The World Bank Burundi Coffee Sector Competitiveness Project (P151869) REPORT NO.: RES47141 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF BURUNDI COFFEE SECTOR COMPETITIVENESS PROJECT APPROVED ON JUNE 17, 2016 TO MINISTRY OF FINANCE, BUDGET, COOPERATION AND ECONOMIC DEVELOPMENT AGRICULTURE AND FOOD AFRICA EAST Regional Vice President: Hafez M. H. Ghanem Country Director: Jean-Christophe Carret Regional Director: Mark R. Lundell Practice Manager/Manager: Shobha Shetty Task Team Leader(s): Amadou Alassane, Benjamin Billard The World Bank Burundi Coffee Sector Competitiveness Project (P151869) ABBREVIATIONS AND ACRONYMS ARFIC Agency for the Regulation of the Coffee Sector / Agence de Régulation du Secteur Café CD Country Director CMU Country Management Unit CNAC National Confederation of Coffee Growers Associations / : Confédération Nationale des Associations de Caféiculteurs GoB Government of Burundi IDA International Development Association IPF Investment Project Financing MTR Mid Term Review ODECA Office of Coffee Development / Office de Développement du Café PACSC Coffee Sector Competitiveness Project / Projet d’Appui à la Compétitivité du Secteur Café PDO Project Development Objective UCP Project Coordination Unit / Unité de Coordination du Projet SDR Special Drawing Rights The World Bank Burundi Coffee Sector Competitiveness Project (P151869) 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 P151869 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 17-Jun-2016 30-Jun-2023 Organizations Borrower Responsible Agency Ministry of Finance, Budget, Cooperation and Economic Ministry of Environment, Agriculture and Livestock Development Project Development Objective (PDO) Original PDO The project development objective (PDO) is to increase coffee productivity and improve its quality among small-scale coffee growersin Burundi. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-D0570 17-Jun-2016 05-Aug-2016 12-Oct-2016 30-Jun-2023 55.00 37.93 17.19 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Burundi Coffee Sector Competitiveness Project (P151869) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. The Coffee Sector Competitiveness Project-CSCSP/PACSC(P151869) was approved by the Board on June 17, 2016 with a total budget of US$55Mn (IDA Grant). The Financing Agreement was signed on August 5, 2016 and the Project became effective on October 12, 2016. The initial Project closing date is set for June 30, 2023. 2. The MTR of the Project took place in November 2019 but the recommendations agreed upon were not implemented because the Government changed the institutional governance in the sector in early 2020 as described above. Despite many exchanges with the authorities of Burundi by the CMU, numerous discussions and exchanges by the Task team and Aide-Memoires clearly mentioning that these considerable changes posed huge risks to the Project, things have not changed. 3. In view of the above and as a result of the major changes to the institutional governance of the sector, 6 indicators of the project’s Results Framework (1 PDO level indicator and 5 intermediate indicators of which 2 under component 1 and 3 under component 3) have stagnated due to the freeze of the activities. So, given the obvious risk of the PDO not being achieved, the Government and the Bank have agreed that: (i) the Project will be closed on June 30, 2021, (ii) the remainder of the IDA Grant financing of the project will remain at the disposal of the Country if recommitted prior to June 2022 and could be reallocated to another Project in order to, for instance, continue supporting the improvement of the coffee production. Taking into account all of the above, a formal letter dated April 07, 2021 was sent by the Government, requesting the Bank to proceed with the cancellation of funds and next steps. The GoB sent another letter dated June 11, 2021 to confirm to the WB the undisbursed IDA amount to cancel along with a detailed table for