The World Bank VN - Central Highlands Poverty Reduction Project (CHPov) (P128072) REPORT NO.: RES38667 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF VN - CENTRAL HIGHLANDS POVERTY REDUCTION PROJECT (CHPOV) APPROVED ON DECEMBER 27, 2013 TO SOCIALIST REPUBLIC OF VIETNAM SOCIAL EAST ASIA AND PACIFIC Regional Vice President: Victoria Kwakwa Country Director: Ousmane Dione Regional Director: Benoit Bosquet Practice Manager/Manager: Susan S. Shen Task Team Leader: Sean Bradley, Nghi Quy Nguyen The World Bank VN - Central Highlands Poverty Reduction Project (CHPov) (P128072) ABBREVIATIONS AND ACRONYMS The World Bank VN - Central Highlands Poverty Reduction Project (CHPov) (P128072) 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 P128072 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 27-Dec-2013 31-Dec-2019 Organizations Borrower Responsible Agency Socialist Republic of Vietnam Ministry of Planning and Investment Project Development Objective (PDO) Original PDO The proposed project development objective of the Central Highlands Poverty Reduction project is to: enhance living standards by improving livelihood opportunities in Project Communes of upland Districts of the central highlands of Vietnam. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-53300 27-Dec-2013 24-Apr-2014 22-Jul-2014 31-Dec-2019 150.00 108.62 26.93 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank VN - Central Highlands Poverty Reduction Project (CHPov) (P128072) Note to Task Teams: End of system generated content, document is editable from here. I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. The development objective of the Central Highlands Poverty Reduction project is to enhance living standards by improving livelihoods opportunities in targeted communes of uplands districts of the Central Highlands of Vietnam. The project targets the 26 poorest districts in six provinces of the Central and Central Highlands regions, namely: Dak Lak, Dak Nong, Kon Tum, Gia Lai, Quang Nam and Quang Ngai. As of October 5, 2019, 79.8% of the Credit has been disbursed, leaving a balance of SDR 19.7 million (approximately $27 million) undisbursed. The total number of project beneficiaries, at approximately 132,221 households, exceeds original projections, and of those direct beneficiaries, more than half (58.6%) of them are from indigenous ethnic groups. Sub-project investments have supported the construction or repair of 438.68 kms. of roads, 41.3 kms of irrigation works, 134 water systems, 173 classrooms and other community structures, and 3,687 livelihoods groups (LEGs) have been formed and supported. Women's participation in the decision making meetings where community sub-projects are prioritized stands at just over 50%, and women represent 59% of the LEG members. The overall implementation progress of the project and progress toward achieving the project objective are rated moderately satisfactory. The project is due to close on December 31, 2019. 2. In a letter dated August 19, 2019, the Ministry of Finance formally requested that the Bank cancel SDR 11.5 million (approximately $16 million) of the Central Highlands project credit. This request to cancel some of the project’s financing is related, in part, to restrictions placed on the level of Official Development Assistance funding that the Ministry of Planning and Investment (MPI) and the responsible Provinces were allowed to spend under the Medium-Term Investment Plan of the country, and in part related to the approaching project closing date. In the absence of more time both MPI and the provinces would be challenged to spend the remaining funds under the project. While the task team and the CMU have raised concerns with MPI regarding the likelihood that all planned activities will not be completed by the project’s closing date, and that the rush to complete project activities by December 2019 could risk the quality of implementation, MPI leadership has requested the Bank’s support to facilitate the timely closing of the project as originally planned and the cancellation of the projected remaining funds. 3. As of October 5, 2019, the proposed cancellation of the overall credit would leave a balance of SDR 8.2 million (approximately $11.2 million) under the project, which would be adequate to cover the planned for activities during the remaining year of project implementation. While the positive outputs noted in the first paragraph are consistent with the original plans of the project, the Government and the Bank are not currently able to say if the project will achieve its overall objectives as more than half of the project’s results measures depend on the outcome of the ongoing end-line survey. Nonetheless, given Government’s intention to close the project as originally planned on December 31, 2019, the SDR 11.5 million credit proposed for cancellation is not required for the remaining implementation needs of the Central Highlands Poverty Reduction Project. 4. Finally, the project has no outstanding audit reports. Project Financial Management has been maintained at a Moderately Satisfactory level. The partial cancellation proposed under this restructuring would not have impact on the Project Financial Management as all the FM and disbursement arrangements remain unchanged. The World Bank VN - Central Highlands Poverty Reduction Project (CHPov) (P128072) II. DESCRIPTION OF PROPOSED CHANGES 5. This restructuring entails three changes: a. the cancellation of SDR 11.5 million of the original credit to now total SDR 86.1 million, which will result in reducing: (i) Category 1 (Goods (including vehicles), Works, Non-Consulting Services, Consultants’ Services, Training and Workshops, and Incremental Operating Costs under Part 3 and 4 of the Project) by SDR 4.9 million to a revised total of SDR 35,720,000, and (ii) Category 2 (Grants under Parts 1 and 2 of the Project) by SDR 6.6 million to a revised total of SDR 50,380,000; b. A reduction in all four component costs that reflects, proportionally, the overall reduction in project financing; and c. The revision of disbursement estimates based on actual disbursements to date and the overall reduced amount of the credit. 6. No other changes to the project, including to the PDO or the results framework, are being proposed. 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 Components and Cost ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursement Estimates ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Results Framework ✔ Loan Closing Date(s) ✔ Disbursements Arrangements ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ The World Bank VN - Central Highlands Poverty Reduction Project (CHPov) (P128072) Financial Management ✔ Procurement ✔ 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) Village and Commune Village and Commune 52.40 Revised 46.23 Infrastructure Development Infrastructure Development Sustainable Livelihoods Sustainable Livelihoods 35.20 Revised 31.05 Development Development Connective Infrastructure Connective Infrastructure Development, Capacity Building 51.40 Revised Development, Capacity 45.35 and Communications Building and Communications Project Management 11.00 Revised Project Management 9.70 TOTAL 150.00 132.33 OPS_DETAILEDCHANGES_CANCELLATIONS_TABLE CANCELLATIONS Value Reason Current Cancellation New Ln/Cr/Tf Status Currency Date of for Amount Amount Amount Cancellation Cancellation Disburs UNDISBURSE IDA-53300- ing&Re XDR 97,600,000.00 11,500,000.00 19-Aug-2019 86,100,000.00 D BALANCE 001 paying AT CLOSING OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES The World Bank VN - Central Highlands Poverty Reduction Project (CHPov) (P128072) Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IDA-53300-001 | Currency: XDR iLap Category Sequence No: 1 Current Expenditure Category: GO-INCL VEH,NONCS,CS,TRWS,IOC PT3&4 40,620,000.00 30,033,319.59 35,720,000.00 100.00 100.00 iLap Category Sequence No: 2 Current Expenditure Category: IDA5330 - GRANTS UNDER PT. 1 & 2 56,980,000.00 39,818,629.83 50,380,000.00 100.00 100.00 Total 97,600,000.00 69,851,949.42 86,100,000.00 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2014 3,000,000.00 0.00 2015 11,000,000.00 2,052,000.00 2016 32,000,000.00 16,031,000.00 2017 41,000,000.00 33,550,000.00 2018 38,000,000.00 26,772,000.00 2019 22,000,000.00 25,080,000.00 2020 3,000,000.00 18,515,000.00 . 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