Document of The World Bank Report No: 71439-TZ RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF MARINE AND COASTAL ENVIRONMENTAL MANAGEMENT PROJECT APPROVED ON JULY 21, 2005 TO THE UNITED REPUBLIC OF TANZANIA August 13, 2012 ABBREVIATIONS AND ACRONYMS DSFA Deep Sea Fishing Authority EEZ Exclusive Economic Zone GEF Global Environment Facility IDA International Development Association MACEMP Marine and Coastal Management Project MLF Marine Legacy Fond MPA Marine Protected Area PDO Project Development Objective URT United Republic of Tanzania Regional Vice President: Makhtar Diop Country Director: Philippe Dongier Sector Manager / Director: Magdolna Lovei Task Team Leader: Ann Jeannette Glauber 2 TANZANIA MARINE AND COASTAL ENVIRONMENTAL MANAGEMENT PROJECT P082492 AND P084213 P084213 CONTENTS A. SUMMARY ........................................................................................................................... 4 B. PROJECT STATUS .............................................................................................................. 4 C. PROPOSED CHANGES ...................................................................................................... 4 ANNEX 1: REALLOCATION OF PROCEEDS ......................................................................... 6 ANNEX 2: EXTENSION OF CLOSING DATE ......................................................................... 9 3 TANZANIA MARINE AND COASTAL ENVIRONMENTAL MANAGEMENT PROJECT RESTRUCTURING PAPER A. SUMMARY 1. This Restructuring Paper responds to the request of the Government of the United Republic of Tanzania and introduces the following changes in the Tanzania Marine and Coastal Environmental Management Project (MACEMP; P082492 and P084213, Credit TZ4106-TA/TF055580):  Reallocation of funds to optimize project operations for the remaining project implementation period; and  Extension of the project closing date by five and one-half months. B. PROJECT STATUS 2. As of July 23, 2012 The Project has disbursed $50,223,778 and $8,331,219 of its IDA and GEF funds, respectively, representing 98% and 83% of the available funds. The Project maintains a satisfactory FM rating and has no outstanding audit reports, nor IFRs. Of the five PDO-level indicators, two have already been fully achieved, two are likely to be partially or fully achieved, and one will not be achieved. Among the project’s most important achievements are: (1) the strengthening of a common fisheries governance regime, including the establishment of the Deep Sea Fishing Authority (DSFA) to manage deep sea resources at the Union level; (2) the completion of several large civil works, including the DSFA building in Unguja, the Fisheries Department building, Mvuvi House, on the Mainland, two fish landing sites in Tumbe and Kendwa as well as the near-completion of three fish landing sites in Rufiji, Nyamatsi and Kilindoni; (3) the establishment of two ecologically representative networks of Marine Protected Areas (MPAs), one on the mainland Tanzania and one in Zanzibar; (4) the tripling of territorial seas under effective management, from 4% when the project was launched to over 13%; and (5) benefits have been provided to all coastal districts, including 25,203 direct beneficiaries served through a total of 792 livelihood sub-projects. 3. However, several activities are still not fully accomplished, most importantly including the establishment of the Marine Legacy Fund (MLF), completion of final project evaluation studies, and finalization of construction of three fish landing sites. C. PROPOSED CHANGES 4. There are two proposed changes:  Reallocation 4 The proposed reallocation is necessary to cover expenses related to the establishment of the MLF, to successfully complete impact evaluation studies, and to support fisheries management activities. Please see specific explanation and details on reallocation among categories in Annex 1.  Closing date The Ministry of Finance and Economic Affairs of the Government of the United Republic of Tanzania has requested that the project closing date be extended for the second time. Based on an appraisal of time needed to complete the pending activities, the Bank has agreed to an extension from August 31, 2012 to February 15, 2013. The first extension of one year was granted on May 27, 2011, which extended the closing date from August 31, 2011 to August 31, 2012. The second extension will allow the Government to complete ongoing activities such as the establishment of the Marine Legacy Fund, project evaluation studies that are critical to achieve project objectives as well as to document those achievements, and final construction elements for three fisheries landing sites. 