Document of The World Bank IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-36650, IDA-3665A, IDA-46800) ON A CREDIT

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-36650, IDA-3665A, IDA-46800) ON A CREDIT IN THE AMOUNT OF SDR MILLION (US$42.60 MILLION EQUIVALENT) TO THE REPUBLIC OF NICARAGUA FOR A LAND ADMINISTRATION PROJECT (PRODEP) Sustainable Development Department Central America Country Management Unit Latin America and Caribbean Region October 20, 2013 Report No: ICR2858

2 CURRENCY EQUIVALENTS (Exchange Rate Effective October 20, 2013) Currency Unit = Cordoba C = US$ 1 US$ 1.53 = SDR 1 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS ACR ATLMP CIP CONADETI CPS CTO CSJ DIRAC DNR EA EMP FAO GPS ICB IDA IFR INIFOM INETER INIDE IP IPP MAGFOR MARENA MCC M&E MHCP NDF PCU PDO PGR PNDH Alternative conflict resolution mechanisms Agricultural Technology and Land Management Project Comité Interinstitucional del Proyecto (Project Inter-Institutional Committee) Comisión Nacional para la Demarcación y Titulación (National Commission for Demarcation and Titling of Indigenous Territories) Country Partnership Strategy Comité Técnico Operativo (Project Operational Technical Committee) Corte Suprema de Justicia (Nicaraguan Supreme Justice Court) Dirección de Resolución Alternativa de Conflictos (Nicaraguan Directorate for Alternative Conflict Resolution under CSJ) Dirección Nacional de Registros (National Directorate of Registries) Environmental Assessment Environmental Management Plan Food and Agriculture Organization Global Positioning System International Competitive Bidding International Development Association Interim Financial Report Instituto Nicaraguense de Fomento Municipal (Nicaraguan Institute of Municipal Development) Instituto Nicaraguense de Estudios Territoriales (Nicaraguan Institute for Territorial Studies) Instituto Nacional de Información de Desarrollo (National Institute for Development Information) Intendencia de la Propiedad (Nicaraguan Property Intendancy under PGR) Indigenous Peoples Plan Ministerio Agropecuario y Forestal (Ministry of Agriculture and Forestry) Ministerio del Ambiente y Recursos Naturales (Nicaraguan Ministry of Environment and Natural Resources) US Millennium Challenge Corporation Monitoring and Evaluation Ministerio de Hacienda y Credito Público (Nicaraguan Ministry of Finance) Nordic Development Fund Project Coordination Unit Project Development Objective Procuraduria Generalde la República (Nicaragua Attorney General's Office) Plan Nacional de Desarrollo Humano (National Plan for Human

3 PPA PRODEP RPPIM SA SBD SDR SEPA SIAFI SIC SIGFA SIICAR SIIPRO SILEC SISCAT SIT SMEI Development) Project Preparation Advance Proyecto de Ordenamiento de la Propiedad (Land Administration Project) Registro Público de la Propiedad Inmueble y Mercantil (Public Registry of Real Estate and Commercial Property) Social Assessment Standard Bidding Documents Special Drawing Rights Sistema de Ejecución de Planes de Adquisiciones (Procurement Plan Execution System) Sistema Integrado de Administración y Finanzas (Integrated Administrative and Financial System) Sistema de Información Catastral (Cadastre Information System) Sistema Integrado de Gestión Financiera y Auditoria (Nicaraguan Integrated Financial Management and Auditing System) Sistema Integrado de Información de Catastro y Registro (Integrated Cadastre-Registry Information System) Sistema Integrado de Información de la Propiedad (Property Information System) Sistema de Información Legal y Catastral (Legal and Cadastral Information System) Sistema de Registro Catastral (Municipal Cadastre System) Sistema de Información Territorial (Territorial Information System) Sistema de Monitoreo y Evaluación de Impacto (Monitoring and Impact Evaluation System) Vice President: Hasan A. Tuluy Country Director: C. Felipe Jaramillo Sector Manager: Laurent Msellati Project Team Leader: Enrique Pantoja ICR Team Leader: Robin Rajack

4 NICARAGUA Land Administration Project 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 1. Project Context, Development Objectives and Design Key Factors Affecting Implementation and Outcomes Assessment of Outcomes Assessment of Risk to Development Outcome Assessment of Bank and Borrower Performance Lessons Learned Comments on Issues Raised by Borrower/Implementing Agencies/Partners Annex 1. Project Costs and Financing Annex 2. Outputs by Component Annex 3. Economic and Financial Analysis Annex 4. Bank Lending and Implementation Support/Supervision Processes Annex 5. Beneficiary Survey Results Annex 6. Stakeholder Workshop Report and Results Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders Annex 9. List of Supporting Documents Annex 10. Map IBRD

5 A. Basic Information Country: Nicaragua Project Name: Land Administration Project ID: P Credit Numbers: IDA-36650, IDA- 3665A, IDA ICR Date: 10/20/2013 ICR Type: Core ICR Lending Instrument: SIL Borrower: Republic of Nicaragua Original Total Commitment: XDR 26.20M Disbursed Amount: XDR 31.67M Revised Amount: XDR 31.68M Environmental Category: B Implementing Agencies: (a) At Appraisal: Ministerio de Hacienda y Crédito Público (MHCP) (b) After 2008 Project Restructuring: Procuraduría General de la República (PGR) Other External Partners: Nordic Development Fund (NDF) and Millennium Challenge Corporation (MCC) B. Key Dates Process Date Process Original Date Revised / Actual Date(s) Concept Review: 11/27/2000 Effectiveness: 02/25/ /25/2003 Appraisal: 04/16/2001 Restructuring(s): 01/26/ /27/ /10/2009 Approval: 06/18/2002 Mid-term Review: 03/20/2006 Closing: 12/31/ /30/2013 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Risk to Development Outcome: Bank Performance: Borrower Performance: Satisfactory Moderate Moderately Satisfactory Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Moderately Satisfactory Government: Satisfactory Quality of Implementing Satisfactory Satisfactory Supervision: Agency/Agencies: Overall Bank Performance: Moderately Satisfactory Overall Borrower Performance: Satisfactory

6 C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Performance (if any) Potential Problem Project at any time (Yes/No): Problem Project at any time (Yes/No): DO rating before Closing/Inactive status: Yes Yes Satisfactory Quality at Entry (QEA): Quality of Supervision (QSA): Rating None Moderately Satisfactory D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration General agriculture, fishing and forestry sector 3 2 Law and justice 2 3 Other social services Sub-national government administration Theme Code (as % of total Bank financing) Biodiversity Indigenous peoples Land administration and management Other rural development Personal and property rights E. Bank Staff Positions At ICR At Approval Vice President: Hasan A. Tuluy David de Ferranti Country Director: C. Felipe Jaramillo Donna Dowsett-Coirolo Sector Manager: Laurent Msellati John Redwood Project Team Leader: Enrique Pantoja Isabel Lavadenz Paccieri ICR Team Leader: ICR Primary Authors: Robin Rajack Robin Rajack André Carletto

7 F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) PRODEP was designed as a major pilot effort, with two PDOs: (a) to develop the legal, institutional, technical and participatory framework for the administration of property rights in the Republic of Nicaragua's territory; and (b) to demonstrate the feasibility of a systematic land rights regularization program. Revised Project Development Objectives (as approved by original approving authority) There were no changes to the original PDOs throughout the life of the Project. (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: 1. Key legal and procedural reforms have been approved, that permit to carry out massive national regularization program by the end of the project. Value Quantitative or 0% 100% 100% Qualitative) Date achieved 02/25/ /30/ /30/2010 Comments (Incl. % of achievement) Indicator 2: Fully achieved. Approval of Titling of Indigenous Peoples Lands Law; Cadastre Law; Public Registry Law; Policy for Protected Areas; and a General Land Policy Framework. The comprehensiveness of this reform package is rare and represents a major achievement. 2a. At least 30% reduction in the average number of days to regularize property rights through the Property Intendancy in the pilot area. Value Quantitative or Not Available 1 30% Not Available Qualitative) Date achieved 02/25/ /30/ /15/2013 Comments (Incl. % of achievement) Indicator 3: Partially achieved. Regularization timeframes vary with social and tenure conditions (1.5 to 8 years) making baseline and follow up measurements difficult to standardize. A total of 109,487 legal documents were issued which was a significant improvement. 2b. At least 40% of the territory under irregular land tenure status (i.e. reformed sector, national and state land) in the pilot area has legal certainty about tenure. Value Quantitative or 0% 40% 26% Qualitative) Date achieved 02/25/ /30/ /15/2013 Comments Partially achieved (65% of target). 32,667 properties were regularized in the pilot 1 This indicator had no baseline and due to the difficulty in accessing reliable and comparable information no baseline could be retrospectively set under the AF. As a proxy, an indicator was calculated based on the improvement of IP s capacity to issue legal documents.

8 (Incl. % of achievement) Indicator 4: area. As a proportion of eligible properties, this may be an underestimate because some private land may have been inadvertently included among eligible properties. 3. At least 70% of beneficiaries receiving new rural titles fall under the category of very small producer. Value Quantitative or Not Applicable 70% 85% Qualitative) Date achieved 01/01/ /30/ /15/2013 Comments (Incl. % of achievement) Indicator 5: Target surpassed (121% achieved). By July 2012, a total of 44,019 people in rural areas benefited from new titles of which 37,416 (85%) were in the target group At least 40% of new titles are provided directly to women and/or jointly with their spouse/partner. Value Quantitative or Not Applicable 40% 51% Qualitative) Date achieved 01/01/ /30/ /15/2013 Comments (Incl. % of achievement) Indicator 6: Target surpassed. Due to the way the data is recorded, the reported actual percentage reflects the number of women who are beneficiaries (37,525) as a proportion of all beneficiaries (73,947). 5a. At least 50% reduction in number of days required registering a transaction in SIICAR, in the pilot area. Value Quantitative or 0% 50% 50% Qualitative) Date achieved 02/25/ /30/ /15/2013 Comments (Incl. % of achievement) Indicator 7: Fully achieved. The success of the achievement is due mainly to: strengthening and capacity building of officials; implementation of working plans; the availability of resources; and the starting of SIICAR in Chinandega. 5b. Public Registries in the pilot area are financially sustainable. Value Quantitative or Not Available 100% 100% Qualitative) Date achieved 02/25/ /30/ /15/2013 Comments (Incl. % of achievement) Fully achieved. The NPV ( ) for the Public Registry in the Project s area was calculated as USD 7,755,040 indicating a favorable revenue/cost ratio. Indicator 8: 6. Land taxation rates updated in 33 municipalities in the pilot area through the use of cadastral survey information in SISCAT. Value Databases Quantitative or Qualitative) 0 33 transferred to 30 municipalities Date achieved 01/01/ /30/ /15/ The Ministry of Agriculture (MAGFOR) categorizes producers based on property size. A very small producer property range is manzana and small producer range is manzana. (1 manzana = 1.72 acres). Both these categories are the target group as defined at the time of revising the Results Framework at the AF.

9 Comments (Incl. % of achievement) Indicator 9: Partially achieved. Most municipalities received the databases in The indicator proved to be ambitious since the updating of land taxation rates depends on the political will of local authorities and technical capacity of the municipalities. 7. All protected areas under the Project are included in INETER s geographical database. Value Quantitative or Qualitative) Date achieved 02/25/ /30/ /15/2013 Comments (Incl. % of achievement) Indicator 10: Fully achieved. By July 2011, 14 protected areas (6 in Chinandega, 5 in Estelí, 2 in Madriz and 1 in León) were demarcated and geo-referenced, and integrated into INETER s database. 8. Indigenous Peoples rights are enforced in 15 territories and respected by government authorities, and the national regional and municipal levels. Value Quantitative or Qualitative) Date achieved 02/25/ /30/ /30/2010 Comments (Incl. % of achievement) Fully achieved. Titled land under traditional Territorial Councils, respected by all government levels - historical progress in the recognition of indigenous peoples land rights; increased capacity for participatory demarcation and conflict resolution. 3 (b) Intermediate Outcome Indicator(s) Indicator Indicator 1: Value Quantitative or Qualitative) Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Actual Value Achieved at Completion or Target Years Land policy framework prepared and consulted with key land administration actors. Land Policy Framework Land Policy framework Document Completed document did not exist endorsed and in use. Date achieved 02/25/ /30/ /30/2010 Comments Fully achieved. A National Land Policy Framework was prepared through a (Incl. % of participatory process and approved by Ministerial Decree. achievement) Indicator 2: Organizational Development Plans designed, approved, and implemented. Value Quantitative or No ODPs ODPs fully implemented Completed 3 The Government has continued this effort, and has titled a total of 21 indigenous territories to date.

10 Qualitative) Date achieved 02/25/ /30/ /15/2013 Fully Achieved. This activity supported institutional strengthening, training, Comments improvement of organizational structures, and streamlining of procedures of (Incl. % of Project-related organizations. Project administration also benefited from these achievement) activities. Indicator 3: UTOs established and maintaining close coordination in municipalities where surveying has been completed. Value Quantitative or Qualitative) UTOs did not exist before the project area UTOs operating in Project area Completed (4 UTOs operating in the project area) Date achieved 02/25/ /30/ /15/2013 Comments (Incl. % of achievement) Fully achieved. UTOs were established in Chinandega, Estelí, Madriz, and León. As part of the mainstreaming of project activities, UTOs responsibilities were later integrated into INETER and IP s regional offices. Indicator 4: INETER has opened departmental offices where lacking in the Project area. Value Quantitative or Qualitative) No Cadastre Offices (INETER) Offices operating Completed Offices operating in project area Date achieved 02/25/ /30/ /15/2013 Fully achieved. The project supported INETER s rehabilitation and Comments modernization of its offices, including upgrading of computer equipment. In (Incl. % of addition, 625 Project-related organizations personnel were trained to strengthen achievement) institutional capacity. Cadastral surveying database transferred to at least 33 municipalities in the pilot Indicator 5: area; and in 4 municipalities SIICAR and SISCAT share data as well as resources and technology for their management. Value Quantitative or Qualitative) Date achieved 01/01/ /30/ /15/2013 Comments (Incl. % of achievement) Indicator 6: Partially achieved. 30 municipalities have received the databases of cadastral information, SISCAT has been upgraded, and in Chinandega Department SIICAR and SISCAT platforms were integrated. Diagnostics to identify land tenure status on ejido and municipal lands have been carried out in at least 33 municipalities, to support titling processes. Value Quantitative or Qualitative) Date achieved 01/01/ /30/ /15/2013 Comments (Incl. % of achievement) Indicator 7: Value Quantitative or Qualitative) Partially achieved. INIFOM in partnership with municipalities provided IP a diagnosis on the land tenure status of ejido and municipal land for 22 cases. Although the target was 67% achieved, a successful and replicable methodology was developed. At least 52,282 rural and urban parcels regularized in the pilot area. 0 52,282 54,534

11 Date achieved 02/25/ /30/ /15/2013 Comments (Incl. % of achievement) Target surpassed (110% of target). Of the regularization outputs, 37% were rural titles, 23% were urban titles, 24% were solvencias, 14% were minutas, and 2% were certificado de cumplimiento. Indicator 8: At least 12,600 of regularized parcels in the pilot area receive new titles. Value Quantitative or 0 12,600 32,677 Qualitative) Date achieved 02/25/ /30/ /15/2013 Comments (Incl. % of achievement) Indicator 9: Value Quantitative or Qualitative) Target surpassed (259% achieved). All parcels regularized through the systematic process in the pilot area received new titles (62 % rural). This success was due to refinement of the methodology, better coordination and additional implementation period. At least 14,230 pending urban titles resolved. 0 14,230 15,525 Date achieved 02/25/ /30/ /15/2012 Comments (Incl. % of achievement) Target surpassed (109% Achieved). During this process, field activities outside of the systematic titling included: updating of the census; investigating the registry information; and compiling the necessary data for titling. Indicator 10: At least 15,554 rural titles provided. Value Quantitative or 0 15,554 13,488 Qualitative) Date achieved 02/25/ /30/ /15/2013 Comments (Incl. % of achievement) Indicator 11: Partially achieved. A total of 13,488 rural titles (87% of target) were provided outside of the systematic process. At least 10,565 agrarian reform titles reviewed. Value Quantitative or 0 10,565 32,905 Qualitative) Date achieved 02/25/ /30/ /15/2013 Comments (Incl. % of achievement) Indicator 12: Target surpassed (311% approved). 32,905 agrarian reform titles were reviewed and the cases solved by IP. 1,140 cases from cooperatives were also reviewed approved. The remainder of cases was rejected since they did not meet the legal requirements. At least 4,985 cases resolved by the Quantification Indemnification Office (OCI), along with the provision of compensation determination. Value Quantitative or 0 4,985 5,563 Qualitative) Date achieved 02/25/ /30/ /15/2013 Comments (Incl. % of achievement) Target surpassed (111% achieved). OCI was created to process the claims of landowners who lost part of their farms during the land reform. The OCI, in coordination with IP and the PGR, solved a total of 5,563 cases from different categories.

