Document of The World Bank FOR OFFICIAL USE ONLY Report No: 75813-BR RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SECOND MINAS GERAIS DEVELOPMENT PARTNERSHIP PROJECT LOAN 75470-BR May 1, 2008 TO THE STATE OF MINAS GERAIS, BRAZIL WITH THE GUARANTEE OF THE FEDERATIVE REPUBLIC OF BRAZIL March 25, 2013 Poverty Reduction and Economic Management, Human Development and Social Development Departments Country Management Unit for Brazil Latin America and Caribbean Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Regional Vice President: Hasan A. Tuluy Country Director: Deborah L. Wetzel Sector Director: Rodrigo A. Chaves Sector Manager: Arturo Herrera Task Team Leader: Roland Clarke 2 BRAZIL SECOND MINAS GERAIS DEVELOPMENT PARTNERSHIP PROJECT CONTENTS DATA SHEET ................................................................................................................................ 4 Restructuring Paper ......................................................................................................................... 6 3 BRAZIL SECOND MINAS GERAIS DEVELOPMENT PARTNERSHIP PROJECT DATA SHEET Restructuring Status: Draft Restructuring Type: Level Two Last modified on date : 1. Basic Information Project ID & Name P101324: BR-Second Minas Gerais Dev't Partnership Country Brazil Task Team Leader Roland N. Clarke Sector Manager/Director Arturo Herrera Gutierrez Country Director Deborah L. Wetzel Original Board Approval Date 05/01/2008 Original Closing Date: 06/30/2011 Current Closing Date 03/31/2013 Proposed Closing Date [if applicable] 12/31/2013 EA Category B-Partial Assessment Revised EA Category B-Partial Assessment-Partial Assessment EA Completion Date 01/15/2008 Revised EA Completion Date 2. Revised Financing Plan (US$m) Source Original Revised BORR 0.00 0.00 IBRD 976.00 1,437.00 Total 976.00 1,437.00 3. Borrower Organization Department Location State of Minas Gerais Brazil 4. Implementing Agency Organization Department Location Secretariat of Planning and Brazil Management 4 5. Disbursement Estimates (US$m) Actual amount disbursed as of 03/25/2013 1,430.74 Fiscal Year Annual Cumulative 2013 1.50 1,432.24 2014 3.32 1,435.56 To be cancelled 1.44 Total 1,437.00 6. Policy Exceptions and Safeguard Policies Does the restructured project require any exceptions to Bank policies? N Does the restructured projects trigger any new safeguard policies? If yes, please select N from the checklist below and update ISDS accordingly before submitting the package. 7a. Project Development Objectives/Outcomes Original/Current Project Development Objectives/Outcomes (i) To help the State of Minas Gerais improve the efficiency and effectiveness of public resource use and allocation for economic and social development; (ii) to support the adoption of innovations in public management by the State; and (iii) to support the State in strengthening its results-based management system of monitoring and evaluation of results. 7b. Revised Project Development Objectives/Outcomes [if applicable] 5 BRAZIL SECOND MINAS GERAIS DEVELOPMENT PARTNERSHIP PROJECT LOAN 7547-BR Restructuring Paper 1. The closing date for the Brazil - Second Minas Gerais Development Partnership Project (P101324), loan number 7547-BR, will be extended until from March 31st 2013 to December 31st, 2013. 2. The project objectives continue to be achievable and the performance of the Borrower and other project implementing agencies is satisfactory. Disbursements to date account to US$1.430 billion; which corresponds to 99.5 percent of total Bank financing (US$1.437 billion). There remain US$6.26 million undisbursed. The 2010 target for one of the disbursement-linked indicators (DLIs) was not met. As a result, an amount of US$1,437,500 of Component 1 was not disbursed, and will be cancelled. All other DLIs have been met and disbursement against them made. In March 2012, the Borrower submitted a request for extension through October 31, 2013. However, at that time the Guarantor only approved the extension until March 31, 2013, which was granted by the Bank On December 17, 2012 the Borrower submitted a request for an extension until December 31, 2013 to ensure sufficient time to finalize the last ongoing consulting activities. The extension was approved by the Guarantor through COFIEX’s Recommendation letter No. 706 of December 12, 2012 and a letter from Brazil’s National Treasurer (STN) dated February 27, 2013. The main two main outstanding contracts relate to consulting services for logistic studies for railways in the North of Minas Gerais (US$ 1 million, signed August 2012) and for a metropolitan master plan for Belo Horizonte (US$2.8 million, signed December 2012). These two contracts together with final payments from two other consulting contracts fully account for the US$4.8 million still to be disbursed. 3. The proposed extension is necessary for the project to be fully and successfully completed. Additional time is needed to complete technical assistance activities of strategic importance to the Borrower, related to the new institutional arrangements introduced for the management of the Metropolitan Region of Belo Horizonte (MRBH), the state capital. The activities seek to support the development of master plans to guide urban and economic development in key areas of the metropolitan region. This initiative could have potential demonstration effects for other metropolitan areas in Brazil. The contract with the consulting company was signed in early December 2012. 4. This will be the third extension of the project. 6