The World Bank Oromia National Regional State Forested Landscape Program (P156475) REPORT NO.: RES39878 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF OROMIA NATIONAL REGIONAL STATE FORESTED LANDSCAPE PROGRAM APPROVED ON MARCH 17, 2017 TO FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA ENVIRONMENT, NATURAL RESOURCES & THE BLUE ECONOMY AFRICA Regional Vice President: Hafez M. H. Ghanem Country Director: Carolyn Turk Regional Director: Ede Jorge Ijjasz-Vasquez Practice Manager/Manager: Iain G. Shuker Task Team Leader(s): Paul Jonathan Martin, Karin Teixeira Kaechele, Nigel Ross Hughes The World Bank Oromia National Regional State Forested Landscape Program (P156475) ABBREVIATIONS AND ACRONYMS A/R Afforestation/Reforestation BSM Benefit Sharing Mechanism ER Emission Reduction ERPA Emission Reductions Purchase Agreement FM Financial Management GRM Grievance Redress Mechanism ISFL Initiative for Sustainable Forest Landscapes (of the BioCarbon Fund) MTR Midterm Review M&E Monitoring and Evaluation MRV Monitoring, Reporting, and Verification OEFCCA Oromia Environment, Forest and Climate Change Authority OFLP Oromia National Regional State Forested Landscape Program OFWE Oromia Forest and Wildlife Enterprise ORCU Oromia REDD+ Coordination Unit PAD Project Appraisal Document PDO Program Development Objective PFM Participatory Forest Management PIM Program Implementation Manual The World Bank Oromia National Regional State Forested Landscape Program (P156475) 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 P156475 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 17-Mar-2017 31-Dec-2022 Organizations Borrower Responsible Agency Federal Democratic Republic of Ethiopia Environment, Forest and Climate Change Comission Project Development Objective (PDO) Original PDO The Development Objective is to improve the enabling environment for sustainable forest management and investment in Oromia. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-A4442 23-Mar-2017 23-Mar-2017 28-Apr-2017 31-Dec-2022 8.55 4.07 4.48 TF-A4467 23-Mar-2017 23-Mar-2017 28-Apr-2017 31-Dec-2022 9.45 4.37 5.08 The World Bank Oromia National Regional State Forested Landscape Program (P156475) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No Note to Task Teams: End of system generated content, document is editable from here. 1. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. PROJECT STATUS 1. Overview. This restructuring responds to a request by government (letter dated August 16, 2019) and the proposed restructuring measures were discussed during the Midterm Review (MTR) mission (January 2020), and agreed by the project steering committee, chaired by the vice-president of the Oromia Region on Feb 13, 2020. The MTR mission concluded that the Project continues to be highly relevant, the project is on track to achieve the PDO by project close (December 2022), and has already disbursed 34%, which is on track with projected disbursement at design. In the MTR ISR (March 2020), progress towards achievement of PDO has been upgraded from “Moderately Satisfactory” to “Satisfactory”. The PDO-level indicators show that: a) The Composite Index, which provides a proxy measure of the overall enabling environment for forest management and investment, has already exceeded the end of project target (104%); b) The area reforested is on track to achieve the final target (94% of the MTR target has been achieved and 38% of the final target of the grant); (c) 93% of the midterm target for number of direct project beneficiaries has already been achieved. Reporting against intermediate indicators also indicates that project implementation is generally progressing well. However, support for Participatory Forest Management (PFM) and afforestation/reforestation (A/R) efforts in deforestation ‘hotspot’ woredas is constrained in several woredas where insecurity currently poses access problems for project implementation. For this reason, and to ensure that land is available for afforestation efforts, it was agreed that the project will be restructured to include additional woredas where insecurity does not pose a constraint. In addition, adjustments to project indicators are also proposed as part of the restructuring. RATIONALE FOR RESTRUCTURING 2. The project will be restructured to: (i) ensure that sufficient land is available to meet afforestation and reforestation targets, by increasing the number of woredas supported by project interventions; and (ii) improve the consistency and relevance of monitoring and reporting by adjusting reporting guidance in the Project Implementation Manual (PIM) for one PDO level indicator and to adjust three intermediate level indicators. 