The World Bank PACIFIC RESILIENCE PROJECT UNDER PACIFIC RESILIENCE PROGRAM (P155257) REPORT NO.: RES40247 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF PACIFIC RESILIENCE PROJECT UNDER PACIFIC RESILIENCE PROGRAM APPROVED ON JUNE 19, 2015 TO REPUBLIC OF THE MARSHALL ISLANDS URBAN, RESILIENCE AND LAND EAST ASIA AND PACIFIC Regional Vice President: Victoria Kwakwa Country Director: Michel Kerf Regional Director: Benoit Bosquet Practice Manager/Manager: Abhas Kumar Jha Task Team Leader(s): Artessa Saldivar-Sali The World Bank PACIFIC RESILIENCE PROJECT UNDER PACIFIC RESILIENCE PROGRAM (P155257) I. BASIC DATA Product Information Project ID Financing Instrument P155257 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 19-Jun-2015 31-Oct-2023 Organizations Borrower Responsible Agency Republic of the Marshall Islands Ministry of Finance Project Development Objective (PDO) Original PDO To strengthen the financial protection of the Republic of Marshall Islands. Current PDO To strengthen the financial protection of the Republic of the Marshall Islands from natural disasters. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-D3770 27-Sep-2018 22-Oct-2018 07-Nov-2018 31-Oct-2023 2.50 .50 2.01 IDA-D0790 19-Jun-2015 24-Jul-2015 15-Oct-2015 30-Nov-2020 1.50 1.50 .03 The World Bank PACIFIC RESILIENCE PROJECT UNDER PACIFIC RESILIENCE PROGRAM (P155257) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES I. Project Status Progress towards achieving the development objective and implementation progress have both been rated Satisfactory since November 2015, and the PDO has been achieved. While no covered (insured) event has taken place in the Republic of the Marshall Islands (RMI), under the pilot Pacific Catastrophe Risk Assessment and Financing Initiative, Vanuatu received a payment after Tropical Cyclone Pam in 2015, and Tonga (under the Pacific Resilience Program) received a payment after Tropical Cyclone Gita (2018), both within one month of the respective insured disasters (the PDO-level indicator for the Program is that “Participating PICs have received payment within a month of the occurrence of a covered (insured) event”). The regional catastrophe insurance pool has achieved premiums lower than the simulated price for a comparable coverage purchased individually in the market. The project is in compliance with the applicable fiduciary and safeguard policies, as well as the legal covenants, with the exception of the provision of counterpart funding to partially finance the premium for the insurance period commencing November 2019 (which will be deleted via this proposed restructuring). There are currently no overdue audit reports. II. Rationale for Project Restructuring In a letter dated December 17, 2019 and transmitted to IDA on December 30, 2019, the Government of RMI requested: (i) cancellation of the unwithdrawn financing amounts from the Original Grant (Grant No. D079-MH) in an amount of SDR 24,432.27 and the Additional Grant (Grant No. D377-MH) in an amount of SDR 1,440,863.94, which were intended to be used for partially financing the annual premia payments to obtain the catastrophe risk insurance, for the period commencing November 2019 onwards; and (ii) the advancement of the closing date of both grants to January 15, 2020. Cabinet Paper C.M. 259 (2019) indicated that this would allow for the reallocation of the concessional core IDA portion of the cancelled amount to the Pacific Resilience Project Phase II (specifically the Contingent Emergency Response Component), which is deemed to be the appropriate instrument for RMI (at this time) for financial protection from natural disasters. III. Description of Proposed Changes The proposed changes are as follows: The World Bank PACIFIC RESILIENCE PROJECT UNDER PACIFIC RESILIENCE PROGRAM (P155257) (i) cancellation of the Original Grant (Grant No. D079-MH) in an amount of SDR 24,432.27 and the Additional Grant (Grant No. D377-MH) in an amount of SDR 1,440,863.94, and revision of the withdrawal table set forth in Section III.A of Schedule 2 to the Financing Agreement to reflect the amounts cancelled; and (ii) advancement of the Closing Date of the Original Grant and the Additional Grant to January 15, 2020 (from November 30, 2020 and October 31, 2023, respectively). Consequentially, the implementation arrangements will be adjusted such that RMI shall: (a) maintain from the Effective Date to the Closing Date of the Original Grant, a representative from within the Ministry of Finance as its representative at the Regional Advisory Committee; and (b) ensure continued participation of such representative in all meetings of the Regional Advisory Committee. In addition, due to the advancement of the closing dates of both grants, the covenants on provision of counterpart funding to partially finance the premia under the project, on an annual basis, shall be deleted for the insurance periods commencing November 2019, 2020, 2021, and 2022. II. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IDA-D0790 Effective 30-Nov-2020 15-Jan-2020 15-May-2020 IDA-D3770 Effective 31-Oct-2023 15-Jan-2020 15-May-2020