The World Bank Second Urban Poverty Reduction Project (PREPUD II) (P145848) REPORT NO.: RES37322 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SECOND URBAN POVERTY REDUCTION PROJECT (PREPUD II) APPROVED ON MAY 14, 2014 TO MINISTRY OF FINANCE SOCIAL, URBAN, RURAL AND RESILIENCE GLOBAL PRACTICE MIDDLE EAST AND NORTH AFRICA Regional Vice President: Ferid Belhaj Country Director: Marina Wes Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez Practice Manager/Manager: Jaafar Sadok Friaa Task Team Leader: Guido Licciardi The World Bank Second Urban Poverty Reduction Project (PREPUD II) (P145848) I. BASIC DATA Product Information Project ID Financing Instrument P145848 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 14-May-2014 30-Jun-2019 Organizations Borrower Responsible Agency Ministry of Finance Djibouti Social Development Agency (ADDS) Project Development Objective (PDO) Original PDO The proposed Project Development Objective (PDO) is to increase access to basic urban services in Quartier 7 (Q7) in Djibouti City. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-54580 14-May-2014 23-Jul-2014 19-Dec-2014 30-Jun-2019 5.60 4.94 .20 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 Urban Poverty Reduction Project (PREPUD II) (P145848) PROJECT CONTEXT. Quartier 7 (Q7), the neighborhood targeted by the project, is located in the Boulaos municipality of Djibouti Ville, and it is the city‘s largest and densest old neighborhood, with 25,000 inhabitants living on 0.56 square kilometers. Q7 is one of the last neighborhoods developed in the 1950s and it is located in an area prone to flooding. Q7 presents a microcosm of the country’s disparities and challenges in providing services. In fact, seventy percent of Q7 households have no sewage system, they use either rudimentary pits or holes in the ground, or have no sanitary system at all. The neighborhood is also regularly flooded, including the houses, which are built below street levels, leading to situations of health hazards. PROJECT AT A GLANCE. The Project Development Objective (PDO) is to increase access to basic urban services in Quartier 7 (Q7). The project finances three components: (i) Infrastructure upgrading in Q7; (ii) Building institutional capacity and citizen engagement; and (iii) Support to implementation, monitoring and evaluation. The project builds on 30 years of Bank engagement in the urban sector in Djibouti, and is a follow-up to a first operation which focused on Q7 and initiated the neighborhood's transformation process. The project is implemented by the Djibouti Agency for Social Development (ADDS), a well-established institution which mandate revolves around urban upgrading and social development in Djibouti, with a long track record of successfully implemented projects financed by the Bank and the donor community. PROJECT PERFORMANCE. The project was approved on May 12, 2014, became effective on December 19, 2014, with a closing date of June 30, 2019. Fiduciary and safeguards provisions have been duly fulfilled throughout preparation and implementation, without major elements of concern. There are no outstanding audits related to the project and the last audit was satisfactory. A Resettlement Action Plan (RAP) was prepared, disclosed, and regularly updated during implementation, reflecting the evolving situation on the ground of a fragile country. Although impacted by low country capacity, typical of a fragile setting, the project achieved a number of results, with substantial advancement toward the PDO, thanks to engagement of the implementing entity. In the last year of implementation, project results exceeded targets in almost all areas, particularly for: (i) number of direct project beneficiaries; (ii) population living within 50 meters of rehabilitated and new roads, drains, and street lighting; and (iii) person-days of short-term employment generated under the project investments. Furthermore, in terms of outputs, all roads planned to be upgraded under the project have been completed, with labor intensive cobblestone techniques that built on regional best practices, development plans for urban expansion have been fully developed and approved, and all planned grants for local civil society organizations based in Q7 have been awarded and fully implemented. In the last Implementation Supervision Report of October 2018, progress towards achievement of the PDO was rated Satisfactory and the overall implementation progress was rated Satisfactory. As of May 2019, disbursement reached 94 percent. Activities lagging behind schedule are: (i) completion of the Omar Gouled central square in Q7; and (ii) roll-out of survey to assess project beneficiary satisfaction. The delay in the implementation of Omar Gouled central square was due to land availability and the opportunity to ensure proper application of Bank safeguards. The delay in the implementation of the survey is a direct consequence of the latter, since such survey aims at measuring beneficiary perceptions of project outputs, including the square. The task team exercised intense supervision and discussed with the implementing entity a detailed timeline for the completion of all remaining activities, both for the construction of the square and for the survey. Concerning the survey, it has been agreed that it will be extended from targeting only the square, as defined by the PAD, to all activities delivered by the project, in the effort to advance the citizen engagement agenda in the country. This will also enhance the relevance of the survey, since the exercise will include outputs delivered and utilized by communities for a sufficient period of time to be statistically relevant. The survey will inform the preparation of the Implementation Completion Report (ICR), and provide first-hand evidence on community feedback. The completion of remaining activities within 6- months is realistic, and the full achievement of the PDO is possible. The World Bank Second Urban Poverty Reduction Project (PREPUD II) (P145848) EXTENSION REQUEST. On May 21, 2019, the Ministry of Finance has requested the Bank a potential 6-month extension to complete all project-funded activities, moving the closing date from June 30, 2019 to December 31, 2019. Requirements for extension of the closing date are satisfied: (i) PDO remains achievable; (ii) performance is satisfactory (as of October 2018, progress towards achievement of the PDO rated Satisfactory and the overall implementation progress rated Satisfactory); and (iii) action plan for project completion has been discussed and agreed with the borrower. This restructuring is only for extending the closing date, it is the first extension granted to the project, and there are no other changes to any aspect of the project design. II. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IDA-54580 Effective 30-Jun-2019 31-Dec-2019 30-Apr-2020