The World Bank Emergency National Poverty Targeting Program Project (P149242) REPORT NO.: RES45170 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF EMERGENCY NATIONAL POVERTY TARGETING PROGRAM PROJECT APPROVED ON JUNE 6, 2014 TO LEBANESE REPUBLIC SOCIAL PROTECTION & JOBS MIDDLE EAST AND NORTH AFRICA Regional Vice President: Ferid Belhaj Country Director: Saroj Kumar Jha Regional Director: Keiko Miwa Practice Manager/Manager: Anush Bezhanyan Task Team Leader(s): Haneen Ismail Sayed The World Bank Emergency National Poverty Targeting Program Project (P149242) I. BASIC DATA Product Information Project ID Financing Instrument P149242 Investment Project Financing Original EA Category Current EA Category Not Required (C) Not Required (C) Approval Date Current Closing Date 06-Jun-2014 31-Dec-2020 Organizations Borrower Responsible Agency Lebanese Republic Ministry of Social Affairs Project Development Objective (PDO) Original PDO The objective of the Project is to expand the coverage and enhance the social assistance package of the National Poverty TargetingProgram (NPTP) to Lebanese affected by the Syrian crisis and all Lebanese households under the extreme poverty line. Current PDO The objective of the Project is to expand the coverage and enhance the social assistance package of the National Poverty Targeting Program (NPTP) to Lebanese affected by the Syrian crisis and all Lebanese households under the extreme poverty line. Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-A2803 29-Oct-2016 29-Oct-2016 29-Oct-2016 31-Dec-2020 10.00 7.48 2.52 TF-17200 18-Aug-2014 18-Aug-2014 18-Aug-2014 31-Dec-2019 7.39 7.39 0 The World Bank Emergency National Poverty Targeting Program Project (P149242) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES Project Status. The latest project implementation status and results (ISR) rated Progress towards achievement of Project Development Objective (PDO) Moderately Satisfactory (MS) while Implementation Progress rating was upgraded from Moderately Unsatisfactory (MU) to Moderately Satisfactory (MS). The upgrade to the IP rating was based on the recent restructuring revising the Project’s PDO and dropping the Graduation Pilot (Component 3 under the project) which had been impeding project implementation since its inclusion to the project in 2016. Following discussions between the World Bank and the Government of Lebanon (GOL) – it was agreed that once the project was restructured, remaining funds under the Grant would be allocated to a set of priority activities including the following: (i) an external technical audit of the NPTP database; (ii) the establishment of Phase 1 of the GRM system in MOSA; and (iii) a verification of applicants in the NPTP and other databases. In this respect, the procurement process of the three activities has been launched. The objective of the project related to expanding coverage and enhancing the social assistance package of the National Poverty Targeting Program (NPTP) has been met. The project has achieved several PDO-level outcomes. For example, the project has reached 260,696 direct beneficiaries, of which about 51.3 percent female beneficiaries. Although the end-target was indicated to be 460,281 prior to the recertification outcomes, the recertification reduced the number of beneficiaries to 240,000 individuals per the updated extreme poverty score, and this target has been met. The number of NPTP beneficiaries from extremely poor households as a share of total NPTP applicants has reached 43 percent. This is based on the analysis of the NPTP database which showed that 43 percent of the NPTP individuals belong to the poorest 10 percent (i.e., extreme poor). The project has also exceeded its target for the PDO- level indicator – “beneficiaries of safety net programs, of which e-card food vouchers” - reaching 105,538 beneficiaries against a target of 52,715 beneficiaries. Implementation progress has been affected by multiple factors, including the severe economic and financial crisis, the COVID-19 pandemic and associated restrictions, and more recently, the August 4, 2020 Beirut port explosion. These factors have further exacerbated the weak capacity of MOSA and inability to take decisions and actions, particularly on procurement-related issues. In terms of fiduciary performance and compliance, the project’s financial management is rated MS, reflecting the project’s adherence to timely submission of IFRs, and project audits yielding unqualified opinions. The procurement rating, however was downgraded in the last ISR from MS to U due to the lack of progress in launching procurement contracts since December 2018, including the firms that would implement the Graduation Pilot. To address the slow procurement decisions within the MOSA, the Minister of MOSA, the CMU, and the Deputy Prime Minister have agreed to a condensed timeline to complete the three activities which were agreed upon. With this recent commitment and the start of the related process - the procurement rating is upgraded to MU, provided that the implementing agency adheres to the stated commitments, and further delays are prevented. Project disbursements currently stand at US$14.86 million out of a total grant amount of US$17.39 million (85.5 percent of the total grant). An amount of US$811,592.68 from the original grant which was not disbursed by December 2019 was cancelled, leaving an undisbursed balance of US$2.52 million, of which around US$1.9 million was allocated for Component 3. The World Bank Emergency National Poverty Targeting Program Project (P149242) Description of Changes. This restructuring proposes a level 2 restructuring entailing a three month extension to the closing date of the AF Grant (TF0A2803) from December 31, 2020 to March 31, 2021, and is in response to a letter from the Government dated November 11, 2020. The AF Grant was approved on June 8, 2016 for a total amount of US$10 million funded out of the Lebanon Syrian Crisis Trust Fund (LSCTF) (TF072143). The end disbursement date of the LSCTF is September 30, 2021. Thus, the proposed extension of the Grant is six months prior to the end disbursement date of the Trustee Fund. The project was restructured a number of times, including as part of the Additional Financing (AF) approved in 2016 which provided an additional US$10 million to scale up the e-card food voucher program and fund a graduation pilot aimed to lift NPTP beneficiaries out of extreme poverty. The closing date was also extended through the earlier restructurings: for the parent grant from December 31, 2017 to December 31, 2019, and for the AF from December 31, 2018 to December 31, 2020. The project was again restructured in early December 2020 to revise the PDO, drop the Graduation Pilot component and its associated PDO and intermediate level indicators. Given that the cumulative extensions of closing date of the AF Grant is two years and three months (beyond two years) – this restructuring requires approval at the Regional Vice President (RVP) level. Finally, there are no outstanding audits under the Project. Rationale for Changes. The proposed extension will allow the GOL time to carry out the following three key priority activities as described above: (i) an external technical audit of the NPTP database; (ii) the establishment of Phase 1 of the GRM system in MOSA; and (iii) a verification of applicants in the NPTP and other databases. No other modifications to the project are envisioned under this restructuring. The GOL has developed (and cleared with the World Bank) a condensed timeline and action plan, detailing the specific activities to be carried out and the Government has committed to completing these activities by the new proposed closing date of March 31, 2021. II. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications 31-Dec-2018, 31-Dec- TF-17200 Closed 31-Dec-2017 2019, 22-Oct-2020 31-Dec-2019, 31-Dec- TF-A2803 Effective 31-Dec-2018 31-Mar-2021 31-Jul-2021 2020