The World Bank ENVIRONMENTAL SERVICES (P130492) REPORT NO.: RES42847 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF ENVIRONMENTAL SERVICES APPROVED ON JULY 8, 2014 TO MINISTRY OF FINANCE ENVIRONMENT, NATURAL RESOURCES & THE BLUE ECONOMY EUROPE AND CENTRAL ASIA Regional Vice President: Anna M. Bjerde Country Director: Linda Van Gelder Regional Director: Steven N. Schonberger Practice Manager/Manager: Kseniya Lvovsky Task Team Leader(s): Drite Dade The World Bank ENVIRONMENTAL SERVICES (P130492) ABBREVIATIONS AND ACRONYMS AF Additional Financing ESP Environmental Services Project IPARD Instrument for Pre-Accession for Rural Development of the European Union MTE Ministry of Tourism and Environment PDO Project Development Objective The World Bank ENVIRONMENTAL SERVICES (P130492) BASIC DATA Product Information Project ID Financing Instrument P130492 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 08-Jul-2014 30-Sep-2020 Organizations Borrower Responsible Agency Ministry of Finance Ministry of Environment Project Development Objective (PDO) Original PDO The Project Development Objective (PDO) is to support sustainable land management practices and increase communities’ monetary and non-monetary benefits in targeted Project areas which are mainly in erosion prone rural upland areas. This PDO is to be achieved through the support of alternative livelihoods and provision of environmental services and through sustainable utilization of wood andpasture products in the long term. The Project will particularly focus on enhancing the financial, economic, and institutional sustainability of land use and natural resources management, and will help build capacities of Albania farmers, community organizations and government institutions to efficiently use EU funding. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-84010 08-Jul-2014 25-Jul-2014 29-Jan-2015 30-Sep-2020 10.00 6.50 2.15 TF-18238 10-Oct-2014 27-Jan-2015 29-Jan-2015 30-Sep-2020 7.31 5.43 1.88 TF-17364 25-Jul-2014 25-Jul-2014 29-Jan-2015 30-Sep-2020 2.88 2.06 .82 The World Bank ENVIRONMENTAL SERVICES (P130492) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. This Restructuring Paper (RP) proposes an eight months extension of the project closing date from September 30, 2020 to May 31, 2021, and provision of US$0.56 million available fund balance by the Swedish Government original commitment. This will be the second restructuring for the Environmental Services Project (ESP). The ESP financing includes US$10.0 million from IBRD, US$2.88 million from the Global Environment Facility, and from the Swedish Government US$7.3 million under the original Trust Fund and US$2.0 million Additional Financing. 2. The Additional Financing Trust Fund of US$2.0 equivalent is expected to be effective during August 2020. 3. Progress against the Project Development Objective (PDO) and implementation progress are currently rated Moderately Satisfactory. Key ESP achievements to date include: (i) successful completion of field measurements and data processing for the National Forest Inventory, (ii) successful implementation of IPARD-like (Instrument for Pre-Accession for Rural Development of the European Union) forestry grants by forest users’ associations of two calls of IPARD-like forestry grants, (iii) completion of registration of forest and pasture lands in 19 municipalities and advanced implementation in 42 municipalities, (iv) finalized Albanian Forest Information System in the Ministry of Tourism and Environment (MTE - former Ministry of Environment) and all municipalities, (v) ongoing preparation of forest and pasture management plans in four municipalities. The new law on forestry was approved by the Parliament in April 30, 2020. ESP is supporting the newly established National Forestry Agency under the institutional strengthening component. The ESP overall disbursement from the above mentioned three sources of funding is 75 percent, while commitment is 90 percent. The ESP’s implementation arrangements remain adequate (fiduciary, safeguards, monitoring and evaluation) in terms of staff and effectiveness. There are no outstanding financial audits for the project and financial management is satisfactory. The environmental and social safeguards performance of the Project has been satisfactory. The Environmental and Social Management Framework is properly applied. The ESP investments did not have any negative environmental impacts, but rather helped reverse land and watershed degradation through both physical interventions for forest and pasture regeneration and the empowerment of rural population and municipalities to properly manage their natural resources.The Integrated Safeguards Data Sheet was updated during the first restructuring. II. DESCRIPTION OF PROPOSED CHANGES The World Bank ENVIRONMENTAL SERVICES (P130492) 5. The RP proposes a second level restructuring comprising: (i) an eight month extension of the original project closing date from September 30, 2020 to May 31, 2021 ensure sufficient time for the completion of registration and forest and pasture management planning and additional grants to be supported under the Additional Financing Trust Fund; and (ii) increase of US$0.56 million under the Swedish Grant amount available for commitment after deduction of all administrative fees on the contributions received from the donor. The allocation of additional funds will be used for activities under disbursement category 1 – Goods, Works, Consultants and Non-consulting services, Training, Operating Costs under Part 1, Part 2 (a) and (c), Part 3 (a) and (c) and Part 4 of the Project. 