The World Bank COVID-19 Crisis Emergency Social Safety Nets Project (P173984) REPORT NO.: RES46277 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF COVID-19 CRISIS EMERGENCY SOCIAL SAFETY NETS PROJECT APPROVED ON MAY 14, 2020 TO PLURINATIONAL STATE OF BOLIVIA SOCIAL PROTECTION & JOBS LATIN AMERICA AND CARIBBEAN Regional Vice President: Carlos Felipe Jaramillo Country Director: Marianne Fay Regional Director: Luis Benveniste Practice Manager/Manager: Pablo Gottret Task Team Leader(s): Gaston Mariano Blanco The World Bank COVID-19 Crisis Emergency Social Safety Nets Project (P173984) ABBREVIATIONS AND ACRONYMS AFD Agence Française de Développement BJAP Bono Juana Azurduy de Padilla BJP Bono Juancito Pinto BC Bono para Ciegos BCF Bono Canasta Familiar BD Bono para Discapacitados COVID-19 Coronavirus Disease 2019 DGAA General Directorate of Administrative Issues (Dirección General de Asuntos Administrativos) DGPOT General Directorate of Treasury Planning and Operation (Direccion General de Programacion y Operaciones del Tesoro) ESCP Environmental and Social Commitment Plan GESTORA Public Management Entity of Long-Term Social Security (Gestora Pública de la Seguridad Social de Largo Plazo) GoB Government of the Plurinational State of Bolivia IADB Interamerican Development Bank ISR Implementation Status and Results Report LMP Labor Management Plan MDP Ministry of Development Planning (Ministerio de Planificacion del Desarrollo) ME Ministry of Education MEFP Ministry of Economy and Public Finance (Ministerio de Economía y Finanzas Públicas) PCU Project Coordination Unit PDO Project Development Objective RD Renta Dignidad SEP Stakeholders Engagement Plan VIPFE Vice Ministry of Public Investment and External Financing (Viceministerio de Inversión Pública y Financiamiento Externo) The World Bank COVID-19 Crisis Emergency Social Safety Nets Project (P173984) BASIC DATA Product Information Project ID Financing Instrument P173984 Investment Project Financing Environmental and Social Risk Classification (ESRC) Moderate Approval Date Current Closing Date 14-May-2020 30-Apr-2021 Organizations Borrower Responsible Agency Ministry of Development Planning Ministry of Economy and Public Finance Project Development Objective (PDO) Original PDO The objective of the Project is to provide temporary economic support to poor and vulnerable households impacted by the COVID-19 pandemic OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-91150 14-May-2020 15-May-2020 20-Nov-2020 30-Apr-2021 200.00 200.00 0 IDA-66700 14-May-2020 15-May-2020 20-Nov-2020 30-Apr-2021 21.00 21.00 0 IDA-66710 14-May-2020 15-May-2020 20-Nov-2020 30-Apr-2021 33.30 30.20 3.10 The World Bank COVID-19 Crisis Emergency Social Safety Nets Project (P173984) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project Background and Status 1. This Restructuring Paper seeks the approval of the restructuring of the COVID-19 Crisis Emergency Social Safety Nets Project (P173984), Loan No. 9115-BO, Credits No. 6670-BO and 6671-BO. The Loan and Financing Agreements of US$254.3 million for the Project were approved by the World Bank Group Board of Executive Directors on May 14, 2020 and declared effective on November 20, 2020. The PDO is to provide temporary economic support to poor and vulnerable households impacted by the COVID-19 pandemic. The Project has three components: (i) Component 1 - Temporary cash transfers to vulnerable households which sought to address the significant impacts of COVID-19 on the income of poor and vulnerable households by financing temporary payments Bono Familia (BF) and Bono Canasta Familiar (BCF) to beneficiaries of existing safety nets programs1; (ii) Component 2. Support the transitory expansion of the safety net to informal workers aimed to extend the safety net to households with informal workers not eligible for BF and BCF by financing temporary payments Bono Universal (BU); and (iii) Component 3. Support the payment system for cash transfers during the COVID-19 emergency and the project implementation arrangements sought to support the expansion of payments through the banking system to all beneficiaries of emergency cash transfers during the COVID-19 emergency and the financial audit of the project. 