The World Bank Peru Subnational Implementation of EITI (P160633) REPORT NO.: RES36103 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF PERU SUBNATIONAL IMPLEMENTATION OF EITI APPROVED ON MARCH 31, 2017 TO PERU ENERGY & EXTRACTIVES LATIN AMERICA AND CARIBBEAN Regional Vice President: Axel van Trotsenburg Country Director: Alberto Rodriguez Senior Global Practice Director: Riccardo Puliti Practice Manager/Manager: Christopher Gilbert Sheldon Task Team Leader: Javier Aguilar The World Bank Peru Subnational Implementation of EITI (P160633) ABBREVIATIONS AND ACRONYMS EGPS Extractives Global Programmatic Support EITI Extractives Industry Transparency Initiative MSG Multi-stakeholder groups PDO Project Development Objective The World Bank Peru Subnational Implementation of EITI (P160633) BASIC DATA Product Information Project ID Financing Instrument P160633 Investment Project Financing Original EA Category Current EA Category Not Required (C) Not Required (C) Approval Date Current Closing Date 31-Mar-2017 15-Mar-2019 Organizations Borrower Responsible Agency Peru Ministry of Energy and Mines Financing (in USD Million) FIN_SUMM_PUB_TBL SUMMARY Total Project Cost 0.50 Total Financing 0.00 Financing Gap 0.00 DETAILS -NewFin3 Project Development Objective (PDO) Original PDO Foster transparency and accountability in extractive industries and improve the quality of engagement by key local stakeholders around extractive industries in 5 regions, by i) influencing key extractive industries stakeholders to become more transparent and responsive, and ii) enabling local organizations and individuals to demand information. OPS_TABLE_PDO_CURRENTPDO The World Bank Peru Subnational Implementation of EITI (P160633) Summary Status of Financing Net TF Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-A4886 18-May-2017 18-May-2017 18-May-2017 15-Mar-2019 .50 .23 .27 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. Peru is in many ways a success story in regard to Extractives Industry Transparency Initiative (EITI). The EITI has brought transparency to revenue collection and a forum for discussing governance and different challenges in the management of extractive resources. This is appreciated by stakeholders at the national level. However, all three constituencies agree that the main challenge is in improving revenue management at subnational levels. Peru distributes 50% of extractive revenues to regions and municipalities. The Extractives Global Programmatic Support (EGPS) has provided a grant for deepening the EITI to five regions. 2. During early 2018 Peru underwent validation and has been declared with “meaningful progress” towards the full achievement of the requirements set by the EITI Standard 2016. Peru is implementing the corrective actions set by the EITI International Board last January with an aim at being validated by the end of 2019. The Multi-stakeholder group (MSG) reviewed impact and planned future EITI implementation. To date, Peru has produced 5 EITI national reports which covers the period between 2004 to 2016, which could be found on EITI Perú web site: http://eitiperu.minem.gob.pe/. Procurement of the Independent Administrator for the next national report, with government funding, is in progress. EITI Perú is implementing the Initiative so far in 4 regions out of the 5 planned, those are Arequipa, Moquegua, Piura and Apurimac, where regional MSGs have been established, and now preparations for the second EITI regional reports (Arequipa and Apurimac) are making good progress. For Moquegua and Piura this would be its third EITI report. Transfers to regional and municipal government derived from extractives would be tracked and disclosed as well as the investment budget from these local governments with focus on some key public investment projects. The World Bank Peru Subnational Implementation of EITI (P160633) 3. Progress towards the achievement of the PDO is satisfactory. The project has supported the setting up of 4 MSGs out of the 5 planned, regions’ MSGs are having meetings regularly, they discussed and approved the scope of work for the 2017 EITI reports and have agreeing on the TORs for the consultants identified for the task. 4. As of February 2019, an amount of US$ 230,000 has been disbursed and represents about 45 percent of the grant. The project made good progress on completing key activities for achieving its project development objective (PDO). Since November 2017, progress towards PDO and Overall Implementation are Satisfactory. An audit report was prepared by the Auditor General for the implementing agency, the Ministry of Energy and Mines. There were no issues to the audit and the report was accepted by the World Bank. Financial Management and Procurement have been handled adequately by the implementation unit in line with World Bank procedures. The changes proposed do not trigger any change in the safeguards policies. This will be the first extension of the closing date. Without the extension, achieving the PDO is uncertain. II. DESCRIPTION OF PROPOSED CHANGES 5. On February 11, 2019, the government of Peru has requested a 9-month extension of the closing date from March 15, 2019 to December 15, 2019. This extension would support the EITI work program in its efforts to contribute towards the establishment of an inclusive regional information and dialogue platform for addressing issues of local interest on extractive industries in five selected regions. The reasons for this extension are first, the recent change of local government authorities which are new to the EITI local process and, second, the fifth regional EITI platform that needs to be completed. The extension would allow the project to sustain its support to the existing four regional multi- stakeholder groups and to finalize the arrangements for setting up the fifth regional EITI as originally planned. III. SUMMARY OF CHANGES Changed Not Changed Loan Closing Date(s) ✔ Implementing Agency ✔ Project's Development Objectives ✔ Results Framework ✔ Components and Cost ✔ Cancellations Proposed ✔ Additional Financing Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Change in Overall Risk Rating ✔ The World Bank Peru Subnational Implementation of EITI (P160633) Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline TF Status Closing Closing(s) Closing for Withdrawal Applications TF-A4886 Effective 15-Mar-2019 15-Dec-2019 15-Apr-2020 Note to Task Teams: End of system generated content, document is editable from here.