Timor-Leste - Building Climate and Disaster Resilience along the Dili-Ainaro and Linked Road Corridors Project : restructuring

The World Bank Building Climate/Disaster Resilience Along The Dili-Ainaro and Linked Road Corridors in Timor-Leste (P144818) REPORT NO.: RES30097 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF BUILDING CLIMATE/DISASTER RESILIENCE ALONG THE DILI-AINARO AND LINKED ROAD CORRIDORS IN TIMOR-LESTE APPROVED ON AUGUST 27, 2014 TO MINISTRY OF SOCIAL SOLIDARITY SOCIAL, URBAN, RURAL AND RESILIENCE GLOBAL PRACTICE EAST ASIA AND PACIFIC Regional Vice President: Victoria Kwakwa Country Director: Rodrigo A. Chaves Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez Practice Manager/Manager: Abhas Kumar Jha Task Team Leader: Iwan Gunawan  The World Bank Building Climate/Disaster Resilience Along The Dili-Ainaro and Linked Road Corridors in Timor-Leste (P144818) ABBREVIATIONS AND ACRONYMS CBDRM Community Based Disaster Risk Management CCA Climate Change Adaptation CPF Country Partnership Framework DRR Disaster Risk Reduction DRM Disaster Risk Management ISDS Integrated Safeguard Data Sheet MOF Ministry of Finance of the Democratic Republic of Timor Leste MSS Ministry of Social Solidarity of the Democratic Republic of Timor Leste NDMD National Disaster Management Directorate PDO Project Development Objective PIU Project Implementation Unit PNDS Programa Nasional Dezenvolvimentu Suku (National Program for Suco Development) SCD Systemic Country Diagnostic SDG Sustainable Development Goals  The World Bank Building Climate/Disaster Resilience Along The Dili-Ainaro and Linked Road Corridors in Timor-Leste (P144818) Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. BASIC DATA Product Information Project ID Financing Instrument P144818 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 27-Aug-2014 30-Oct-2017 Organizations Borrower Responsible Agency Ministry of Social Solidarity National Disaster Management Directorate Project Development Objective (PDO) Original PDO To build the capacity of communities around the Dili-Ainaro and linked road corridors and district and sector agencies incommunity-based disaster risk management and adaptation for reducing the impacts of recurring landslides and floods. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net TF Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-18187 05-Feb-2015 06-Feb-2015 27-Aug-2015 30-Oct-2017 2.70 1.11 1.59 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No  The World Bank Building Climate/Disaster Resilience Along The Dili-Ainaro and Linked Road Corridors in Timor-Leste (P144818) Note to Task Teams: End of system generated content, document is editable from here. I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project Status 1. This project experienced several initial delays totaling to 20 months. An initial delay occurred when he Grant Agreement was only signed on February 2015, a 6 month after Bank approval of the project in August 2014 because of a change in the Government procedure about the authorized signatory of the Grant Agreement from the Ministry of Finance to the sectoral ministry (i.e., Ministry of Social Solidarity as executing agency). The second 6-month delay was on the effectiveness date of only in August 2015, due the lack of capacity of the executing agency in completing the Project Operations Manual (POM). The third major delay was for 8-month when the largest project Component 2 on Community Based Disaster Risk Management (CBDRM) implementation has to be centrally procured by the Government as the contract size was above the US$1 million threshold requiring the National Procurement Committee (NPC) which had to manage all Government large procurements. 2. Despite this initial delay, especially on Component 2 CBDRM which accounts for 67% of the budget and the main PDO indicator, the Ministry of Social Solidarity (MSS) as the Executing Agency was able to implement the Capacity Building activities under Component 1 relatively well with 92% of the immediate result indicator of officials trained achieved. As the contractor (PLAN International) to implement the CBRDM Component was finally on-board, despite the shorter and smaller contract due to eminent project closing date, the project managed to accelerate the PDO target achievement from only 1% in June 2017 (before to CBDRM started) to 64% of the targeted beneficiaries in September 2017. In PDO gender indicator, the project surpassed the target at 164%. This was a confirmation that the project had put a system in place and that the executing agency, the implementing contractor and the community has the capacity to deliver the CBDRM/CDD projects. 3. There is no pending audit requirement with 2016 audit completed and recommendation followed up by the Executing Agency, and audit for January – December 2017 period already requested to the Ministry of Finance. B. Rationale for Restructuring 4. The Project is currently rated as MU/MU because it ran out of time to implement the CBDRM in all 25 targeted sucos (villages) with 30 community projects, and only able to cover 10 sucos with 26 projects. However, with the proposed extension of 12 months, the Task Team is fully confident that the Project will already at the level of MS/MS in 3-month time. Based on the rate of progress in the last 3 months from August to October 2017 where CBDRM implementation in 10 sucos were successfully carried out, additional 6 sucos and at least 15 more projects and brings benefit to additional 9,500 beneficiaries will be achieved by January 2018. This would put the PDO main indicator achievement at 83% and the immediate result indicator targets of community projects will also be surpassed by 36%. 