2. The Government of Bolivia (GoB) completed the payments to beneficiaries of three temporary cash transfer programs by the end of September 2020. The GoB committed US$533.7 million, or 1.34 percent of GDP, to finance BF, BCF and BU which were a central part of the government’s response to the COVID-19 pandemic. Through the three temporary cash transfer programs, the GoB reached 7,616,820 beneficiaries, surpassing the original PAD estimations by 9 percent.2 3. The overall implementation progress is satisfactory. Progress towards achievement of the PDO and overall implementation progress (IP) remains Satisfactory (S) as indicated in the last Implementation Status and Results Report (ISR) archived in April 2021. By December 9, 2020, US$251.2 million were disbursed, reaching a disbursement ratio of almost 99 percent. Financial management and procurement are rated satisfactory, while compliance with relevant environmental and social policies are all rated satisfactory or moderately satisfactory. There are no overdue audits for the Project. There are no overdue audits at Bolivia portfolio level and all audit reports were considered satisfactory to the Bank. A mid-term review was undertaken in mid-March 2021. Progress in the implementation of components is as follows: 1 Bono Juancito Pinto (BJP), Renta Dignidad (RD), Bono Juana Azurduy de Padilla (BJAP), Bono para Discapacitados (BD), and Bono para Ciegos (BC). 2 The total number of beneficiaries paid by each temporary cash transfer program are: (a) Bono Familia (BF): 2,907,048; (b) Bono Canasta Familiar (BCF): 1,050,867; and (c) Bono Universal (BU): 3,658,905. The World Bank COVID-19 Crisis Emergency Social Safety Nets Project (P173984) a. Component 1 - Temporary cash transfers to vulnerable households (US$99.72 million). As the GoB decided to request reimbursements only for Bono Universal (BU) under Component 2, there is no implementation to report on this Component. b. Component 2 - Support the transitory expansion of the safety net to informal workers (US$150.93 million). In late November 2020, the GoB communicated its intention to apply all the resources of the Project’s Category 1 “Cash Transfers” to the Project’s Component 2. Taking into consideration that only this Project within the GoB’s external financing portfolio had the BU as an eligible expenditure, the GoB decided to use other projects financed by the Interamerican Development Bank (IADB) and the Agence Française de Développement (AFD) to partially fund the other two temporary cash transfer programs (Bono Familia -BF- and Bono Canasta Familiar -BCF), which are eligible expenditures of Component 1. Thus, the actual implementation of this Component reached US$250.65 million, exceeding the original estimated cost by 66 percent. c. Component 3 - Support the payment system for cash transfers during the COVID-19 emergency and the project implementation arrangements (US$3.1 million). There has been no implementation under this Component. The main activity under this Component 3 is to support the expansion of payments through the banking system to all beneficiaries of emergency cash transfers during the COVID-19 emergency. The GoB used a private provider of payment platform called SINTESIS for the three temporary cash transfer programs, BF, BCF and BU. The decision to use SINTESIS was based on an adequate fiduciary assessment of the firm, the fact that it had experience in delivering payments for two traditional social assistance programs (BJAP and RD), as well as its unique ability to reach across the banking sector. Despite the fact that the Public Management Entity of Long-Term Social Security (Gestora Pública de la Seguridad Social de Largo Plazo - GESTORA) had signed contracts with SINTESIS in 2020, it could not provide details on the procurement process to the PCU to support the eligibility of the activity for reimbursement through the Project. The PCU thus informed the Bank during the Mid-Term Review of the intention to request the cancelation of this activity and reallocate resources to Component 1. The PCU is in the final process of contracting an External Financial Audit, which is the other eligible activity under Component 3. 