12 Indicator 13: At least 450 trained community mediators. Value Quantitative or Qualitative) Date achieved 02/25/ /30/ /15/2013 Comments (Incl. % of achievement) Target surpassed (133% achieved). Twenty training events were carried out in the Project area. 242 community members and 337 public officials were trained in mediation-related skills. Indicator 14: At least 2,225 detected boundary conflicts mediated. Value Quantitative or 0 2,225 1,622 Qualitative) Date achieved 02/25/ /30/ /15/2013 Comments (Incl. % of achievement) Indicator 15: Value Quantitative or Qualitative) Fully achieved.73% of the original target was reached, but this was because fewer disputes arose and were accepted for mediation than originally projected. Capacity for alternative conflict resolution through DIRAC was substantially strengthened. At least 14 protected areas under the Project demarcated Date achieved 02/25/ /30/ /15/2013 Comments (Incl. % of achievement) Fully achieved. As planned, delimitation and demarcation was completed for 14 protected areas following a participatory process, combined with an environmental awareness raising campaign. Indicator 16: At least 7 management plans prepared and implemented. Value Quantitative or Qualitative) Date achieved 02/25/ /30/ /15/2013 Comments (Incl. % of achievement) Indicator 17: Value Quantitative or Qualitative) Target surpassed (114% achieved). 8 Management Plans were developed and implemented by a participatory process in the areas that were demarcated. In addition, 30 activities for fire control and prevention were carried out and training given on this topic. At least 15 indigenous territories demarcated Date achieved 02/25/ /30/ /30/2010 Comments (Incl. % of achievement) Fully achieved. 15 indigenous territories, corresponding to over 20% of the national territory, were demarcated and titled in the Caribbean Region benefitting more than 120 indigenous communities. Indicator 18: At least 5 of titled territories have a productive subproject under implementation. Value Quantitative or Qualitative) Date achieved 02/25/ /30/ /30/2010 Comments Partially achieved. Subprojects were not directly linked to PDO, and delayed due

13 (Incl. % of achievement) Indicator 19: to difficulties in the demarcation and titling processes and to the remoteness of locations. This very small component of the Project was subsequently discontinued. SIICAR linking the legal and geographic information on each property is fully operational in 4 pilot departments. SIICAR is operational in Value Chinandega. Estelí Quantitative or % of progress; Qualitative) León and Madriz 6% of progress. Date achieved 02/25/ /30/ /15/2013 Comments (Incl. % of achievement) Indicator 20: Partially achieved. SIICAR is fully operational in Chinandega, and its implementation is advancing in other departments. Full system development faced initial technical difficulties that led to the GoN s decision to slow its expansion. At least 80% of regular properties included in SIICAR CAT are transferred to SIICAR REG. Value Quantitative or 0 80% 13% Qualitative) Date achieved 02/25/ /30/ /15/2013 Comments (Incl. % of achievement) Indicator 21: Partially achieved. A total of 10,718 properties were transferred in Chinandega (13% achieved) due to initial technical issues with SIICAR REG and difficulties with ensuring consistency between geographical and legal records. SIIPRO contains updated information of the regularization cases submitted to the IP central level. Value Quantitative or 100% 100% Qualitative) Date achieved 01/01/ /30/ /15/2013 Comments (Incl. % of achievement) Fully achieved. A total of 288,737 files were introduced in SIIPRO together with more than 240,000 images that are in the process of incorporation. The different modules of the system are either fully operational or more than 90% finished. G. Ratings of Project Performance in ISRs No. Date ISR Archived DO IP Actual Disbursements (USD millions) 1 06/28/2002 Satisfactory Satisfactory /23/2002 Satisfactory Satisfactory /16/2003 Satisfactory Satisfactory /16/2003 Satisfactory Satisfactory /18/2004 Satisfactory Satisfactory /09/2004 Satisfactory Satisfactory /22/2004 Satisfactory Satisfactory 6.37

14 8 12/03/2004 Satisfactory Satisfactory /29/2005 Satisfactory Moderately Unsatisfactory /23/2005 Moderately Unsatisfactory Moderately Unsatisfactory /14/2005 Moderately Satisfactory Moderately Satisfactory /27/2006 Moderately Satisfactory Moderately Satisfactory /28/2006 Moderately Satisfactory Moderately Satisfactory /07/2007 Moderately Satisfactory Moderately Unsatisfactory /27/2007 Moderately Satisfactory Moderately Unsatisfactory /03/2008 Moderately Satisfactory Moderately Unsatisfactory /01/2008 Moderately Satisfactory Moderately Satisfactory /13/2009 Moderately Satisfactory Moderately Satisfactory /03/2009 Satisfactory Satisfactory /24/2010 Satisfactory Satisfactory /01/2011 Satisfactory Satisfactory /15/2011 Satisfactory Satisfactory /05/2011 Satisfactory Satisfactory /25/2012 Satisfactory Satisfactory /10/2013 Satisfactory Satisfactory /17/2013 Satisfactory Satisfactory H. Restructuring (if any) Restructuring Date(s) Board Approved PDO Change ISR Ratings at Restructuring Amount Disbursed at DO IP Restructuring in USD millions 01/26/2007 MS MU /27/2008 MS MU /10/2009 S S Reason for Restructuring & Key Changes Made a) Extension of Closing Date to December 31, 2008; (b) revision of implementation arrangements; (c) reallocation of expenditure categories; (d) increase to 100 percent financing of eligible expenditures; (e) update to the new 2004 Bank's Procurement Guidelines; and (f) incorporation of new procurement methods To change the implementation arrangements, including transferring the Project from the MHCP to the Attorney General s Office (PGR) and restructuring the Project Inter-Institutional Committee (CIP). Extension of closing date to April 2010 to allow for the preparation of the AF.

15 I. Disbursement Profile

16 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal 1. Country and Sector Background. Securing property rights and modernizing land administration is central to Nicaragua s social and economic development. The country one of the poorest in Latin America experienced years of contradictory legal and administrative decisions affecting land, which contributed to land tenure insecurity and undermined the population s confidence in state institutions. At appraisal, poverty was overwhelmingly rural and the country was emerging from a post-conflict situation. It was estimated then that over one third of the rural land was held without a clear title. The share of land with no or improper documents was critically high among small and poor producers. Land conflicts due to overlapping claims were numerous. Long-term insecurity of tenure posed particular challenges to agricultural growth, natural resource preservation, and social fairness and cohesion. The land claims of indigenous peoples, some of the most disadvantaged and poorest rural groups, remained mostly unaddressed. There was also an urgent need to promote gender equity in land ownership because past agrarian reform programs and inheritance laws had favored males. 2. To address the above challenges, Nicaragua needed to develop a suitable land administration framework. This effort demanded legal and institutional changes, organizational capacity building and modernization of land records. The legal framework was inconsistent and limited, while the institutional framework needed leadership and consolidation; for example, an institutional assessment identified 25 institutions that over time dealt with land allocation and rights. The procedures for land regularization were cumbersome and centralized, and the land agencies lacked capacity to handle the volume of pending cases, let alone to engage in a systematic, nation-wide program. Cadastral and property registry information was outdated or missing in many places, while the existing cadastral and property registry records were not systematically linked. 3. Government Strategy. The Government of Nicaragua s (GoN) interim 1999 Poverty Reduction Strategy Paper (I-PRSP) placed strong emphasis on the development of rural areas because of their higher incidence of poverty and high growth potential. Moreover, the Strategy recognized the importance of small towns for the dynamism of the rural economy. In this context, the Strategy recognized the importance of strengthening land tenure security as a necessary element to complement other efforts such as investing in rural infrastructure, implementing demand-driven programs for small and medium-sized producers, and promoting advanced technologies. In order to address land tenure insecurity, the Strategy gave priority to legal and institutional reforms, to improving cadastre and property registry systems, and to the land regularization process. 4. The GoN had gained relevant experience through the Bank-financed Agricultural Technology and Land Management Project (ATLMP, P007780, effective ), which included, inter alia, a land titling component, a small cadastre pilot activity, and improvements in property registry. Aware of the magnitude of the challenge, and 1

17 consistent with the I-PRSP, the GoN requested Bank support for a pilot project to build the foundation for launching a long-term national program. Although the proposed scope was mainly rural, the Government also intended to benefit smaller urban and peri-urban settlements within the Project area. To make the effort more comprehensive, the GoN would also request financing from the Nordic Development Fund (NDF) Rationale for Bank Involvement. Reflecting Nicaragua s priorities, the Country Assistance Strategy (CAS) had rural development at the center of its poverty alleviation objectives. In this respect, the Land Administration Project (PRODEP) was expected to contribute to rural development by helping to remove some of the impediments to the functioning of land markets and to investments in and diversification of the rural economy. The Bank was in a unique position to support Nicaragua s efforts given its extensive experience in land policy reform and land administration. In particular, for more than 15 years, its global scope had permitted the Bank to develop a typology of effective models for cadastre and property registry systems as well as for land regularization. In Central America, the Bank was supporting pioneering land projects in Panama, El Salvador, Honduras and Guatemala, in addition to supporting a growing global portfolio of projects with land-related components. The Bank had also initiated its partnership for land reform with the GoN through the ATLMP. 6. Considering the objective of consolidating the pilot effort and IDA resource constraints, the GoN requested an Additional Financing (AF) Credit in This AF was consistent with the Country Partnership Strategy (CPS), which recognized the progress made by Nicaragua in land administration and the importance of continued Bank support in this area. The AF ensured continuity of the Bank-Government partnership while a new land operation was prepared. Currently, the Bank is the only agency supporting land efforts in the country through the Second Land Administration Project or PRODEP II (P121152, US$40 million) Original Project Development Objectives (PDO) and Key Indicators 7. PRODEP was designed as a major pilot effort, with two PDOs: (a) to develop the legal, institutional, technical and participatory framework for the administration of property rights in the Republic of Nicaragua s territory; and (b) to demonstrate the feasibility of a systematic land rights regularization program. 6 4 The Nordic Development Fund (NDF) provided a Credit of EUR5.5 million (implemented between 2003 and 2010) supporting institutional strengthening and urban cadastral surveying in four large urban areas within the Project area, namely, Chinandega, El Viejo, Estelí and Somoto. These activities complemented well the Bank-financed project. 5 PRODEP II was approved in March 2013 and is under implementation. Of the US$40 million IDA Credit, US$32 million were allocated for land administration components. 6 The ICR uses the PDOs stated in the original Development Credit Agreement (DCA), which were reconfirmed in the Additional Financing Paper and corresponding Financing Agreement. In the PAD (p. 3), the PDO is defined in a similar way as: to develop the legal, institutional, and technical framework for the administration of property rights, and to demonstrate the feasibility of a systematic land rights regularization program. Throughout the PAD, however, the PDO is stated in different ways. 2

18 8. According to the Project Appraisal Document (PAD), key indicators 7 were: Existence of a lively, broadly attended national debate on the country s land policy. Key legal and procedural reforms have been approved, that permit the carrying out of a massive regularization program. The Organization Development Plan has been implemented. Longer-term institutional reforms are underway. A less costly and more effective systematic approach is in place to regularize land rights and clear the backlog of titles and legal services provision. Procedural manual for the Systematic Legal Cadastre countrywide is finalized. Transaction time and cost at the Property Intendancy (IP), the Nicaraguan Institute for Territorial Studies (INETER), and the Public Registry of Real Estate and Commercial Property (RPPIM) have decreased by at least 30 percent. Indigenous Peoples land rights are enforced in the selected areas, providing them with greater access to land administration services and land tenure security. Rate of land degradation in the Project area decreases by 20 percent. Potential negative environmental effects from land regularization are less than the benefits in the project area. 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification 9. There were no changes to the original PDOs throughout the life of the Project. Since Project activities were scaled up, key indicators were clarified and adjusted under the AF building on a first revision of key indicators carried out after the 2006 Mid-Term Review (MTR). This review had made recommendations to clarify and simplify the results matrix, including key indicators since their list was considered to be too long and difficult to monitor. Among other things, certain indicators that measured results for which direct attribution from project activities was difficult to establish or required additional interventions beyond the Project scope were eliminated or replaced, including for instance, the indicator related to land degradation Revised key indicators, as described in Annex 7 of the AF Paper, were: Key legal and procedural reforms have been approved, that allow carrying out a Comprehensive National Regularization program; land administration system is strengthened by the end of the Project. 9 A less costly, more effective and systematic approach is in place to regularize land rights and clear the backlog of titles and legal services provision. 7 The original key indicators described in the main text of the PAD (see pages 3-4) are not always consistent with the key indicators described in the results matrix in Annex 1. Based on recommended practice, this ICR lists the key indicators described in Annex 1. 8 As corroborated by environmental assessments carried out for Project preparation, land deforestation corresponds to an indirect, induced effect related to peoples behavior influenced by wider social, economic and cultural factors. 9 As detailed in the datasheet, this indicator was measured through two sub-indicators: (i) reduction in time to regularize a property; and (ii) percentage of area with irregular status which is given legal certainty. 3

19 At least 70% of beneficiaries receiving new rural titles fall under the category of very small producer (as defined by the Ministry of Agriculture and Forestry, MAGFOR). [New indicator under the AF] At least 40% of new titles are provided directly to women and /or jointly with their spouse/partner. [New indicator under the AF] Transaction time and costs at the IP, Property Intendancy, INETER and the RPPIM have decreased. 10 Land taxation rates updated in 33 municipalities in the pilot area through the use of cadastral survey information in the Municipal Cadastre System (SISCAT). [New indicator under the AF] All protected areas under the Project are included in INETER s geographical database. Indigenous Peoples land rights are enforced in 15 territories and are respected by government authorities at the national, regional, and municipal levels, providing them with greater access to land administration services and land tenure security. 1.4 Main Beneficiaries 11. The Project s primary target group was poor rural households with insecure land tenure, mainly in the reform sector. 11 These beneficiaries live in municipalities of the target departments of Estelí, Madriz, Chinandega, and under the AF, León. 12 The Project also included beneficiaries in the urban areas of smaller cities in these departments, as well as in peri-urban areas of municipalities such as León, Managua, Rivas and Granada, given that many of these areas were considered important for the overall regional economy. Reflecting its additional focus on indigenous territories, the Project also included the Caribbean region, which is the poorest area in the country and the one with most of the indigenous population. Seeking to complete the cadastre in some key municipalities, and consistent with the urban focus of NDF-financed cadastral activities, additional urban and peri-urban areas were considered under the AF. 12. Overall, the Project's direct beneficiaries included: (a) rural and urban households in participating municipalities who would benefit from systematic cadastral surveying, titling, and regularization services, as well as individuals who would benefit from demand-based regularization; (b) women in participating municipalities, who would benefit from titling and regularization services by promoting issuance of titles jointly to couples and to female-headed households; (c) indigenous communities living in the territories of the Caribbean Region that would benefit from demarcation and titling, and potentially other communities living in some of the participating municipalities in the Pacific and Central regions; (d) authorities and technical staff of participating municipalities, who would benefit from technical assistance, cadastral information, and improved coordination with land administration agencies; and (e) land administration 10 As detailed in the datasheet, this indicator was measured through two sub-indicators: (i) reduction in time to register a transaction; and (ii) financial sustainability of property registries in the Project area. 11 The reform sector corresponds to Agrarian Reform beneficiaries from the 1980s and the 1990s (PAD p.6). 12 These departments were selected on the basis of criteria such as levels of poverty, tenure insecurity and land conflicts. 4

