The World Bank Integrated Habitat and Housing Project (P159929) REPORT NO.: RES38346 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF INTEGRATED HABITAT AND HOUSING PROJECT APPROVED ON FEBRUARY 27, 2017 TO THE REPUBLIC OF ARGENTINA URBAN, RESILIENCE AND LAND LATIN AMERICA AND CARIBBEAN Regional Vice President: Axel van Trotsenburg Country Director: Jordan Z. Schwartz Regional Director: Anna Wellenstein Practice Manager/Manager: Ming Zhang Task Team Leader: Catherine Lynch, Beatriz Eraso Puig, Santiago Ezequiel Arias The World Bank Integrated Habitat and Housing Project (P159929) ABBREVIATIONS AND ACRONYMS AGN National General Auditor (Auditoría General de la Nación) MIOPV Ministry of Interior, Public Works and Housing (Ministerio del Interior, Obras Públicas y Vivienda) The World Bank Integrated Habitat and Housing Project (P159929) 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 P159929 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 27-Feb-2017 31-Aug-2022 Organizations Borrower Responsible Agency Republic of Argentina Ministry of Interior, Public Works and Housing Project Development Objective (PDO) Original PDO The proposed Project's development objectives are to: (i) increase access to formal housing for eligible households; and (ii) improve living conditions for households in selected precarious urban settlements. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-87120 27-Feb-2017 17-Aug-2017 14-Dec-2017 31-Aug-2022 200.00 84.66 115.34 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Integrated Habitat and Housing Project (P159929) Note to Task Teams: End of system generated content, document is editable from here. I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project Description 1. The development objectives of the Integrated Habitat and Housing Project (the Project) are to: (i) increase access to formal housing for eligible households; and (ii) improve living conditions for households in selected precarious urban settlements.The Project has four components: (i) Increased access to formal housing (US$90 million, 100 percent IBRD financing); (ii) Integrated habitat improvement (US$100 million, 100 percent IBRD financing); (iii) Institutional Strengthening (US$11 million, of which US$9 million IBRD financing and US$2 million Borrower contribution); and (iv) Project Management (US$4.5 million, of which US$0.5 IBRD financing and US$4 Borrower contribution) B. Project Status 2. The Loan Agreement was signed on August 17, 2017 and loan was declared effective on December 14, 2017. The US$200 million loan has disbursed US$84.7 million (42.3 percent) through implementation of Component 1 and Component 3, as summarized below. However, implementation of Component 2 continues to be slow, even after the reallocation of US$45 million to Component 1, see below. 3. Implementation Status of Component 1. The Solucion Casa Propria (SCP) program is performing satisfactorily. US$81.4 million of the total US$90 million in the Component has disbursed, with an additional disbursement of US$8.6 being processed. The latest round of SCP was launched in June 2019, targeting 10,000 beneficiaries. 4. Implementation Status of Component 2. Component 2 is making progress in the preparation of 14 eligible subprojects with an estimated cost of US$53 million, out of a total pipeline of 16 subprojects with a total estimated cost of US$69 million. Two subsidiary loans have been signed with the province of Mendoza and Corrientes. Another eight framework agreements have been signed with the Provinces of Catamarca, Córdoba, Corrientes, Mendoza, Neuquén, and the Municipalities of Córdoba, Neuquén and Rosario, showing interest in pursuing subsidiary loan agreements and agreement to comply with project guidelines and Bank policies. The component is facing delays since subprojects are prepared and designed by municipal and provincial executing units, often with limited capacity. The iterative approval process takes time as it requires review by MIOPV and no objection by the Bank. To expedite the process, MIOPV has contracted two engineering companies to support subproject design, and the Bank and MIOPV have streamlined the review process to reduce future delays. Another problem with the implementation of this component is that provinces have shown much less interest in subsidiary loans for subprojects than originally expected. Given this scenario is unlikely to change in the near future, this component will focus on the implementation of the 16 subprojects with committed provinces and reallocate remaining funds to Component 1. 