Document of The World Bank Report No: RES11477 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF THE SAN JUAN SOCIAL INCLUSION AND DEVELOPMENT PROJECT - SWAp LOAN NO. AR-7853 MARCH 16, 2010 TO THE PROVINCE OF SAN JUAN, ARGENTINA WITH THE GUARANTEE OF THE ARGENTINE REPUBLIC SEPTEMBER 24, 2013 Poverty Reduction and Economic Management Unit Country Management Unit for Argentina, Paraguay and Uruguay 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. ABBREVIATIONS AND ACRONYMS DLI Disbursement-linked Indicator PAD Project Appraisal Document PDO Project Development Objective SWAp Sector Wide Approach Regional Vice President: Hasan A. Tuluy Country Director: Penelope J. Brook Acting Sector Director: J. Humberto Lopez Sector Manager: Auguste Tano Kouame Task Team Leader: Hannah Nielsen 2 ARGENTINA AR SAN JUAN SWAP P113896 CONTENTS Page A. SUMMARY ........................................................................................................................... 4 B. PROJECT STATUS .............................................................................................................. 4 C. PROPOSED CHANGES ...................................................................................................... 4 3 AR SAN JUAN SOCIAL INCLUSION AND DEVELOPMENT PROJECT – SWAP P113896, LOAN AR-7853 RESTRUCTURING PAPER A. SUMMARY 1. The proposed restructuring is to: (i) extend the closing date by 6 months to March 31, 2014, and (ii) reallocate loan proceeds from the technical assistance component (Category 2) to the components supporting the implementation of the Eligible Expenditure Programs in the health and education sector (Category 1). The proposed changes are to ensure the sustainability of the reforms supported by the project and to fully achieve the Project Development Objective (PDO). B. PROJECT STATUS 2. The Board approved a loan in the amount of US$50 million for the San Juan Social Inclusion and Development Project – SWAp on March 16, 2010. The loan only became effective on September 14, 2011 due to unforeseen delays in passing a governmental decree authorizing the signature of the loan. The project was restructured in March 2012 to extend the closing date by 18 months to September 30, 2013 and to adjust the implementation schedule and the target reference date of the disbursement-linked indicators for the Health Sector. 3. The San Juan SWAp has so far shown good results and progress towards achievement of the PDO and Implementation Progress have both been rated satisfactory continuously. Four out of five disbursements have taken place with disbursement currently standing at 81 percent. The PDO can be fully achieved by the new closing date. C. PROPOSED CHANGES 4. Extension of closing date: The closing date will be extended from September 30, 2013 to March 31, 2014. This will be the second extension of the project. 5. Reallocation of loan proceeds: Proceeds of the loan will be reallocated as follows: Current Proposed Difference due to Category of allocation allocation reallocation Expenditure (USD) (USD) (USD) (1) Personnel Expenditure under the 46,875,000 47,575,000 +700,000 Eligible Expenditures Programs (2) Goods, consultant’s services (including Project audits) and/or 3,000,000 2,300,000 -700,000 Training under Part C of the Project (3) Premia for Interest Rate Caps and 0 0 0 Interest Rate Collars (4) Front-end Fee 125,000 125,000 0 Total 50,000,000 50,000,000 0 4 6. Also, Schedule 4 of the Loan Agreement is updated as follows: SCHEDULE 4 Eligible Expenditure Programs Sectors and Borrower’s Eligible Annual Budget Annual Budget Annual EEPs Budget Line Expenditure for the year for the year Budget for the Numbers Type 2010 (in AR$- 2011 (in AR$- year 2012 (in Pesos) Pesos) AR$-Pesos) Health Sector Personal Health 01.04.00.A04 Personnel 170,080,000 170,447,300 198,820,000 Care Program Expenditures Public Health 01.04.00.A05 Personnel 3,181,500 3,271,350 4,345,700 Prevention and Expenditures Promotion Program Public Health 01.04.00.A06 Personnel 10,919.200 11,663.420 14,911,500 Management Expenditures Program for Service Providers Public Health 01.04.00.A07 Personnel 17,212,800 17,816,860 20,000,000 Management Expenditures Program for the Ministry of Health Education Sector Todos Pueden 01.04.00.A08 Personnel 14,057,113 13,010,800 14,980,000 Aprender (“All Expenditures Can Learn”) program Jornada 01.04.00.A09 Personnel 28,052,407 27,521,000 38,560,000 Completa (“Full Expenditures Day”) program 5 7. And Table 2 from the PAD (page 7) changes as follows: Table 2 EEP Budget Lines by sector (in AR$ Pesos) Program Budget Name and Line Number 2010 2011 2012 2010-2012 (GoSJ Budget—Programmatic classification) Total EEP Budgets: Health 01.04.00.A04 170,080,000 170,447,300 198,820,000 539,347,300 Personal Health Care Program 01.04.00.A05 3,181,500 3,271,350 4,345,700 10,798,550 Public Health Prevention and Promotion Program 01.04.00.A06 10,919.200 11,663.420 14,911,500 14,934,083 Public Health Management Program for Service Providers 01.04.00.A07 17,212,800 17,816,860 20,000,000 55,029,660 Public Health Management Program for the