20 agencies, which would benefit from an improved governance structure and capacity development. More generally, the Project would benefit the country s population through the development of the legal and institutional framework for property rights, mainstreaming of methodologies and increased capacity for cadastre and regularization. 1.5 Original Components (as approved) 13. The Project had six original components: A. Policy and Legal Reforms (US$0.57 million or 1.5 percent of total project cost). This component aimed to strengthen the country s land policy and legal frameworks through, inter alia, the development of a national land policy framework, and the development of key laws related to indigenous peoples land rights in the Caribbean region, the modernization of cadastre and property registry systems, and to the enabling of their technological integration. B. Institutional Strengthening and Decentralization (US$13.77 million or 35.6 percent of total project cost). This component would help improve national institutional capacity through activities such as: (i) establishing the National Directorate of Land and Agrarian Reform; (ii) implementing a new organizational model for cadastre and regularization; (iii) increasing efficiency in land administration services; and (iv) promoting coordination between land sector institutions. C. Titling and regularization services (US$16.61 million or 43 percent of total project cost) to develop and implement a land regularization methodology that would serve as a foundation for a long-term, comprehensive program. This component would also support processing of land claims and conflict resolution. D. Demarcation and Consolidation of Protected Areas (US$2.40 million or 6.2 percent of total project cost) to physically demarcate selected protected areas, formulate management plans in a participatory manner, and implement a social and environmental communication program in and around these areas. E. Demarcation of Indigenous Peoples Lands (US$2.61 million or 6.8 percent of total project cost). This component would support the strengthening of indigenous peoples land rights in the Caribbean region through demarcation and titling of selected indigenous territories, including within the Bosawas Reserve, and the development of a limited number of territorial management plans. F. Information Systems (US$2.70 million or 7.0 percent of total project costs) to develop an efficient technological framework (i) to help modernize cadastre and registry services and land titling and regularization procedures (including through the piloting of an Integrated Cadastre-Registry Information System or SIICAR), and (ii) to ensure adequate Project management and monitoring and evaluation (M&E). 1.6 Revised Components 14. While the six components were maintained throughout Project implementation, the 2010 AF introduced changes to scale up activities in four of them. The original project components (A) and (E) did not receive additional resources under the AF since their activities had been satisfactorily completed under the original Credit. The changes are as follows: 5

21 A. Policy and Legal Reforms (US$0.57 million or 1.2 percent of total project cost). No changes. B. Institutional Strengthening and Decentralization (US$3.56 million under the AF, for a total of US$17.33 million or 35.6% of total project cost). The main changes under this component aimed to support: (i) the organizational development plan under the IP; (ii) the strengthening of the Project Coordination Unit (SE-PRODEP or PCU); and (c) the provision of technical assistance and equipment for land titling to periurban areas in the cities of Granada, Managua, León and Rivas. C. Titling and regularization services (US$5.29 million under the AF, for a total of US$21.90 or 45% of total project cost). Main modifications to this component included: (i) supporting field supervision and quality control and the social communication campaign; and (ii) broadening the support for demand-based land claims from marginal peri-urban settlers to urban and peri-urban ones. D. Demarcation and Consolidation of Protected Areas (US$0.25 million under the AF, for a total of US$2.65 or 5.4% of total project cost). The key adjustments to this component included the demarcation of two additional protected areas, and carrying out of a social and environmental communication campaign in communities located near these protected areas. E. Demarcation of Indigenous Lands (US$2.61 million or 5.3% of total project cost). No changes. F. Information Systems (US$0.90 million under the AF, for a total of US$3.60 or 7.4% of total project cost). This component was mainly adjusted by including a more detailed description of M&E activities, and by transferring the financing of project audits to sub-component B.3 (Support to Project Management). 1.7 Other significant changes Project Restructuring. Based on the 2006 MTR s findings and agreements, a first Project restructuring was approved in January 2007 that included: (a) an extension of the Closing Date to December 31, 2008; (b) a revision of the implementation arrangements that replaced the original Project Technical and Administrative Unit (UTAP) with an Executive Secretariat; (c) a reallocation of expenditure categories; (d) an increase to 100 percent financing of eligible expenditures; (e) an update to the then new 2004 Bank s Procurement Guidelines; and (f) an incorporation of new procurement methods. Due to a governmental transition, signing by GoN of the respective legal amendment would take place five months later Project Restructuring. In December 2007, seeking to strengthen leadership in the land sector and to improve project performance, the new government proposed to change the implementation arrangements, including transferring the Project from the Ministry of Finance and Public Credit (MHCP) to the Attorney General s Office (PGR) and restructuring the Project Inter-Institutional Committee (CIP). In parallel, the GoN implemented an action plan for institutional strengthening of the IP. The Project restructuring, which also included an extension of the Credit closing date to October 31, 2009, was approved by the Bank in February 2008 and countersigned by the GoN a month later. 6

22 Additional Financing. To scale up Project activities, an AF Credit of SDR 6.3 million (US$10 million equivalent) was approved on February 16, 2010, which increased the total financing amount to SDR 32.6 million (US$42.6 million equivalent). Since it had successfully completed its activities, MAGFOR was not included as a coexecuting agency under the AF and its responsibility for M&E was transferred to PGR. The closing date of the original Credit was extended to July Change in Project area under the Additional Financing. The AF included the original municipalities in Chinandega, Estelí and Madriz, as well as municipalities in an additional department, León. The inclusion of the new municipalities in León allowed for the completion of cadastral surveying for the whole department. 19. Extension of Closing Dates. The Project officially ended in April 2013 after four closing date extensions of the original Credit, and the expected implementation period of the AF. The closing date extensions of the original Credit included: (a) with the January 2007 restructuring from December 31, 2007 to December 31, 2008 to allow for additional time required to achieve PDOs and targets; (b) with the February 2008 restructuring, to October 31, 2009 to provide additional time for the completion of key activities; (c) with the approval of a six-month extension in May 2009 to April 30, 2010 to allow for the preparation of the AF; and (d) with the approval of the AF, to July 2010 to ensure continuity with the AF and the adequate closing of credit accounts. 20. Reallocation of funds across expenditure categories. The 2007 restructuring reallocated credit proceeds from categories that had savings in order to support the demarcation and titling of indigenous peoples lands, which required additional funding. 21. Funds cancellation. Funds were cancelled under the original Credit and AF due to Project efficiencies and savings related to fluctuations of the SDR exchange rate. Specifically, SDR 820, (US$1,241, equivalent) was canceled at the closing of the original Credit, and SDR 20, (US$ 13, equivalent) at the closing of the AF. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry 22. Soundness of Background Analysis. Project design was based on a thorough analysis, including a growing body of knowledge on land administration and regularization. Moreover, the ATLMP provided valuable insights, reinforced by lessons learned from projects financed by the Bank and other development partners. Project design also benefited from a Bank-funded comprehensive land tenure diagnostic study and from specific institutional, economic and gender analyses. These studies provided a solid basis to define the PDOs, components and activities, and to select the Project area. AF design took advantage of knowledge already generated by the Project and new operational and technical lessons. 7

23 23. Assessment of Project Design. Considering the many legal and institutional constraints and the challenging land tenure issues faced by Nicaragua, the Project was designed as a five-year pilot effort. This decision reflected the well founded conclusion that before a large, countrywide program could be undertaken, the country needed, in the long term, to develop its capacity, strengthen its land agencies, eliminate bureaucratic bottlenecks and legal uncertainties, and switch to a modern system and technologicallyadvanced process within a clearer and consolidated legal and institutional framework. It seems, however, that despite such an in-depth understanding of the country context and needs, the final design of PRODEP as a pilot project may have been somewhat ambitious. In particular, it was expected that several key laws would be prepared and passed during the first half of the Project implementation period. 24. Project design was strengthened by focusing on socially defined rights to land that are not always formally defined. This was applied not only through the focus on the land rights of indigenous communities but more broadly through: (a) the mainstreaming of alternative conflict resolution mechanisms; (b) assistance to agrarian reform sector beneficiaries in putting together evidence of their property claims; and (c) strengthening of the role of Regional Councils 13 and other key agencies such as the National Commission for Demarcation and Titling of Indigenous Territories (CONADETI). 25. At the design stage, the Project anticipated the need for an innovative M&E approach given the political and social sensitivity of land issues and the potential impact of proposed legal and institutional changes. However, details of the system and capacity building for its implementation were not sufficiently considered. Likewise, more attention should have been paid to baseline data generation. 26. Risk Assessment. Overall Project Risk was assessed as Moderate at appraisal. This rating, in retrospect, seems to have underestimated the challenges of the project related to its innovative nature and institutional weaknesses. Most of the identified risks materialized during Project implementation, while in several cases the proposed mitigation measures were not effective. One of these risks, rated as moderate the possibility of coordination problems between co-executing agencies under a decentralized implementation framework materialized early on. The proposed mitigation measure of establishing a high level Project Inter-Institutional Committee (CIP) proved ineffective initially, although a solution was identified once the CIP was restructured under new implementation arrangements. An additional, difficult to mitigate risk that especially affected capacity building was staff turnover in some co-executing agencies and municipalities caused by government changes after electoral cycles. 27. The risk that the approval of a key law such as the Public Registry Law would not be achieved before the MTR was also underestimated as Moderate, and no concrete mitigation measures were identified. This issue, which was critical for property registry 13 Regional Councils are elected bodies composed of representatives in the two autonomous regions in the Caribbean. 8

24 modernization, including the implementation of SIICAR, remained unresolved until the National Assembly finally approved the law in On the other hand, the high risk associated with the political sensitivity of recognition of indigenous peoples land rights was correctly flagged at appraisal as Substantial. Mitigation measures were sensible and comprised reliance on progress that could be achieved outside of the enactment of such law, such as conflict resolution and boundary demarcation. The additional social and reputational risks identified under the AF, related to unresolved tenure issues in municipalities with indigenous communities in the Pacific and Central regions, did not materialize thanks to GoN s commitment to recognizing indigenous peoples land rights and close supervision. 2.2 Implementation 29. Implementation was satisfactory for most of the Project s life, underpinned by strong Government commitment. Given the Project s innovative nature and the difficult challenges faced by Nicaragua, implementation had been conceived at appraisal as having two distinct phases. The first half of implementation would focus on preparation and field activities in one of the target departments, while the second half, following the MTR, would expand field activities to the rest of the Project area. In this context, the MTR was critical. As some of the issues mentioned below emerged, PRODEP became an actual problem project during 2005, when the second phase of project implementation was expected to start. After corroborating implementation improvements, the 2006 MTR concluded that the project could achieve its PDOs. PRODEP would again become a problem project in 2007, but after 2008 it remained in satisfactory status until the end of implementation. 30. Several factors helped implementation positively: 31. Continuous Government-Bank partnership and strong Government commitment. The Government and the Bank built a solid partnership on land administration modernization, which has ensured continuous technical and financial support and close collaboration. In parallel, throughout Project implementation the GoN demonstrated its commitment to PDO achievement. The early enactment of Law 445 (Law for Collective Land Rights of Indigenous Peoples) sent an important signal of the intention to recognize indigenous peoples land rights. And after 2007 in particular, a renewed commitment from GoN expedited project implementation. 32. Changes in implementation arrangements. The appointment of the PGR as Implementing Agency and the restructuring of the CIP fostered a closer inter-institutional collaboration, especially between the judicial branch (property registry) and the executive (cadastre, regularization), strengthened co-executing agencies institutional capacities and improved implementation. In addition, the IP was transferred from MHCP to PGR as a decentralized unit, which contributed to institutional consolidation. These changes, backed by strong government commitment, contributed to smooth project implementation. 9

25 33. Multi-agency support. The GoN expanded its efforts with support from other development partners such as the NDF and the US-Millennium Challenge Corporation (MCC). NDF provided a credit of EUR5.5 million to support institutional strengthening and urban cadastral and regularization activities outside the scope of the Project. In addition, MCC financed the successful piloting of a new methodology for cadastral surveying and regularization that would be applied under the AF and eventually scaled up under PRODEP II. Moreover, MCC transferred to PGR about US$2.6 million in equipment and vehicles that supported the implementation of this methodology at the time of the AF, and also funded the studies and assessments needed to prepare the AF. 34. Several factors some outside and some within the control of government and implementing agencies adversely affected the Project: 35. Electoral cycles. Project implementation spanned two national as well as regional and municipal elections, although the disruptions were not as severe as they could have been. Several factors contributed to project continuity after the 2007 national elections: (i) institutional and operational support of the Project s CIP; (ii) withdrawal of potential legal reforms that could have obstructed PDO achievement, such as Law 512 (creation of a new property institute); and (iii) maintenance of most of the core Project staff. Still, the Project did experience some delays on account of negotiations in the National Assembly as well as some disruption after municipal elections in November In particular, there were three Project Coordinators in 12 months in Complexity of indigenous peoples land titling. Progress on the recognition of indigenous peoples land rights was a concern for much of the Project life. Two years into the Project, institutional responsibilities for and communication with the Bank on the component were still not well defined although the pertinent law had been passed in Once implementation began, demarcation and titling processes advanced slowly because of inter-territorial conflicts, remoteness of the sites, and the need to ensure adequate consultations. An emblematic example is the Awas Tingni territory, which had been the subject of an Inter-American Human Rights Court ruling in favor of the Mayagna communities living in this territory. In addition, registration of the titles for the first five territories (located in Bosawas) experienced delays because the titles needed to be annulled and reissued to minimize the prospect of future legal challenges. Finally, unresolved tenure issues also posed challenges during the regularization process in municipalities with indigenous communities in the Pacific and Central Regions. Although the Government demonstrated its commitment and cadastral process advanced in some of these municipalities, the legal framework was not always conducive to dealing with issues of indigenous land rights in these regions. Careful Bank supervision of social issues supported Government efforts in addressing the concerns of communities and helped to facilitate their participation. 37. Delays in regularization and titling of individual properties. The Cadastre Law s approval was expected at appraisal by November 2003, but it took place only in Additionally, weak institutional and contract management capacity at the beginning of Project implementation, and the slow learning curve of country conditions by some of the 10

26 firms, resulted in problems with large international contracts related to cadastral surveying. Achievement of targets accelerated thanks to a demand-based titling strategy with strong municipal focus, improved contract management and technical capacity, better performance of co-executing agencies, and the adoption of a new cadastral survey methodology. Together with the additional implementation period, these improvements helped increase the number of titled properties to more than two and a half times the original target. 38. Delays in registration of individual properties. As regularization and issuing of new tittles accelerated, and the volume of new titles increased due to GoN s broader efforts, the RPPIM faced capacity constraints for registration. The RPPIM has proactively dealt with this issue, and implemented an Action Plan under the Project since This plan, which included the recruitment of additional personnel and training, has led to accelerated improvements in registration rates. For instance, between January and July 2013 RPPIM received 17,723 titles and registered 10,402, achieving a much improved rate of 58 percent. 39. Delays in developing and testing SIICAR and initial technical issues in its implementation. Development and implementation of SIICAR, which was to be carried out first in Chinandega, suffered delays due to contract management issues and the need to make system adjustments. Initial implementation, as in many cases where new technological platforms are developed in an evolving legal and procedural environment, presented new challenges that required stabilization before a decision was made on how and when to continue SIICAR s expansion to other areas. 40. Ensuring active participation of municipalities. Project design included working closely with municipalities to facilitate regularization and to ensure maintenance of cadastral information. Although initially their participation in the Project was marginal, municipalities have been effectively supported by the Nicaraguan Institute of Municipal Development (INIFOM) and gradually made key partners of IP and INETER. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization 41. M&E design. The original Project Results Matrix (detailed in Annex 1 of the PAD) had shortcomings, especially if assessed on the basis of current M&E practice. Some of the PDO outcome indicators were unrealistic, especially its expected time for achievement. Establishment of baselines, in particular, could have been costly and time consuming. Nonetheless, development of a practical methodology and baseline survey to measure some of the key potential economic, environmental, social, and gender impacts identified in the PAD should have been attempted at the time of the original design. 42. Building on the MTR revision to M&E design, the AF supported the implementation of the Monitoring and Impact Evaluation System (SMEI) including: (a) maintaining a specialized unit to ensure adequate attention to M&E; (b) carrying out of validation and consultation workshops with Project beneficiaries; (c) conducting relevant studies as agreed in the M&E Strategy included in the Operational Manual, such as 11