4. Environmental and Social Standards status. The virtual mid-term review mission assessed the implementation of the Environmental and Social Commitment Plan (ESCP), the Stakeholders Engagement Plan (SEP) and the Labor Management Plan (LMP). Following the ESCP commitments, the PCU sent to Bank updated versions of the SEP and LMP within 30 days after Project effectiveness. Final versions are expected to be published in May 2021. The PCU agreed to request an update of the ESCP through the MEFP, mainly to reflect the time frame for the publication of the updated versions of SEP and LMP. Regarding to the implementation of the SEP, there are pending tasks to be addressed: (i) description of the payment modalities in distant rural areas, including the use of the Armed Forces for a limited percentage of payments related to the Bono Canasta Familiar (BCF); and (ii) confirmation of the dissemination of Gender based-Violence prevention messages within financial entities in charge of payments. The PCU will inform the Bank of advances in those areas in the next ISR, expected by May. B. Rationale for Restructuring 5. On April 14, 2021, the Ministry of Development Planning (MD) requested a restructuring of the Project to make the following adjustments: (i) extend the Project closing date for three months to July 30th, 2021; (ii) revise the The World Bank COVID-19 Crisis Emergency Social Safety Nets Project (P173984) Results Framework to reflect changes in Components; (iii) revise the Components, including name, scope of activities and costs; (d) revise the disbursement categories allocation; and (iv) revise the institutional arrangements. The Restructuring does not entail a change in the Project Development Objective (PDO) nor changes in social and environmental standards. The extension of the Project closing date to July 30th, 2021 is necessary to allow the documentation of payments to beneficiaries of emergency cash transfers and complete the request for reimbursement of the remaining IDA Credit funds. The Results Framework, as well as component and disbursement category allocations, have to be revised to reflect the GoB’s decision to apply all the resources of the Project to Category 1 “Cash Transfers” under Component 2 and to cancel the main activity under Component 3 and reallocate those resources to Component 1. II. DESCRIPTION OF PROPOSED CHANGES 6. Based on the GoB’s request and technical discussions,3 the main proposed changes are: (a) Extension of the Project’s closing date; (b) Revision of the PDO indicators, intermediate indicators and targets in the Results Framework; (c) Changes to Components’ 1, 2 and 3 and costs; (d) Reallocation of funds across disbursement categories; and (e) Revision of institutional arrangements. 7. Extension of the Project’s Closing date. The Project closing date will be extended from April 30th, 2021 to July 30th, 2021 to allow the documentation of payments to beneficiaries of emergency cash transfers under Component 1 and complete the request for reimbursement of the remaining Credit funds. This will be the first extension of the closing date. 8. Results Framework. The Restructuring will include the: (a) deletion of indicators that are no longer relevant due to the change in the scope of the financed activities; (b) revision of existing indicators target values to better capture the contribution of the Project to the PDO; and (c) deletion of intermediate indicators due to reallocation of financing among Components. The GoB reached the objective of providing temporary economic support to poor and vulnerable households impacted by the COVID-19 pandemic completing payments of temporary cash transfer to more than 7.6 million individuals. The first two PDO indicators, measuring the Project contribution to payments of BF and BCF, will be dropped as the GoB decided to use other sources of financing for those temporary cash transfer programs. The indicators that are being dropped are still achieved at the program level but just not financed by this Project. The target for the third PDO indicator “Direct beneficiaries of temporary economic support financed by the Project, who are not beneficiaries of existing social assistance programs” will be revised upwards to align it with the current implementation progress. This indicator covers the Project’s contribution to payments of BU, which is the program that now accounts for the majority of the original Project resources of disbursement Category 1 ‘Cash Transfers”. The target of the fourth PDO indicator “Percentage of direct beneficiaries of temporary economic support financed by the Project” will be reduced from 51 percent to 46 percent as the overall coverage of BU was expanded beyond the original estimate, changing the denominator of the indicator. Finally, the target for the corporate report indicator (CRI) “Beneficiaries of social safety net programs” will be revised slightly downwards to align it with the current implementation progress and the 3On March 15, 2021, the Team conducted a virtual Mid-Term Review mission. An Aide-Memoire was finalized following the mission, which documents the agreements. The World Bank COVID-19 Crisis Emergency Social Safety Nets Project (P173984) expected number of BF benefiary payments to be reimbursed before the proposed extended Project closing date. Annex 1 provides details on the proposed changes to the indicators and targets and the rationale. 