of strong
SMEs. The grants will be managed by Participating Financial Institutions (PFIs) to be selected following the World
Bank’s IPF policy. Eligibility criteria specific to grants are defined in Annex 2. Further details will be defined in the
Grants Manual (GM) which will be finalized prior to effectiveness. The selected PFIs will enter into a legal
“Participation Agreement” with the MAGEL, which is a disbursement condition for this subcomponent.
(a) Window #1 (US$6 million): To address the limited access to finance in the agri-food sector in vulnerable
regions such as Diffa, Tahoua, and Tillabéri, the project will provide matching grants for working capital
and small investments in productive agricultural assets that have a demonstrated potential to improve
the incomes of, create jobs for or increase the resilience of beneficiaries. The following could be eligible
under this window: producer groups, youth and women groups, and SMEs already operating or interested
in farming and activities resulting in value-addition for agri-food products. These groups would have to
show (i) that they have received support for productive partnerships under the productive partnership
program or have other pre-identified off-takers or markets; and (ii) that they currently have no access to
financial services from financial institutions. Grants under this window will range from US$500 to
US$3,000. Seventy percent of the grants (in number) will be allocated to women and young people (under
35 years old). Grants will cover up to 80 percent of the costs of the subproject presented by eligible
beneficiaries, while the beneficiaries will have to provide a minimum of 20 percent in cash or in-kind.
Women- and youth-led SMEs and groups will be required to provide only 10 percent cash or in-kind
contributions and will receive grants covering up to 90 percent of the costs of the eligible investment. All
beneficiaries will be required to open accounts in a financial institution (microfinance, bank, or mobile
account). PFIs in charge of grants under this window will receive management fees to ensure the quality
of their services; and
(b) Window #2 (US$22 million): To address the limited access to finance for producer groups and SMEs in the
regions of Diffa, Tahoua, Tillabéri, Niamey, Zinder, and Agadez, the project’s CSF program will provide
matching grants backed by loans from PFIs for investment in subprojects in the agri-food sector. Under
this window, the CSF program, in accordance with the FISAN principles, is a cost-sharing program between
beneficiaries, donors, and financial institutions. The project will provide grants for up to 40 percent of the
costs of each subproject, while the beneficiaries will have to prove that they have obtained loans from a
PFI for up to 50 percent of the subproject costs. The remaining 10 percent of the subproject funding will
be provided by the beneficiaries in the form of cash contributions. Eligible subprojects under this window
include working capital and investments, such as equipment, storage, small infrastructure for production,
post harvesting and processing activities, and any other activities related to the agri-food sector. Where
feasible, energy efficient equipment as well as climate-resilient and energy efficient design storage and
small infrastructure facilities will be supported. The CSF will be accessible to producer groups, processors
groups, and SMEs (including startups) who would have received support under the productive partnership
program, or who have a pre-identified off-taker. Grants under this window may range from US$4,000 to
US$100,000. In the specific case of women and youth, beneficiaries will receive grants up to 50 percent
of the subproject costs while they will have to prove that they have obtained loans from a PFI for up to 40
percent of the subproject costs. In-kind contributions would be accepted for women- or youth-led SMEs and women or youth groups for projects with total costs less than US$20,000.
50. Subcomponent 2.3: Providing support to financial institutions (US$11 million equivalent from IDA with
IFC participation of US$6 million). To address the high risks of lending to the agri-food sector, the project will put
in place a risk-sharing mechanism, and it will strengthen the capacity of financial intermediaries to catalyze the
supply of credit from financial intermediaries under the CSF scheme. The subcomponent, to be further detailed
in the Risk Sharing Facility Manual (RSFM), is divided into two parts and will benefit from the participation of the
IFC.
(a) Risk-Sharing Mechanism (US$6 million). A risk-sharing facility (RSF) will be put in place to incentivize
financial institutions (the same PFIs that are participating under subcomponent 2.2) to provide the 50
percent credit to producers, producer groups, and SMEs in the agri-food sector under Window #2 of the
CSF program. The RSF fund will be managed by two independent fund administrators.
