The World Bank Water Sector Improvement APL Phase II: Metolong Dam and Water Supply (P108143) REPORT NO.: RES35653 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF WATER SECTOR IMPROVEMENT APL PHASE II: METOLONG DAM AND WATER SUPPLY APPROVED ON MAY 26, 2009 TO COMMISSIONER OF WATER WATER AFRICA Regional Vice President: Hafez M. H. Ghanem Country Director: Paul Noumba Um Senior Global Practice Director: Jennifer J. Sara Practice Manager/Manager: Catherine Signe Tovey Task Team Leader: Sanyu Sarah Senkatuka Lutalo The World Bank Water Sector Improvement APL Phase II: Metolong Dam and Water Supply (P108143) I. BASIC DATA Product Information Project ID Financing Instrument P108143 Investment Project Financing Original EA Category Current EA Category Full Assessment (A) Full Assessment (A) Approval Date Current Closing Date 26-May-2009 31-Dec-2018 Organizations Borrower Responsible Agency Ministry of Natural Resources,Ministry of Natural Commissioner of Water Resources, Metolong Authority Project Development Objective (PDO) Original PDO The Project Development Objectives is to support the GoL in: (i) developing and sustaining an environmentally sound, sociallyresponsible, and financially viable framework for the MDWSP; (ii) an increase in the quantity of safe, bulk water supplied toTeyateyaneng;and, (iii) strengthening institutions and related instruments in the water sector. Current PDO The Project Development Objectives are to support the Recipient in: (i) developing and sustaining an environmentally sound, socially responsible, and financially viable framework for the MDWSP; (ii) increasing the quantity of safe, bulk water supplied toTeyateyaneng; (iii) strengthening institutions and related instruments in the water sector; (iv) advancing strategic infrastructure investments; and (v) in the event of an Eligible Crisis or Emergency, to provide immediate and effective response to said Eligible Crisis or Emergency. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed The World Bank Water Sector Improvement APL Phase II: Metolong Dam and Water Supply (P108143) IDA-54920 20-Jun-2014 07-Jul-2014 09-Jan-2015 31-Dec-2018 9.05 7.18 1.11 IDA-H9670 20-Jun-2014 07-Jul-2014 09-Jan-2015 31-Dec-2018 6.39 3.28 2.47 IDA-H7380 10-Nov-2011 16-Nov-2011 22-Mar-2012 30-Jun-2015 13.00 12.74 0 IDA-45740 26-May-2009 20-Jul-2009 18-Sep-2009 31-Dec-2018 16.50 15.72 0 IDA-H4750 26-May-2009 20-Jul-2009 18-Sep-2009 31-Dec-2017 8.50 8.82 0 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES The proposed changes relate to cancellation of unutilized funds under the project, in the amount of XDR 3,089,883.43, which had been allocated to support specific activities under Components 3/ Part C in the Financing Agreement (Sector institutional strengthening and policy support) and Component 4/ Part D in the Financing Agreement (Preparation of Hydropower Component of Lesotho Highlands Water Project), which will not be completed by the project closing date (December 31, 2018). Most of the project activities have been substantially completed, with about 90 percent of activities completed. Given the mentioned outstanding activities under the project, achievement of the PDO is rated Moderately Satisfactory. There is a balance of unutilized funds under Component 3, specifically relating to outstanding technical assistance activities, and capacity building, including goods and training for sector institutions. Ongoing activities under Component 4, which is implemented by Lesotho Highlands Development Authority (LHDA) which will not be completed by the project closing date relate to geotechnical studies involving borehole drilling and soil analysis to confirm the soil stability at the three potential hydropower sites under consideration, Senqu B, Senqu D and Ox-bow lake and finalization of the bankable feasibility study report. Although the draft hydropower feasibility studies have been prepared, they will be qualified subject to completion of the outstanding studies. The Government of Lesotho through a letter from the Minister of Finance dated December 3, 2018, received on December 27, 2018, has requested the Bank to approve cancellation of the outstanding balance in the amount of XDR 3, 089,883.43, to allow the unutilized funds to remain available to the GoL's IDA envelope. III. DETAILED CHANGES