2. DESCRIPTION OF PROPOSED CHANGES Proposed increase in the number of woredas supported by project interventions 3. Additional targeted woredas within the Oromia Region will become eligible for project support. Currently the project implements activities in 49 woredas, and through this restructuring the project will increase its The World Bank Oromia National Regional State Forested Landscape Program (P156475) geographical area. The additional targeted woredas will be selected on the basis of close proximity to deforestation hotspots, the availability of nursery capacity and good security conditions. These woredas will receive support for A/R and PFM activities. This change will also help the project to offset slower implementation progress in a number of woredas where security risks constrain implementation of activities, including project implementation support. This change will be reflected in the Project Implementation Manual. Indicator adjustments 4. The MTR identified the need to improve consistency of monitoring and reporting against the PDO-level indicator relating to the number of direct beneficiaries. This PDO-level indicator is defined in the Project Appraisal Document (PAD) as “people or groups who directly derive benefits from an intervention.” The description of this indicator in the Project Implementation Manual (PIM) was found to lack clarity leading to inconsistent reporting against this indicator. The description of this indicator in the Project Implementation Manual (PIM) will therefore be better-defined and previously-reported figures will then be revised accordingly to ensure consistency of application. The adjustments will clarify that reporting should include all those that receive livelihoods support, direct employment or training, as well those involved in PFM and A/R activities, but should not include the numbers of community members that have simply been ‘consulted’ as part of project implementation. 5. In addition, it was agreed that three Intermediate Results Indicators will be modified as follows: a. Indicator #5 - Forest users trained: This indicator was defined to include the number of woreda/kebele experts and community members trained in the application of PFM, land use planning, extension practices and safeguard trainings. Because of this, the indicator is found to be the same as Indicator #3. Therefore, it was agreed to include only the community members trained in the application of the PFM, land use planning, extension practices, and safeguards, and exclude the woreda and kebele level experts from future reporting on this indicator; b. Indicator #7 - Beneficiaries that feel project investments reflected their needs: it was agreed that the survey for this indicator should be sample based instead of covering all the target beneficiaries indicated in the Result Framework. c. Indicator #11 – Benefit Sharing Mechanism (BSM) established and maintained: This indicator will be modified to read “approved” instead of “established and maintained” to better reflect the objectives of the OFLP Grant. While approval of the BSM is an objective of the OFLP Grant, maintenance of this mechanism is part of the Emissions Reduction Program which will only become active once the ERPA is approved. Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. 3. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Components and Cost ✔ Overall Risk Rating ✔ Implementing Agency ✔ The World Bank Oromia National Regional State Forested Landscape Program (P156475) DDO Status ✔ Project's Development Objectives ✔ PBCs ✔ Loan Closing Date(s) ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Enabling investments 11.54 Revised Enabling investments 11.54 Enabling environment 6.46 No Change Enabling environment 6.46 TOTAL 18.00 18.00 The World Bank Oromia National Regional State Forested Landscape Program (P156475) OPS_DETAILEDCHANGES_SORT_TABLE SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Rating at Approval Current Rating Political and Governance  High  High Macroeconomic  Moderate  Moderate Sector Strategies and Policies  Substantial  Substantial Technical Design of Project or Program  Substantial  Substantial Institutional Capacity for Implementation and  High  High Sustainability Fiduciary  Substantial  Substantial Environment and Social  High  High Stakeholders  Substantial  Substantial Other Overall  High  Substantial . The World Bank Oromia National Regional State Forested Landscape Program (P156475) . Results framework COUNTRY: Ethiopia Oromia National Regional State Forested Landscape Program Project Development Objectives(s) The Development Objective is to improve the enabling environment for sustainable forest management and investment in Oromia. