The World Bank Rep. of Congo - Water, Electricity & Urban Development SIL (LEN) (P106975) REPORT NO.: RES39254 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF REP. OF CONGO - WATER, ELECTRICITY & URBAN DEVELOPMENT SIL (LEN) APPROVED ON MARCH 25, 2010 TO REPUBLIC OF CONGO ENERGY & EXTRACTIVES GLOBAL PRACTICE AFRICA REGION Regional Vice President: Hafez M. H. Ghanem Country Director: Jean-Christophe Carret Regional Director: Riccardo Puliti Practice Manager/Manager: Wendy E. Hughes Task Team Leader(s): Anas Benbarka, Patrice Joachim Nirina Rakotoniaina The World Bank Rep. of Congo - Water, Electricity & Urban Development SIL (LEN) (P106975) ABBREVIATIONS AND ACRONYMS DA Designated Account E2C Energie Electrique du Congo IBRD International Bank for Reconstruction and Development IDA International Development Association FEF Front End Fee GDP Gross Domestic Product MEH Ministry of Energy and Hydraulics MIS Management Information System MTR Mid Term Review PEEDU Water, Electricity and Urban Development Project (Projet Eau, Électricité et Développement Urbain) PDO Project Development Objective PIU Project Implementation Unit RPP Revenue Protection Program SNE National Electricity Utility (Société Nationale d’Electricité) The World Bank Rep. of Congo - Water, Electricity & Urban Development SIL (LEN) (P106975) 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 P106975 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 25-Mar-2010 31-Dec-2020 Organizations Borrower Responsible Agency Republic of Congo Ministry of Finance, Budget and Public Portfolio Project Development Objective (PDO) Original PDO To increase sustainable access to basic infrastructure and safe drinking water for the inhabitants of Brazzaville and Pointe Noire. Current PDO To increase access to basic infrastructure services, safe drinking water and electricity to the inhabitants of targeted areas in the cities of Brazzaville and Pointe Noire. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-84450 16-Sep-2014 10-Oct-2014 15-Dec-2015 31-Dec-2020 35.00 27.48 7.52 IDA-55410 16-Sep-2014 10-Oct-2014 15-Dec-2015 31-Dec-2020 15.00 10.63 3.13 IDA-47010 25-Mar-2010 25-May-2010 27-Oct-2010 31-Dec-2019 25.50 24.84 0 The World Bank Rep. of Congo - Water, Electricity & Urban Development SIL (LEN) (P106975) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING Project Status 1. The Congo Water, Electricity and Urban Development Project (P106975) was approved by the World Bank Board of Directors on March 25, 2010 with a total amount of US$125.5 million (IDA: US$25.5 million equivalent and Government: US$100 million). The project was topped up with an Additional Financing (P147456) which was approved on September 16, 2014 and jointly financed by IDA (US$15 million), IBRD (US$45 million) and the Government (US$90 million). The original project was dedicated mainly to finance urban infrastructure and water supply and sector reform while the Additional Financing aimed at upgrading of the electricity distribution and transmission system and improving the operational performance of the utility to restore the system’s reliability and viability. The Bank’s total financing is US$85.5 million. 2. If approved, this would be the fifth restructuring of the Project. The fourth restructuring was approved in September 2019 to amend the current financing agreements (IBRD-84450, IDA55410 and IDA-47010) to: (i) cancel activities under subcomponent C.4, except for the environmental and social studies for the rehabilitation and construction works for SNE customer service offices (but excluding the rehabilitation works which will not be financed under the Project) ; (ii) as a result of (i), reduce the amount of Loan Number 84450 from US$ 45 million to US$ 35 million, the difference being equal to the budget allocated to activities that are cancelled (MIS and RPP); (iii) update the results framework. The PDO was to increase access to basic infrastructure services, safe drinking water and electricity for the inhabitants of targeted areas in the cities of Brazzaville and Pointe-Noire. The PDO remained unchanged. 3. The first restructuring was approved in 2014 as part of the processing of the Additional Financing to, inter alia, align the original PDO and description of activities with the changes introduced through the Additional Financing and extend the closing date. The second restructuring was approved in April 2017 and amended the financing agreements (IBRD-84450, IDA-47010, and IDA-55410) to allow the front-loading of Bank resources in the absence of the counterpart funding disbursement. The third restructuring was approved in April 2018 and eliminated the counterpart funding which was the main constraint the project has faced since its effectiveness by: (i) downscaling the Project and reallocating IDA/IBRD resources and already disbursed funds from the Government to finance priority activities for the achievement of the Project Development Objective (PDO); allowing resources of IDA/IBRD (IBRD- 84450, IDA-55410) in the Additional Financing to be used to cover expenses already contracted and executed in the original Financing, (iii) allowing to use the Bank's resources to cover 100 percent of eligible expenditures to be financed by the Project; (iv) extending the closing date to December 31, 2020 to address delays caused by the lack of counterpart funding. 4. As per the last ISR, the Project was rated Moderately Satisfactory (MS) for overall implementation progress and MS for progress towards achievement of PDO. The Project is in compliance with all legal covenants and all external audit The World Bank Rep. of Congo - Water, Electricity & Urban Development SIL (LEN) (P106975) reports and Interim Financial Reports are up to date and satisfactory. There is no overdue audit report. As of October 20, 2019, total disbursement of Bank financing was 84.7 percent; and 91.0 percent of IDA funds and 78.2 percent of IBRD funds have been disbursed. Rationale for restructuring 5. This restructuring paper seeks approval to amend two minor typos in the fourth (and previous) restructuring paper approved in September 2019:  In Section 1 (Project Status and Rationale for Restructuring), paragraph 7 should read:” The proposed restructuring results from the Government's letter N⁰244-19/MPSIR-CAB, dated 5 April 2019, requesting the cancellation of the RPP and MIS, which the MEH decided to drop from the Project. These activities are supposed to be financed by the utility as part of the ongoing reform of the power sector. This is in line with the Aide-memoire dated November 21, 2018 here attached”.  In section 4 (Detailed Changes), in the Component Table, the revised component 3 should have a proposed cost of US$ 47.11 million as it was reduced by US$ 10 million. II. DESCRIPTION OF PROPOSED CHANGES There are no changes as compared to the fourth restructuring. III. SUMMARY OF CHANGES Changed Not Changed Components and Cost ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Results Framework ✔ Loan Closing Date(s) ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ The World Bank Rep. of Congo - Water, Electricity & Urban Development SIL (LEN) (P106975) Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ 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) Urban Infrastructure and Urban Infrastructure and 15.76 No Change 15.76 Services Services Urban Water Supply 10.13 No Change Urban Water Supply 10.13 Electricity Sector Reform, Electricity Sector Reform, Commercial and Electricity 57.11 Revised Commercial and Electricity 47.11 Supply Systems Upgrade. Supply Systems Upgrade. TOTAL 83.00 73.00 . The World Bank Rep. of Congo - Water, Electricity & Urban Development SIL (LEN) (P106975)