The World Bank Urban Water Sector Project (P106909) REPORT NO.: RES34662 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF URBAN WATER SECTOR PROJECT APPROVED ON MAY 28, 2009 TO BURKINA FASO WATER AFRICA Regional Vice President: Hafez M. H. Ghanem Country Director: Pierre Frank Laporte Senior Global Practice Director: Jennifer J. Sara Practice Manager/Manager: Ayat Soliman Task Team Leader: Carolina Dominguez Torres, Seydou Traore The World Bank Urban Water Sector Project (P106909) I. BASIC DATA Product Information Project ID Financing Instrument P106909 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 28-May-2009 31-Dec-2018 Organizations Borrower Responsible Agency BURKINA FASO ONEA Project Development Objective (PDO) Original PDO The overall objective of the project is to increase access to sustainable water and sanitation services in selected urban areas.This will contribute to achievement of the water and sanitation MDGs. The project will achieve the objective through: (a)facilitatingaccess to services through programs for constructing social water service connections, public standpipes, and on-sitesanitation facilities; and (b) consolidating the achievements of the urban water supply sub- sector reforms and strengtheningcapacities to deliver andmanage services. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-H9970 12-Jan-2015 02-Feb-2015 07-Jul-2015 31-Dec-2018 80.00 64.23 9.28 IDA-H4820 28-May-2009 09-Jun-2009 05-Oct-2009 31-Dec-2018 80.00 81.02 0 The World Bank Urban Water Sector Project (P106909) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES 1. SUMMARY. This Restructuring Paper seeks the approval of the Country Director to amend the Financing Agreement of the Burkina Faso Urban Water Sector Project Additional Financing (IDA-H9970) in order extend the project closing date from December 31, 2018 to December 31, 2019. This change has been requested by the Government in a letter dated September 17, 2018. 2. PROJECT STATUS. The Financing Agreement of the Burkina Faso Urban Water Sector Project Additional Financing (AF, IDA-H9970) was signed on February 2, 2015 for an amount of SDR52.70 million (US$80 million equivalent), of which 16 percent is undisbursed (equivalent to US$12.03 million). The total amount of the original credit (IDA-H4820, signed on June 9, 2009) of SDR53.50 million (US$80 million equivalent) has been disbursed. The development objective of the project (PDO) is to increase access to sustainable water and sanitation services in selected urban areas. The project will achieve the objective through: (a) facilitating access to services through programs for constructing social water service connections, public standpipes, and on-site sanitation facilities; and (b) consolidating the achievements of the urban water supply sub-sector reforms and strengthening capacities to deliver and manage services. 3. The overall project implementation status is satisfactory. Most PDO indicators have been achieved and, in some cases, exceeded. As of October 31, 2018, thanks to the project 1'136,069 have benefited from improved water and sanitation services representing 98% of the end-of-project-target (EOPT); 698,832 additional people (92% EOPT) have gained access to piped water; 437,200 additional people (124% of the EOPT) have gained access to improved sanitation services; 120,600 students have gained access to appropriate sanitation facilities in their schools (100% of the EOPT); the financial equilibrium of the urban water sector is maintained with a net positive cash balance of US$6M in December 2017. Similarly, the staff productivity of the water utility (ONEA) has improved from 4.3 to 2.7 staff per 1000 connections (versus 3.4 EOPT), and the bill collection ratio of private water consumers has improved from 95 to 97.6 percent (versus the EOPT of 97.5%). 4. The project good performance rating is also based on: (i) the satisfactory credit disbursement level of 92% of the total credit as of October 31, 2018 (the original credit was fully disbursed and under the AF 84% of the US$80 million have been disbursed), which is consistent with revised projections in the Project paper; (ii) the commitment rate of works contracts is at 100%; (iii) adequate compliance with fiduciary and safeguards requirements; (iv) full compliance with agreed covenants under the Financing Agreement with the Government of Burkina Faso (GoBF) and the Project Agreement with ONEA and; (v) appropriate risks mitigation - the overall project risk rating is moderate. Based on those findings, the project is very close to achieve its PDO, which remains valid and unchanged as well as the results framework and funds allocation. 5. Civil works contracts under implementation. There are three (3) works contracts now under implementation (financed under the AF), which experienced significant procurement delays that pushed forward the implementation schedule. In relation to two (2) contracts (related to distribution networks and social connections), the procurement took more than 18 months to be completed as several bidders contested the process' results, resulting in the need to The World Bank Urban Water Sector Project (P106909) revised the results following the decision of the procurement authority (ARCOP) and lengthy renegotiations in view of the time elapsed between the original offers and the time of contract negotiation. During the time the project ratings related to "Progress towards achievement of PDO" and "Procurement" were downgraded from satisfactory to moderately satisfactory (ISR#17 and ISR#18).The 3rd contract has experience minor implementation delays, and the works are expected to be completed by February 2019. Therefore an extension of the closing date of the AF credit is requested to allow sufficient time to complete such works (related to social water connections, distribution networks, and water storage). 6. PROPOSED CHANGES. It is proposed to extend the project closing date for 12 months from December 31, 2018 to December 31, 2019. The extension is requested by the Government to allow for the completion of civil works under three (3) contracts. Once completed, it is expected that the number of people served by improved piped water supply thanks to the project will be close to 950,000 - exceeding by 25% the EOPT of 759,000; and the total number of project beneficiaries will be close to 1.4 million -exceeding by 21% the EOPT of 1'160,600; and, the Ouagadougou water system will be significantly strengthened by adding 6,000 m3 of storage capacity and 344 kilometers of distribution networks. The outputs/outcomes expected under the three (3) contracts is as follows: (i) The completion of 13,050 household connections, 40 standpipes and 172 kilometers of distribution mains under lot 1, which was signed in October 2018 after a protracted procurement process. The civil works are expected to be completed by November 2019 and will contribute to provide access to improved water supply through household connections and standpipes to additional 126,840 in Ouagadougou; (ii) The completion of 13,050 household connections, 40 standpipes and 172 kilometers of distribution mains under lot 2, which was signed in March 2013. The civil works are expected to be completed by April 2019 and will contribute to provide access to improved water supply through household connections and standpipes to additional 126,840 in Ouagadougou; (iii) The completion of two water reservoirs, a water tower, and four pumping stations, which was signed in July 2017. The civil works are expected to be completed by February 2019 and are backbone infrastructure required to provide water to the areas where water connections and standpipes are currently being installed. 7. As part of the AF Project Paper (dated October 21, 2014), the description of Component 3 was expanded to include the provision of support to develop technical studies on water supply and institutional development. Consequently, the cost of Component 3 (Strengthening of Capacities) was increased under the AF by US$1.44 million to reflect the additional activities. The extension of the closing date will provide an opportunity to fully utilize these funds in line with the description of Component 3 by financing activities related to strengthening the procurement capacity of ONEA; and, activities that will lead to boost the implementation capacity for the Water Supply and Sanitation Program for Results where ONEA is a key implementation agency (P164345, approved on June 2018), including the financing the strategic implementation support consultants (cabinet d 'assistance technique CAT). These activities fit into the scope of the activities currently listed in the AF. 8. No other changes are proposed. 9. There is no overdue audit report related to the project. III. DETAILED CHANGES The World Bank Urban Water Sector Project (P106909) LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IDA-H4820 Effective 30-Jun-2015 31-Dec-2018 31-Dec-2018 30-Apr-2019 IDA-H9970 Effective 31-Dec-2018 31-Dec-2019 30-Apr-2020