5. Implementation Status of Component 3. Although disbursements for Component 3 are low, several institutional strengthening consultancies are under execution, including the evaluation of national housing programs, development of a multidimensional habitat index with Oxford University, and a best practices in urban upgrading competition. A design studio with Harvard University to incorporate gender perspective in the design of public spaces was completed and outputs are informing the design of public space in an informal settlement in Mendoza. The procurement processes for The World Bank Integrated Habitat and Housing Project (P159929) several consultancies are underway, including support for a housing beneficiary registry system, characterization of informal settlements through satellite images, and analysis of a social rental housing program. Table 1. Revised IBRD Allocation to different Components (in US$ million) Original Allocation Current Allocation New Allocation Project Components (Appraisal) (Rest. June 2019) (Rest. Oct 2019) IBRD Local IBRD Local IBRD Local Component 1: Increased Access to Formal Housing 45 - 90 - 110 - Component 2: Integrated Habitat Improvement 145 - 100 - 80 - Component 3: Institutional Strengthening 9 2 9 2 9 2 Component 4: Project Management 0.5 4 0.5 4 0.5 4 Front End Fee 0.5 - 0.5 - 0.5 - Total 200 6 200 6 200 6 6. Previous Restructurings. Given the fiscal constraints of the federal government, subsidiary loans for provinces and municipalities were introduced as part of the restructuring in December 2018 and implementation arrangements were revised. Due to delays in Component 2, a second Project restructuring was processed in June 2019 that reallocated US$45 million from Component 2 to Component 1 and revised the results framework. C. Project Performance 7. Progress towards achieving the Project Development Objective is rated Satisfactory and overall Implementation Performance is rated Moderately Satisfactory. The Project has a satisfactory track record on safeguards implementation and is in compliance with the loan covenants. The audit report for 2018 is currently being finalized by the National General Auditor (Auditoría General de la Nación, AGN). D. Rationale for Restructuring 8. Given the continued delays in implementing subprojects under Component 2 and the lack of interest from provinces and the smaller pool of potential subprojects, the team decided not to wait and reallocate US$20 million from Component 2 to Component 1 to further support the SCP housing subsidy program under Component 1. The Project Development Objective will remain unchanged and continues to be achievable. II. DESCRIPTION OF PROPOSED CHANGES A. Reallocation of Funds 9. The proposed reallocation of US$20 million from Component 2, Integrated Habitat Improvement, to Component 1, Increased Access to Formal Housing, which will result in a reallocation of US$20 million from Category 2 (a) “Goods, works, non-consulting services, consulting services, Training, Operating Costs under Subprojects, including works under Part 2 (e)(ii) of the Project” to Category 1 “Upfront Subsidies under Part 1 of the Project”. Disbursements will be made against subsidies already provided under the SCP housing subsidy program that are in accordance with the conditions of the loan agreement. The World Bank Integrated Habitat and Housing Project (P159929) B. Revisions to the Results Framework 10. The results framework will be revised to reflect the change in financing allocated to each component. Specifically, the number of beneficiaries under Component 1 will increase from 13,000 to 17,000, of which 3,400 will be female headed households. This increase in the number of households not only follows the change in funds allocated for Component 1, but also the devaluation of the Argentine Peso which allows the Ministry of Interior, Public Works, and Housing (MIOPV) to request reimbursement for a larger number of subsidies granted. At the same time, the number of beneficiary households under Component 2 will reduce from 13,000 to 10,000 reflecting the smaller number of subprojects that will be supported under the Project. The reduction in the number of beneficiary households will impact other indicators related to improved service provision. The total number of direct project beneficiaries will remain at 75,000. The results indicators for Component 3: Institutional Strengthening will remain unchanged. Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Components and Cost ✔ Reallocation between Disbursement Categories ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Loan Closing Date(s) ✔ Cancellations Proposed ✔ Disbursements Arrangements ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ The World Bank Integrated Habitat and Housing Project (P159929) 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) Increased Access to Formal Increased Access to Formal 45.00 Revised 110.00 Housing Housing Integrated Habitat Integrated Habitat Improvement 145.00 Revised 80.00 Improvement Institutional Strengthening 11.00 No Change Institutional Strengthening 11.00 Project Management 4.50 No Change Project Management 4.50 Front End Fee 0.50 No Change Front End Fee 0.50 TOTAL 206.00 206.00 OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IBRD-87120-001 | Currency: USD iLap Category Sequence No: 1 Current Expenditure Category: Upfront Subsidies under Part 1 90,000,000.00 81,420,347.06 110,000,000.00 100.00 100.00 The World Bank Integrated Habitat and Housing Project (P159929) Current Expenditure Category: GO, CW, N-CS, CS, TRG & OP - Subp & CW Part iLap Category Sequence No: 2A 2e(ii) 100,000,000.00 0.00 80,000,000.00 100.00 100.00 iLap Category Sequence No: 2B Current Expenditure Category: Land Aquisition& Compensation -P.2 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 3 Current Expenditure Category: GO, NON-CS, CS, TRG & OP-P.3&4 9,500,000.00 963,673.97 9,500,000.00 100.00 100.00 Total 199,500,000.00 82,384,021.03 199,500,000.00 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2017 0.00 0.00 2018 1,000,000.00 1,000,000.00 2019 7,582,881.04 100,000,000.00 2020 30,000,000.00 25,000,000.00 2021 50,000,000.00 25,000,000.00 2022 60,000,000.00 25,000,000.00 2023 51,417,118.76 24,000,000.00 OPS_DETAILEDCHANGES_SORT_TABLE SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Rating at Approval Current Rating Political and Governance  Moderate  Substantial Macroeconomic  Substantial  Substantial Sector Strategies and Policies  Moderate  Moderate Technical Design of Project or Program  Substantial  Substantial The World Bank Integrated Habitat and Housing Project (P159929) Institutional Capacity for Implementation and  Substantial  Substantial Sustainability Fiduciary  Substantial  Substantial Environment and Social  Moderate  Substantial Stakeholders  Substantial  Substantial Other Overall  Substantial  Substantial . The World Bank Integrated Habitat and Housing Project (P159929) . Results framework COUNTRY: Argentina Integrated Habitat and Housing Project Project Development Objectives(s) The proposed Project's development objectives are to: (i) increase access to formal housing for eligible households; and (ii) improve living conditions for households in selected precarious urban settlements. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 Number of eligible households with access to formal housing. Number of eligible households with access to 0.00 0.00 2,300.00 17,000.00 17,000.00 17,000.00 17,000.00 formal housing. (Number) Action: This indicator has been Revised Number of housing subsidies allocated to 0.00 0.00 700.00 3,400.00 3,400.00 3,400.00 3,400.00 female headed households (Number) Action: This indicator has been Revised Number of households with improved living conditions in precarious urban settlements. Number of households with improved living conditions 0.00 0.00 0.00 2,000.00 6,500.00 10,000.00 10,000.00 in precarious urban settlements. (Number) The World Bank Integrated Habitat and Housing Project (P159929) RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 Action: This indicator has been Revised Number of female headed households with improved living 0.00 0.00 0.00 1,000.00 3,300.00 5,100.00 5,100.00 conditions in precarious urban settlements. (Number) Action: This indicator has been Revised Direct project beneficiaries Direct project beneficiaries 0.00 0.00 6,000.00 51,900.00 71,700.00 75,000.00 75,000.00 (Number) Action: This indicator has been Revised Female beneficiaries 0.00 51.00 51.00 51.00 51.00 51.00 51.00 (Percentage) PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 Increased Access to Formal Housing Percentage of subsidies 0.00 50.00 50.00 50.00 50.00 50.00 50.00 allocated for beneficiaries The World Bank Integrated Habitat and Housing Project (P159929) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 between 2 and 3 minimum wages (Percentage) Percentage of subsidies allocated for household 0.00 1.00 1.00 1.00 1.00 1.00 1.00 with members with disabilities (Percentage) Integrated Habitat Improvement Number of people in urban areas provided with access 0.00 0.00 0.00 0.00 8,600.00 17,200.00 17,200.00 to Improved Water Sources under the project (Number) Action: This indicator has been Revised Number of completed Human Development 0.00 0.00 0.00 0.00 8.00 16.00 16.00 activities (Number) Action: This indicator has been Revised Land Parcels benefitted under the project with 0.00 0.00 0.00 0.00 500.00 1,000.00 1,000.00 increased tenure security (Number) Action: This indicator has been Revised Percentage of Land Parcels with increased tenure 0.00 65.00 65.00 65.00 65.00 65.00 65.00 security where rights of women have been The World Bank Integrated Habitat and Housing Project (P159929) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 recognized when applicable (Percentage) Creation of a list of identified and prioritized No No No Yes Yes Yes Yes sub-projects in the urban agglomerations. (Yes/No) People provided with access to ‘improved sanitation 0.00 0.00 0.00 0.00 2,100.00 4,200.00 4,200.00 facilities” under the proj. (CRI, Number) Action: This indicator has been Revised People provided with access to “improved 0.00 0.00 0.00 0.00 2,100.00 4,200.00 4,200.00 sanitation facilities” - urban (Number) Action: This indicator has been Revised Kilometers of roads constructed or rehabilitated 0.00 0.00 0.00 0.00 5.60 11.20 11.20 (Number) Action: This indicator has been Revised Institutional Strengthening Number of technical studies aimed at improving the 0.00 0.00 6.00 14.00 17.00 19.00 19.00 design of housing and The World Bank Integrated Habitat and Housing Project (P159929) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 habitat policies in the country (Number) Number of capacity building trainings implemented 0.00 0.00 1.00 13.00 16.00 20.00 20.00 (Number) IO Table SPACE The World Bank Integrated Habitat and Housing Project (P159929)