27 evaluation of the efficiency of the property registry and regularization services and a study for the updating of relevant baseline information; and (d) carrying out of the Project impact evaluation during the last year of implementation. 43. Implementation and Use. Appropriate data for PDO indicators were not always systematically collected, especially in the initial implementation phase. The Project s M&E Unit (SMEI) was transferred from MAGFOR to PGR in Thanks to the GoN s concerted effort and enhanced inter-institutional coordination, overall M&E improved under the AF, and monitoring reports were used more appropriately for project management. Specific technical missions with the support of the United Nations Food and Agriculture Organization (FAO) were conducted in April and June 2012 to support the GoN in the final project evaluation. For this evaluation, in addition to measurement of Project indicators, the GoN commissioned a household-level impact evaluation, cost effectiveness assessments of the RPPIM and IP operations, and an ex-post economic and financial analysis. Initial results of these studies supported the preparation of PRODEP II, and the final evaluation report provided valuable information for this ICR. 2.4 Safeguard and Fiduciary Compliance 44. Safeguard Compliance. The Project was classified as Category B, and triggered the following policies: Environmental Assessment (OP/BP 4.01), Natural Habitats (OP/BP 4.10), Indigenous Peoples (OP/BP 4.10), Involuntary Resettlement (OP/BP 4.12), 14 Forests (OP/BP 4.36), and Physical Cultural Resources (OP/BP 4.01) Environmental safeguards. Overall, environmental safeguard compliance is satisfactory. As corroborated during supervision missions and assessments carried out for the preparation of the 2010 AF and the 2013 PRODEP II, the Project did not have any major or irreversible negative environmental impacts. Moreover, no field evidence was found of any indirect environmental impacts such as increased deforestation because of land regularization. Positively, at the end of the Project, all major Protected Areas (PAs) in the target departments had been physically demarcated and certain areas of ecological importance identified, while awareness of environmental issues increased among people living within and around these areas. This, in turn, has allowed stakeholders, who are critical for conservation and development of PAs, to know these areas precise boundaries and to respect or implement better the rules and activities identified in the respective protected area s management plan. Targets for the preparation of management plans for the PAs and implementation of some of these plans were surpassed. Although monitoring of potential environmental impacts was not always even across project components, this does not seem to have resulted in any major safeguard issues. 14 This policy was triggered in relation to the demarcation of protected areas, which could potentially lead to restrictions of people s access to natural resources. The systematic cadastral and regularization activities fell under the exception set forth in footnote 8 of OP4.12, specifically the second part stating, the policy does not apply to disputes between private parties in land titling projects. 15 The same policies applied throughout Project implementation, but at the time of the original Credit s approval the following older versions of policies applied: Cultural Property (OPN 11.03) and Indigenous Peoples (OD 4.20). These policies were updated under the 2010 Additional Financing. 12

28 46. Social Safeguards. Social safeguard compliance is also considered generally satisfactory. Based on supervision missions, the assessments mentioned above, and an analysis of the consultation process within the framework of OP4.10 carried out by the Bank in 2012, it can be concluded that: (i) indigenous peoples were adequately consulted throughout project implementation; (ii) their broad support for relevant project activities was ensured; and (iii) relevant project activities considered indigenous peoples social organization and culture. As detailed in Section 3, remarkable progress was made in the recognition of indigenous peoples land rights in the Caribbean Region. In addition, the Project also benefited 20,250 indigenous peoples of two indigenous communities of the Pacific and Central Regions through cadastral surveying, despite several major challenges. These challenges included limitations in the legal framework, as well as historical factors influencing the socio-political situation of indigenous communities living in these regions. 16 At the end of the Project there were three indigenous communities in target municipalities in the Pacific and Central Regions where project activities could not be implemented. However, the GoN has demonstrated its commitment to respecting their land rights and has continued consultations with them. If an agreement is reached, cadastral and regularization activities for these communities would be financed under PRODEP II. 47. Field evidence corroborated that demarcation of protected areas did not result in restrictions to access to natural resources for persons living in the buffer zones or nearby the PAs. The Ministry of Environment and Natural Resources (MARENA) promoted comanagement of protected areas and the involvement of communities living within the PA s buffer zones in the preparation and implementation of management plans to ensure environmental sustainability and accessibility to people living in nearby areas. Safeguard compliance and overall social and environmental sustainability was facilitated by the implementation of a Communication Strategy, which was strengthened under the AF. 48. Fiduciary Compliance. No major fiduciary issues requiring Government or Bank attention emerged throughout Project implementation, as corroborated by audit reports and procurement post-reviews. 49. Financial Management. At Project closing the overall Financial Management was rated as Satisfactory due to stable Project management overtime based on adequate experience in financial management (including accounting records, interim financial reports or IFRs, and external audits). In addition, the PCU was proactive in addressing minor shortcomings in the supervision of external audits. 50. Procurement. Procurement performance at project closing was rated Satisfactory. The Procurement Unit at the PCU was assessed as having adequate capacity to comply 16 In contrast to the Caribbean region, the legal framework in the Pacific and Central regions is not as conducive to recognizing indigenous territorial rights. Moreover, indigenous peoples in these regions are more difficult to differentiate from other ethnic groups due to the disintegration of their cultural patterns and insertion within the Spanish culture and political institutions of the Nation/State structure. 13

29 with Bank s procurement standards and procedures. Overall, close supervision, adoption of the Electronic Procurement Management System (SEPA), and periodic fiduciary training for government and project staff generated good results. 2.5 Post-completion Operation/Next Phase 51. Within the framework of a 15-year National Land Program, a second operation (PRODEP II, US$$40 million) was approved in March The new project continues to support transparency and efficiency in the land administration sector, with similar components to PRODEP while expanding its activities to other municipalities. PRODEP II is supporting the further consolidation of the policy and institutional framework, and strengthening of key land agencies; advancing the integration of the cadastral and property registry information; land regularization; strengthening of indigenous peoples land rights; and demarcation of protected areas. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation 52. The Project Development Objectives (PDOs) remain highly relevant and are consistent with the 2008 National Plan for Human Development (NPHD) and the current World Bank s CPS (FY ). The 2008 NPHD identified land as a factor of economic, social and cultural cohesion, and described the regularization of land tenure, cadastre, land titling and territorial development as fundamental aspects in achieving enhancements in agricultural production and development in general. The CPS reiterates the importance of land issues for Nicaragua, and included a second land operation (PRODEP II), which is already under implementation. 53. Project design was consistent with the PDOs and remains relevant to ongoing and planned efforts to continue strengthening property rights. The Project was flexible, allowing for adjustments to reflect emerging good practices regarding institutional strengthening, implementation responsibilities and modalities, the engagement of local governments and communities, and different methodological approaches. The original focus on protecting the property rights of indigenous populations and on demarcating protected areas remains highly relevant and positively contributes to the positioning of the country in contemporary regional and global policy debates on these topics, including social accountability, disaster risk mitigation and climate change. 54. Project implementation supported the evolution of the legal and institutional framework for regularization and cadastre services, through the development and implementation of an extensive pilot program, and modernization of cadastre and property registry services including the development of SIICAR. Implementation of these activities remained highly relevant at project closing because of the growing significance of well-defined property rights for both households in terms of security of occupation and production and for municipalities faced with growing demands related to land use planning, service provision and property taxation. The changes introduced through the 14

30 2007 and 2008 restructurings maintained the relevance of implementation arrangements, which have been continued under PRODEP II. 3.2 Achievement of Project Development Objectives 55. As described below, the Project achieved its two PDOs: Develop the legal, institutional, technical and participatory framework for the administration of property rights (achieved) 56. With Project support, a more solid and clearer land administration framework has been established in Nicaragua. The country s policy and legal framework has been positively transformed, key land agencies capacity strengthened, and their services decentralized within pilot areas. Regarding the policy framework, PRODEP supported the preparation and implementation of a National Land Policy Framework and a Protected Area Land Policy. Moreover, as substantiated by a 2012 assessment, the key legal and procedural changes achieved under the Project have established the conditions to implement adequately a countrywide land regularization program. In particular, the 2005 Cadastre Law has facilitated the modernization of cadastral processes and information, and the 2009 Public Registry Law has furthered the modernization of the RPPIM and the systematic integration of cadastral and registry information. This law had a major institutional impact by finally bringing together under a national system all the 17 regional property registries of the country. Importantly, the law also mandated the establishment of the Special Commission of Property Registries 17 to set policy and national procedures and standards, and the National Directorate of Property Registries 18 for administrative and operational purposes. 57. The historical importance and social impact of the 2003 Law for Collective Land Rights of Indigenous Peoples cannot be overemphasized. Thanks to the approval and implementation of this law, supported by the Project, poor and marginalized indigenous communities in the Caribbean Region have received collective titles to 15 of their ancestral territories, comprising over 22,000 square kilometers or close to 19 percent of the national territory. Legal recognition, at the same time, strengthened the recognition by central, regional and local authorities of the traditional forms of governance of these territories. The experience and capacity created through the Project has provided the basis for the Government s continued effort to recognize the land rights of the rest of indigenous communities in the Caribbean Region Institutional consolidation is evident, inter alia, in the integration of the IP (the land regularization agency) under the PGR, and the clear mandate given to PGR to coordinate the land agenda in the country. Implementation of SIICAR has fostered a 17 Four Supreme Court judges, including the President of the Court, integrate the National Commission. 18 Previously, each property registrar applied procedures discretionally, and was managed directly by an individual Supreme Court judge. 19 Currently, the GoN has titled 21 indigenous territories in the Caribbean Region. With this effort, only one territory (currently being titled) and two complementary areas (included under PRODEP II) are pending. 15

31 closer partnership between the Supreme Court (CSJ) which is responsible for the property registries and executive branch agencies in charge of the national cadastre (INETER) and regularization (IP). Institutional capacity, at the same time, was improved with the satisfactory implementation of organizational development plans and the preparation of manuals and guides. Technical capacity has also improved, reaching a point at the time of the AF where it was possible for the relevant agencies to implement directly the activities that at the beginning of the Project had to be contracted out to international firms. This capacity has been gradually institutionalized as close to 700 people that have worked and gained experience under the Project and other externally financed initiatives have been made staff of the key land agencies. 59. Decentralization of services has advanced, and INETER and IP currently have regional offices within the Project area. Furthermore, municipalities now have a clearer role in the land administration framework. The SISCAT was upgraded and is being linked to INETER s database in selected places, and local capacity for land administration improved, although not evenly across all local governments. Central land agencies partnered effectively with local governments to improve the results of regularization efforts. Challenges remain regarding the effective incorporation of municipalities into the national cadastre system, but a select number of municipalities have received the information generated by the Project and are using the information to improve tax revenues, territorial planning, and to advance in the integration of the graphic information in SISCAT. 60. The above results have improved the efficiency of the land agencies. As corroborated by an independent assessment, for instance, on average, the time taken to conduct a land transaction within the pilot areas has been cut by more than half. Correspondingly, the number of trips to conduct a transaction has also been reduced, with time and monetary savings for users of the land administration system. SIICAR is now fully operational in Chinandega, and after some delays, its implementation is advancing in other target departments. As SIICAR is further consolidated, efficiency results and confidence in the system are likely to improve. Demonstrate the feasibility of a systematic land rights regularization program (achieved) 61. The systematic land rights regularization methodology developed and tested under the Project has provided the country with the foundation to launch a long-term national program. The GoN has already outlined its vision for and is implementing a 15- year National Land Program with an overarching goal of continuing to promote land governance while advancing cadastral and regularization processes and improving land administration services. The Project s regularization methodology has incorporated current technologies and global good practices, and by responding to Nicaragua s needs and challenges, it has simultaneously increased national capacity and institutional ownership of project results. This methodology has been mainstreamed by land agencies and has already been scaled up in other areas of the country beyond the pilot departments, and is being applied under PRODEP II. 16

32 62. Implementation of this methodology has benefited over 61,690 rural and urban, mostly poor households with titles to their land. Importantly, 85 percent of rural beneficiaries receiving new titles are categorized as small and very small producers and approximately 60 percent of new titles were provided directly to women and/or jointly with their spouse/partner. In terms of physical targets, the methodology specifically resulted in 32,677 regularized properties, and 222,134 parcels were surveyed for a total area of km 2, which represent a 107 percent and 95 percent increase in the number of parcels and the area respectively. Total surveyed area corresponds to almost 20 percent of the country s land area. Targets were exceeded regarding demarcation of protected areas, with 14 areas demarcated and 10 Management Plans prepared under the Project (original targets were 11 and 7, respectively). Management of protected areas seems to have improved as a result. 63. The database and mapping migration to the National Cadastre Database (BND) under INETER was completed in 30 municipalities, allowing the update of the data collected in the area back in the seventies, which in turn strengthened municipal finance by expanding the potential Property Income Tax (IBI) taxable base and local land and development planning. Given improved efficiencies the Public Registry is financially sustainable. 64. Finally, the methodology also allowed improving capacity for alternative conflict resolution, which is critical as part of any land rights regularization program. DIRAC, also under the CSJ, stands out in the region regarding its methods and procedures for land conflict mediation. At Project closing the number of land conflicts mediated by DIRAC totaled 1,622. Over time, the process of alternative conflict mediation has proven to be a vital and effective tool contributing to a culture of peace and negotiation in the country. 3.3 Efficiency 65. An ex-post economic analysis was conducted to evaluate the economic efficiency of the Project through a cost-benefit analysis, using actual project outputs and costs. The analysis also compared the economic feasibility indicators (i.e. Net Present Value and Economic IRR) to those obtained at appraisal. 66. The analysis applied the same methodology and assumptions used for the ex-ante analysis with some minor exceptions that are explained in Annex 3. Costs included direct expenditures in the regularization process and development of technological platforms and administration/coordination expenses. The economic benefits accounted for in the analysis are the expected increases in property values derived from a sense of enhanced security of tenure owing to land regularization and titling. 67. At appraisal, the discounted net benefits of the Project were estimated at US$7.4 million with an Economic Internal Rate of Return (IRR) of 19 and 21 percent for the Original Credit and Additional Financing (AF), respectively. At completion, the discounted net benefits were estimated at US$17.4 million, and the Economic IRR at

33 percent (Table 1). It is evident that ex-post discounted net economic benefits are significantly higher, more than double, than those estimated at appraisal. The difference is largely explained by the higher than anticipated number of urban properties regularized and titled as a result of project activities. Table 1 PRODEP ex-ante and ex-post economic feasibility indicators Item Ex ante PRODEP I Ex ante PRODEP AF 20 Ex ante PRODEP I-AF Ex - post PRODEP I-AF Net Present Value (US$ Million) Gross Benefits Rural 8.7 Urban 25.4 Total 34.1 Costs Net Benefits Economic IRR 19% 21% 23.6% Benefit/Cost Ratio Justification of Overall Outcome Rating Rating: Satisfactory 68. As detailed above, the Project remains highly relevant, while its PDOs were achieved and most of its performance indicators were met or exceeded, which likely improved the economic situation of poor households. Building on Project results, the country has already launched a national land program. Although several targets were not fully achieved in the expected timeframe under the original Credit, results within the AF period were achieved six months before the expected three-year period. Targets that were not fully achieved were in most cases substantially achieved, and this shortfall was more than compensated by surpassed targets on indicators of equal or greater relative weight. The net economic benefits were significantly higher than those expected at appraisal. The legal and institutional framework is clearer and more consolidated, and SIICAR is fully operational even though its expansion was more limited than originally planned. For these reasons, the Project is rated as satisfactory. 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development 69. Poverty Impacts and Social Development. The Project was expected to increase access to secure land tenure for the rural poor, considered as a starting point for the accumulation of assets and opportunities for accessing credit markets. Moreover, Project design acknowledged that land titling on its own was not sufficient for poverty reduction, and that broader land tenure regularization would most likely lead to positive impacts on land-related investments, land values, and land use. The four departments within the Project intervention area were identified as the ones with higher indices of poverty and 20 For presentation purposes, gross and net benefits, and costs of AF ex-ante analysis have been discounted to year 0 of PRODEP with a 12 percent discount rate. 18

34 extreme poverty. According to M&E workshops held in 2012, Project beneficiaries (land title recipients) have experienced an increase in the value of their land assets, enhanced livelihoods, better access to credit, and regularized their water and electricity services. Significantly, having a title has allowed them to benefit from other Government programs that require legal documents confirming property ownership. Critically, the project has also contributed to social peace and cohesion. 70. Gender Aspects. The Project s Gender Strategy aimed to reduce the gender gap in access to land nationwide, and particularly in the four Project departments. Of the rural and urban beneficiaries with land titles, 51 percent are women. Apart from benefiting from land titles, 787 women participated in more than 100 workshops on environmental management in the Project s 14 protected areas. In the 15 indigenous territories, more than 50 percent of PRODEP beneficiaries were women. Moreover, in ten of the 33 municipalities within the Project area, the heads of SISCAT are women. (b) Institutional Change/Strengthening 71. As noted in Section 3.2, the Project has significantly strengthened the institutional framework for land administration and improved inter-institutional coordination. As evidenced by several Project indicators (Annex 2), the overall impacts of the institutional changes are already visible in the improved efficiency and increasing equity of the land administration services. Also, there is better collaboration between central and local government institutions. 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops 72. In 2012, a household socio-economic survey to evaluate the impacts of the regularization and titling activities was conducted. The survey methodology and results are detailed in Annex 5. In summary, Project beneficiaries were generally satisfied with the cadastral and regularization services. Additionally, investment in home construction and improvement was greater in the titled Project areas than in the control group, consistent with the theory of the positive effects of land tenure regularization. Project and non-project rural households were not found to differ substantially in their propensity to undertake commercial activities on their plots and such parity was also observed in perceived security of tenancy and access to credit, when non-project households were compared only with rural households who had experienced both cadastral surveying and titling. As expected, at the end of the Project, rural Project beneficiary households are more progressive in having women as property titleholders than non-project beneficiaries. 4. Assessment of Risk to Development Outcome Rating: Moderate 73. Risk to development outcome is rated as moderate considering that the GoN has a clear vision and is implementing a long-term land program. As part of this program, the GoN continues to invest, including through the Bank-financed PRODEP II, in the consolidation of the policy and institutional framework, and in the modernization and 19

