61530 v1
                                    Document of
                                The World Bank


                                                          Report No:




                            RESTRUCTURING PAPER

                                         ON A

                PROPOSED PROJECT RESTRUCTURING
                                OF
   BUSINESS ENVIRONMENT STRENGTHENING TECHNICAL ASSISTANCE
              PROJECT (BESTAP) – GRANT NO. H293-MAI


                     IN THE AMOUNT OF SDR 10 MILLION

                                  MAY 24, 2007


                                     TO THE

                             REPUBLIC OF MALAWI


                                  March 25, 2011




Finance and Private Sector Development
Eastern and Southern Africa
Africa Region
  Regional Vice President:       Obiageli Katryn Ezekwesili
Country Director (Acting):       Olivier P. Godron
         Sector Director:        Marilou J. Uy
 Sector Manager(Acting) :        Michael Fuchs
       Task Team Leader:         Brian G. Mtonya




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_______________________________________________________________________


       MALAWI — BUSINESS ENVIRONMENT STRENGTHENING TECHNICAL
                     ASSISTANCE PROJECT (BESTAP)
                                P103773
                          GRANT NO. H293-MAI
                                         Restructuring Paper

1.      Proceeds for Malawi, Business Environment Strengthening Technical Assistance
Project (BESTAP), Grant No. H293-MAI, P103773 will be reallocated as follow:

 Category of Expenditure                 Amount of the Grant          % of Expenditures to be
                                        Allocation (expressed in       Financed (inclusive of
                                                 SDR)                          Taxes)
   Current             Revised           Current       Revised         Current        Revised
1) Goods            (1) Goods                           1,860,000       100%           100%
(Excluding Part     (Excluding Part
A and C.2 of the    A and C.2 of the       580,000
Project)            Project)
(2) Works           (2) Works                               30,000      100%         100%
                                            33,000
3) Consultants’     (3) Consultants’                      5,900,000     100%         100%
Services            Services
(including          (including           6,000,000
Financial           Financial
Audits), Training   Audits), Training
and Workshops       and Workshops
(Excluding Part     (Excluding Part
A of the Project)   A of the Project)
(4) (a) Matching    (4) (a) Matching                       800,000      100%         100%
Grants under        Grants under
Part C.2 of the     Part C.2 of the      1,060,000
Project             Project
(4) (b) Operating   (4) (b) Operating                      460,000      100%         100%
Costs and Goods     Costs and Goods
under Part C.2      under Part C.2         640,000
of the Project      of the Project
(5) Operating       (5) Operating                          800,000      100%         100%
Costs under Part    Costs under Part
D of the Project    D of the Project       350,000
(6) Unallocated (   (6) Unallocated                              0      100%          n/a
                                         1,337,000
                    (7) Goods,                             150,000       n/a         100%
                    Consultants’
                    Services,                  n/a
                    Training and
                    Workshops
                    under Part A of
                    the Project
TOTAL               TOTAL               10,000,000       10,000,000
AMOUNT              AMOUNT



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2.     Briefly summarize project implementation progress.

The cumulative IDA disbursements as of March 21, 2011 were US$ 13,860,000,
representing 88 percent of the total IDA funding available to the project of US$
15,750,000. No funds have been disbursed from the EC resources ( 2.8 Million) which
are allocated to downstream activities yet to be implemented. The proposed restructuring
does not affect the use of the funds provided by the EC. All fiduciary aspects of the
project are satisfactory. The project procurement and financial management are currently
rated as satisfactory, and have been since project effectiveness. Financial management is
Satisfactory and the project is up-to-date with Interim Financial Reports (IFRs) as well as
Audit Reports. A mid-term review of BESTAP conducted in October 2010 rated the
project as satisfactory


3.     The proposed reallocation is necessary to:

 A level one restructuring of the Business Environment Strengthening Technical
Assistance Project (BESTAP) was approved by the World Bank Board on a 10 day No
Objection basis in November 2010. However, due to delays in finalizing administrative
arrangements needed to operationalize the use of European Union (EU) co-financing for
activities that the World Bank and EU agreed would be jointly financed, there has been
subsequent overruns in actual disbursements over allocated disbursements in a number of
disbursement categories where there was to be joint financing. This reallocation of
proceeds is intended to normalize this situation by reallocating proceeds among the
relevant affected categories.

Two separate Designated Accounts (DAs) and Operating Accounts (OAs) would be
maintained for the IDA and EU financing to avoid co-mingling of funds. Use would be
made of Statement of Expenditure (SOE) based disbursement for both IDA and EU
accounts.




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