5. With the increased capacity of MSS as the Executing Agency, and readiness of PLAN International to complete  The World Bank Building Climate/Disaster Resilience Along The Dili-Ainaro and Linked Road Corridors in Timor-Leste (P144818) works in all 25 sucos, the proposed extension will enable the Development Objective to be fully achieved with all indicators above the targets. The capacity of the Government officials at national and municipal levels, the CBDRM implementation contractor which relies on Timorese national experts and facilitators, and the community at the suco level have all been strengthened by the Project thus far as evident from their ability to facilitate and complete 26 CBDRM projects in 10 sucos in only 3 months. Thus the proposed extension will enable these stakeholders to fully complete and achieve the Project Development Objective. 6. Timor Leste recently conducted peaceful parliamentary and presidential elections with new Administration in place having focus on human development investment. With the high disaster and climate vulnerability of the population, especially in sucos located in remote areas, the CBDRM activities will significantly contribute to the Government agenda, and in line with the Bank’s new Systemic Country Diagnostic (SCD) and subsequent CPF priorities currently being prepared. II. DESCRIPTION OF PROPOSED CHANGES 7. This Restructuring Paper seeks the approval of Country Director for a Level 2 restructuring for which the Bank had received request of the Government of Timor Leste through the letters of the Minister of Social Solidarity dated 29 September 2017 and 25 October 2017. The proposed restructuring consists of: (i) Extension of the closing date of the project and the Grant Agreement from 31 October 2017 to 31 October 2018; (ii) Reallocation of the component budget in the amount of $150,000 from Component 1 (Strengthening Capacity at sub-district level for Planning and Delivering Community-Based Disaster Risk Management) to Component 2 (Community-Based Disaster Risk Management and Adaptation Plans and Pilot Projects) to enable the community to implement more project activities to build their resilience to disaster and climate change; (iii) Reallocation between disbursement categories : a) Reduction of $250,000 from Category 1 (Consultant Services), b) Addition of $80,000 to Category 3 (Incremental Operating Cost), c) Addition of $20,000 to Category 4 (Goods), and d) Addition of $150,000 to Category 5 (Sub-projects, as per point 6 (ii) above); (iv) The proposed restructuring estimates that the remaining project budget of around $1,560,000 will be fully spent by the end of the extension period; 8. Subsequent to the approval of the proposed restructuring, an extension of the Project Supervision budget (BETF TF018186) will also be requested. Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. I. SUMMARY OF CHANGES Changed Not Changed Change in Components and Cost ✔  The World Bank Building Climate/Disaster Resilience Along The Dili-Ainaro and Linked Road Corridors in Timor-Leste (P144818) Change in Loan Closing Date(s) ✔ Reallocation between Disbursement Categories ✔ Change in Disbursement Estimates ✔ Change in Overall Risk Rating ✔ Change in Implementation Schedule ✔ Change in Implementing Agency ✔ Change in Project's Development Objectives ✔ Change in Results Framework ✔ Cancellations Proposed ✔ Additional Financing Proposed ✔ Change in Disbursements Arrangements ✔ Change in Safeguard Policies Triggered ✔ Change of EA category ✔ Change in Legal Covenants ✔ Change in Institutional Arrangements ✔ Change in Financial Management ✔ Change in Procurement ✔ Other Change(s) ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Strengthening Capacity at sub- Strengthening Capacity at sub- district level for Planning and district level for Planning and 0.46 Revised 0.31 Delivering Community-Based Delivering Community-Based Disaster Risk Management Disaster Risk Management Community-Based Disaster Risk Community-Based Disaster Management and Adaptation 1.87 Revised Risk Management and 2.02 Plans and Pilot Projects Adaptation Plans and Pilot  The World Bank Building Climate/Disaster Resilience Along The Dili-Ainaro and Linked Road Corridors in Timor-Leste (P144818) Projects Project Management and Project Management and 0.37 No Change 0.37 Administration Administration TOTAL 2.70 2.70 OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline TF Status Closing Closing(s) Closing for Withdrawal Applications TF-18187 Effective 30-Oct-2017 31-Oct-2018 28-Feb-2019 OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed TF-18187-001 | Currency: USD iLap Category Sequence No: 1 Current Expenditure Category: TF 18187 CON SERV PT 1 & PT 3 543,650.00 183,026.16 293,650.00 100.00 100.00 iLap Category Sequence No: 2 Current Expenditure Category: TF 18187 TRAINING PT 1 & PT 3 200,200.00 55,435.50 200,200.00 100.00 100.00 iLap Category Sequence No: 3 Current Expenditure Category: TF 18187 IOC 70,000.00 35,790.62 150,000.00 100.00 100.00 iLap Category Sequence No: 4 Current Expenditure Category: TF 18187 GOODS PT 1 & PT 3 18,000.00 12,240.00 38,000.00 100.00 100.00  The World Bank Building Climate/Disaster Resilience Along The Dili-Ainaro and Linked Road Corridors in Timor-Leste (P144818) iLap Category Sequence No: 5 Current Expenditure Category: TF 18187 GO WK CS SUBPROJ PT 2 1,872,000.00 588,753.60 2,022,000.00 100.00 100.00 Total 2,703,850.00 875,245.88 2,703,850.00 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2015 300,000.00 100,000.00 2016 700,000.00 200,000.00 2017 1,400,000.00 840,000.00 2018 300,000.00 1,560,000.00 2019 0.00 0.00 OPS_DETAILEDCHANGES_SORT_TABLE OVERALL RISK RATING Risk Category Rating at Approval Current Rating Overall  Substantial Note to Task Teams: End of system generated content, document is editable from here.