Ministry of Health Subtotal 201,393,500 203,198,930 238,077,200 642,669,630 Education 01.04.00.A08 14,057,113 13,010,800 14,980,000 42,047,913 Todos Pueden Aprender (“All Can Learn”) program 01.04.00.A09 28,052,407 27,521,000 38,560,000 94,133,407 Jornada Completa (“Full Day”) program Subtotal 42,109,520 40,531,800 53,540,000 136,181,320 Part of EEP Budgets financed by the Bank: Health 01.04.00.A04 120,680,000 121,047,300 149,420,000 391,147,300 Personal Health Care Program 01.04.00.A05 3,181,500 3,271,350 4,345,700 10,798,550 Public Health Prevention and Promotion Program 01.04.00.A06 10,919.200 11,663.420 14,911,500 14,934,083 Public Health Management Program for Service Providers 01.04.00.A07 17,212,800 17,816,860 20,000,000 55,029,660 Public Health Management Program for the Ministry of Health Subtotal 151,993,500 153,798,930 188,677,200 494,469,630 Education 01.04.00.A08 14,057,113 13,010,800 14,980,000 42,047,913 Todos Pueden Aprender (“All Can Learn”) program 01.04.00.A09 28,052,407 27,521,000 38,560,000 94,133,407 Jornada Completa (“Full Day”) program Subtotal 42,109,520 40,531,800 53,540,000 136,181,320 8. The proposed changes do not entail a change in the PDO, loan amount, DLIs, other indicators or percentages of expenditures financed by the loan nor do they affect other aspects of the project (economic and financial analysis, environmental impact category etc.). 6 DATA SHEET Argentina AR San Juan SWAP (P113896) LATIN AMERICA AND CARIBBEAN LCSPE Report No: RES11477 Basic Information Project ID: P113896 Lending Instrument: Specific Investment Loan Regional Vice President: Hasan A. Tuluy Original EA Category: Partial Assessment (B) Country Director: Penelope J. Brook Current EA Category: Partial Assessment (B) Acting Sector Director: J. Humberto Lopez Original Approval Date: 16-Mar-2010 Sector Manager: Auguste Tano Kouame Current Closing Date: 30-Sep-2013 Team Leader: Hannah Sibylle Nielsen Borrower: Province of San Juan, Argentina The project is being implemented by the Ministries of Health and Education (the two Responsible first components) and the San Juan Investment Development Agency (the third Agency: component). The Agency is the main focal point for the project. Restructuring Type Form Type: Decision Authority: Regional Vice President Short Form Approval Restructuring Level 2 Explanation of The cumulative extension of Level: Approval Authority: the closing date is 24 months. Financing ( as of 09-Aug-2013 ) Key Dates Effectiveness Original Revised Project Ln/Cr/TF Status Approval Date Signing Date Date Closing Date Closing Date P113896 IBRD-78530 Effective 16-Mar-2010 31-Aug-2011 14-Sep-2011 31-Mar-2012 30-Sep-2013 Disbursements (in Millions) Un- % Project Ln/Cr/TF Status Currency Original Revised Cancelled Disbursed disbursed Disbursed P113896 IBRD-78530 Effective USD 50.00 50.00 0.00 40.56 9.44 81 Policy Waivers Does the project depart from the CAS in content or in other significant Yes [ ] No [ X ] respects? Does the project require any policy waiver(s)? Yes [ ] No [ X ] 7 A. Summary of Proposed Changes The proposed restructuring is to: (i) extend the closing date by 6 months to March 31, 2014, and (ii) reallocate loan proceeds from the technical assistance component (Category 2) to the components supporting the implementation of the Eligible Expenditure Programs in the health and education sector (Category 1). B. Project Status The San Juan SWAp has so far shown good results and progress towards achievement of the Project Development Objective (PDO) and Implementation Progress have both been rated satisfactory continuously. Four out of five disbursements have taken place with disbursement currently standing at 81 percent. The PDO can be fully achieved by the new closing date. C. Proposed Changes Financing Change in Loan Closing Date(s): Explanation The closing date of the project will be extended from September 30, 2013 to March 31, 2014. This would be the second extension for this operation. The proposed extension is necessary to ensure the sustainability of the reforms. Original Closing Current Closing Proposed Closing Previous Closing Ln/Cr/TF Status Date Date Date Date(s) IBRD- Effective 31-Mar-2012 30-Sep-2013 31-Mar-2014 30-Sep-2013 78530 Reallocations Explanation Undisbursed funds under the technical assistance component of US$700,000 (out of US$3 million originally assigned to the technical assistance component) will be reallocated to the components supporting the implementation of the Eligible Expenditure Programs in the health and education sector and will be disbursed together with the 5th and last disbursement. Current Category of Disbursement % Ln/Cr/TF Currency Allocation Expenditure (Type Total) Current Proposed Current Proposed Personnel Exp under IBRD-78530 USD 46,875,000.00 47,575,000.00 100.00 100.00 Eleg Exp Prgrm GO, CS (incl Audits), 3,000,000.00 2,300,000.00 100.00 100.00 TR under Pt C Premia for Interest, 0.00 0.00 0.00 0.00 Caps/Collars Designated Account 0.00 0.00 0.00 0.00 Designated Account 0.00 0.00 0.00 0.00 FRONT END FEE 125,000.00 125,000.00 0.00 0.00 Total: 50,000,000.00 50,000,000.00 8