The World Bank Congo: Forest and Econ. Diversification Project (P124085) REPORT NO.: RES46350 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF CONGO: FOREST AND ECON. DIVERSIFICATION PROJECT APPROVED ON MAY 24, 2012 TO CONGO, REPUBLIC OF ENVIRONMENT, NATURAL RESOURCES & THE BLUE ECONOMY AFRICA WEST Regional Vice President: Ousmane Diagana Country Director: Abdoulaye Seck Regional Director: Simeon Kacou Ehui Practice Manager/Manager: Sanjay Srivastava Task Team Leader(s): David Maleki The World Bank Congo: Forest and Econ. Diversification Project (P124085) I. BASIC DATA Product Information Project ID Financing Instrument P124085 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 24-May-2012 26-Jul-2021 Organizations Borrower Responsible Agency Congo, Republic of Ministry of Forest Economy Project Development Objective (PDO) Original PDO The project development objective is to increase the capacity of the Republic of Congo to: (i) promote better implementation ofitsforestry legislation; and (ii) enhance the policy environment for participation of local communities and the private sector insustainable forest management and reforestation. Current PDO To increase the capacity of the forest administration, local communities, and indigenous peoples to co-manage forests. Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-51210 24-May-2012 13-Jun-2012 27-Mar-2013 31-Mar-2018 10.00 9.23 0 TF-A4666 05-May-2017 23-Jun-2017 23-Jun-2017 26-Jul-2021 6.51 4.99 1.52 The World Bank Congo: Forest and Econ. Diversification Project (P124085) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES PFDE has been advancing well despite the COVID-19 crisis, but due to the consequences of increased public health risks and lockdowns as well as technical challenges regarding some activities there have been delays that warrant an 8-month extension. 25% ($1.7m) of the GEF Additional Financing (AF; TF0A4666; total: $6.5m) have not been disbursed yet but could likely be disbursed and implemented through the extension, which would be the first one for the AF. The main activities subject to delays are the following: 1. Ranger stations: The largest activity still under implementation is the construction of two ranger stations (base- camps) of the Ntokou-Pikounda National Park (PNNP), a contract of around $360,000 that is part of an agreement signed with WWF. The activity has started but is expected to only be completed by January 2022. Major reasons for the delay are government-internal discussions about the construction material and delays in the preparation of the safeguards plans. 2. Beekeeping micro-projects: These micro-projects have been under implementation by the Center for the Valorization of Non-Timber Forest Products (CVPFNL) for over two years, but only 50% of the planned activities have been carried out so far. Around $100,000 remain to be disbursed. A major reason for the delay is this state institution’s limited management capacity, especially with a few to following World Bank procedures for procurement. Financial challenges included advancing payments to mobilize project workers for beehive construction and beneficiary training as well as the remoteness of the intervention areas, which made supervision for CVPFNL, with its headquarters located in Pointe-Noire, more expensive than the organization had expected. CVPFNL and the PIU have taken measures to resolve these challenges. A CVPFNL field office was opened in February 2021 in Ouesso, at the heart of the project’s intervention area. PIU specialists are supporting CVPFNL’s supervision during their own field missions and also offer support on procurement. The PIU expects to complete the activity by December 2021. 3. Revolving funds: The funds are supposed to be designed and implemented by a group of three national NGOs and were intended to serve as microfinance mechanism for the upcoming Northern Congo Agroforestry Project (PANC). However, as advised by the Bank's FM team, the PIU contacted the responsible Central African Banking Commission (COBAC) to consult whether the proposed system is consistent with its rules. After several months of delay and repeated reminders from the task team, COBAC responded by informing the PIU that the proposed design will need to be adjusted. The PIU and the NGOs are now revising the proposal accordingly, though the process is moving forward only slowly despite Bank support. There is therefore still a possible risk of not reaching completion for this part of the project ($0.3m). 4. Wildlife Legislation: The revision of the wildlife law and its implementing texts is delayed due to the long legislative processes, which experienced further delays due to the 2021 presidential election and the ensuing reorganization of ministries (though the Minister of Forest Economy remained responsible for leading the process). While the new law is currently being drafted, with the Bank having made recommendations, the date for its approval is hard to predict and will likely be longer than anticipated. Therefore it is not clear yet whether the activity can be fully completed before The World Bank Congo: Forest and Econ. Diversification Project (P124085) project closure. However, there are no implications of this for the results framework as finalizing the legislation is not captured by any of the indicators. The PIU submitted to the Bank an implementation timeline and a disbursement proposal for how the outstanding activities could be implemented if the extension was granted. Some minor inconsistencies remain in the disbursement proposal despite several iterations, but the PIU confirmed that the remaining project funds will be sufficient to finance its continued operation and that the disbursement categories have been complied with. The task team considers this to be credible based on the evidence provided by the PIU. Given the positive track record of the project (with all key project ratings having been assessed as satisfactory or moderately satisfactory during the last ISR) and the results that can be expected if an extension is granted, the task team supports the government’s request to extend the project to March 31, 2022. The project design, scope, and component financing will remain the same. The extension would also reduce the risk of creating a gap between PFDE completion and the start of the upcoming Emission Reductions Program in Sangha and Likouala (P163361; signed in April 2021) and the Northern Congo Agroforestry Project (P166189; expected to be negotiated in June 2021), which are expected to be implemented by the same PIU. The project has already achieved/exceeded all PDO indicators (except share of female beneficiaries, probably only due to a gap in the M&E system rather than neglect of women during implementation) and is expected to also meet/exceed the remaining intermediary indicator targets. As indicated in Client Connection, there are no overdue audits for the project. III. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications 31-Mar-2018, 07- IDA-51210 Closed 30-Nov-2017 Nov-2018 TF-A4666 Effective 26-Jul-2021 31-Mar-2022 31-Jul-2022