The World Bank Water and Sanitation in Tourist Areas (P054221) REPORT NO.: RES29512 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF WATER AND SANITATION IN TOURIST AREAS APPROVED ON APRIL 2, 2009 TO THE DOMINICAN REPUBLIC Regional Vice President: Jorge Familiar Calderon Country Director: Tahseen Sayed Khan Senior Global Practice Director: Guang Zhe Chen Practice Manager/Manager: Rita E. Cestti Task Team Leader: Marco Antonio Aguero The World Bank Water and Sanitation in Tourist Areas (P054221) ABBREVIATIONS AND ACRONYMS AOB: Absence of Objection APL: Adaptable Program Loan CMU: Country Management Unit CORAAPPLATA: Corporación de Acueductos y Alcantarillados de Puerto Plata DDO: Deferred Drawdown Option DR: Dominican Republic EA: Environmental Assessment GP: Global Practice IBRD: International Bank for Reconstruction and Development ID: Project Identification Code IP: Implementation Project OP/BP: Operation Policy and Bank Procedures PASCT: Water and Sanitation in Tourist Areas Project PDO: Project Development Objective The World Bank Water and Sanitation in Tourist Areas (P054221) BASIC DATA Product Information Project ID Financing Instrument P054221 Investment Project Financing Original EA Category Current EA Category Full Assessment (A) Full Assessment (A) Approval Date Current Closing Date 02-Apr-2009 31-Mar-2018 Organizations Borrower Responsible Agency Unidad Ejecutora del PASCT,Ministerio de Economía Dominican Republic Planificación y Desarrollo (MEPyD) Project Development Objective (PDO) Original PDO The objectives of the first phase of the proposed APL (the Project, APL I) are: (i) strengthening and consolidating the policy framework of the water and sanitation sector in the Dominican Republic; (ii) improving and expanding access to sanitation and wastewater treatment and disposal services in the Puerto Plata region; (iii) improving the financial and operational performance of CORAAPLATA, the regionâ s water utility; and (iv) enhancing operational and commercial performance of other regional utilities and preparing them to participate in the second phase of the Program (APL II). OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-76800 02-Apr-2009 18-Sep-2009 25-Feb-2010 31-Mar-2018 27.50 26.43 1.07 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Water and Sanitation in Tourist Areas (P054221) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project Status 1. The US$27.5 million IBRD loan was approved on April 2, 2009 and was declared effective on February 25, 2010. The current closing date is March 31, 2018. 2. The Project has retained the IP and DO ratings of Moderately Satisfactory over the past three ISRs, which reflect a positive progress on achieving the PDO and its indicators. At present, the PDO and IP ratings, as well as ratings for all other components are rated "MS". 3. Since the last extension granted in June 2017, disbursements have improved and now reached 95 percent, from 78.93 percent in June 2017, and all loan proceeds have been committed. As of November 13, 2017, a total of US$ 1.44 million still needs to be disbursed by the end of June 2018. The remaining funds are allocated to the two ongoing construction contracts: (i) the Submarine Outfall, and (ii) the Pretreatment Plant and Sewerage of Neighboring Areas. It is worth highlighting the progress in the implementation of the Single Treasury Account for this Project, selected as part of a pilot for projects financed with external resources and that continues to proceed smoothly, without slowing down the execution of the Project. B. Rationale for Restructuring 4. As expressed in the Government's restructuring request, the Dominican Republic Water and Sanitation in Tourist Areas Project (Loan No. 7680-DO) and the water sector in general, have a high priority in the national agenda, and it is of the authorities’ best interest to complete the project satisfactorily as possible. The Government has requested to adjust the PDO and results framework, by removing all reverences related to the APL instrument. 5. The GP and CMU agree that the proposed Level II restructuring, complies with the Articles of Agreement of the Bank. In addition, the team considers if the PDO would remain unchanged, it could potentially downgrade the Project’s performance, despite the good progress made in the remaining indicators. The proposed adjustment will ensure that the progress in the PDO and Results Framework are objectively measured in the ICR, facilitating the alignment between the Project’s results and lessons learned with the objectives. 6. The GP and CMU recommend the RVP’s approval in accordance with the terms of this Memorandum which we kindly request you initial. Upon approval, the Loan No. 7680-DO Agreement will be amended accordingly. The World Bank Water and Sanitation in Tourist Areas (P054221) 7. DESCRIPTION OF PROPOSED CHANGES 6. The current PDOs are: i) strengthening and consolidating the policy framework of the water and sanitation sector in the Dominican Republic; (ii) improving and expanding access to sanitation and wastewater treatment and disposal services in the Puerto Plata region; (iii) improving the financial and operational performance of CORAAPPLATA, the region’s water utility; and (iv) enhancing operational and commercial performance of other regional utilities and preparing them to participate in the second phase of the Program (APL II). Associated with above numeral (iv), the current Results Framework includes two references to the APLII related to preparation activities for the APL II. 7. The proposed restructuring would entail specifically a change in the PDO’s fourth objective: “(iv) enhancing operational and commercial performance of other regional utilities and preparing them to participate in the second phase of the Program (APL II)”. The team is recommending to remove the reference related to the APL II in objective number iv as well as the associated references in the Loan Agreement and the Results Framework. 8. The proposed revised PDO for the fourth objective would read as follows: “iv) enhancing operational and commercial performance of other regional utilities”. The rest of objectives will remain the same. In addition, the Results Framework presents marginal changes, where all references to the APL instrument are removed. 9. The Bank is also not contemplating a follow-up operation for the current project as was envisaged in the original APL. Furthermore, with the updating of OP/BP 10.00, all World Bank investment instruments are now consolidated Investment Policy Financing (IPF), so the APL has ceased to exist. Thus, the restructuring also seeks to align the PDO to the World Bank operational policies for investment project financing. II. SUMMARY OF CHANGES Changed Not Changed Change in Project's Development Objectives ✔ Change in Results Framework ✔ Change in Implementing Agency ✔ Change in DDO Status ✔ Change in Components and Cost ✔ Change in Loan Closing Date(s) ✔ The World Bank Water and Sanitation in Tourist Areas (P054221) Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Change in Disbursements Arrangements ✔ Change in Disbursement Estimates ✔ 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_PDO_TABLE PROJECT DEVELOPMENT OBJECTIVE Current PDO The objectives of the first phase of the proposed APL (the Project, APL I) are: (i) strengthening and consolidating the policy framework of the water and sanitation sector in the Dominican Republic; (ii) improving and expanding access to sanitation and wastewater treatment and disposal services in the Puerto Plata region; (iii) improving the financial and operational performance of CORAAPLATA, the regionâ s water utility; and (iv) enhancing operational and commercial performance of other regional utilities and preparing them to participate in the second phase of the Program (APL II). Proposed New PDO The objectives the Project are: (i) strengthening and consolidating the policy framework of the water and sanitation sector in the Dominican Republic; (ii) improving and expanding access to sanitation and wastewater treatment and disposal services in the Puerto Plata region; (iii) improving the financial and operational performance of CORAAPPLATA, the regional's water utility; and (iv) enhancing operational and commercial performance of other regional utilities. OPS_DETAILEDCHANGES_RESULTS_TABLE RESULTS FRAMEWORK The World Bank Water and Sanitation in Tourist Areas (P054221) Project Development Objective Indicators Note to Task Teams: End of system generated content, document is editable from here.