The World Bank BO PICAR Community Investment in Rural Areas (P107137) REPORT NO.: RES36974 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF BO PICAR COMMUNITY INVESTMENT IN RURAL AREAS APPROVED ON JULY 21, 2011 TO PLURINATIONAL STATE OF BOLIVIA AGRICULTURE LATIN AMERICA AND CARIBBEAN Regional Vice President: Axel van Trotsenburg Country Director: Alberto Rodriguez Senior Global Practice Director: Juergen Voegele Practice Manager/Manager: Preeti S. Ahuja Task Team Leader: Garry Charlier The World Bank BO PICAR Community Investment in Rural Areas (P107137) I. BASIC DATA Product Information Project ID Financing Instrument P107137 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 21-Jul-2011 30-Nov-2019 Organizations Borrower Responsible Agency PLURINATIONAL STATE OF BOLIVIA EMPODERAR,Ministry of Rural Development and Lands Project Development Objective (PDO) Original PDO To improve access to sustainable basic infrastructure and services for the most disadvantaged rural communities selected in some ofthe poorest municipalities of Bolivia. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-57120 04-Aug-2015 16-Nov-2015 15-Feb-2016 30-Nov-2019 55.70 43.76 12.19 IDA-57130 04-Aug-2015 16-Nov-2015 15-Feb-2016 30-Nov-2019 4.30 2.40 1.87 IDA-50040 21-Jul-2011 22-Aug-2011 23-Nov-2011 30-Apr-2017 39.76 36.33 0 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank BO PICAR Community Investment in Rural Areas (P107137) I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES A. Background 1. The purpose of this restructuring is to extend the closing date by 5 months (first extension) and to reallocate credit proceeds among categories of eligible expenditures of the Additional Financing for the Bolivia-Community Investment in Rural Areas Project (PICAR, P107137, IDA Credits Nos. 5712-BO and 5713-BO). The proposed extension will allow the provision of adequate technical assistance and support to beneficiary communities (considering agricultural production cycles) to ensure achieving full impact from the investments, as well as strengthening longer- term sustainability of community investments funded by PICAR. This restructuring will also enhance the achievement of the intended PDO. 2. The Bolivia-PICAR was approved on July 21, 2011 and became effective on November 23, 2011. It was originally funded by IDA Credit No. 5004-BO (SDR 25.0 million or USD 40 million equivalent) signed on August 22, 2011, and successfully implemented over a six-year period. It closed on schedule on April 30, 2017. To enhance and scale up the impact, interventions, and activities of this well-performing project—proven to be effective in reducing extreme rural poverty, especially for women, in the poorest municipalities of Bolivia, an Additional Financing proposal was approved on August 4, 2015 (including: Credits Nos. 5712-BO and 5713-BO totaling SDR 43.2 million or USD 60.0 million equivalent). These additional credit funds became effective on February 15, 2016, with a closing date of November 30, 2019. 3. The original Project Development Objectives (PDO) “to improve access to sustainable basic infrastructure and services for the most disadvantaged rural communities selected in some of the poorest municipalities of Bolivia” remained unchanged for the AF. Similarly, the three components (Community Capacity Building; Community Investments; and Coordination, Monitoring and Evaluation) were also kept unchanged under the AF, as were the implementation arrangements through EMPODERAR of the Ministry of Rural Development and Land (MDRyT). The adjustments introduced in the AF were to: a) finance about 1,100 additional community subprojects in existing and new communities, b) add an additional department to the original four to expand the project geographical coverage, c) revise the results framework to account for the corresponding new targets, d) trigger the additional safeguard policy of Project in International Waterways (OP/BP 7.50), and e) update the legal covenants, disbursement estimates, cost per components and implementation schedule. B. Status of Implementation 4. The PICAR AF performance continues to be satisfactory, with an accelerated pace of implementation after an initial delay. The AF implementation faced an initial delay of around 16 months; the AF credits became effective in February 2016 instead of December 2015, and the first disbursement of the USD 2.0 million advance to the Designated Account took place only in April 2017. The delay was mainly due to factors beyond the control of the implementing entity (EMPODERAR), as it took longer than expected to put in place the Government-required Subsidiary Agreement between the Ministry of Economy and Public Finances (MEFP), the Ministry of Development Planning (MPD) and the Ministry of Rural Development and Land (MDRyT), and to determine the expanded geographic area of the Project in accordance with new national requirements and strategic approaches. 5. Although the Project is on track to meet its PDO targets, the extension of the closing date will allow the achievement of the sustainability aspects of the PDO by ensuring the provision of Technical Assistance (TA) and extension services (acompañamiento) during two productive cycles, which is critical to PDO indicators 1 and 2, namely, to improve access to sustainable basic infrastructure and services for disadvantaged rural communities, and subprojects fully-functional 12 months after their completion. Implementation progress (IP) has been rated Satisfactory since early 2017 and significant results have been achieved on the ground with supported activities and investments. Under Component 1,Community Capacity Building, the processes of a) prioritizing beneficiary communities (so-called “category A” and among the poorest and most vulnerable), b) community participatory The World Bank BO PICAR Community Investment in Rural Areas (P107137) planning, and c) preparation of subproject portfolio for the AF are now completed. As a result, 653 Participatory Community Investment Plans have been prepared and 1,227 subprojects prioritized (exceeding the targets of 550 and 1,100, respectively). Supported through Component 2, Community Investments, these subprojects are at various stages of implementation and/or completion. Since 95% of these investments are of productive nature (family-sized greenhouses, silos for grain storage, rainwater harvesting systems for micro-ir rigation, bee-keeping, chicken husbandry and livestock pens), the provision of sufficient TA is key to guarantee that the operation and maintenance of these investments is assumed by the beneficiaries after the Project closing date. The number of beneficiary families under PICAR has already surpassed 80% of the end target (more than 281,000 direct beneficiaries out of 350,000). 