each disbursement category. The amount to cancel and the table per disbursement category required corrections as exchange rate USD/SDR used was incorrect. A revised document dated June 17, 2021 was sent by the PIU with the modified amount and table, which was then validated by WFA. II. DESCRIPTION OF PROPOSED CHANGES The World Bank Burundi Coffee Sector Competitiveness Project (P151869) 1. This restructuring seeks to: (i) cancel the entire undisbursed balance of XDR 11,174,133.44, based on estimates that future project expenditures are less than the current Designated Account balance ; and (ii) sets a new Closing Date of June 30, 2021, with a grace period until October 29, 2021. 2. This restructuring seeks an advancement rather than an extension of the Closing Date due to institutional changes making it both impossible to implement the Project as planned as well achieve the PDO. As such, this restructuring does not require a confirmation indicated in the Bank Directive relating to IPFs that “the PDOs remain achievable, the performance of the Borrower or Project participant(s) remains satisfactory, and the Bank and the Borrower or Project Participant(s) agree on actions that will be undertaken by the Borrower or Project Participant(s) to complete the Project.”. Therefore, this does not require a waiver from OPCS. III. SUMMARY OF CHANGES Changed Not Changed Loan Closing Date(s) ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Results Framework ✔ Components and Cost ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ The World Bank Burundi Coffee Sector Competitiveness Project (P151869) Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ 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-D0570 Effective 30-Jun-2022 30-Jun-2023 30-Jun-2021 29-Oct-2021 OPS_DETAILEDCHANGES_CANCELLATIONS_TABLE CANCELLATIONS Value Reason Current Cancellation New Ln/Cr/Tf Status Currency Date of for Amount Amount Amount Cancellation Cancellation BORROWER' S REQUEST IDA-D0570- Disburs XDR 39,100,000.00 11,174,133.44 30-Jun-2021 27,925,866.56 FOR 001 ing COUNTRY REASONS OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IDA-D0570-001 | Currency: XDR iLap Category Sequence No: 1 Current Expenditure Category: GD,WK,NCS,CS,OC & TR The World Bank Burundi Coffee Sector Competitiveness Project (P151869) 10,795,610.00 10,795,609.13 10,795,609.13 100.00 100.00 iLap Category Sequence No: 10 Current Expenditure Category: CWS Matching Grants, Pt 3a iii 712,155.00 108,018.08 131,294.14 100.00 100.00 iLap Category Sequence No: 11 Current Expenditure Category: GD,WK,NCS,CS,OC & TR 1,731,351.00 5,271.29 13,210.65 100.00 100.00 iLap Category Sequence No: 12 Current Expenditure Category: Fertilizer Subsidies, Pt 2b (i) 2,905,730.00 242,774.12 277,503.40 100.00 100.00 iLap Category Sequence No: 2 Current Expenditure Category: GD,WK,NCS,CS,OC & TR 1,392,386.00 1,392,385.80 1,392,385.80 100.00 100.00 iLap Category Sequence No: 3 Current Expenditure Category: GD,WK,NCS,CS,OC & TR 676,262.00 676,261.10 676,261.10 100.00 100.00 iLap Category Sequence No: 4 Current Expenditure Category: GD,WK,NCS,CS,OC & TR 3,101,826.00 3,101,825.05 3,101,825.05 100.00 100.00 iLap Category Sequence No: 5 Current Expenditure Category: Women & Youth Matching Grants 55,416.00 55,415.34 55,415.34 100.00 100.00 iLap Category Sequence No: 6 Current Expenditure Category: CWS Matching Grants, Pt 3a iii 32,887.00 32,886.43 32,886.43 100.00 100.00 iLap Category Sequence No: 7 Current Expenditure Category: Fertilizer Subsidies, Pt 2b (i) 1,694,271.00 1,694,270.10 1,694,270.10 100.00 100.00 iLap Category Sequence No: 8 Current Expenditure Category: PPF REFINANCING The World Bank Burundi Coffee Sector Competitiveness Project (P151869) 104,956.00 104,955.87 104,955.87 100.00 100.00 Current Expenditure Category: GD,WK,NCS,CS,OC & TR Women & Youth iLap Category Sequence No: 9 Matching Grants 15,897,150.00 6,641,664.04 9,650,249.55 100.00 100.00 Total 39,100,000.00 24,851,336.35 27,925,866.56 .