35 integration of cadastral and property registry information. There are several factors contributing to the overall sustainability of project outcomes: (i) SIICAR is already operational with developed platforms, operational and technical manuals, and institutional support, and an upgraded version is being developed and expanded to additional departments beyond Chinandega; (ii) increased focus on the participation and future role of municipalities in the maintenance of the national cadastre system; (iii) increased national capacity for land administration including the hiring of close to 700 persons who had been trained and worked on the Project as consultants or technicians; and (iv) stronger inter-institutional coordination and collaboration. There are nevertheless several potential internal and external risks: 74. Internal risks. Potential internal risks include degradation, vulnerability, and underutilization of the cadastral information. Although it is unlikely that the information will become obsolete in the short term, cadastral information can be at risk of becoming outdated if it is not regularly maintained. In this respect, municipalities are the weakest link in the land administration system and technical capacity and interest in cadastre remains limited across several municipalities. Moreover, it is critical that the RPPIM offices receive adequate resources to sustain the impact of system modernization. Encouragingly, there is a strong emphasis going forward in capacity development and increased participation of municipalities in the establishment and maintenance of the cadastral information. 75. External risks. Information recorded in SIICAR could be at risk of becoming outdated if users fail to record new transactions in the RPPIM. In fact, a critical element for the sustainability of Project results is ensuring that a culture of registration takes hold, particularly in rural areas. Accessible registry offices, affordable registry transaction fees and reliable systems are key elements in building this culture. This risk is likely to be reduced when people further internalize the benefits of registering their transactions. PRODEP II includes information campaigns and will continue to make land administration services more accessible. 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Moderately Satisfactory 76. This rating is based on the close collaboration between the Bank and GoN during Project preparation, the relevance of the Project to both the GoN and the Bank, flexibility of Project design, and inclusion of innovative elements that enhanced Project impact in a context of institutional evolution. The Project design reflected a pioneering effort at the time and responded adequately to country needs. Being one of the first generation of land administration projects in the region, and embracing a comprehensive set of legal and institutional reforms requiring broad-based support from small producers, indigenous communities and stakeholders in the PA system, PRODEP represented a high-risk - high reward undertaking given the prevailing uncertainties at the time. 20

36 77. Despite the satisfactory sector analysis and project design, there were shortcomings in the risk assessment, the Project results framework and the M&E system. As noted earlier, some risks were underestimated and consequently the design lacked adequate mitigation measures when they materialized, affecting project implementation. The Project results framework had ambitious targets for PDO outcome indicators that needed to be reassessed. The M&E system lacked a proper methodology to measure PDO indicators and other impacts, which posed challenges for Project evaluation. In brief, the high relevance and satisfactory elements of design provided a relatively good framework, but the shortcomings had an effect on implementation. As a result, Bank performance in ensuring quality at entry is rated moderately satisfactory. (b) Quality of Supervision Rating: Satisfactory 78. The Quality Assurance Group (QAG) rated initial supervision as moderately satisfactory. The ICR rating recognizes that in general, supervision missions were timely, appropriately resourced, and solution-oriented. There was a MTR that resulted in effective decisions and agreements (through a major Project restructuring), and critical issues affecting implementation were adequately handled by, among other things, bringing in additional international expertise with Trust Fund resources and close collaboration with specialized agencies such as FAO. Social safeguards were well supervised particularly given the level of complexity and risks associated with indigenous peoples land rights. The successful Project restructurings attest to the timeliness and responsiveness of Bank supervision. As agreed, the Bank also helped to supervise the NDF-funded project, thus further promoting coordination. In addition the Bank supported the supervision of the MCC-financed land project through a fee-based service agreement. (c) Justification of Rating for Overall Bank Performance Rating: Moderately Satisfactory 79. While Bank performance in ensuring quality at entry is rated moderately satisfactory, quality of supervision is rated satisfactory. Thus, overall Bank performance is rated moderately satisfactory. 5.2 Borrower Performance (a) Government Performance Rating: Satisfactory 80. Government performance is rated satisfactory considering its sustained commitment to PDO achievement, including especially the concerted effort to consolidate the legal and institutional framework for land titling in the country while strengthening key agencies and local governments. Given the innovative nature of the Project, coordination issues were bound to arise. Nevertheless, the priority given to the Project by successive Governments that consistently provided an enabling environment for Project implementation facilitated resolution to critical constraints, and the 21

37 achievement of the necessary legal reforms. Although the Project at times experienced delays due to government changes after electoral cycles, adjustments made thereafter boosted implementation. (b) Implementing Agency or Agencies Performance Rating: Satisfactory 81. The overall satisfactory rating considers the different performance levels of the two agencies that were responsible for project implementation, namely, MHCP and PGR. The change from MHCP to PGR took place after a project restructuring to strengthen the leadership of the land sector and address implementation problems. The specific performances of each implementation agency are discussed below. 82. MHCP performance is rated as moderately satisfactory. After an initial good implementation pace, MHCP performance faced shortcomings, including: (a) inadequate attention to implementation issues that led to a general state of non-compliance with various commitments reflected in the Credit Development Agreement, and to delays of some key activities; and (b) weak leadership in promoting inter-institutional coordination. Additionally, MHCP did not commission an independent MTR evaluation as originally agreed. However, the Ministry carried out an action plan that improved implementation significantly during PGR performance is rated as highly satisfactory. The change of implementation agency, supported by the strong mandate given by GoN, brought leadership and a renewed commitment to Project implementation. As a result, inter-institutional coordination improved, outstanding contract management issues were resolved, and partnership with co-executing agencies was strengthened, gradually leading to better implementation capacity and achievement of key targets. Consequently, by the second half of 2008 PRODEP was out of problem project status. In addition, the efficiencies realized under the new implementation arrangements led to a successful completion of Project activities six months prior to the closing date. (c) Justification of Rating for Overall Borrower Performance Rating: Satisfactory 84. Government performance and outcome of PDO are rated in the satisfactory range, and the Implementing Agency performance is rated as satisfactory. Thus, overall Borrower performance is rated satisfactory. 6. Lessons Learned 85. The sustainability of outcomes of land administration interventions requires building broad social and political commitment, as well as maintaining and mainstreaming key competencies across electoral cycles. Taken together, the GoN s two-decade commitment to the land administration agenda, supported by the Bank through ATLMP, PRODEP and PRODEP II, stands out in Latin America, as well as 22

38 other regions of the world, including Africa. PRODEP alone spanned three national administrations, as well as municipal and regional elections. It maintained its focus on the original PDOs and geographic targets partly because the underlying justifications were sound and shared across the political spectrum and because the Project was flexible particularly in implementation responsibilities and modalities. In addition, a specific agency with strong leadership and a clear mandate for land policy and administration in the country was given overall implementation responsibility. A substantial number of consultants and technicians were formally incorporated in the land agencies, thereby enhancing the sustainability of the improved institutional capacity. 86. The complexity of recognizing indigenous people s land rights requires attention to historical and social particularities and intensive social supervision. In the case of Nicaragua a specific legal framework was developed for titling indigenous territories in the Caribbean Region. However, a different set of legal provisions is required for titling indigenous territories in the Pacific and Central regions. At the operational level, demarcation and titling processes also need to be tailored to the specific conditions of the target community. Under the Project, intensive supervision of the social dimensions was carried out to address issues such as: unclear territorial boundaries, relationship among neighboring communities, and communication of Project objectives and methodologies. This included significant attention to representativeness, social accountability, conflict resolution, and legitimacy of consultation mechanisms, using existing traditional structures and organizations. 87. Improving a land administration system involves gradual changes in the legal and institutional frameworks. Laws that seek to reform this system set out to change societal behaviors and long established procedures and norms. Each individual law also has a set of corresponding regulations and institutional arrangements that take time to develop. In Nicaragua, the expectation that the full package of reform laws would have been passed at the beginning of the Project, proved to be unrealistic, and in fact spanned a period of six years with institutional capacity and associated information systems continuing to be developed after this period. Additionally, as in similar projects in Guatemala and Panama, there were time lags between the completion of cadastral surveying and eventual titling and registration. Future projects should consider longer terms for achieving land administration reforms as well as mechanisms to better monitor the evolution of the legal and institutional framework and its implications for PDO achievement. 88. A strong focus on municipalities is critical to the sustainability of investments on cadastre and registry modernization in Nicaragua. Given the entrenched and pervasive commitments to decentralization in much of Latin America, it is particularly important to integrate land administration within the long-term vision of municipalities and to make them active partners in the implementation of the national cadastral system. In Nicaragua, municipalities also represent a relatively accessible tier of government, which may enhance the chances of regular updating of information when transactions occur. The original Project design envisioned a limited role of the municipalities as users of the information, but as the Project evolved the need for them to perform an enhanced 23

39 role became clearer. Such a role is incorporated in PRODEP II and is being incentivized by stronger communication of the linkages between land information and municipal priorities, such as urban planning, revenue generation, and disaster risk mitigation. 89. Alternative conflict resolution (ACR) mechanisms can effectively facilitate cadastral and regularization processes. As demonstrated by PRODEP s experience, key elements of this process should include capacity development for conflict mediation, community outreach, and close inter-institutional coordination. The success of the cadastral surveying and regularization interventions of the Project are in part attributable to the responsiveness of the methodologies that relied upon ACR mechanisms in the field, which are well aligned with socially defined rights, as commonly encountered in regularization programs. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies 90. The GoN confirmed its agreement with the ICR conclusions and ratings. 21 It also noted that successful Project implementation has provided conditions for further progress in land administration and management in Nicaragua. In addition, GoN suggested to emphasize the following issues: (i) the need to strengthen Project M&E through systemgenerated reports and early warning notifications in order to support decision making; (ii) the additional impact from the demarcation of protected areas on local communities regarding tourism development, including employment generation; (iii) the positive impact generated by the direct implementation of cadastral surveying by national agencies; and (iv) the high levels of satisfaction reported by beneficiaries with respect to the cadastral, titling and registry services provided by the Government under the Project. (b) Other partners and stakeholders 91. Nordic Development Fund. According to NDF, the Project was able to achieve most of its objectives despite several delays related to the management and implementation of multiple contracts, as well as inter-institutional coordination. It was difficult for NDF to assess the cost-efficiency of the Project given that many of the activities broke new ground and thereby were not directly comparable with similar efforts. However, NDF considered that the Project contributed to the establishment of more efficient land registration and administration processes in Nicaragua. The fact that municipal revenue from property taxation has increased, and that an increasing number of land conflicts is being resolved, indicated a higher efficiency in the new system. The institutional strengthening and the technical assistance provided by the Project allowed the Nicaraguan institutions to be more involved and gain more ownership of the process. The Project results are significant, and the development and piloting of SIICAR will create a lasting impact. 21 Official letter from GoN dated October 7, 2013, in Project files. 24

40 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 Policy and Land Reforms % B Institutional Strengthening and Decentralization % C Titling and Regularization Services % D Demarcation and Consolidation of Protected Areas % E - Demarcation of Indigenous Lands % F - Information Systems % Total Baseline Cost % Physical Contingencies % Price Contingencies % Total Project Costs % Project Preparation Fund % Total Financing % TOTAL % Project Cost (by Original Appraisal and Additional Financing Appraisal) Appraisal Actual / Latest Estimate (USD millions) (USD millions) Components Under Original Credit Under Additional Financing Under Original Credit Under Additional Financing A Policy and Land Reforms B Institutional Strengthening and Decentralization C Titling and Regularization Services D Demarcation and Consolidation of Protected Areas E - Demarcation of Indigenous Lands F - Information Systems Total Financing

41 (b) Financing Source of Funds Type of Cofinancing Appraisal Estimate (USD millions) Actual/Latest Estimate (USD millions) Percentage of Appraisal Government of Nicaragua Counterpart % Local communities Counterpart % International Development Association (IDA) Credit % 26

42 Annex 2. Outputs by Component With Project support, a more solid and clearer land administration framework has been established in Nicaragua. The country s policy and legal framework has been positively transformed, key land agencies capacity strengthened, and their services decentralized within pilot areas. Regarding the policy framework, PRODEP supported the preparation and implementation of a National Land Policy Framework and a Protected Area Land Policy. Moreover, as substantiated by a 2012 assessment, the key legal and procedural changes achieved under the Project have established the conditions to implement adequately a countrywide land regularization program. In particular, the 2005 Cadastre Law has facilitated the modernization of cadastral processes and information, and the 2009 Public Registry Law has furthered the modernization of the RPPIM and the systematic integration of cadastral and registry information. This law had a major institutional impact by finally bringing together under a national system all the 17 regional property registries of the country. Importantly, the law also mandated the establishment of the Special Commission of Property Registries to set policy and national procedures and standards, and at the administrative and operational level, a National Directorate of Property Registries. The historical importance and social impact of the 2003 Law for Collective Land Rights of Indigenous Peoples cannot be overemphasized. Thanks to the approval and implementation of this law, supported by the Project, poor and marginalized indigenous communities in the Caribbean Region have received collective titles to 15 of their ancestral territories, comprising over 22,000 square kilometers or close to 19 percent of the national territory. Legal recognition, at the same time, strengthened the recognition by central, regional and local authorities of the traditional forms of governance of these territories. The experience and capacity created through the project has provided the basis for the Government s continued effort to recognize the land rights of the rest of indigenous communities in the Caribbean Region. The systematic land rights regularization methodology developed and tested under the Project has provided the country with the foundation to launch a long-term national program. In fact, the Government has already outlined its vision for the next 15 years, with an overarching goal of continuing to promote land governance while advancing cadastral and regularization processes and improving land administration services. The Project s regularization methodology has incorporated current technologies and global good practices, and by responding to Nicaragua s needs and challenges, it has simultaneously increased national capacity and institutional ownership of project results. This methodology has been mainstreamed by land agencies and has already been applied in areas of the country beyond the pilot departments. The results of the implementation of the different components of the project are reflected in the project development objective indicators showed in Table 1 below. 27

43 Table 1 - Project Development Objective Indicators Indicator Name Baseline Actual End Target Key legal and procedural reforms have been approved, that allow carrying out a Comprehensive National Regularization Program; No Indigenous Land Titling Law; Registry Law did not allow SIICAR; legal The Project supported the approval of: Law for Titling of Indigenous Peoples Lands (2002); 100% Land Administration Systems strengthen by the end of the Project. difficulties for regularization. Cadastre Law (2004); and Public Registry Law (2009) At least 30% reduction in the average number of days to regularize property rights through No baseline initially 25% 30% the Property Intendancy in the pilot area. At least 40% of the territory under irregular land tenure status (i.e. reformed sector, national and state land) in the pilot area has legal certainty about tenure 0% 35% 40% At least 70% of beneficiaries receiving new rural titles fall under the category of very small producer. At least 40% of new titles are provided directly to women and/or jointly with their spouse/partner. At least 50% reduction in number of days required registering a transaction in SIICAR, in the pilot area. Public Registries in the pilot area are financially sustainable. Land taxation rates updated in 33 municipalities in the pilot area through the use of cadastral survey information in SISCAT. All protected areas under the Project are included in INETER s geographical database. Indigenous Peoples rights are enforced in 15 territories and respected by government authorities, and the national regional and municipal levels. AF New Indicator Base = 0 AF New Indicator Base = 0 85% 70% 51% 40% 90 days 50% 50% AF New Indicator Base = 0 Component A. Policy and Land Reforms 100% 100% This component aimed to support the strengthening of the policy and legal frameworks for land administration in the country. Under this component, key legal and procedural reforms were approved that permit the carrying out of a national regularization program. Relevant outputs include: (i) the policy and legal framework for land administration has been strengthened through the preparation of a National Land Policy Framework; (ii) the Law for Collective Land Rights of Indigenous Peoples in the Caribbean (2003) allowed 28