5 ANNEX 1: Reallocation of Proceeds MARINE AND COASTAL ENVIRONMENTAL MANAGEMENT PROJECT 1. Proceeds for Tanzania, Marine and Coastal Environment Management, (P082492 and P084213, Credit TZ4106-TA/TF055580), will be reallocated as follow: Table 1: Amount of the IDA Credit (TZ4106) allocated (in SDR). Exchange rate applied: SDR 1: USD 1.50573 Category of Expenditure Allocation Increase/decrease of current allocation Number Description Current Revised Amount % IDA 4106 GOODS - MAINLAND 1A TANZANIA 2,568,873.00 2,581,226.89 12,353.89 0.5 IDA GOODS - 1B ZANZIBAR 1,532,531.00 1,551,709.86 19,178.86 1.3 IDA 4106 CIVILWORKS - MAINLAND 2A TANZANIA 3,637,305.00 3,662,490.79 25,185.79 0.7 IDA4106 CIVILWORKS 2B - ZANZIBAR 3,274,033.00 3,148,516.07 (125,516.93) (3.8) IDA41060 CONS SERV - MAINLAND 3-A TZ 903,409.00 708,634.00 (194,775.00) (21.6) IDA41060 CONS SERV- 3-B ZANZIBAR 595,620.00 595,620.00 - - IDA41060 TRAINING - MAINLAND 4-A TZ. 1,534,125.00 1,534,125.00 - - IDA41060 TRAINING - 4-B ZANZIBAR 1,196,484.00 1,196,484.00 - - IDA41060 OPERAING COSTS- MAINLAND 5-A TZ 8,168,279.00 8,276,279.00 108,000.00 1.3 IDA41060 OPERATING 5-B COSTS – 4,204,412.00 4,329,928.93 125,516.93 3.0 ZANZIBAR IDA41060 SUB- PROJECTS - MAINLAND 6-A TZ 3,256,644.00 3,305,879.32 49,235.32 1.5 IDA41060 SUB- PROJECTS- 6-B ZANZIBAR 2,576,008.00 2,556,829.14 (19,178.86) (0.7) IDA41060 PPF 7 REFINANCING 452,277.00 452,277.00 - - Grand Total 33,900,000.00 33,900,000.00 - Table 2: Amount of the GEF Trust Fund Grant (TF055580) allocated (in USD) Category of Expenditure Allocation Increase/decrease of current allocation Number Description Current Revised Amount % TF55580 GOODS- 1-A MAINLAND 1,500,000.00 1,646,959.80 146,959.80 9.8 TF55580 GOODS- 1-B ZANZIBAR 1,200,000.00 1,125,000 (75,000.00) (6.3) TF55580 WORKS- 2-A MAINLAND 416,000.00 396,000.00 (20,000.00) (4.8) TF55580 WORKS- 2-B ZANZIBAR 618,450.00 618,450.00 - - TF55580 CON. SERV.- 3-A MAINLAND 600,000.00 473,040.20 (126,959.80) (21.2) TF55580 CON. SERV.- 3-B ZANZIBAR 900,000.00 900,000.00 - 0.67 TF55580 TRAINING- 4-A MAINLAND 509,000.00 508,163.23 (836.77) - TF55580 TRAINING- 4-B ZANZIBAR 604,250.00 679,250.00 75,000.00 12.4 TF55580 OP. COSTS- 5-A MAINLAND 1,850,000.00 1,850,836.77 836.77 0.05 TF55580 OP. COSTS- 5-B ZANZIBAR 1,552,300.00 1,552,300.00 - - MARINE LF- 6-A PARTA.1(B)- 125,000.00 125,000.00 - - 7 MAINLAND MARINE LF- PARTA.1(B)- 6-B ZANZIBAR 125,000.00 125,000.00 - - Grand Total 10,000,000.00 10,000,000.00 - 2. For project status please see section 2 on page 4. 3. The project is nearly completed, and remaining tasks and funds have been assessed to maximize project impact. Based on this assessment, the proposed reallocation is necessary to cover expenses associated with several priority remaining activities. First, additional operational costs are needed to support consultation sessions associated with final studies, including the establishment of the Marine Legacy Fund, and project impact and evaluation studies. Secondly, using GEF funds the GOT’s Marine Parks units has purchased buoys to enable marine boundary demarcation in priority sites in all project- supported Marine Protected Areas. The deployment of these buoys will be covered under the operational cost under the IDA Credit. And thirdly, under the GEF Grant an additional allocation to the training category is needed to cover project-related training activities, which have already taken place. 4. Overall, these reallocations have been made possible because: i) several planned consultancies have been conducted by government institutions rather than by external parties; ii) consultancies and civil works were less costly than anticipated due to changes in the local currency value; and iii) the Government has granted VAT exemptions for goods and civil works purchased through the Project. 8 ANNEX 2: Extension of Closing Date MARINE AND COASTAL ENVIRONMENTAL MANAGEMENT PROJECT P082492 AND P084213 1. The closing date for MACEMP will be extended from August 31, 2012 until February 15, 2013. 2. For project status please see section 2 on page 4 3. Most of the Project’s objectives continue to be achievable. The performance of the borrower was downgraded to Moderately Satisfactory due to largely the delays in contracting of key studies, for which the extension is needed to allow completion. 4. The proposed extension is necessary to complete key ongoing activities such as the establishment of the Marine Legacy Fund and to ensure the completion of project impact evaluation studies that are critical to achieve project objectives as well as to document those achievements. Also, the extension will allow for the completion of several civil works, more notably three fish landing sites in Rufiji, Nyamatsi and Kilindoni. The Borrower has prepared a specific action plan to complete the project within the new time period. 5. This will be the second extension of the project. The first extension was granted on May 27, 2011 and extended the project one year from August 31, 2011 to August 31, 2012. 9