9. Components and Costs. The following changes will be made to the components to reflect the change in Project activities: a. Revision to Component 1 - Temporary cash transfers to vulnerable households (proposed cost US$3.085 million). As the GoB decided to use other financing sources to cover the implementation of BCF and BF and only use US$ 3.085 million of this Component to reimburse the payments to 42,847 beneficiaries of BF, the cost of the Component will be reduced and the Subcomponent 1.2 “Temporary cash transfer to vulnerable households with pregnant women, children below 2 years old, or disabled and elderly individuals”, that contributes to compensate the loss among vulnerable households through the implementation of the BCF, will be dropped as no Project resources were used to fund this transfer. The difference between the proposed and the original cost of this component (US$96.935 million) will be reallocated to Component 2. b. Revision to Component 2 - Support the transitory expansion of the safety net to informal workers (proposed cost US$250.6475 million). This component supports the effort of the GoB to temporary extend the safety net to households with informal workers not eligible for BF and BCF, through the implementation of the BU. The actual execution of this Component is US$250.6 million, exceeding the original estimated cost by 66 percent. Resources from Components 1 and 3 will be reallocated to this Component to cover the difference. c. Revision to Component 3 - Support project implementation arrangements (proposed cost US$0.015 million). The activity to support the expansion of payments through the banking system to all beneficiaries of emergency cash transfers during the COVID-19 emergency was not implemented and will be dropped. The name of the Component 3 will be revised to reflect this adjustment. The only remaining activity under this component is the financing of the financial audit of the Project. The difference between the proposed and the original cost of this component (US$3.085 million) will be reallocated to Component 2. 10. Reallocation of resources between disbursement categories. The Restructuring entails a reallocation of $3.085 million of Credit No. 6671-BO from the disbursement Category 2 to 1. The current and proposed allocation of loan and credits proceeds between disbursement categories are provided under Section IV of this Restructuring Paper (RP). 11. Revision of institutional arrangements. The PCU under MEFP is responsible for the administrative and financial management of the Project. The PCU responsibility for the implementation of Component 2 will be transferred to other unit under MEFP as the implementation of temporary cash transfer programs in charge of MEFP were implemented before the PCU became operational with Project effectiveness. The General Directorate of Treasury Planning and Operation (Direccion General de Programacion y Operaciones del Tesoro -DGPOT) will replace the PCU for the implementation of Component 2. The National Agency of Electronic Government and Technology of Information (AGETIC) and GESTORA will continue providing support to DGPOT. The World Bank COVID-19 Crisis Emergency Social Safety Nets Project (P173984) III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Components and Cost ✔ Loan Closing Date(s) ✔ Reallocation between Disbursement Categories ✔ Disbursement Estimates ✔ Institutional Arrangements ✔ Implementation Schedule ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ PBCs ✔ Cancellations Proposed ✔ Disbursements Arrangements ✔ Overall Risk Rating ✔ Legal Covenants ✔ Financial Management ✔ Procurement ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) The World Bank COVID-19 Crisis Emergency Social Safety Nets Project (P173984) OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) 1. Temporary cash transfers to 1. Temporary cash transfers to 99.72 Revised 3.08 vulnerable households vulnerable households 2. Support the transitory 2. Support the transitory expansion of the safety net to 150.93 Revised expansion of the