The World Bank Education Sector Strategy Support Project (P133557) REPORT NO.: RES29063 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF EDUCATION SECTOR STRATEGY SUPPORT PROJECT nly APPROVED ON APRIL 19, 2013 TO THE REPUBLIC OF NICARAGUA EDUCATION LATIN AMERICA AND CARIBBEAN Regional Vice President: Jorge Familiar Calderon Country Director: Christian Albert Peter Senior Global Practice Director: Jaime Saavedra Chanduvi Practice Manager/Manager: Reema Nayar Task Team Leader: Enrique O. Alasino Massetti The World Bank Education Sector Strategy Support Project (P133557) ABBREVIATIONS AND ACRONYMS EU European Union GoN Government of Nicaragua IRI Intermediate Results Indicator PDO Project Development Objective TF Trust Fund nly The World Bank Education Sector Strategy Support Project (P133557) Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. BASIC DATA Product Information Project ID Financing Instrument P133557 Specific Investment Loan nly Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 19-Apr-2013 15-Nov-2017 Organizations Borrower Responsible Agency The Republic of Nicaragua Ministry of Education (MINED) Project Development Objective (PDO) Original PDO The objectives of the Project are to: (a) increase access to preschool education in selected municipalities, and to improve preschool education learning conditions nationwide; and (b) increase access to lower secondary education in selected municipalities, and improve lower secondary education quality and completion rates nationwide. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-15143 17-Sep-2013 17-Sep-2013 19-Sep-2013 15-Nov-2017 31.32 31.32 0 TF-13232 20-Apr-2013 20-Apr-2013 02-May-2013 15-Nov-2017 16.70 16.70 0 The World Bank Education Sector Strategy Support Project (P133557) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No Note to Task Teams: End of system generated content, document is editable from here. I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project Status 1. Overall, end targets have been exceeded for four Project Development Objective (PDO) indicators and met for 8 out of the 13 intermediate results indicators (IRI). Both Overall Implementation Progress and Progress towards achievement of PDO are currently rated Moderately Satisfactory. On preschool education (components 1 and 3), end targets for four of six IRIs have been met, one is on track and one fell slightly short of the target. A new unified preschool curriculum has been implemented, including the training of teachers in the new curriculum (IRI 2, target met); learning materials have been distributed to every preschool nationwide, including yearly distribution of expendable learning materials (IRI 4, target met); over 2,300 community-level preschool teachers have been “formally certified” through an in-service training (IRI 3, target met); and preschool management capacity has been strengthened through equipment and training at the central level, as well as in the 19 department offices (IRI 11, target met). The new system for early childhood development and learning assessment has been piloted, and the final report is being developed (IRI 5, end target on track). Rehabilitation/construction of preschool classrooms is projected to reach a total of 104 classrooms built, with 80 preschool classrooms completed, and 24 currently under construction (IRI 1,falling slightly below target of 106 classrooms). 2. On secondary education (components 2 and 4), end targets for four of six IRIs have been met, and two fell slightly short. Textbooks and teaching guides for key subject areas have been fully delivered for lower secondary students (IRI 9, target met), and teachers of public schools nationwide (IRI 10); over 900 lower secondary education teachers have been certified (IRI 7, target met); MINED’s management capacity related to secondary education, teacher training and infrastructure has been strengthened through equipment and training of key line directorates, as well as the opening of three regional infrastructure offices (IRI 12, target met); and 1,529 in-service teachers have received “updating training” based on the revised secondary curriculum (falling slightly short on the end target of 1,600 for IRI 8). In the case of core schools with lower secondary facilities (IRI 6), the Project is expected to build a total of 74 core schools; with 59 core schools with lower secondary facilities already completed and 15 under construction (IRI 6, falling slightly below target of 75 schools). 