The World Bank TA for Capacity Development in Hydropower and Mining Sector (P109736) REPORT NO.: RES32553 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF TA FOR CAPACITY DEVELOPMENT IN HYDROPOWER AND MINING SECTOR APPROVED ON JANUARY 12, 2010 TO LAO PEOPLE'S DEMOCRATIC REPUBLIC ENERGY & EXTRACTIVES GLOBAL PRACTICE EAST ASIA AND PACIFIC REGION Regional Vice President: Victoria Kwakwa Country Director: Ellen A. Goldstein Senior Global Practice Director: Riccardo Puliti Practice Manager/Manager: Julia M. Fraser Task Team Leader: Takafumi Kadono, Franz Gerner The World Bank TA for Capacity Development in Hydropower and Mining Sector (P109736) ABBREVIATIONS AND ACRONYMS AF Additional Financing HMTA Technical Assistance for Capacity Building in Hydropower and Mining Sectors Project IDA International Development Association INT Integrity Vice Presidency LVI Laos - Vietnam Interconnector Project MEM Ministry of Energy and Mines PDO Project Development Objective PSHD Policy on Sustainable Hydropower Development The World Bank TA for Capacity Development in Hydropower and Mining Sector (P109736) BASIC DATA Product Information Project ID Financing Instrument P109736 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 12-Jan-2010 30-Sep-2018 Organizations Borrower Responsible Agency Lao People's Democratic Republic Ministry of Energy and Mines Project Development Objective (PDO) Original PDO Development objective is to increase human capacity and improve the performance of Government oversight institutions for the hydropower and mining sectors. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-54490 03-Jun-2014 14-Aug-2014 23-Sep-2014 30-Sep-2018 8.90 4.42 3.82 IDA-H9470 03-Jun-2014 14-Aug-2014 23-Sep-2014 30-Sep-2018 8.90 8.03 0 IDA-H5390 12-Jan-2010 08-Feb-2010 04-Aug-2010 30-Sep-2018 8.00 7.58 0 TF-99572 09-Apr-2012 09-Apr-2012 22-Aug-2012 01-Mar-2014 2.54 2.54 0 The World Bank TA for Capacity Development in Hydropower and Mining Sector (P109736) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank TA for Capacity Development in Hydropower and Mining Sector (P109736) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Background 1. The original project was approved on January 12, 2010. In June 2014, the World Bank approved an Additional Financing (AF) in an amount of US$ 17.8 million equivalent for scaling up the original Technical Assistance for Capacity Building in Hydropower and Mining Sectors Project (HMTA) to extend the impact of the institutional and human capacity development efforts that are being supported under the original project. The AF became effective on September 22, 2014; the project closing date was extended from September 30, 2015 to September 30, 2018. 2. In February - March 2018, the World Bank carried out a project implementation support mission for HMTA to review project implementation progress and discussed the need for the project closing date extension by 12 months (without additional financing) of IDA-54490 and IDA H9470 to September 30, 2019. The restructuring will ensure completion of key project activities that are already under implementation, including support for the cross-border power trade agenda and the preparation of the Laos-Vietnam Interconnector Project (LVI), which is targeted for Board delivery in Q1FY20. The Bank received the official request from the Ministry of Energy and Mines on May 14, 2018. B. Project Status 3. Progress towards achieving the Project Development Objective (PDO) has remained Satisfactory or better for at least two years and the objectives remain Achievable. Implementation Progress is rated Moderate Satisfactory. Capacity building activities for Ministry of Energy and Mines (MEM) both centrally and locally were carried out under various components continuing to strengthen technical knowledge in sector planning and management. Institutional oversight to better govern the hydropower and mining sectors is continuing to improve. All critical technical assistance packages (particularly power sector reform, mining sector strategy and strategic environmental and social assessment, electricity tariff, independent power producer process improvement and the Policy on Sustainable Hydropower Development (PSHD) implementation, geo-data infrastructure including geological survey and mapping) are under implementation to develop tools and management systems to enhance MEM oversight capacity. Coordination among implementing agencies improved substantially through regular project monitoring meetings and the establishment of technical working groups for all deliverables under the project. Disbursement from the IDA grant 9470 is 100 percent and IDA credit 54490 is 54 percent as of May 2018, and 95 percent of the total funds are committed. Borrower performance has been rated Satisfactory throughout implementation. 4. The original project was restructured in May 2013 to address implementation challenges, update the results framework, streamline components, and extend the project closing date to September 30, 2015. In June 2014, the World Bank approved an additional financing and the project closing date was extended from September 30, 2015 to September 30, 2018. There are no outstanding audit report, legal, fiduciary, safeguards and INT related issues. The World Bank TA for Capacity Development in Hydropower and Mining Sector (P109736) II. DESCRIPTION OF PROPOSED CHANGES 5. The Project Development Objective (PDO) remains valid, namely: “to increase human capacity and improve the performance of government oversight institutions for the hydropower and mining sectors”. The PDO outcome indicators remain relevant and achievable by the current project closing date of September 30, 2018. The proposed extension to September 30, 2019 will not affect the current Results Framework as the indicators have either already been achieved and targets have been exceeded, or are on track to being achieved prior to the revised closing date. 6. The restructuring proposes to extend the project closing date by 12 months from September 30, 2018 to September 30, 2019 to ensure completion of project activities that are already under implementation, in particular on support for the cross-border power trade agenda under Component 2: Hydropower Sector Development which includes the preparation of the LVI. 7. As part of the recent missions (February-March 2018 missions), the Bank team discussed and agreed with the MEM on a specific action plan and adjusted implementation schedule to ensure all activities will be completed by the new closing date. III. SUMMARY OF CHANGES Changed Not Changed Change in Loan Closing Date(s) ✔ Change in Disbursement Estimates ✔ Change in Implementation Schedule ✔ Change in Implementing Agency ✔ Change in DDO Status ✔ Change in Project's Development Objectives ✔ Change in Results Framework ✔ Change in Components and Cost ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Change in Disbursements Arrangements ✔ Change in Overall Risk Rating ✔ Change in Safeguard Policies Triggered ✔ The World Bank TA for Capacity Development in Hydropower and Mining Sector (P109736) Change of EA category ✔ Change in Legal Covenants ✔ Change in Institutional Arrangements ✔ Change in Financial Management ✔ Change in Procurement ✔ Other Change(s) ✔ Change in Economic and Financial Analysis ✔ Change in Technical Analysis ✔ Change in Social Analysis ✔ Change in Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IDA-54490 Effective 30-Sep-2018 30-Sep-2019 30-Jan-2020 30-Sep-2015, 30- IDA-H5390 Effective 30-Sep-2014 Sep-2018 IDA-H9470 Effective 30-Sep-2018 30-Sep-2019 30-Jan-2020 TF-99572 Closed 01-Mar-2014 09-Jul-2014 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2010 0.00 0.00 2011 994,130.19 994,130.19 2012 394,276.60 394,276.60 The World Bank TA for Capacity Development in Hydropower and Mining Sector (P109736) 2013 1,187,341.92 1,187,341.92 2014 2,030,547.13 2,414,412.78 2015 4,250,000.00 3,476,251.55 2016 5,000,000.00 2,926,900.20 2017 5,000,000.00 4,484,816.18 2018 5,000,000.00 4,154,184.94 2019 1,943,704.16 3,845,123.76 2020 0.00 1,922,561.88