44 the demarcation, titling and registry of 15 indigenous territories in RAAN and RAAS, achieving 100% of the project target; and (iii) the creation, approval and implementation of the National Land Policy Framework (Marco General de Política de Tierras), Cadastre Law (2005), Protected Areas Policy, and the Public Registry Law (2009). Approval of the latter law formalizes major administrative and technological changes that will facilitate modernization of property registration, including the implementation of SIICAR. In general this component had a satisfactory implementation and was not included in the additional financing since its proposed activities were completed under the original Credit. Despite the satisfactory achievement of the objective, the approval of some of the policies was delayed mainly as a result of necessary negotiations in the National Assembly. Component B. Institutional Strengthening and Decentralization This component aimed to improve institutional capacity for (a) ensuring adequate Project implementation; (b) increasing efficiency in land administration services, including through a new organizational model and methodology for cadastral surveying and regularization; and (c) promoting coordination between key land sector institutions. This component included the following subcomponents: B.1 Decentralization and Strengthening for the Administration of Property Rights; B.2 Municipal Capacity Development; and B.3 Support to Project Management. - B.1 Decentralization and Strengthening for the Administration of Property Rights This subcomponent strengthened institutional capacities of the IP, INETER, Registry and DIRAC regarding actual legislation of land administration and the improvement of institutional coordination within the IP and cadastre and registry. Support was given to: the Property Intendancy (IP) for the provision of legal adjudication, titling and other regularization services at the central and departmental level; the Nicaragua Institute for Territorial Studies (INETER) for carrying out cadastral analysis and the issuing of documents required for regularization activities under the Project at the central and departmental levels; the Registry with the implementation of dissemination activities of the Registry Law and modernization of the departmental offices; and the Directorate for Alternative Conflict Resolution (DIRAC) for implementing alternative or extra-judicial methods for resolution of disputes that emerge during the cadastral surveying process. Support was also given to strengthen the capacity for Project implementation of the coexecuting agencies and Technical Operational Units (UTOs). The establishment of UTO in the departments of Chinandega, Estelí Madriz and León streamlined the implementation of the project by facilitating operational and institutional coordination at a local level. Table 2 shows the results of the indicators related with this component. Organizational development plans with new internal organization and processes, for each institution, were designed, approved and implemented, simplifying, in this way, land administration services and reducing transaction costs. 29

45 - B.2 Municipal Capacity Development Activities under this subcomponent included the provision of technical assistance, equipment and software to selected municipalities mainly to: (a) enable them to participate in Project activities; (b) train them in the use of SIICAR and help them integrate the municipal cadastre systems (SISCAT) with SIICAR; and (c) improve their capacity for cadastral and regularization activities. As a result, technical and financial assistance was given to 33 municipalities in four departments (Chinandega, Estelí, Madriz and León) to ensure their participation in the land regularization process. - B.3 Support to Project Management The PCU (SE-PRODEP) received Project management support in: (a) financial management, Project audits, and procurement; (b) overall coordination of co-executing agencies, including the Project Inter-Institutional Committee (CIP) and its Operational Technical Committee (CTO); (c) training on fiduciary, operational and safeguard aspects of the Project; and (d) oversight of the Monitoring and Evaluation (M&E), communication and gender strategies and the application of safeguards requirements of the Project. Table 2 - Indicators component B, Institutional strengthening and decentralization Indicator Name Baseline Actual End Target Organizational Development Plans designed, approved, and implemented. UTOs established and maintaining close coordination in municipalities where surveying has been completed. INETER has opened departmental offices where lacking in the Project area. Cadastral surveying database transferred to at least 33 municipalities in the pilot area; and in 4 municipalities SIICAR and SISCAT share data as well as resources and technology for their management. Diagnostics to identify land tenure status on ejido and municipal lands have been carried out in at least 33 municipalities, to support titling processes. Diagnostic established in UTOs did not exist before the Project No Cadastre Office (INETER) in Madriz. Target achieved under original Credit Four UTOs integrated into regional offices of relevant agencies under the AF (in Chinandega, Estelí and Madriz). INETER offices operating in Project area, including Madriz. 0 Cadastral surveying databases transferred to 30 municipalities (13 Chinandega, 6 Estelí, 6 Madriz and 5 in León; A total of 318,445 parcels in the databases). SISCAT is implemented in 33 municipalities (13 in Chinandega, 6 in Estelí, 9 in Madriz and 5 in León) 0 There are 22 diagnostics on land tenure status by INIFOM ODPs fully implemented UTOs operating in Project area Offices operating

46 Component C. Titling and Regularization Services This component focused on the consolidation of a methodology to clarify rights and to carry out a land regularization process that served as a foundation to develop a long-term, comprehensive Property Regularization Program. Accordingly, the component included the following sub-components: C.1 Systematic Regularization Services taking place in 4 pilot areas; C.2 Titling and Review of Titles of the Reformed Sector, and C.3. Conflict Mediation. - C.1 Systematic Regularization Services Sub component C1 supported a mass regularization process initially in some municipalities of Chinandega, Estelí and Madriz; the additional financing approved in 2010 expanded the Project area to include the department of León. Activities funded under this component included: technical and legal support for systematic regularization services in selected municipalities, preparation of cadastral databases, definition of urban boundaries, cadastral surveying, implementation of a social communication campaign, verification and validation of property rights, conflict resolution, public disclosure of results (exposiciones públicas), field supervision and quality control, and titling, regularization and registration of rural and urban parcels. Under this subcomponent a systematic land rights regularization program was developed tested, and consolidated in the pilot departments. Cadastral surveying was carried out by INETER and IP/PGR under the new organizational model developed and successfully validated in the municipality of Nagarote (León) with support from MCC and in direct collaboration with the Millennium Challenge Account-Nicaragua. By providing greater institutional ownership, control and coordination, and streamlining of technical processes, this experience helped to reduce processing times. Titling, for instance, now occurs almost simultaneously with the cadastral surveying process, as parcels with technical and legal conditions that allow for early titling are identified. Early demands for titling of properties in the selected municipalities that are not yet being surveyed also receive attention. In this way, the target of 12,000 regularized parcels to be titled under the Project was surpassed, achieving a result of 32,677 parcels titled in the pilot departments alone (Table 3). This value corresponds, at the same time, to the total of the parcels regularized in the same area. From this total, 20,197 were rural titles and 12,480 were urban. The total number of parcels surveyed was 222,134 in 10,503 km 2, which represents a 441 percent increase in the number of surveyed parcels before the project. The Project also produced 117 urban maps with a scale 1:1, C.2 Titling and Review of Titles of the Reformed Sector Under subcomponent C.2 the Project supported demand based titling of the reformed sector. As such, the Project supported titling requests of beneficiaries of Nicaragua s agrarian land reform; ex-combatants; and marginal urban and peri-urban settlers. This subcomponent also covered expropriation-based indemnification claims, including the provision of technical assistance to beneficiaries and agencies to simplify land-related procedures, legal services, topographic services, and registration of parcels. The Project 31

47 showed positive results especially in the number of pending urban titles and the agrarian titles reviewed. These activities surpassed the target values as shown in the Table 3. - C.3. Conflict Mediation This subcomponent supported alternative conflict resolution activities. A training program in mediation, negotiation, collaboration and co-management of conflicts was designed and implemented giving special attention to community leaders and field mediators. Twenty training events were developed in which a total of 598 persons were trained (242 mediators and 337 public officials from IP, Register, MAGFOR, INIFOM, PGR, MARENA, National Police and Judges). At the end of the project, from a total of 2667 cases, 1,622 boundary conflicts were subject to mediation. In spite of the success of the mediation process, there is still the need for judicial intervention in order to modify the measurements of parcels in the Registro Único de Propiedad. Table 3. Indicators component C, Titling and Regularization Services Indicator Name Baseline Actual End Target At least 52,282 rural and urban parcels regularized in the pilot area. 0 54,534 52,282 At least 12,600 of regularized 32,677 (20,197 rural and parcels in the pilot area receive 0 12,480 urban) new titles. 12,600 At least 14,230 pending urban titles resolved (out of the area of 0 15,525 14,230 mass regularization). At least 15,554 rural titles provided (out of the area of mass 0 13,488 15,554 regularization). At least 10,565 agrarian titles reviewed. 0 32,905 10,565 At least 4,985 cases resolved by OCI, along with the provision of 0 5,563 4,985 compensation resolutions. At least 2,225 detected boundary conflicts mediated. 0 1,622 2,225 Component D. Demarcation and Consolidation of Protected Areas This component aimed originally to physically demarcate and consolidate 11 selected protected areas in the Project area. Under the AF, demarcation of two other areas (Complejo Volcánico Telica-Rota and Tepesomoto Pataste) was included (one in Chinandega and one in León). The component also aimed at implementing an environmental communication program in and around the selected protected areas. Accordingly, the component includes 2 subcomponents: D.1 Demarcation of Protected Areas; and D.2 Social Communication and Environmental Education. The project also aimed at analyzing property problems in the 14 protected areas by revising the existing 32

48 PA policy. Ten major workshops in the pilot departments were carried out and at the end of this process a document Land Policy of the National Protected Areas System (Política de Tierras del Sistema Nacional de Áreas Protegidas) was approved by MARENA. - D.1 Demarcation of Protected Areas Activities in this subcomponent included: (a) preparatory work, obtaining preliminary information and consultation with beneficiaries; (b) field socio-economic and tenure data collection, and ecological assessments; (c) determination of the precise boundaries to be demarcated; and (d) physical demarcation, geo-referencing and registration in the Cadastre and Registry. Targets were exceeded regarding demarcation of protected areas; 12 PAs were demarcated, exceeding the original target of 11, additionally, certain areas of ecological importance were also identified. Demarcation in one of the original PAs, Tepesomoto Pataste, was postponed, but two other PAs, the Cañón de Somoto National Monument and the Memorial Park for Hurricane Mitch Victims, were demarcated in its place. Under the AF, two PAs more were demarcated. The Project also supported the preparation and implementation of 8 management plans (exceeding the original target of 7). Thirty activities for fire control and prevention were developed and training was given on this topic to local volunteers in the PAs. A monitoring and evaluation system for forest fires was also designed. Although the implementation of this subcomponent was successful, some delays occurred due to difficulties in stakeholder participation and in reaching agreements related to the management plans. Regarding the identification of ecologically important areas, the project supported scientific studies in the pilot departments. This activity produced 7 studies that were publicly distributed, leading to three areas being declared as Ecological Municipal Parks: (a) Cerro San Rafael, in San Juan de Cinco Pino; (b) Cerro San Ignacio, in San Pedro de Potrero Grande; and (c) Cerro La Chocolata, in Santo Tomás del Norte. - D.2 Social Communication and Environmental Education This subcomponent supported a social and environmental communication campaign in the protected areas and the surrounding areas, including the dissemination of information on each protected area, environmental laws and regulations, direct and indirect benefits of natural resources conservation activities, and recommended land management practices. The process included the participation of landowners, community members, government and non-governmental institutions that are present in the protected areas and buffer zones. Sixty environmental education events were developed to present information about the management plans of the protected areas, delimitation activities and environmental legislation. A total of 1,574 people (33 percent of whom were women) participated in these activities. Several documents with information about environmental resources, existing flora and fauna and the importance of their protection were distributed in local communities. Component E. Demarcation of Indigenous Lands 33

49 The goal of this component was to promote the strengthening of indigenous peoples land rights in the Caribbean region of the country through demarcation and titling of selected indigenous territories. Three key elements were supported: (i) a dialogue about indigenous land law, at national and regional level in order to reach an agreement for enactment of legislation to regulate the titling, demarcation and access to natural resources; (ii) participatory field demarcation and conflict resolution on the ground; and, (iii) implementation of the indigenous peoples strategy and the Indigenous Peoples Process Framework and support to territorial management and small sub-projects. At the end of the original Credit, the component s target was achieved. Specifically, 15 indigenous territories were demarcated and titled in the Caribbean, representing historical progress in the recognition of indigenous peoples land rights in Nicaragua and Latin America in general. This outcome has benefitted more than 120 indigenous communities. Since its activities had been successfully completed under the original Credit, no funds were allocated for this component under the AF. An studied done to understand the perception of the results on the local population showed that 71 percent of the total interviewed people in RAAN and RAAS thought that the legal framework is complete regarding the resolution of land conflicts and 47 percent stated that they felt secure about their land property. Three out of five productive subprojects were implemented by the end of the project. The development of subprojects was delayed due inter alia to difficulties in the demarcation and titling processes. Considering its marginal link to PDOs, it was agreed to discontinue this activity. Component F. Information Systems The purpose of this component was to develop an efficient technological framework (a) to help modernize cadastre and registry services and land titling and regularization procedures, and (b) to ensure adequate Project s financial management and monitoring and evaluation (M&E). Accordingly, there are five subcomponents under this component: F.1 Integrated Cadastre and Registry Information System (SIICAR); F.2 Integrated Property Information System (SIIPRO); F.3 Project Financial Management System (SIAFI); F.4 Monitoring and Impact Evaluation System (SMEI); and F.5 Participatory Evaluation. - F.1 Integrated Cadastre and Registry Information System (SIICAR) This subcomponent supported the implementation of SIICAR as well as the provision of training on the system to relevant staff of the different land agencies. More specifically, activities under this subcomponent helped to: (i) modernize, secure and computerize land related records; (ii) establish at the departmental level a unified information system which will record graphic and alphanumerical data; (iii) link cadastral data with property registry information; (iv) maintain updated registry and cadastral field information, and (v) grant easy access to land tenure information to public and private parties. At the end of the Project, SIICAR was completely established in Chinandega and was still in process for Estelí (12%), Madriz (6%) and León (6%) (Table 4). The development 34

50 of the activities under this subcomponent was delayed at the beginning of the Project due to reluctance of the staff to use technological tools and a lack of technical knowledge from the personnel who needed special training. Another barrier to the broader implementation of SIICAR was the discrepancy of the information as some properties had sizes and owners in the registry different from those recorded in the cadastre. Currently, the CSJ has established the Directorate of Registry Systems that oversees the implementation of maintenance contract of SIICAR and its technical support. - F.2 Integrated Property Information System (SIIPRO) This subcomponent supported the development and implementation of SIIPRO to help IP track the issuance of land titles, including, inter alia, the development of the relevant software and provision of training. SIIPRO was piloted under the original Credit, and the additional funding continued supporting its implementation in selected municipalities. At the end of the Project, the system was installed in the four pilot departments and three workshops had been conducted to give information about SIIPRO s use and maintenance. The System for Legal and Cadastral Information (SILEC) was also developed and linked to SIIPRO, thus allowing an efficient transfer of information between both systems. - F.3 Project Financial Management System (SIAFI) This subcomponent included the implementation of a system to monitor the Project financial and administrative management (SIAFI). SIAFI was managed by the PCU in order to provide automated registration and control of the Project s accounting records, procurement and planning, and timely preparation of FM reports required by the Bank. Computer equipment was acquired for the System s strengthening and technical support made available to ensure its adequate functioning. SIAFI was installed in León and Madriz contributing to the efficiency of the management of the financial resources. To date, the system is working normally. - F.4 Monitoring and Impact Evaluation System (SMEI) Support was given for the implementation of SMEI including: (a) maintaining a specialized unit to ensure adequate attention to M&E; (b) carrying out of validation and consultation workshops with Project beneficiaries; (c) conducting relevant studies as agreed in the M&E Strategy included in the Operational Manual, such as evaluation of the efficiency of the registry and regularization services, and a study for the updating of relevant baseline information; and (d) carrying out of the final Project impact evaluation during the last year of Project implementation. The SMEI kept track of 30 monitoring indicators that were used in the quarterly reports of Project progress. A technical group also designed a plan to follow up on Project activities. The group carried out monthly visits to the pilot departments in order to directly validate information with field Project personnel. An impact evaluation was done including the results of several thematic studies such as: benefits of titling, perception of cadastre and registry, the efficiency of co-executing agencies, and Project effects at the municipal levels. - F.5 Participatory Evaluation 35

51 The component supported activities to include Project beneficiaries and officials in the evaluation process of the project in order to assess the social and institutional learning process, the outreach of the project to the people, the fairness of the processes, the opportunities given to potential beneficiaries, the transparency of the activities, and the quality of administrative services. For this, consultation workshops, satisfaction surveys, and participative evaluation workshops were done with selected focal groups of project beneficiaries. Sixty-eight participative evaluation studies were completed covering topics such as legal policies and reforms, institutional decentralization and strengthening, land tenure regularization services, among others. SIICAR linking the legal and geographic information on each property is fully operational in 4 pilot departments. At least 80% of regular properties included in SIICAR CAT are Table 4. Indicators Component F. Information Systems Indicator Name Baseline Actual End Target SIICAR is operational in 0 Chinandega. Estelí 12% of progress, León and Madriz 4 have 6% of progress. transferred to SIICAR REG. SIIPRO contains updated information of the regularization cases submitted to the IP central level. 0% Measurement corrected. 10,990 (12.9%) properties transferred thus far. 80% 100% 100% 36

