Document of The World Bank Report No: 58531-BA RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF WATER QUALITY PROTECTION (GEF) PROJECT (P085112) GRANT TRUST FUND NO. TF055265 BOARD APPROVAL DATE: JUNE 7, 2005 TO BOSNIA AND HERZEGOVINA DECEMBER 30, 2010 ABBREVIATIONS AND ACRONYMS BiH Bosnia and Herzegovina EU European Union GEF Global Environment Facility IPA Instrument for Pre-Accession PDO Project Development Objective SIDA Swedish International Development Cooperation Agency TF Trust Fund WWTP Waste Water Treatment Plant Regional Vice President: Philippe H. Le Houerou Country Director: Jane Armitage Sector Manager: Wael Zakout Task Team Leader: Vesna Francic 2 Restructuring Status: Draft Restructuring Type: Level two Last modified on date : 12/16/2010 1. Basic Information Project ID & Name P085112: QUALITY PROTECT (GEF) Country Bosnia and Herzegovina Task Team Leader Vesna Francic Sector Manager/Director Wael Zakout Country Director Jane Armitage Original Board Approval Date 06/07/2005 Original Closing Date: 02/28/2011 Current Closing Date 02/28/2011 Proposed Closing Date [if applicable] 08/28/2012 EA Category A-Full Assessment Revised EA Category A-Full Assessment-Full Assessment EA Completion Date 12/22/2003 Revised EA Completion Date 2. Revised Financing Plan (US$m) Source Original Revised BORR 6.19 6.19 GEFI 4.00 4.00 GEFU 8.90 8.90 GSPN 1.18 1.18 Total 20.27 20.27 3. Borrower Organization Department Location Bosnia and Herzegovina Bosnia and Herzegovina 4. Implementing Agency Organization Department Location Ministry of Agriculture, Water Bosnia and Herzegovina Management & Forestry 5. Disbursement Estimates (US$m) Actual amount disbursed as of 12/20/2010 4.85 Fiscal Year Annual Cumulative 2010 0.00 4.85 2011 3.00 4.85 2012 Total 5.0 6. Policy Exceptions and Safeguard Policies Does the restructured project require any exceptions to Bank policies? N Does the restructured projects trigger any new safeguard policies? If yes, please select N from the checklist below and update ISDS accordingly before submitting the package. 7a. Project Development Objectives/Outcomes Original/Current Project Development Objectives/Outcomes The project development objective is to further strengthen the capacity of local utilities and reduce pollution from municipal sources into the Neretva and Bosna Rivers. The global objective is to reduce municipal pollution and nutrients in the Adriatic Sea and the Danube Basin. The sub-objectives are: (i) develop the Wastewater Improvement Plan; (ii) further strengthen the Joint BiH/Croatian Working group, with coordination from Serbia and Montenegro to implement the Wastewater Improvement Plan; (iii) develop and implement high-priority, low-cost water capital investments; and (iv) disseminate information in BiH and the region for replication of project activities at other priority sites in the Balkans. 7b. Revised Project Development Objectives/Outcomes [if applicable] 4 BOSNIA AND HERZEGOVINA WATER QUALITY PROTECTION GEF PROJECT PROJECT ID: P085112; GEF Grant No. TF055265 RESTRUCTURING PAPER EXTENSION OF CLOSING DATE 1. The closing date for Bosnia and Herzegovina, Water Quality Protection GEF Project, Grant No. TF055265, Project ID P085112 will be extended from February 28, 2011 until August 28, 2012. 2. Overall progress in project implementation has proceeded more slowly than expected. However, after initial delays, overall implementation progress has accelerated since 2009. The Project Development Objectives remain unchanged and are expected to be achieved. Most of the remaining required actions for timely implementation are now close to completion. High priority investments in the wastewater sector are presently under implementation or in the final stages of tendering. The rehabilitation of two Wastewater Treatment Plants (WWTP) has been completed and the plants commissioned in October and December of 2010 . The preparation of final designs and bidding documents for the two remaining WWTPs in Mostar and Zivinice are in final phase, and construction is expected to start in February 2011. Recently approved EU IPA 2010 in the amount of EUR1.5 million and SIDA grant funds in the amount of EUR2.5 million will partly finance the construction of the two WWTPs in Zivinice and Mostar respectively. In addition, all three studies have been completed. With this progress, it is likely that the project will achieve its Development Objectives (PDO). Overall, investments and technical assistance financed under the Project have had a positive impact on living conditions of beneficiaries in the targeted areas. 3. There are no outstanding financial management or procurement issues. The joint fiduciary review conducted during December 2009 concluded that the financial management system, including accounting, budgeting, and reporting, continues to be adequate and satisfies the Bank's requirements. There are no audit reports outstanding. Finally, disbursement has also picked up and as of the end of November 2010, US$4.65 million, or about 52% of the funds have been disbursed, and an additional US$1.0 million is committed. It should be noted that the disbursement ratio in FY10 was 24.8%, and to date in FY11 is 25.2%, while the current disbursement ratio for the BiH portfolio is 7.5%. 4. The proposed 18 months' extension requested by the Ministry of Finance and Treasury of Bosnia and Herzegovina on November 12, 2010 is necessary for the implementation and completion of two sub-projects, disbursement of the recently-approved EU and SIDA trust funds, and achievement of the PDO. The implementing agencies have revised the project's procurement and implementation plan in accordance with an 18-month extension and this action plan for project completion is considered satisfactory. This will be the project's first closing date extension. 6