The World Bank Dioxins Reduction from the Pulp and Paper Industry (P125528) REPORT NO.: RES32623 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF DIOXINS REDUCTION FROM THE PULP AND PAPER INDUSTRY APPROVED ON MARCH 29, 2012 TO PEOPLE'S REPUBLIC OF CHINA ENVIRONMENT & NATURAL RESOURCES EAST ASIA AND PACIFIC Regional Vice President: Victoria Kwakwa Country Director: Bert Hofman Senior Global Practice Director: Karin Erika Kemper Practice Manager/Manager: Iain G. Shuker Task Team Leader: Ning Yang, Ms. Anisi The World Bank Dioxins Reduction from the Pulp and Paper Industry (P125528) I. BASIC DATA Product Information Project ID Financing Instrument P125528 Investment Project Financing Original EA Category Current EA Category Full Assessment (A) Full Assessment (A) Approval Date Current Closing Date 29-Mar-2012 30-Jun-2018 Organizations Borrower Responsible Agency Foreign Economic Cooperation Office of Ministry of People's Republic of China Environment Protection Project Development Objective (PDO) Original PDO The project development objectives are to: (a) demonstrate the result of adoption of best available techniques and best environmental practices (BAT/BEP) in four selected non-wood pulp mills; and (b) support China in developing and adopting a long-term action plan to guide the promotion of a sector-wide BAT/BEP adoption. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-11898 25-May-2012 25-May-2012 19-Jun-2012 30-Jun-2018 15.00 13.43 1.57 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES The World Bank Dioxins Reduction from the Pulp and Paper Industry (P125528) The US$15 million GEF grant for Dioxins Reduction from Pulp and Paper Industry Project was approved on March 29, 2012 and became effective on June 19, 2018; the current loan closing date is June 30, 2018. The Project Development Objectives are to: (a) demonstrate the result of adoption of best available techniques and best environmental practices (BAT/BEP) in four selected non-wood pulp mills; and (b) support China in developing and adopting a long- term action plan to guide the promotion of a sector-wide BAT/BEP adoption. The project comprises of four components: (i) Best Available Techniques (BAT) / Best Environmental Practices (BEP) investments in participating mills and promotion of BAT/BEP investment in selected mills; (ii) National action plan for sector-wide replication; iii) Monitoring and evaluation; and iv) Project management. A US$8.39 million of sub-grants was allocated to the BAT/BEP investments in three participating mills, while the remaining US$6.61million to technical assistance managed by Foreign Economic Cooperation Office (FECO) of Ministry of Ecology and Environment (MEE, Formerly MEP). US$13.43 million has been disbursed from the GEF grant. The project is in compliance with legal covenants as well as bank fiduciary and safeguard policies. There are no outstanding audits or audit qualifications. Safeguard performance is rated as satisfactory. The likelihood of the project achieving its development objectives is rated as moderately satisfactory, while overall implementation progress is rated moderately satisfactory. Currently, one of the two PDO level indicators has been achieved; the other is expected to be achieved in coming months. The delay of the second PDO, namely the "adoption of a long-term action plan for the sector's UPOPs reduction" is due to extensive coordination required with key stakeholders including Ministry of Ecology and Environment (MEE) and China Paper Association (CPA). This issue has been resolved and progress has been to achieve the target. To enable the project meet the PDO and complete remaining activities surrounding the above-mentioned PDO indicator, FECO has proposed a 1-year extension. FECO has prepared an action plan agreed by the Bank. This action plan will also require additional changes to the project design and the grant agreement. As MoF sent a formal restructuring request to the Bank for only the closing date extension, without requesting the additional changes to the project design and the grant agreement, it is proposed to allow for a shorter 3-month extension, i.e. until September 30, 2018. This will be the second extension of the closing date and will provide sufficient time for a second comprehensive restructuring request to be prepared by MoF. III. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications TF-11898 Effective 30-Jun-2017 30-Jun-2018 30-Sep-2018 30-Jan-2019 The World Bank Dioxins Reduction from the Pulp and Paper Industry (P125528)