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 To improve the enabling environment for sustainable forest management and investment in Oromia Score on composite index for tracking changes in the enabling environment for 0.35 0.39 0.43 0.47 0.51 0.55 0.55 reducing deforestation and forest degradation (Number) Incentives (policy, laws, regulations, markets) 0.37 0.41 0.45 0.49 0.53 0.57 0.57 (Number) Information (generation and dissemination of 0.35 0.39 0.43 0.47 0.51 0.55 0.55 information) (Number) Institutions (capacity to implement & 0.33 0.37 0.41 0.45 0.49 0.54 0.54 coordinate) (Number) Area reforested 0.00 1,800.00 3,600.00 6,300.00 8,100.00 9,000.00 9,000.00 (Hectare(Ha)) The World Bank Oromia National Regional State Forested Landscape Program (P156475) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 Direct project beneficiaries 0.00 7,000.00 13,000.00 20,000.00 25,000.00 25,000.00 25,000.00 (Number) Rationale: The Mid Term Review identified the need to improve consistency of monitoring and reporting against the PDO-level indicator relating to the number of direct beneficiaries. This PDO-level indicator is defined in the Project Appraisal Document (PAD) as “people or groups who directly derive benefits from an intervention.” The description of this indicator in the Project Implementation Manual (PIM) was found to lack clarity leading to inconsistent reporting against Action: This indicator has this indicator. The description of this indicator in the Project Implementation Manual (PIM) will therefore be better-defined and previously-reported figures will been Revised then be revised accordingly to ensure consistency of application. This adjustment clarifies that reporting should include all those that receive livelihoods support, direct employment or training, as well those involved in PFM and A/R activities, but should not include the numbers of community members that have simply been ‘consulted’ as part of project implementation. Female beneficiaries 0.00 15.00 20.00 25.00 30.00 30.00 30.00 (Percentage) PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name PBC Baseline End Target Enabling investment Forest area brought under management plans (CRI, Hectare(Ha)) 0.00 120,000.00  Forest users trained (Number) 0.00 25,000.00 Rationale: Indicator #5 - Forest users trained: This indicator was defined to include the number of woreda/kebele experts and Action: This indicator has been Revised community members trained in the application of PFM, land use planning, extension practices and safeguard trainings. Because of this, the indicator is found to be the same as Indicator #3. Therefore, it was agreed to include only the The World Bank Oromia National Regional State Forested Landscape Program (P156475) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline End Target community members trained in the application of the PFM, land use planning, extension practices, and safeguards, and exclude the woreda and kebele level experts from future reporting on this indicator Forest users trained - Female (Number) 0.00 7,500.00 Land users adopting sustainable land mgt. practices as a result of 0.00 18,000.00 the project (Number) Land users adopting sustainable land management practices 0.00 30.00 as a result of the project - Female (Percentage) Beneficiaries that feel project investments reflected their needs 0.00 90.00 (Percentage) Rationale: This survey will be sample based instead of covering all the target number of beneficiaries indicated in the Result Action: This indicator has been Revised Framework. Beneficiaries that feel project inv. reflected their needs - 0.00 6,750.00 female (Number) Beneficiaries that feel project inv. reflected their needs - male 0.00 14,000.00 (Number) Total beneficiaries - female (Number) 0.00 7,500.00 Total beneficiaries - male (Number) 0.00 17,500.00 Enabling environment Reforms in forest policy, legislation or other regulations Yes Yes supported (Yes/No) Grievances registered related to delivery of project benefits 0.00 100.00 addressed (Percentage) The World Bank Oromia National Regional State Forested Landscape Program (P156475) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline End Target  MRV system established and maintained at national and No Yes Oromia levels (Yes/No) Benefit Sharing Mechanism (BSM) approved (Yes/No) No Yes Rationale: This indicator is modified to read “approved” instead of “established and maintained” to better reflect the objectives of the Action: This indicator has been Revised OFLP Grant. While approval of the BSM is an objective of the OFLP Grant, maintenance of this mechanism is part of the Emissions Reduction Program which will only become active once the ERPA is approved. Safeguards system established and maintained (Yes/No) No Yes IO Table SPACE The World Bank Oromia National Regional State Forested Landscape Program (P156475)