6. COVID-19 crises and travel restrictions slowed down the pace of implementation that was gained prior to March 2020 and key phases of implementation of several activities were postponed in time like public display of registration, field data collection for forest and pasture management plans, and rolling out of Albanian Forest Information System in municipalities. Detailed revised time-bound plan for project activities have been agreed with the MTE and will be closely monitored to ensure their timely completion and achievement of the PDO. Another reason for the requested extension was the delayed countersigning of the Grant Agreement for the AF. III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Components and Cost ✔ Loan Closing Date(s) ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ PBCs ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ The World Bank ENVIRONMENTAL SERVICES (P130492) Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Component 1. Strengthening Component 1. Strengthening Institutional Capacity to improve Institutional Capacity to environmental services from 10.09 Revised improve environmental 10.35 integrated landscape services from integrated management landscape management Component 2. Planning and Component 2. Planning and Provision of IPARD like Grants to 9.94 Revised Provision of IPARD like Grants 10.24 improve land management to improve land management Component 3. Introducing Component 3. Introducing Payment for Environmental 0.98 No Change Payment for Environmental 0.98 Services Services Component 4. Supporting Project Component 4. Supporting 1.17 No Change 1.17 Implementation Project Implementation TOTAL 22.18 22.74 OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IBRD-84010 Effective 30-Sep-2019 30-Sep-2020 31-May-2021 30-Sep-2021 TF-17364 Effective 30-Sep-2019 30-Sep-2020 31-May-2021 30-Sep-2021 The World Bank ENVIRONMENTAL SERVICES (P130492) 30-Sep-2019, 30- TF-18238 Effective 30-Jun-2019 31-May-2021 30-Sep-2021 Sep-2020 . The World Bank ENVIRONMENTAL SERVICES (P130492) . Results framework COUNTRY: Albania ENVIRONMENTAL SERVICES Project Development Objectives(s) The Project Development Objective (PDO) is to support sustainable land management practices and increase communities’ monetary and non-monetary benefits in targeted Project areas which are mainly in erosion prone rural upland areas. This PDO is to be achieved through the support of alternative livelihoods and provision of environmental services and through sustainable utilization of wood andpasture products in the long term. The Project will particularly focus on enhancing the financial, economic, and institutional sustainability of land use and natural resources management, and will help build capacities of Albania farmers, community organizations and government institutions to efficiently use EU funding. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 To support sustainable land management practices in targeted project areas Land area where sustainable land mgt. practices were adopted as a 0.00 0.00 0.00 3,000.00 4,000.00 7,500.00 9,000.00 result of proj (CRI, Hectare(Ha)) To increase communities' monetary and non-monetary benefits in targeted project areas People in forest&adjacent community with monetary/non-monetary 0.00 3,000.00 benefit from forest (Number) The World Bank ENVIRONMENTAL SERVICES (P130492) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 People in forest and adjacent community 0.00 1,000.00 with benefits from forest-female (Number) People in forest&adj. commy with benefit from forest-Ethnic 0.00 10.00 minority/indigenous (Number) PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 Component 1. Strengthening Institutional Capacity to improve environmental services from integrated landscape management Forest and Pasture Areas Registered 0.00 262,029.00 870,000.00 1,100,000.00 (Hectare(Ha)) Land management specialists and users 0.00 0.00 500.00 1,000.00 1,500.00 2,000.00 2,000.00 trained (Number) Members of Forest Pasture Users' 0.00 0.00 100.00 500.00 800.00 1,000.00 2,000.00 Associations trained (Number) The World Bank ENVIRONMENTAL SERVICES (P130492) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 Female members of Forest and Pasture 0.00 0.00 50.00 100.00 300.00 400.00 800.00 Users's Associations trained (Number) Individual famers 0.00 0.00 300.00 trained (Number) Female farmers 0.00 0.00 100.00 200.00 300.00 400.00 165.00 trained (Number) Ministry staff 0.00 100.00 300.00 400.00 500.00 600.00 700.00 trained (Number) Female land management 0.00 0.00 100.00 1,000.00 4,000.00 8,000.00 800.00 specialists and users trained (Number) Beneficiaries participating in project consultation activities 0.00 350.00 during implementation (Number) Female benficiaries participating in project consultation 0.00 100.00 activities during implementation (Number) Component 2. Planning and Provision of IPARD like Grants to improve land management The World Bank ENVIRONMENTAL SERVICES (P130492) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 % of grant applications fulfill the requirements 0.00 0.00 20.00 40.00 60.00 60.00 60.00 (Percentage) % of the grant budget 0.00 0.00 0.00 10.00 40.00 100.00 100.00 disbursed (Percentage) % of grants budget disbursed to female 0.00 0.00 0.00 5.00 10.00 15.00 15.00 applicants (Percentage) % of grants budget disbursed to 0.00 0.00 0.00 10.00 10.00 50.00 50.00 10.00 farmers (Percentage) % of grants disbursed to Forest and Pasture Users' 0.00 0.00 0.00 10.00 10.00 50.00 82.00 Associations (Percentage) Pasture area brought under management 0.00 0.00 20,000.00 30,000.00 50,000.00 70,000.00 90,000.00 plans (Hectare(Ha)) Forest area brought under management 0.00 0.00 30,000.00 60,000.00 90,000.00 114,000.00 180,000.00 plans (CRI, Hectare(Ha)) % of forest and pasture users’ associations 0.00 80.00 reporting that forest The World Bank ENVIRONMENTAL SERVICES (P130492) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 and pastures management plans represented the views of the community (Percentage) Component 3. Introducing Payment for Environmental Services Percentage of estimated sediment delivery to reservoirs in 0.00 0.00 0.00 10.00 10.00 pilot areas covered by PES (Percentage) IO Table SPACE The World Bank ENVIRONMENTAL SERVICES (P130492)