The World Bank Ulaanbaatar Clean Air Project (P122320) REPORT NO.: RES31913 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF ULAANBAATAR CLEAN AIR PROJECT APPROVED ON APRIL 3, 2012 TO MONGOLIA ENERGY & EXTRACTIVES EAST ASIA AND PACIFIC Regional Vice President: Victoria Kwakwa Country Director: Bert Hofman Senior Global Practice Director: Riccardo Puliti Practice Manager/Manager: Jie Tang Task Team Leader: Yun Wu The World Bank Ulaanbaatar Clean Air Project (P122320) I. BASIC DATA Product Information Project ID Financing Instrument P122320 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 03-Apr-2012 30-Jun-2018 Organizations Borrower Responsible Agency Mongolia UBCAP Project Management Unit Project Development Objective (PDO) Original PDO The development objective (PDO) is to enable consumers in ger areas to access heating appliances producinglessparticulatematteremissions and to further develop selected medium-term particulate matter abatement measures in Ulaanbaatarincoordinationwithdevelopment partners. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-50390 03-Apr-2012 04-Apr-2012 18-Dec-2012 30-Jun-2018 15.00 12.58 1.72 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 Ulaanbaatar Clean Air Project (P122320) A. Summary of Proposed Changes This restructuring paper seeks Regional Vice President’s (RVP) approval for the extension of the Ulaanbaatar Clean Air Project (UBCAP) closing date by 12 months from current closing date of June 30, 2018 to June 30, 2019 to complete remaining activities. This will be the second extension of the closing date cumulatively reaching 24 months of extension. The extension will provide additional time to complete implementation of the project activities. This extension will also allow additional time for preparation of the additional financing (AF) as requested by the Government of Mongolia (GoM). In the meantime, the AF request is being addressed separately from this extension. Reallocation is not needed for implementing the remaining activities. B. Project Status and Proposed Changes UBCAP was approved on April 3, 2012 with an International Development Association (IDA) credit of SDR$ 9.7 million (US$ 15 million equivalent). The project became effective on December 18, 2012 and the original project closing date was June 30, 2017, which was later revised to June 30, 2018. The objective of the project is to enable consumers in ger areas to access heating appliances producing less particulate matter emissions and to further develop selected medium-term particulate matter abatement measures in UB in coordination with development partners. This objective is to be achieved through three components: (A) Ger Area Particulate Matter Mitigation; (B) Particulate Matter Mitigation in Central Ulaanbaatar; and (C) Public Awareness Raising, Program Coordination, and Project Management. Progress in achieving the PDO and in project implementation is satisfactory. After almost five years of project implementation, the activities under Component B and C have been largely completed, and the remaining activities under Component A are either under implementation or planned for. The end target of component A to implement a stove replacement program by providing subsidies and technical assistance has been reached and new standards for stoves and low-pressure boilers have been issued. All four medium-term abatement studies under Component B have been completed and endorsed by relevant political agencies. Under Component C, the remaining activities, program coordination and public awareness support, and project management and Monitoring and Evaluation, are being finalized. As of April 2018, total disbursements have reached US$ 12.58 million (87.95%). Despite notable achievements of UBCAP, continued efforts are still needed to help tackle air pollution in UB. The GoM continues to be fully committed to finding a coherent and sustainable solution to achieve desired air pollution reduction objectives. The priority programs and responsible parties are specified in the “National Program on Reducing Air and Environmental Pollution” from March 2017 and the government’s Decree #49 released in Feb 2018. In this regard, UBCAP will continue to support government’s program through implementing its remaining activities. The rationale for the proposed extension is to allow for additional time needed to complete the remaining activities. UB and the GoM are committed to the goals of UBCAP and wish to continue to find solutions to winter air pollution in UB and ger areas. UBCAP has demonstrated success through the promotion of low emissions stoves, development of medium term abatement measures, and facilitating coordination among stakeholders on air pollution abatement. Additionally, the extension will allow for time to prepare the AF project, as part of GoM’s request. Finally, the extension will support the Bank’s continued engagement with UB and the GoM’s clean air initiatives in close coordination and collaboration with other development partners. The Project Management Unit has prepared a detailed work plan which provides reasonable assurance that they will be completed within the extended project period. The World Bank Ulaanbaatar Clean Air Project (P122320) The project is in full compliance with legal, safeguard and fiduciary requirements. There are no outstanding audit reports. Project procurement, financial management, and safeguard performance have consistently been rated satisfactory or moderately satisfactory throughout the project life time. III. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IDA-50390 Effective 30-Jun-2017 30-Jun-2018 30-Jun-2019 30-Oct-2019