Document of

               The World Bank


              FOR OFFICIAL USE ONLY



                                                  Report No: 82701 v1




              RESTRUCTURING PAPER



                      ON A



        PROPOSED PROJECT RESTRUCTURING



                       OF



MMA CERRADO POLICY AND BIOME MONITORING PROJECT

                   TO FUNBIO



                     AND OF



     TOCANTINS SUSTAINABLE CERRADO PROJECT

                     TO THE

               STATE OF TOCANTINS



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                           GRANTS FROM THE SUSTAINABLE CERRADO INITIATIVE




                                                October 29, 2013




Sustainable Development Unit

Brazil Country Management Unit

Latin American 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.




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Regional Vice President:   Hasan Tuluy, LCRVP

      Country Director:    Deborah L. Wetzel, LCC5C

       Sector Manager:     Emilia Battaglini, Acting LCSEN

     Task Team Leader:     Maria Bernadete Ribas Lange, LCSEN




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                                                 BRAZIL

                                   SUSTAINABLE CERRADO INITIATIVE

   MMA CERRADO POLICY AND BIOME MONITORING PROJECT – TF096767 TOCANTINS SUSTAINABLE
                             CERRADO PROJECT - TF096766



                                 P091827 / TF096766 AND TF0966767

                                    RESTRUCTING PAPER – LEVEL 2



This level two restructuring paper is to extend the Closing Date of all two projects under the Sustainable
Cerrado Initiative, namely: TF096767 - MMA Cerrado Policy and Biome Monitoring Project, and
TF096766 - Tocantins Sustainable Cerrado Project, from December 2, 2013 to December 31, 2014.



Both projects are part of the Sustainable Cerrado Initiative that addresses global environmental
biodiversity protection priorities, through decentralized actions together with an integrated, biome-
wide coordination.



The MMA Cerrado Policy and Biome Monitoring Project Grant, in the amount of US$4.0 million, which is
implemented by Funbio, was declared effective on September 10, 2010. To date, the Project has
disbursed US$ 1,340,224 (34% of the grant amount). 85% of the remaining funds have already been
committed and are expected to be fully disbursed by December 2014. This project suffered delays due
to the changes in MMA, which caused the project implementation to slow down as the new team
needed to understand the project before moving forward with its implementation.



The Tocantins Sustainable Cerrado Project is financed by a GEF Grant in the amount of US$3.0 million.
The grant was declared effective on September 13, 2010. To date, the Project has disbursed
US$1,854,284 (62% of the grant amount). Most of the remaining funds have already been committed
and are expected to be fully disbursed by December 2014. The project implementation was delayed and
did not meet the tight Procurement Plan’s timeline, as some procurement processes took longer than
expected to be completed. As a result some contracts had to be shorter in order to make the Project’s
current Closing Date, and the required extension will enable these processes and contracts to be
finalized in a more efficient way, allowing the state to receive products that are more complete and with
better quality.


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The proposed amendments are based on the requests from the recipients dated August 12 and
September 25, and the Ministry of the Environment’s (MMA) endorsement, dated August 30, 2013, as
well as the earlier endorsement of the Brazilian Overseas Finance Commission’s (COFIEX), dated May 9,
2013.



This is the second extension of closing date for the TF096766 - Tocantins Sustainable Cerrado Project,
for 13 months, which will add to a total of 18-months extension; and the first extension of Closing Date
for TF096767 - MMA Cerrado Policy and Biome Monitoring Project in a total of 12-months extension.
The reason for these extensions is to fully complete financing of contracts under implementation and to
carry out a broad evaluation of the Projects’ results and intermediary indicators.



The design of the components and activities will remain the same and the projects are expected to
reach their intended objectives, although the scope of the outcome (250,000 ha in new protected areas)
will ultimately depend on the commitment of both Federal and State Governments. Major
accomplishments to date include: (i) strengthening of protection of existing protected areas; (ii)
implementation of new policies on water resources, fauna, and environmental regularization of rural
properties, including specific systems ready to be used; and (iii) development of proposals for the
creation of new protected areas.



As a result of the Project implementation, both MMA and the Tocantins Government were able to
strengthen the dialog and engage with relevant environmental agencies and local actors that are key for
the achievement of the Projects’ objective.



In order to process this request, the Bank team confirms that: (i) the projects’ objectives continue to be
achievable; (ii) all safeguards are being complied with; (iii) the performance of the recipients is
moderately satisfactory; and (iv) the Bank and the recipients agreed on actions that will be undertaken
by the recipients to complete the Project. Procurement post-review and financial management missions
were carried out, and the arrangements in place were considered moderately satisfactory. The
Recipients are in compliance with all major legal covenants including audit requirements concerning
these Grants.




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