3. The audit reports for the period from January to December 2016 is overdue since June 30th. The delay is mainly due to the high number of transactions that took place during the audited period. MINED and Bank’s team have agreed on an additional 78-day period to submit the final report, up to September 18th 2017. The World Bank Education Sector Strategy Support Project (P133557) B. Rationale for Restructuring 4. The current request for a restructuring is due to an increase in the total amount of one of the Project’s trust funds (TF15143 financed by the European Commission) as a result of changes in the euro/dollar exchange rate, which produced an increase in the final Trust Fund (TF) contribution from US$31.32 million (after a previous cancellation in the amount of US$2,063,994 due to prior currency exchange fluctuations) to US$32.68 million. This final amount was only known until August 2017, when all European Union (EU) funds were effectively disbursed to the Bank’s account. i. The sequence of EU disbursements is as follows a. Out of the total EU contribution to the Education Sector Multi-Donor Trust Fund of Euro 28,780,000, the amount to be executed by the recipient, the Republic of Nicaragua (RoN), was Euro 26,900,00 (TF015143) to be paid in three tranches: 50%-25%-25%. b. The Grant agreement between the Bank and the RoN, corresponding to components 2 and nly 4 of the Project, was signed for US$33,386,608 (exchange rate of 1.24 dollars per euro) c. In 2012, the first 50% of the contribution was disbursed to the Bank at an exchange rate of approximately US$1.3 per euro d. In 2015, the second 25% was disbursed at an exchange rate of US$1.07 per euro. Since this new exchange rate affected the Project’s projections, it was restructured to account for a reduction of approximately US$2 million (new total amount of US$31,322,614) e. In March 2017, the last tranche of 25% was received at an exchange rate of approximately US$1.12 per euro, leading to a new total amount of US$32,688,269 and a surplus of approximately US$1.37 million compared to the current Grant total after the previous cancellation. II. DESCRIPTION OF PROPOSED CHANGES The total project cost will be modified to reflect an increase in the US Dollar equivalent of the European Commission-funded trust fund, which was originally in Euros, increasing the total TF amount to US$32,688,269. This change will warrant a modification in Disbursement Estimates and Costs per Component. The increase in funds will finance activities that were previously cancelled due to the exchange rate fluctuations in previous years and that will now be reintroduced. These are related to i) aspects within infrastructure works that had been excluded due to budget cuts, such as improved drainage systems, security fences, and food storage rooms (depending on the site); ii) an increase in the number of secondary school books purchased through the project for rural schools. I. SUMMARY OF CHANGES Changed Not Changed Change in Components and Cost ✔ The World Bank Education Sector Strategy Support Project (P133557) Change in Disbursement Estimates ✔ Change in Implementing Agency ✔ Change in DDO Status ✔ Change in Project's Development Objectives ✔ Change in Results Framework ✔ Change in Loan Closing Date(s) ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Change in Disbursements Arrangements ✔ Change in Overall Risk Rating ✔ Change in Safeguard Policies Triggered ✔ Change of EA category ✔ Change in Legal Covenants ✔ Change in Institutional Arrangements ✔ Change in Financial Management ✔ Change in Procurement ✔ Change in Implementation Schedule ✔ Other Change(s) ✔ Change in Economic and Financial Analysis ✔ Change in Technical Analysis ✔ Change in Social Analysis ✔ Change in Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Increasing Access and Improving Increasing Access and Learning Conditions of Preschool 15.85 No Change Improving Learning Conditions 15.85 Education of Preschool Education The World Bank Education Sector Strategy Support Project (P133557) Improving Access, Quality and Improving Access, Quality and Completion of Lower Secondary 29.82 Revised Completion of Lower 30.69 Education Secondary Education Strengthening of the Ministry Strengthening of the Ministry of of Education’s Institutional Education’s Institutional Capacity 0.85 No Change 0.85 Capacity for Preschool for Preschool Education Education Strengthening of the Ministry Strengthening of the Ministry of of Education’s Institutional Education’s Institutional Capacity 2.00 No Change 2.00 Capacity for Lower Secondary for Lower Secondary Education Education TOTAL 48.52 49.39 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2013 3,328,396.00 429,288.08 2014 19,926,281.00 7,203,840.95 2015 15,000,000.00 9,983,504.50 2016 6,200,000.00 14,773,061.59 2017 0.00 16,998,574.05