The World Bank Second Science & Technology Project (P127308) REPORT NO.: RES36483 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SECOND SCIENCE & TECHNOLOGY PROJECT APPROVED ON APRIL 26, 2013 TO CROATIA FINANCE, COMPETITIVENESS AND INNOVATION EUROPE AND CENTRAL ASIA Regional Vice President: Cyril E Muller Country Director: Arup Banerji Senior Global Practice Director: Ceyla Pazarbasioglu-Dutz Practice Manager/Manager: Marialisa Motta Task Team Leader: Todor Milchevski The World Bank Second Science & Technology Project (P127308) I. BASIC DATA Product Information Project ID Financing Instrument P127308 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 26-Apr-2013 31-Jan-2020 Organizations Borrower Responsible Agency Ministry of Science, Education and Sports,Ministry of Croatia Finance Project Development Objective (PDO) Original PDO The development objective of the proposed Project is to support Croatia to absorb EU Funds in the research and innovation sector bycapacitating selected public sector organizations and stimulating the demand for those funds from the business and scientific communities. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-82580 26-Apr-2013 22-May-2013 31-Jul-2013 31-Jan-2020 26.24 22.70 1.12 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES The World Bank Second Science & Technology Project (P127308) The progress towards Project Development Objective (PDO) is satisfactory, with targets achieved or close to be achieved (most PDO indicators have been met or surpassed). Also, the project implementation progress (IP) is satisfactory, with more than 98 % of the loan funds contracted and about 95 % of the loan funds disbursed. As evidenced by the results framework indicators there is progress both in terms of outcome and output indicators. Thus, the capacity of the research and innovation public sector to absorb the EU funds has improved. Specifically, the government developed and adopted key strategic documents constituting ex-ante conditionality to use EU funds in R&D area. EUR 12.8 million have been absorbed from EU funds through a R&D grant scheme developed by the Ministry of Science and Education (MoSE), whereas the grant beneficiaries under the Unity for Knowledge Fund (UKF) have developed a R&D project pipeline worth EUR 24 million for the EU’s Horizon 2020 program, some of which have already been awarded. The MoSE is well advanced in the preparation of the technical documentation for four large R&D infrastructure projects that will apply for European Regional Development Fund (ERDF), for a value estimated at EUR 159 million (out of which 85% or 135 million is a grant from ERDF; and the remaining 15% will be funded from national component). The project has provided training in EU Funds management to technical staff in the MoSE, and R&D practitioners in UKF, Croatian Science Foundation (CSF) and Croatian Agency for SMEs, Innovations and Investments (HAMAG-BICRO). About 200 knowledge-based companies and public research entities benefited from R&D programs of UKF/CSF and HAMAG-BICRO, which increases the pool of innovative firms and researchers’ groups able to apply for R&D allocations available under EU Funds. There are only two activities that still need to be contracted and completed by project’s closing date (January 2020), both under Component A related to the STP2 M&E. The proposed restructuring entails the reallocation of EUR 165,837 from Part B.1 to Part A and of EUR 7,514 from Part B.1 to Part B.2. As result of this reallocation the total project cost decreases by EUR 157,481. No modifications are envisaged in the project activities or the results framework. As stipulated in the restructuring request submitted by the client, the reallocated funds shall be used for: i) completing the preparation of the technical documentation for the open scientific infrastructural platforms for innovative applications in the economy and society (O-ZIP) research infrastructure project, implemented by Rudger Boskovic Institute (RBI). As evidenced by the previous Implementation Status Reports, the preparation of this substantive research infrastructure project has come across several critical points, so it would be good to support the finalization accordingly; ii) evaluation of the STP2 project in preparation of the forthcoming Implementation Completion Report, due following the project closing; iii) small increase to the Connectivity Program implemented by UKF (B2). II. DETAILED CHANGES REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Current Current Actuals + Proposed Disbursement % Ln/Cr/TF Expenditure Allocation Committed Allocation (Type Total) Category Current Proposed The World Bank Second Science & Technology Project (P127308) IBRD- G,non CS,TR,CS 82580-001 for Part 5,950,920.90 4,479,253.44 6,116,757.90 100.00 100.00 Currency: A,IOC,Audit EUR Sub-financing 9,574,405.00 8,610,765.34 9,401,054.00 78.00 78.00 under Part B.1 Sub-financing 3,386,700.00 3,297,945.41 3,394,214.00 71.00 71.00 under Part B.2 PPF 1,037,974.10 1,037,974.10 1,037,974.10 REFINANCING UNALLOCATED 0.00 0.00 0.00 Total 19,950,000.00 17,425,938.29 19,950,000.00