6. Disbursements of the AF have increased significantly and have reached 72% or SDR 31.3 million (USD 43.2 million), which represents an overall disbursement rate of 80%. Additional disbursements for firmly committed interventions are expected by current project closing (November 30, 2019), which will leave an anticipated balance of unused resources of around SDR 6.8 million (USD 9.4 million equivalent). This remaining balance will come from the savings achieved through the efficient implementation by EMPODERAR and the reduction in operating costs due to initial implementation delays of the AF. The Project continues to comply with all the environmental and social safeguards, and fiduciary requirements; related ratings have consistently been rated Satisfactory and Moderately Satisfactory, respectively. C. Rationale and Impact of the Restructuring 7. In a letter dated April 23, 2019, the Government of Bolivia (GoB) requested the World Bank to extend the closing date of the PICAR AF by five months until April 30, 2020, and to reallocate the Credit proceeds among categories of expenditures. The goal of this restructuring is to strengthen the TA and support provided to community beneficiaries to better ensure post-project sustainability of PICAR investments. This need stems from the significantly-reduced (by around 16 months, or about one-third) implementation period of the AF due to the initial delay mentioned previously, which leaves insufficient time to provide adequate technical support during the initial operational and maintenance phases of these investments in accordance with the agricultural production cycle. Incidentally, the extension and the reallocation of proceeds would also allow the Project to better respond to the expectations and demands generated during the processes of Prioritization and Participatory Planning in 45 eligible communities. These communities will also receive TA from EMPODERAR up to the Project closing-date, and furthermore, implementation of these community subprojects is subject to the signed commitment (MoU) of the municipal authorities to provide the necessary TA beyond the project closing date.This commitment from local authorities, guarantees that these communities will received the necessary TA for at least two productive cycles. 8. The need to enhance and strengthen the technical support provided to beneficiary communities to ensure the sustainability of project-supported investments was discussed extensively between the GoB and World Bank teams during the last implementation support mission of February 2019 and was deemed necessary. The proposed extension of five months was considered adequate to reach this goal. At the end of the mission, the assessment of both teams was that the obj ectives of the Project remain achievable, and an extension of five months would contribute to making up for part of the start-up delays and providing enough technical support in the initial operation and maintenance (O&M) phases in line with the production cycles and agricultural calendars of the most recent batches of completed community subprojects to ensure their sustainability. Only remaining subprojects with enough time for adequate technical support in their initial operational and maintenance phases would be supported and completed. With this extension, the Project would achieve more adequately its stated objective and expected results by the revised closing date. 9. The proposed extension would allow the continuation of implementation efforts that have been focusing on providing and strengthening adequate TA and accompanying support to beneficiaries for the operations and maintenance of the investments. TA actions already undertaken by the Project include: i) extending contracts of extension agents (“acompañantes”); ii) strengthening links with municipal governments so that they are prepared to The World Bank BO PICAR Community Investment in Rural Areas (P107137) assume the provision of technical support to the communities after the Project's closing; iii) delivering specialized training and workshops at the level of beneficiaries and extension agents; and iv) developing teaching materials for easy dissemination at scale, taking ad vantage of new information and communication technologies (e.g. educational and training videos circulated through WhatsApp groups, etc.). 10. The Borrower is in compliance with the Credit covenants and there are no outstanding audits. Moreover, all the audit reports for this project have been considered satisfactory to the Bank. The Project has prepared an updated action plan together with a revised procurement plan, both of which are deemed adequate and feasible. D. Proposed Changes 11. Reallocation of Credit Proceeds: Proposed changes in the reallocation of proceeds between categories of the AF Financing Agreement corresponding to IDA Credit (Cr. 5712-BO), which would include the transfer of SDR 5.55 million (or 43% of the amount of Component 1 and 13% of the total AF financing) of operating cost savings from Category (1) to Category (2) to finance the consolidation and completion of prioritized community subprojects. 12. Change in the Project Closing Date: The closing date of both IDA Credits Nos. 5712-BO and 5713-BO supporting the PICAR AF would be revised from November 30, 2019 to April 30, 2020 (first extension for five months). 13. Revised Disbursement Estimates: Revised disbursement projections submitted by EMPODERAR (see complementary files attached), imply that both credits will be fully disbursed by December 31, 2019. The Project foresees to complete the all transfers to community subprojects by the end of the calendar year 2019. II. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications 22-Dec-2017, 11-Jan- IDA-50040 Closed 30-Apr-2017 2018 IDA-57120 Effective 30-Nov-2019 30-Apr-2020 30-Aug-2020 IDA-57130 Effective 30-Nov-2019 30-Apr-2020 30-Aug-2020 REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Current Current Actuals + Proposed Disbursement % Ln/Cr/TF Expenditure Allocation Committed Allocation (Type Total) Category Current Proposed The World Bank BO PICAR Community Investment in Rural Areas (P107137) IDA-57120- GO,CW,NCS,CS, 001 OP&TR(Wks) - 12,030,000.00 5,188,396.73 6,474,523.25 100.00 100.00 Currency: Pts A & C XDR CI Grants 28,070,000.00 23,545,457.06 33,625,476.75 100.00 100.00 Total 40,100,000.00 28,733,853.79 40,100,000.00 IDA-57130- GO,CW,NCS,CS, 001 OP&TR(Wks) - 930,000.00 0.00 930,000.00 100.00 100.00 Currency: Pts A & C XDR CI Grants 2,170,000.00 0.00 2,170,000.00 100.00 100.00 Total 3,100,000.00 0.00 3,100,000.00