The World Bank NI Sustainable Rural Water Supply and Sanitation Sector Project (P147006) REPORT NO.: RES36290 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF NI SUSTAINABLE RURAL WATER SUPPLY AND SANITATION SECTOR PROJECT APPROVED ON MARCH 18, 2014 TO REPUBLIC OF NICARAGUA WATER LATIN AMERICA AND CARIBBEAN Regional Vice President: Axel van Trotsenburg Country Director: Yaye Seynabou Sakho Senior Global Practice Director: Jennifer J. Sara Practice Manager/Manager: Rita E. Cestti Task Team Leader: Martin Benedikt Albrecht, Juan David Casanova Anoll The World Bank NI Sustainable Rural Water Supply and Sanitation Sector Project (P147006) I. BASIC DATA Product Information Project ID Financing Instrument P147006 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 18-Mar-2014 31-Jul-2019 Organizations Borrower Responsible Agency Republic of Nicaragua Emergency Social Investment Fund (FISE) Project Development Objective (PDO) Original PDO The Project Development Objectives (PDOs) are: (a) to increase the access to sustainable WSS services in selected poor rural areas of Nicaragua through the consolidation of rural WSS sector institutions and the provision of adequate infrastructure; and (b) to improve Nicaragua’s capacity to respond promptly and effectively to an eligible emergency. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-53770 18-Mar-2014 03-Apr-2014 31-Jul-2014 31-Jul-2019 14.30 10.36 3.94 IDA-H9120 18-Mar-2014 03-Apr-2014 31-Jul-2014 31-Jul-2019 15.70 12.55 1.76 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank NI Sustainable Rural Water Supply and Sanitation Sector Project (P147006) I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES Since the Mid-Term Review that took place in early 2017, Project implementation has been progressing largely as planned. This was confirmed during a technical mission in March 2019, which included the visit to 4 sub-projects, and a regular implementation support mission in April 2019, which visited 3 sub-projects. The construction works of rural water supply and sanitation schemes have been completed for 41 sub-projects to date, 9 sub-projects are expected to be completed by end- May 2019, and another 26 sub-projects are scheduled to be completed by end-July 2019. Out of these 26 sub-projects to be completed by end-July, 2019, 8 are at a risk of not being completed by the current closing date - 31 July 2019. Additional to the civil works, the Project includes a three-month period for post-works interventions, including training and capacity building of communities for the operation and maintenance of their new water supply and sanitation systems. These post-works interventions are key to the sustainability of the systems and are being measured through the sustainability classification of the community organizations (CAPS). While the current closing date will allow for the completion of post-works interventions for the 50 subprojects, there will not be sufficient time to complete the post- works intervention for the 26 remaining sub-projects. The Restructuring Paper is therefore seeking an extension of 2 months from July 31, 2019 to September 30, 2019, to ensure the completion of all ongoing civil works as well as to conduct the post-works intervention in the beneficiary communities. Additionally, the Restructuring Paper is seeking a reallocation of financing proceeds of the IDA credit among categories of disbursement, so as to reflect the reallocation of funds between components in order to cover for a deficit in the components financed by the IDA grant, which was impacted by changes in the currency exchange rate between the SDR and the USD since the time of Board approval. Disbursements over the first three quarters of FY20 have been progressing well, with US$22.91 million (80 percent) disbursed to date. Commitments for all remaining sub-projects and technical assistance have been made, amounting to approximately US$6.49 million. It was also confirmed that there are no outstanding financial audits pending. The proposed changes would allow the Project to finalize the execution for the 8 sub-projects and improve capacity to support the sector institutions and the sustainability of the infrastructure investments within the timeframe of the operation and to achieve its development objectives. II. DETAILED CHANGES LOAN CLOSING DATE(S) Original Proposed Proposed Deadline Revised Ln/Cr/Tf Status Closing Closing for Withdrawal Closing(s) Applications The World Bank NI Sustainable Rural Water Supply and Sanitation Sector Project (P147006) IDA-53770 Effective 31-Jul-2019 30-Sep-2019 30-Jan-2020 IDA-H9120 Effective 31-Jul-2019 30-Sep-2019 30-Jan-2020 REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Current Current Actuals + Proposed Disbursement % Ln/Cr/TF Expenditure Allocation Committed Allocation (Type Total) Category Current Proposed IDA-53770- GO,CW,NCS,CS,T 001 R under Pts 1 7,723,000.00 4,580,843.09 7,529,772.00 100.00 100.00 Currency: and 3 USD GO,CW,NCS,CS for Subprojects 4,858,000.00 3,720,856.62 4,924,960.00 100.00 100.00 Pt 2A GO,CW,NCS,CS Subprojects 2Bi, 387,000.00 0.00 513,268.00 100.00 100.00 2Bii Operating Costs 1,332,000.00 1,160,225.32 1,332,000.00 100.00 100.00 under Pt 1C Emergency 0.00 0.00 0.00 100.00 100.00 Procedures Pt 4 Total 14,300,000.00 9,461,925.03 14,300,000.00