i. An IDA allocation of US$3 million will be used as a "first loss" to enable the IFC to set up an RSF of up
to US$9 million. This RSF will function as a partial portfolio guarantee for PFIs (particularly commercial
banks) loans in the agricultural sector (i.e. 50 percent coverage of the credit risks borne by PFIs). The
IFC RSF will cover 50 percent of the principal of defaulted loans offered by the commercial banks
under Window 2 of the CSF scheme (described in subcomponent 2.2) and in accordance with a Risk
Sharing Facility Framework Agreement between IDA, IFC, the MAGEL, and in line with the RSFM;
ii. A local risk sharing facility (LRSF) to be managed by an independent firm (Fund Manager) and located
at the Société Sahélienne de Financement (SAHFI), the private local guarantee company will be
established by the project. The US$3 million IDA allocation will serve for the establishment and
operationalization of an RSF to improve access to finance from the public bank and MFIs that will not
be covered by IFC. The IDA contribution will serve for the capitalization of the Partial Credit Guarantee
(PCG) fund that could serve commercial banks and MFIs. The project will also support the costs of PCG
management along with technical assistance to SAHFI. The Fund Manager will be selected through an
international competitive bidding process (see details in Annex 2). This fund manager will work with
SAHFI pursuant to a legal agreement between the MAGEL, SAHFI, and the LRSF Manager (the “Local
Risk-Sharing Facility Establishment Agreement”) which is a disbursement condition for the LRSF. Part
of the IDA financing will serve to cover the costs of the LRSF manager and technical assistance related
to the risk sharing facility in accordance with the LRSF agreement; and
iii. As the two guarantee providers under the project, IFC and SAHFI, to the extent possible, will be aligned
in terms of processes, risk coverage, pricing and other requirements from the PFIs. Both guarantee
schemes will also follow the same operations manual (the RSFM). The selection of financial
institutions will follow World Bank Policy and Procedures for IPF operations and follow financial
stability and performance criteria. IFC will conduct additional due diligence to ensure that the selected
PFIs fit with IFC’s investment criteria.22 Financial Institutions (FIs) that do not qualify under IFC policies
due to structural aspects (public, or semi-public entities) but which qualify under World Bank Policy
and Procedures for IPF operations and meet financial stability and performance criteria, will be served
by SAHFI. PFIs will sign a Partial Credit Guarantee Agreement with either IFC or SAHFI.
(b) Technical assistance to PFIs and to FISAN23 to address the limited capacity of financial institutions for
agricultural credit. Technical assistance to FISAN will aim at strengthening their capacity to implement agriculture finance policies including the warehouse receipt financing strategy. The technical assistance
to the PFIs will include (i) the establishment of agricultural finance units within PFIs; (ii) support for the
establishment of a network of gender-sensitive agents in the project areas; (iii) capacity building for the
development of more suitable financial products, including financing of leasing and storage receipts,
mobile finance and other products; and (iv) improving risk capacities and the development of credit
assessment techniques based on financial and non-financial information provided by the database to be
created as part of the World Bank Smart Villages for Rural Growth and Digital Inclusion project
(P167543); 24 (v) farm credit risk management; (vi) support for the application of the principles of
environmental safeguarding; and (vii) support to better understand climate risks and the impacts of
climate change as well as design and implement adequate risk- reduction and risk- transfer mechanisms.
The costs of technical assistance for capacity building could be shared between the project and the PFIs.
Component 3: Project coordination (US$13 million equivalent from IDA)
51. The objective of this component is to support MAGEL in the implementation of the project. This
component would provide support to the National Coordination Unit (NCU) in MAGEL for all activities required to
manage IDA funds, procure IDA-funded goods, works and services, conduct project monitoring and evaluation
(M&E), including Iterative Beneficiary Monitoring (IBM), and comply with safeguard policies. It will also implement
a communication strategy, including communication campaigns that work closely with women associations and
traditional leaders. It will provide the necessary gender-inclusive training and equipment support to the MAGEL,
the Ministry of Environment and Sustainable Development, the Ministry of Commerce and Private Sector
Development, the Ministry of Planning, and the High Commissioners 3N initiative at central and regional level to
carry out gender-sensitive, technical monitoring of project implementation and M&E for the aspects that concern
them in the context of the project.
Component 4: Contingent Emergency Response (US$0 from IDA)
52. The CERC will be established and managed in accordance with the provisions of World Bank Policy and
Bank Directive on Investment Project Financing. The project’s CERC will be triggered only when the Government
has officially declared an emergency and a statement of the facts is provided justifying the request to activate the
use of emergency funding. If the World Bank agrees with the determination of the disaster and associated
response needs, this component allows the Government to request the World Bank to recategorize and reallocate
financing from other project components to cover emergency response and recovery costs.
C. Project Beneficiaries
53. Direct beneficiaries. The project is expected to benefit primarily an estimated 25,000 small and medium
crop, sedentary livestock, and fish farming households, and small and medium enterprises in target areas. Women
and youth are targeted beneficiaries, and the numbers reached will be monitored. Direct project beneficiaries
also include: (i) PFIs; (ii) agriculture and livestock producer and processor organizations and (iii) public agricultural
support services.
54. Indirect beneficiaries. Indirect beneficiaries include: (i) on the production, processing and marketing side:
other agriculture, livestock, and fish farmers not directly involved in project activities, but who will benefit
particularly from improved control of crop and animal diseases and higher quality crop and livestock inputs and
services; (ii) value chain stakeholders (buyers and processors) who will not directly benefit from financial support
from the project but would benefit from increased provision of financing for crop, livestock, poultry, and fish commodities and improved access to credit; (iii) on the consumption side, consumers in Niger who will benefit
from increased and better quality crop and animal products and nutritional benefits at the household level; (iv)
other indirect beneficiaries will be agriculture and livestock value chain service providers, including private
veterinarians and inputs providers (seeds, fertilizers, feed, and veterinary medicines); and (v) any beneficiaries of
reforms supported in the sector. |