52 Annex 3. Economic and Financial Analysis Present Value of Flows Gross Benefits: US$34.1million Project Costs: US$16.3million Net Benefits: US$17.8 million Economic IRR 22 : 23.6% An ex-post economic analysis of the PRODEP 23 was conducted to evaluate the economic efficiency of the Project through a cost-benefit analysis, using actual project outputs and actual project costs. The analysis also compared the economic feasibility indicators (i.e. Net Present Value 24 and Economic IRR) to those obtained at appraisal. The analysis applied the same methodology and assumptions used for the ex-ante analysis with some minor exceptions that are explained in this Annex. Costs included direct expenditures in the regularization process and development of technological platforms and administration/coordination expenses. The economic benefits accounted for in the analysis are the expected increases in property values derived from a sense of enhanced security of tenure due to land regularization and titling. At appraisal, the discounted net benefits of PRODEP were estimated at US$ 7.4 million with an Economic IRR of 19 and 21 percent for PRODEP s initial phase and PRODEP s additional financing (AF), respectively. At completion, the discounted net benefits were estimated at US$17.4 million, and the Economic IRR at 23.6 percent. It is evident that expost discounted net economic benefits are significantly higher, more than double, than those estimated at appraisal. The difference is largely explained by the higher than anticipated number of urban properties regularized and titled as a result of project activities, particularly during the initial phase of PRODEP. Theoretical Considerations The theory underpinning PRODEP s economic analysis is based on the presumed linkage between enhanced security of tenure and property values. It is argued that security of tenure, (in this case reaching its highest level with the possession of a clear title of ownership), improves marketability of the property by increasing its desirability, as it reduces risks. It thus creates the condition for longer-term investment decisions that may directly increase land value, or are needed to generate an incremental revenue stream, that otherwise would not be achieved in a short term possession situation, or by an occupant with insecure tenure. It also allows for the real estate to serve as collateral for credit financing for revenue generating activities. According to economic theory, the 22 Internal Rate of Return. 23 Unless otherwise explicitly stated, for the purposes of this Annex, PRODEP refers to PROPEP s initial phase and its Additional Financing. 24 The discount rate used for the economic analysis, representing the international opportunity cost of capital was 12%. 37

53 value of a good is equal to the discounted stream of net benefits it generates during its lifetime. Accordingly, property with higher income generating capacity should, when all else is equal, be more valuable than less-productive land. In addition to the above, there are other benefits to land regularization that are real and relevant, but that often times, as it was the case for this analysis, are not easily measurable, or measurable at all, or expressible in monetary terms, and thus were not included in the analysis. These include potential environmental benefits such as: protection of biodiversity, or water sources; better management of natural resources; or social benefits, such as social stability resulting from reduced land-related conflicts; or improved food security and nutrition from increased production or income, resulting from an enhanced sense of tenure security and access to capital, etc. Methodological Approach to the Economic Cost/Benefit Analysis Estimating the magnitudes of the project s expected benefits is complex, as property values are influenced by a wide range of factors, such as location, access to public services, size, value of construction, use of the property, each of which interacts with tenure status. However when accounting for these factors through econometric/statistical methods, the effect of the change in tenure status after regularization can be isolated and used as an indicator of the economic benefit of land titling, and as a basis to undertake an economic feasibility analysis. The ex-post stream of benefits for the cost/benefit analysis was projected using the same parameters that quantified the expected increment of property value due to titling, estimated for the ex ante analysis at appraisal, coupled with the actual schedule of titles of urban property, and the size of rural area titled, as a result of the intervention. For the estimation of the parameters that isolate and quantify the effect of regularization and titling on property values, an Ordinary Least Squares regression was used to partialout the effects of other factors that can also explain property values. The basic model used for estimating these parameters for both PRODEP s initial phase and its AF were: Y = f (Xi) + b + e where: Y = Expected value per unit of rural land (manzanas 25 in this case), or unit of urban property b = Constant Xi= A set of explanatory variables, including one dichotomic variable for the presence (=1), or not (=0) of a registered title e = Error 25 Manzana is a common unit to measure rural land in Central America; 1 manzana is equivalent to hectares. 38

54 Different parameters were estimated for PRODEP s initial phase ( ) and for its AF ( ). The particular model specification with respect to the selection of explanatory variables for each phase was slightly different, taking into account the particularities of regional coverage, and the data sets used in each case. PRODEP s initial phase used data series form the Survey for the Rural Economy Dynamics Study 26, and the explanatory variables in the model captured whether the land had a registered title, if it was idle, or if it was used for housing or a related use, for annual crops, permanent crops, pastures, or forest. The AF used data from the MECOVI 27, and as explanatory variables for rural property, whether the property had a registered title, whether permanent crops were its main use, and whether its topography was abrupt/irregular or flat/relatively flat. In the case of urban property, in addition to whether or not the property had a registered title, the explanatory variables included whether the property had in-house running water, as a proxy for the provision of basic public services. Economic Benefits The estimation of PRODEP s ex-post benefits is based on the following: i) The stream of benefits derived from titling of rural property used the parameter of US $45/manzana estimated in PRODEP s first phase ex ante analysis, for the years corresponding to and areas covered during this phase; and the parameter of US$ 151/manzanas for the years and areas covered during the AF. The difference in the parameters estimated for the initial phase and those estimated for its AF could be explained by the difference the moment in time when they were estimated, and the different characteristics of the land in the Departments that where covered by each phase. As in the ex ante analysis, it was assumed that benefits would start to accrue three years after titling in constant increments over a 20-year period, and would be based on the rural area actually titled as a result of project activities. ii) The direct economic benefits calculated for titling urban property were based on the US$ 2,083/title parameter that was estimated during the ex-ante analysis of the AF. This parameter was applied to the construction of the stream of benefits for urban property for the whole implementation period of PRODEP. As the initial phase did not anticipate a significant emphasis on the regularization and titling of urban property, this parameter was not estimated ex-ante for this phase. However at the AF phase, the emphasis on urban regularization and titling was explicitly increased in the design of the project. The discounted gross benefits from the ex-ante analysis were estimated at US$ 22.8 million. The ex-post analysis using the actual number of titles generated during project implementation yielded discounted gross benefits of around US$ 34.1 million. As 26 Carter, M. and J.S. Chamorro, Estudio de las Dinámicas de la Economía Rural: Impacto de Proyectos de Titulación en Nicaragua. Preliminary Version, Living Standard Measurement Survey,

55 previously mentioned the difference is largely explained by the higher than anticipated regularization and titling of urban property as a result of project activities, particularly during PRODEP s initial phase. Costs The ex-ante analysis considered only the costs directly associated with land regularization and the functioning of the land administration information system, and the relative share of the project s administration/coordination costs related to those components. Thus, only the analogous costs were considered for the ex-post analysis. The ex-ante analysis yielded a Net Present Value (NPV) of costs of US$ million over the project s ten years, while the ex-post analysis yielded an NPV of costs of around US$16.3 million. Cost-Benefit Analysis The discounted stream of net benefits (i.e. discounted gross benefits minus discounted costs) yielded a NPV of around US$ 17.9 million. This represents the net return (i.e. after costs) of PRODEP s investment over its implementation period, in today s money. The Benefit/Cost ratio for PRODEP was estimated at This means that for each US$ 1.00 invested in land regularization/titling actions, the project generated US $2.09 of gross benefits, or US$ 1.09 of net benefits. Project economic efficiency was also measured by calculating the Economic IRR. The estimated Economic IRR of 23.6% could be explained as the maximum discount rate at which the actual investments would be economically viable. It would be only above this rate that PRODEP would cease to be considered a viable alternative. Table 1 below, compares the ex-post results of the cost-benefit analysis and the ex-ante analyses for PRODEP s initial phase and for the AF, separately and combined. Table 1 PRODEP ex-ante and ex-post economic feasibility indicators Item Ex ante PRODEP I Ex - ante Ex ante PRODEP AF 28 PRODEP I-AF Net Present Value (US$ Million) Ex - post PRODEP I-AF Gross Benefits Rural 8.7 Urban 25.4 Total 34.1 Costs Net Benefits Economic IRR 19% 21% 23.6% Benefit/Cost Ratio For presentation purposes, gross and net benefits, and costs of AF ex-ante analysis have been discounted to year 0 of PRODEP with a 12% discount rate. 40

56 In the ex-post analysis, as in the ex-ante analysis, direct benefits from land value increments, were assumed to accrue as a constant annuity over the course of twenty years. The benefits of titling were expected to start accruing three years after titling for rural property and immediately in the case of urban property. The discount rate used (12%) was the same for both phases under analysis. As seen in Table 1, the NPV for the Project s net benefits is around US$ 17.8 million, and the ERR is 23.6 percent. The aforementioned economic efficiency indicators suggest an economically sound investment. Even when taking into account 100 percent of PRODEP s costs (i.e. including those that were not accounted for, such as the ones related to demarcation and consolidation of protected areas, demarcation of indigenous territories, decentralization and institutional strengthening, policies and legal reforms), the investment would be economically feasible, with an Economic IRR of 13.5% and an NPV of net benefits of US$ 3.9 million. Discussion of Results The ex-post economic analysis shows that investments associated with land regularization and the functioning of the land administration system provided a reasonable economic return for Nicaraguan society as a whole. As seen on Table 2, the discounted net benefits were significantly higher than those estimated at appraisal. This is due to the higher than anticipated regularization and titling targets that were achieved, particularly with respect to urban property during the project s first phase, and lower than anticipated costs. Table 2 Comparison between ex-ante and ex-post benefits and costs PRODEP I + AF Total Ex ante Total Ex Post Change Benefits US$ Million US$ 34.1 Million +54% Project Costs US$ Million US$ 16.3 Million +12% Net Benefits US$ 7.54 Million US$ 17.8 Million +136% As previously mentioned, the analysis does not take into account all possible valueenhancing effects. For example, it may be reasonable to assume that surveying activities might lead to an increase in the marketability of lands and investment incentives in situations where the cadastre assisted in the resolution of conflicts and clarification of boundaries. The ex-post analysis did not attempt to account for these benefits due to the lack of data to estimate the price differentials between surveyed and non-surveyed properties. During the course of implementation there was no systematic monitoring of investments after property titling or of returns to investments. Therefore, assumptions of such as the lengthy lag in the internalization of benefits, and the size of land value increments after titling remained unchecked. 41

57 Conclusion The ex-post economic feasibility analysis suggests that the PRODEP was an efficient investment for the Nicaraguan society. Returns were higher than actual costs, and the difference between them was even higher than that anticipated at appraisal. It is important, however, to bear in mind that the analysis has its shortcomings: (i) the data needed to calculate the parameters that isolate and quantify the likely economic impact of enhance security of tenure through titling, was dropped from the latest MECOVI, and thus the parameters could not be updated; some assumptions, such as the lag for benefits to start accruing after titling, and the length of the deferment period of benefits to achieve their full impact on property values, remain unchecked; and (iii), as pointed out before, indirect potential benefits and perhaps costs were not taken into account due to a lack of readily available information that would permit their inclusion. 42

58 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Names Title Unit Lending Isabel Lavadenz Paccieri Sr Land Resources Specialist Jorge E. Uquillas Rodas Consultant Klaus Deininger Land Policy Advisor Isabelle Girardot-Berg Agricultural Economist Manuel Vargas Financial Management Officer Maria-Valeria Pena Lead Sociologist George Ledec Environmental Analyst Teresa Roncal Procurement Analyst and Budget Specialist Grenville Barnes Cadastre Expert Federic de Dinechin Technical Specialist Yves Crosnier Geodetic Engineer Tom Korczowski Institutional Development Consultant Jose Augusto VCarvalho Sr Counsel Marta E. Morales-Halberg Sr Counsel Mariangeles Sabella Country Counsel Eduardo Mostajo Legal Expert Christine Pendzich Conflict Resolution Specialist Dino Francescutti FAO-Economic Analysis George Aguilar Consultant Anna Corsi Land Administration Specialist Anna Bran Project Assistant Gisela Durand Cost Specialist Responsibility/ Specialty Supervision/ICR Alejandro Alcala Gerez Senior Counsel LEGES Fabiola Altimari Montiel Senior Counsel LEGLE Margarita Arguello Consultant LCSAR Michele Bruni Consultant ECSHD Richard J. Castillo Consultant LCSAR Karla Chaman Sr Communications Officer EXTCD Irani G. Escolano Sr. Procurement Specialist LCSPT Fernando Galeana Land Administration Specialist ECSEN Augusto Garcia Senior Operations Officer LCSAR 43

59 America Teresa Genta Fons Lead Counsel LEGLA Mary Lisbeth Gonzalez Senior Social Development Spec LCSSO Douglas J. Graham Senior Environmental Specialist AFTN2 Carolina J. Cuba Hammond Senior Program Assistant LCSDU Alvaro Larrea Senior Procurement Specialist LCSPT Francisco Rodriguez Senior Procurement Specialist LCSPT George Campos Ledec Lead Ecologist AFTN3 Walter Humberto Mallea Castillo Consultant Cadastral Surveying LCSAR Fabienne Mroczka Financial Management Specialist LCSFM Patricia E. Parera Consultant LCSSO Francisco J. Pichon Sr Natural Resources Mgmt. Spe AFTA1 Anemarie Guth Proite Procurement Specialist LCSPT Enrique Antonio Roman Financial Management Specialist LCSFM Juan Pablo Ruiz Consultant LCSAR Jose Rene Salomon Consultant LCSAR Jorge E. Uquillas Rodas Consultant OPCQC Morag N. Van Praag Senior Finance Officer CTRDM Ketty Morales Program Assistant LCSAR Gabriela Vaz Rodrigues Junior Professional Associate LCSDU Reina Altagracia Zavala Castillo Consultant LCSAR Frederic de Dinechin Representative / TTL LCCPA Diana Rodriguez Paredes Junior Professional Associate LCSAR Andre Carletto Consultant LCSAR Jelena Pantelic Sr. Planning and DRM Specialist AFTN2 Enrique Pantoja Sr. Land Administration Specialist / TTL LCSAR Robin Rajack Sr. Land Administration Specialist LCSAR Maria Manuela Faria Consultant LCSAR Marco Zambrano Environmental Safeguards LCSEN Fabrice Edouard Monitoring and Evaluation FAO Mario Castejon Economic and Financial Analysis FAO 44

60 (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle USD Thousands No. of staff weeks (including travel and consultant costs) Lending FY FY FY Total: Supervision/ICR FY FY FY FY FY FY FY FY FY FY FY FY Total: ,

61 Annex 5. Beneficiary Survey Results In 2012, a consultant firm was hired to carry out a household socio-economic survey to evaluate the impacts of the regularization and titling activities in rural and urban areas. This Annex summarizes the methodology and the most pertinent results of the Survey: Description of the Methodology of the Household Survey The survey covered 2,251 households who were either PRODEP I beneficiaries 29 or prospective PRODEP II beneficiaries. 30 It aimed at assessing the effects of the Project at the household level. In particular, it sought to gather information for analyzing whether cadastral, titling and regularization have contributed to improved economic and social assets of those who received such services. The questionnaire addresses issues related to financial services access, improvement in productive equipment acquisition and housing, and land conflict resolution, as well as the family s perception of secure tenure, change in their asset values and their satisfaction with the services delivered by the Project. In order to compare the PRODEP effects on households with diverse degrees of tenure security, the survey established three sample groups: Group A are the direct beneficiaries of PRODEP I, who were issued new titles; 31 Group B are the households whose tenure situation was only improved by cadastral surveying; and Group C are inhabitants of Nueva Segovia Department, which is included in PRODEP II but currently without project intervention. Further, the analysis also considered to a limited extent the database of 1,600 rural households from a 2003 Survey whose base questionnaire was used to design the new one. 32 The sampling was carried out in each group through a multistage and randomized methodology in which: group A is representative of the rural and urban households who have been participating in the regularization and new titles issuance program between 2004 and 2013; Group B is representative of households of selected intervention municipalities (in Chinandega, Estelí, Madriz and León Departments) where cadastral survey was carried out but who did not benefit from the regularization program; and group C is representative of rural households from selected municipalities in Nueva Segovia Department, with similar social and economic characteristics to the treatment groups. Within groups B and C, households have different tenure situations, ranging from no legal document at all to registered titles. 29 Only where cadastral survey was carried out: Chinandega, Estelí, Madriz and Leon departments. 30 Nueva Segovia Department, where there was no project cadastral intervention in the time of the survey. 31 Participation is not voluntary, but systematic according to the tenure situation evaluation carried out by INETER and the Property Institute. 32 For different reasons, it is not possible to use this baseline for a difference on difference evaluation, but especially because it contains a small group of household comparable to the treatment group of PRODEP I. 46

