The World Bank CG Rep. Health Sector Project (P143849) REPORT NO.: RES39094 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF CG REP. HEALTH SECTOR PROJECT APPROVED ON DECEMBER 20, 2013 TO MINISTRY OF FINANCE HEALTH, NUTRITION & POPULATION AFRICA Regional Vice President: Hafez M. H. Ghanem Country Director: Jean-Christophe Carret Regional Director: Amit Dar Practice Manager/Manager: Magnus Lindelow Task Team Leader: Moulay Driss Zine Eddine El Idrissi, Hadia Nazem Samaha The World Bank CG Rep. Health Sector Project (P143849) ABBREVIATIONS AND ACRONYMS The World Bank CG Rep. Health Sector Project (P143849) Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. BASIC DATA Product Information Project ID Financing Instrument P143849 Investment Project Financing Original EA Category Current EA Category Approval Date Current Closing Date 20-Dec-2013 30-Nov-2019 Organizations Borrower Responsible Agency Ministry of Finance Ministry of Health and Populaton Project Development Objective (PDO) Original PDO The project development objective is to increase utilization and quality of maternal and child health services in targeted areas. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-53570 20-Dec-2013 19-Feb-2014 21-Jan-2015 30-Nov-2019 10.00 9.33 .03 TF-15744 19-Feb-2014 19-Feb-2014 21-Jan-2015 30-Nov-2019 10.00 9.97 .03 The World Bank CG Rep. Health Sector Project (P143849) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No Note to Task Teams: End of system generated content, document is editable from here. I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. The Republic of Congo (ROC) Health Sector Project (P143849) was approved on December 20, 2013. The financing agreement was signed on February 19, 2014. The project became effective 11 months after signing, on January 21, 2014. The project was initially funded through a US$10 million IDA credit, a US$10 million multi- donor trust fund (MDTF) grant and US$100 million in counterpart funding. A first tranche of US$20 million in counterpart funding was released as a condition of project effectiveness; however, other tranches failed to materialize due to the difficult fiscal situation of the country following the sharp drop in oil prices. In order to remedy for the delay in getting the release of the second tranche of counterpart funding, a restructuring was completed in September 2017 to change the disbursement ratios from 84 percent Government and 16 percent World Bank (8 percent for IDA credit and 8 percent for MDTF) to 2 percent Government and 98 percent World Bank (49 percent for IDA credit and 49 percent for MDTF) with the expectation that some counterpart funding would eventually be released. This allowed the project to continue its implementation by frontloading IDA/TF resources to the extent possible. 2. The last Implementation Support Report (May 2019) rated both Implementation Progress and Project Development Objective as moderately satisfactory. Given that additional counterpart funding never materialized, these ratings reflect Project coverage of 48 percent of the population. Had the full counterpart funding materialized, the Project would have covered 86 percent of the population. As of May 2019, implementation was on track and several PDO indicators were substantially achieved and there is no overdue audit report. However funding was depleted after 3.7 years of purchasing health services due to lack of counterpart funding. 3. As additional counterpart funding remained unavailable, IDA funding was exhausted by July 2018. The recipient requested the World Bank to raise the financing percentage for the MDTF from 49 percent to 98 percent. The World Bank team confirmed such option in order to pay pending expenditures and failed to inform the Borrower of the need to formalize such agreement through a restructuring. It is only during an ex-post review of expenditures from withdrawal applications that this matter was raised. Therefore, a retroactive Level 2 restructuring is necessary in order to reflect the change in disbursement percentage for the MDTF and to avoid declaring ineligible expenditures of approximately US$814,000. 4. To address this issue, the Government has requested an amendment to the current financing agreement as it relates to the disbursement ratio. The World Bank CG Rep. Health Sector Project (P143849) II. DESCRIPTION OF PROPOSED CHANGES 5. The purpose of this restructuring is therefore to modify the disbursement percentages. This will allow the use of the MDTF at the ratio of 98 percent retroactive to July 2018. The new disbursement ratio will be 0 percent IDA, 98 percent MDTF and 2 percent Government counterpart funding. III. SUMMARY OF CHANGES Changed Not Changed Reallocation between Disbursement Categories ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Results Framework ✔ Components and Cost ✔ Loan Closing Date(s) ✔ Cancellations Proposed ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ The World Bank CG Rep. Health Sector Project (P143849) Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IDA-53570-001 | Currency: XDR iLap Category Sequence No: 1 Current Expenditure Category: PPF GRANTS PART 1(a) 3,407,985.00 3,407,985.00 3,407,985.00 49.00 0 iLap Category Sequence No: 2 Current Expenditure Category: PPF DEVELOPMT GRANTS PART 1 (b)(i) 1,152,879.00 1,112,152.68 1,112,152.68 49.00 0 iLap Category Sequence No: 3 Current Expenditure Category: GD/NCS/CS/TR/OP PART 1(b)(ii), 2 2,039,136.00 2,098,100.11 2,098,100.11 49.00 0 Total 6,600,000.00 6,618,237.79 6,618,237.79 TF-15744-001 | Currency: USD iLap Category Sequence No: 1 Current Expenditure Category: PBF GRANTS PART 1(a) 5,384,373.00 5,246,693.04 5,384,373.00 49.00 98 iLap Category Sequence No: 2 Current Expenditure Category: PBF DEVELOPMT GRANTS PART 1 (b)(i) 1,601,514.00 1,579,603.53 1,601,514.00 49.00 98 iLap Category Sequence No: 3 Current Expenditure Category: GD/NCS/CS/TR/OP PART 1(b)(ii), 2 The World Bank CG Rep. Health Sector Project (P143849) 3,014,113.00 3,145,687.33 3,014,113.00 49.00 98 Total 10,000,000.00 9,971,983.90 10,000,000.00 .