safety net to 250.65 informal workers informal workers 3. Support the payment system of cash transfers during the 3. Support project COVID-19 emergency and the 3.10 Revised 0.02 implementation arrangements implementing arrangements of the project TOTAL 253.75 253.75 OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IBRD-91150 Effective 30-Apr-2021 30-Jul-2021 30-Nov-2021 IDA-66700 Effective 30-Apr-2021 30-Jul-2021 30-Nov-2021 IDA-66710 Effective 30-Apr-2021 30-Jul-2021 30-Nov-2021 OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IDA-66710-001 | Currency: USD iLap Category Sequence No: 1 Current Expenditure Category: Cash Transfers 30,200,000.00 30,200,000.00 33,285,000.00 100.00 100.00 iLap Category Sequence No: 2 Current Expenditure Category: NCS,CS under Part 3 The World Bank COVID-19 Crisis Emergency Social Safety Nets Project (P173984) 3,100,000.00 0.00 15,000.00 Total 33,300,000.00 30,200,000.00 33,300,000.00 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2020 101,000,000.00 0.00 2021 153,300,000.00 254,300,000.00 . The World Bank COVID-19 Crisis Emergency Social Safety Nets Project (P173984) . Results framework COUNTRY: Bolivia COVID-19 Crisis Emergency Social Safety Nets Project Project Development Objectives(s) The objective of the Project is to provide temporary economic support to poor and vulnerable households impacted by the COVID-19 pandemic Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline End Target To provide temporary economic support to poor and vulnerable households impacted by COVID-19 Direct beneficiaries of existing social assistance programs receiving temporary economic support financed by the project 0.00 1,285,134.00 (Number) Rationale: Action: This indicator has been Marked for Deletion The indicator is being dropped due to the GoB decision to apply almost all Project resources to Component 2. Percentage of direct beneficiaries of existing social assistance programs receiving temporary economic support financed by the 0.00 32.50 project (Percentage) Rationale: Action: This indicator has been Marked for Deletion The indicator is being dropped due to the GoB decision to apply almost all Project resources to Component 2. Direct beneficiaries of temporary economic support financed by the project, who are not beneficiaries of existing social assistance 0.00 3,459,574.00 programs (Number) Action: This indicator has been Revised Rationale: The World Bank COVID-19 Crisis Emergency Social Safety Nets Project (P173984) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline End Target Revised end target to better align with the current implementation progress due to the GoB decision to use Project resources to mainly finance the BU Percentage of direct beneficiaries of temporary economic 0.00 46.00 support financed by the project (Percentage) Rationale: Revised end target to better align with the current implementation progress whereby the GoB has expanded overall Action: This indicator has been Revised coverage of BU beyond the original estimate, thus reducing the share financed by the Project. Denominator changed based on the total number of beneficiaries of BF, BCF, and BU paid (from 6,985,249 to 7,616,820). Beneficiaries of social safety net programs (CRI, Number) 0.00 3,502,421.00 Rationale: Action: This indicator has been Revised Revised end target to better align with the current implementation progress Beneficiaries of social safety net programs - Female (CRI, 0.00 1,827,291.00 Number) Action: This indicator has been Revised PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name PBC Baseline End Target Component 1. Temporary cash transfers to vulnerable households The World Bank COVID-19 Crisis Emergency Social Safety Nets Project (P173984) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline End Target Direct Beneficiaries of Bono Canasta Familiar financed by the 0.00 435,000.00 project (Number) Action: This indicator has been Marked for Deletion Direct Beneficiaries of Bono Canasta Familiar financed by the 0.00 225,379.00 project (FEMALE) (Number) Action: This indicator has been Marked for Deletion Direct Beneficiaries of Bono Familia financed by the project 0.00 42,847.00 (Number) Rationale: Based on the GOB decision to request reimbursement for only 42,847 beneficiaries of BF, targets of these indicators are Action: This indicator has been Revised revised accordingly. Direct beneficiaries of Bono Familia financed by the project 0.00 22,026.00 (FEMALE) (Number) Action: This indicator has been Revised Component 2: Support the transitory expansion of the safety net to informal workers Direct Beneficiaries of Bono Universal financed by the project 0.00 3,459,574.00 (Number) Rationale: Action: This indicator has been Revised Revised end target to better align with the current implementation progress. Direct Beneficiaries of Bono Universal financed by the project 0.00 1,079,998.00 (FEMALE) (Number) Action: This indicator has been Revised Component 3. Support the payment system and the implementing arrangements The World Bank COVID-19 Crisis Emergency Social Safety Nets Project (P173984) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline End Target Payment platform to deliver the payments of the temporary No Yes economic support contracted (Yes/No) Rationale: Action: This indicator has been Marked for Deletion Indicator is no longer relevant as activity has been dropped Percentage of inquiries or grievances that are submitted to the grievance redress mechanism that are addressed during the 0.00 75.00 course of the project. (Percentage) IO Table SPACE The World Bank COVID-19 Crisis Emergency Social Safety Nets Project (P173984) ANNEX 1: Proposed changes to the indicators and targets and the rationale Plurinational State of Bolivia: COVID-19 Crisis Emergency Social Safety Nets Project PDO Indicators Revised Revised Original Revised Original Indicator Status Baseline Rationale Indicator Baseline End Target End Target Direct beneficiaries Dropped 0 N/A 1,285,134 N/A of existing social assistance programs receiving These indicators captured the temporary direct beneficiaries of the economic support pre-existing social safety net financed by the programs (BJAP, BJP, RD, BD project (Number) and BC) who would have Percentage of Dropped 0 N/A 32.50 N/A received BF and BCF financed direct beneficiaries by the Project. These of existing social indicators are now being assistance dropped due to the GoB programs receiving decision to apply almost all temporary Project resources to economic support Component 2. financed by the project (Percentage) Direct beneficiaries Revised 0 N/A 2,290,880 3,459,574 Revised end target to better of temporary align with the current economic support implementation progress due financed by the to the GoB decision to use project, who are Project resources to mainly not beneficiaries of finance the BU. existing social assistance programs (Number) Percentage of Revised 0 N/A 51.00 46.00 Revised end target to better direct beneficiaries align with the current of temporary implementation progress economic support whereby the GoB has financed by the expanded overall coverage of project BU beyond the original (Percentage) estimate, thus reducing the share financed by the Project. Denominator changed based on the total number of beneficiaries of BF, BCF, and BU paid (from 6,985,249 to 7,616,820). Beneficiaries of revised 0 N/A 3,576,013 3,502,421 Revised end target to better social safety net align with the current programs implementation progress. The World Bank COVID-19 Crisis Emergency Social Safety Nets Project (P173984) Beneficiaries of Revised 0 N/A 1,827,291 1,789,686 social safety net programs (Female) Intermediate Indicators Component 1: Temporary cash transfers to vulnerable households Direct Beneficiaries Dropped 0 N/A 435,000 N/A Indicator is no longer of Bono Canasta relevant as activity has been Familiar financed dropped by the project (Number) Direct Beneficiaries Dropped 0 N/A 225,379 N/A of Bono Canasta Familiar financed by the project (Female) Direct Beneficiaries Revised 0 0 1,040,102 42,847 Based on the GOB decision to of Bono Familia request reimbursement for financed by the only 42,847 beneficiaries of project (Number) BF, targets of these indicators Direct Beneficiaries Revised 0 0 534,677 22,026 are revised accordingly. of Bono Familia financed by the project (Female) Component 2: Support the transitory expansion of the safety net to informal workers Direct Beneficiaries Revised 0 N/A 2,100,911 3,459,574 Revised end target to better of Bono Universal align with the current financed by the implementation progress. project Direct Beneficiaries Revised 0 N/A 1,079,998 1,778,434 of Bono Universal financed by the project (Female) Component 3: Support project implementation arrangements Payment platform Dropped No N/A Yes N/A Indicator is no longer to deliver the relevant as activity has been payments of the dropped temporary economic support contracted