62 The field survey activities in the five departments (PRODEP I + PRODEP II) were carried out by a consultancy firm hired by the Government. However, the methodology and tools design, as well as pilot exercises in the field and database supervision were supported by FAO-TCIC experts through the cooperative agreement with the World Bank. Different levels of analysis of this household survey have been carried out with FAO- TCIC support. Firstly, it was possible to obtain a relatively reliable characterization of the direct beneficiaries of the titling program, in terms of their social and economic assets, and thereby their vulnerability. Secondly, an analysis of the tenure situation was also possible for group B and C, enabling the design of sub-sampling groups with similar characteristics for comparative analysis, as well as for PRODEP II baseline construction. Thirdly, a cross-analysis among some of these different sub-groups was undertaken in order to compare the situation of the beneficiaries and their assets against their control groups. Finally, information of the treatment groups will be compared with other survey data such as the 2003 baseline, the 2012 National Agricultural Census and the future results of the next Living Standards Measurement Survey. 33 Main Findings A summary of the number of valid cases and plots size statistics for each of the sample sub-groups is presented in Table 1. It shows that the median plot size in the Control Group (Group C) was comparable to the median rural plot size in intervention Group B (2166.6m 2 and 2400 m 2 respectively) but nearly twice as large as the median rural plot in intervention Group A ( m 2 ), although all groups had very substantial standard deviations. Urban plots in the intervention groups A and B were typically much smaller as expected, with medians of m 2 and m 2 respectively. Table 1: Statistics on the Size (in m 2 ) of Sub-Groups in the Survey Sample Group N Sum Mean Median Stand. Dev. Group A Urban , , Group A Rural ,740, , , , Group B Urban , , , Group B Rural ,719, , , , Group C (Control) ,158, , , , Total 2, ,314, , , Source: Study CINASE, Oct 2013 Note: Excludes 32 cases: 19 who did not report the size of the lot and 13 whose size is 40 manzanas or more. 33 The World Bank and FAO had the opportunity to revise the questionnaire and add some specific questions in order to improve its usefulness for this study and other economic and financial analysis. 47

63 Key findings of the survey as they relate to some of the broader objectives of the Project interventions are as follows: 1. Since 2000 (2 years before the start of the Project), the proportion of households who made significant home improvements in the titled intervention group (Group A) was more than that in the control group. For the control group, the proportion was 9.4%, whereas in treatment Group A, 17.1% of rural households and 19.2% of urban households made such improvements. This pattern is consistent with the theory of secure property rights creating an incentive for investment, however direct attribution to the Project would require more careful analysis of additional factors that may have influenced home construction and improvement behavior. 2. The incidence of titling in the name of women is significantly higher in the intervention Group A (55.9%) than in the control group (37.1%). When only rural households in the intervention groups are considered, the differences are still significant, though smaller. In particular women represent 45.3% of titled households in Group A and 43.4% in Group B. 3. Households in the control group, which are predominantly rural, had similar levels of perceived risks to their security of tenure (7.5%) as rural households in the intervention Group A (10.3%). Rural households in intervention Group B have higher levels of perceived risk (15.3%). In all three cases, the greatest perceived risk was of someone reclaiming all of the parcel s area. The elevated levels of perceived risk in Intervention Group B are not unprecedented and may be reflective of the initial apprehensions that arise when boundaries that for generations had been socially defined become subject to cadastral measurement and demarcation with titling still pending. 4. Households in the control group, which are predominantly rural, had similar levels of access to credit (greater than 93%) as rural households in the Intervention Group A, although those in the control group were more likely to have solicited credit. Among those soliciting credit, use of the parcel of land as collateral was less common in rural households of Group A (12.9%) and Group B (8.1%), than in the control group (31.9%). It is possible that this counterintuitive finding may be explained by differences in unmeasured factors affecting the need or eligibility for collateral-based credit and by differences in preferences for credit that does not involve risk of losing the land upon which the household produces. 5. Rural households in the Project intervention areas were similarly inclined to undertake commercial activities as those in the control group. The proportions of rural households engaged in such activities were 11.5%, 13.3% and 14.5 % in Groups A, B and C respectively % or more of households in the intervention groups expressed satisfaction with the results obtained in the cadastral survey in both urban and rural areas however a 48

64 similar proportion of households indicated that they have not made any payment for these services. In summary, PRODEP beneficiaries were overwhelmingly satisfied with cadastral surveying services that they received. Investment in home construction and improvement was greater in the titled Project areas than in the control group, consistent with the theory of the positive effects of land tenure regularization. Project and non-project rural households did not differ substantially in their propensity to undertake commercial activities on their plots and such parity was also observed in perceived security of tenancy and access to credit, when non-project households were compared only with rural households who had experienced both cadastral surveying and titling. However, counter-intuitively, use of the land as collateral was more common in the control group. As expected, at the end of the Project, rural Project beneficiary households are more progressive in having women as property title-holders than non-project beneficiaries. 49

65 N/A Annex 6. Stakeholder Workshop Report and Results 50

66 Annex 7. Summary of Borrower's ICR The preparation of the Final Evaluation Report of the Land Administration Project (PRODEP) was based on the documents and reports produced and information collected in participatory workshops carried out by the Project, in addition to primary information from cadastral databases and household surveys. This Annex presents a summary of the Government s Final Evaluation Report, which is available in full in Project files. To achieve its development objectives, the Project targeted 33 municipalities through a systematic regularization methodology, and demarcated and titled 15 indigenous territories in the Caribbean Region. The Project also strengthened land tenure rights of aproximately 30,000 rural households in the pilot area and an additional 10,000 rural households from the reform sector on a demand basis across the country. In addition, the Project contributed to the demarcation and strengthening of environmental management of 14 protected areas. Several changes were made to improve PRODEP s original design and adapt it operationally based on implementation experience. Nevertheless, Project objectives, components and activities remained the same. The Ministry of Finance and Public Credit (MHCP), originaly responsible for project implementation, was replaced by the Attorney General s Office (PGR) in 2008, and the Inter-Institutional Coordination Committee (CIP) was restructured. Implementation of PRODEP is considered satisfactory given the results achieved, especially those related to the legal framework, institutional development, regularization services, recognition of indigenous peoples land rights, and demarcation of protected areas. Most of the indicators ere substaintially achieved, and some of them were surpassed. Nevertheless, the roll out of information systems was not fully achieved. Based on PRODEP s results, an efficiency analysis was carried out that considered the Project as highly satisfactory. At appraisal, the discounted net benefits of the Project were estimated at US$ 7.4 million with an Economic Internal Rate of Return (IRR) of 19 and 21 percent for the Original Credit and Additional Financing (AF), respectively. At completion, the discounted net benefits were estimated at US$17.4 million, and the Economic IRR at 23.6 percent. It is evident that ex-post discounted net economic benefits are significantly higher, more than double, than those estimated at appraisal. The difference is largely explained by the higher than anticipated number of urban properties regularized and titled as a result of project activities. The implementation of a gender strategy across components promoted equitable access for women and men to PRODEP s services and benefits, with 51 percent of beneficiaries with property titles being women. The Government of Nicaragua, as borrower and beneficiary, has been represented by all the public agencies involved. Although it acknowledges that there were delays in project implementation at times, the GoN also recognizes the efforts from these agencies to 51

67 address issues in a timely manner in order to reestablish a good pace of implementation. The Project represented a major shift in land policy and land administration in the country, contributing directly to poverty reduction and strengthening of land tenure. In conclusion, PRODEP was conceptualized as a regularization pilot project with strategies and methodologies subject to validation through implementation and results, which would be the basis for a future National Land Administration Program. During implementation, adjustments were made to cope with political, legal and institutional challenges. At closing, the Project has achieved substantial physical and financial execution in most of its components, and with sustainable achievements in infrastructure, technical capacity, and social capital among beneficiaries, co-executing agencies, and other stakeholders. 52

68 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders NDF Credit No. 404 Land Administration Project, Nicaragua Lead Agency: World Bank Borrower: Republic of Nicaragua Implementing Agency: Ministry of Finance and Public Credit (MHCP); and General Attorney s Office (PGR) NDF Board Approval: December 17, 2002 Date Credit Agreement: October 31, 2003 Original Credit amount: EUR 5.5 million Disbursed amount: EUR 4.6 million Original Closing Date: June 30, 2006 Actual Closing Date: March 31, 2011 No. of contracts: 12 Achievements The purpose of the land administration project was to develop a national policy, legal, institutional and technical framework to support the administration of property rights, and to demonstrate the feasibility of a systematic land rights regularization program that is efficient, reliable and equitable. The NDF supported the following activities: (a) Institutional Strengthening; (b) Decentralization of Land Administration Services; (c) Regularization services in four urban areas; (d) Integration of Registry and Cadstre Information; and (e) Support to the PCU of PRODEP. The Project provided continuity to the land reform process in Nicaragua and the establishment of new land administration framework. The Project was able to achieve its objectives despite delays due to contract management shortcomings that were addressed in a timely manner. The Ministry of Finance and Public Credit (MHCP) was originally the implementing agency of the Project. However, it was replaced in 2008 by the PGR, which improved the pace of implementation. In addition, several govermental agencies were involved in implementation, including CSJ, DIRAC, INIFOM, INETER, IP, and MARENA. NDF financed two major contracts: 1) Contract signed with BlomInfo on 18 May 2006 to undertake a survey and titling of approximately 47,000 land parcels in urban areas; and 2) Contract signed with SwedeSurvey on 24 April 2009 to undertake the implementation of the Integrated Information System Land Registry (SIICAR). An additional 10 smaller contracts were financed by NDF. Efficiency: The assessment of cost-efficiency poses a challenge since many of the activities broke new ground and could not be compared directly with activities in other projects financed by NDF. However, the Project did contribute to the establishment of a much more efficient land registration and overall land administration in Nicaragua. The fact that 53

69 municipal revenue from property tax has increased and the increasing number of conflicts related to land tenure are being resolved indicate a higher efficiency in the new system. The institutional strengthening and the technical assistance provided by the Project allowed the Nicaraguan institutions to be more involved and have ownership of the process. The land administration sector in Nicaragua used to be highly inefficient and marked by a high level of conflicts that the authorities were unable to resolve. As a lesson learned for the NDF, its administrative burden would have been lower if the NDF-project had focused in fewer components instead of being spread thin across all components. This in turn, resulted in having to finance a large number of small contracts. Relevance: The Project s Development Objectives (PDOs) were to develop a national policy, legal, institutional and technical framework to support the administration of property rights, and to demonstrate the feasibility of a systematic land rights regularization programme that is efficient, reliable and equitable. PDOs remain relevant and have to some extent been achieved. National land legislation has been approved, and the introduction of the SIICAR system has demonstrated its applicability within the Nicaraguan context. The new legislation recognized the collective ownership to land which is a key issue for the indigenous peoples and ethnic groups which make up about 8-10 percemt of the Nicaraguan population. Conflicts related to indigenous territories continue but in recent years CONADETI has been able to issue 21 titles on indigenous territories out of a total of 22 collective territorial claims. Impact: Project impact is significant according to the indicators achieved. NDF support led to legalization and titling of 58,446 land parcels in urban areas of Chinandega, El Viejo, Esteli and Madriz, with a total area of km2. The project was also able to resolve 129 land conflicts in urban areas. At the national level, the Project was able to register and title 214,990 land parcels in addition to the existing 54,876 land titles, this was an increase of 292 percent compared to the base line. The development and piloting of SIICAR will create a lasting impact. SIICAR was developed in Bolivia in the 1990s and adapted to Nicaraguan municipalities through the NDF financed technical assistance contract with SwedeSurvey. Land registration authorities (municipal and national level) have been able to procure with NDF support significant quantities of the hardware, software and equipment that has been used by the Project and continues to be in use in the country. Sustainability: The project has helped set up and strengthen a number of land registration offices in urban areas. The titling and land registration surveys have provided municipalities and central government with improved instruments for expanding their tax base. In the case of Chinandega, where NDF financed the land registry system, these instruments led to a 32 percent increase in property taxes to the municipality. There is a high level of ownership 54

70 to the project through the participation and involvement of key State institutions. The project has focused on testing and setting up SIICAR which is now working in some municipalities thanks to the World Bank/NDF support. The plan is to replicate SIICAR in other areas during PRODEP II. In conclusion, it is noted that most of the results produced by NDF support have good sustainability prospects since they address fundamental building blocks such as systems development and financing sources. 55

71 Annex 9. List of Supporting Documents 1. Project Appraisal Document on a Proposed Credit in the amount of SDR 26.2 million (US$32.6 million equivalent) to the Republic of Nicaragua for a Land Administration Project (May, 2002) 2. Project Paper on an Additional Financing Credit in the amount of SDR 6.3 million (US$10 million equivalent) to the Republic of Nicaragua for a Land Administration Project PRODEP (January, 2010) 3. Development Credit Agreement (Land Administration Project - Credit #3665-NI) between the Republic of Nicaragua and the International Development Association (June, 2002) 4. Project Appraisal Document on a Proposed Credit in the amount of SDR 26 million (US$40 million equivalent) to the Republic of Nicaragua for a Second Land Administration Project (February, 2013) 5. Borrower s Implementation Completion Report, Original Credit and AF (May 2013) 6. Economic and Financial Analysis for Original Credit and AF (April 2013); 7. Land Regularization and Titling Assessment at the Property Intendance - Evaluación de los procesos de regularización y titulación de la tenencia de la tierra en la Intendencia de la Propiedad (April 2013); 8. Efficiency Assessment of the Public Registry Evaluación de la eficiencia del Registro Público de la Propiedad Inmueble y Mercantil (February 2013) 9. Final Report: Institutional Analysis for PRODEP II (December, 2012) 10. Final Report: Gender Analysis for PRODEP II (December, 2012) 11. Final Report: Social Analysis for PRODEP II (December, 2012) 12. Final Report: Environmental Analysis for PRODEP II (December 2012) 56

72 87 W 86 W 85 W 15 N HONDURAS NICARAGUA To Auasbila LAND ADMINISTRATION PROJECT (PRODEP) INTERVENTION TYPE PILOT MUNICIPALITIES CADASTRAL SURVEYING, CONFLICT RESOLUTION, REGULARIZATION OF URBAN AND RURAL PROPERTIES INDIGENOUS TERRITORIES DEMARCATED AND TITLED REGIÓN AUTÓNOMA DEL ATLÁNTICO NORTE Bocay k al Ku NUEVA SEGOVIA Ocotal Somoto To San Miguel Bocay Amak a Bonanza JINOTEGA Kukalaya Wounta Lagoon MADRIZ Prinzapolka Prinzapolka San Sebastián de Yali ESTELÍ Gulf of Fonseca Estelí Somotillo Potosí 13 N CHINANDEGA Corinto Jinotega Matagalpa El Sauce Masaya Masachapa a Siqu í El Rama Juigalpa MASAYA Jinotepe MAIN ROADS O C E A N Punta Gorda RIVAS P A C I F I C San Juan del Sur 12 N rda Punta Go Rivas NATIONAL CAPITAL Corn Islands dido con Es Nueva Guínea Nicaragua DEPARTMENT CAPITALS Laguna de Perlas Bluefields Bay Lake MAIN CITIES AND TOWNS Sea Bluefields CHONTALES GRANADA CARAZO Mico Lóvago Granada Caribbean Perlas Lagoon REGIÓN AUTÓNOMA DEL ATLÁNTICO SUR San Benito MANAGUA 13 N El Tortuguero inwás Kur BOACO MANAGUA 12 N PAN AMERICAN HIGHWAY Rio Blanco Muy Muy Boaco Lake Managua La Cruz de Río Grande Grande de Mata gal pa LÉON León Puerto Sandino na Tu r MATAGALPA Sébaco Chinandega NICARAGUA 14 N Bamba Siuna Wiwilí Quilalí Puerto Cabezas Karata Lagoon La Rosita GSDPM Map Design Unit Pahara Lagoon wa ay na EL SALVADOR co Co Wa a To Tegucigalpa HONDURAS Wani Lagoon Leimus Waspam AREA This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. 84 W Peñas Blancas San Miguelito RÍO SAN JUAN San Carlos 11 N Río Indi o El Castillo de La Concepcíon 11 N San Juan del Norte Sa n Ju a RAILROADS Punta Gorda Bay n To San José INTERNATIONAL BOUNDARIES 87 W 86 W 0 C O S TA R I C A 85 W 84 W Kilometers Miles IBRD OCTOBER 2013 DEPARTMENT BOUNDARIES