The World Bank Liberia: Public Sector Modernization Project (P143064) REPORT NO.: RES37554 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF LIBERIA: PUBLIC SECTOR MODERNIZATION PROJECT APPROVED ON FEBRUARY 10, 2014 TO REPUBLIC OF LIBERIA GOVERNANCE AFRICA Regional Vice President: Hafez M. H. Ghanem Country Director: Pierre Frank Laporte Regional Director: Asad Alam Practice Manager/Manager: Hisham Ahmed Waly Task Team Leader: Smile Kwawukume, Miki Matsuura The World Bank Liberia: Public Sector Modernization Project (P143064) I. BASIC DATA Product Information Project ID Financing Instrument P143064 Investment Project Financing Original EA Category Current EA Category Not Required (C) Not Required (C) Approval Date Current Closing Date 10-Feb-2014 30-Sep-2019 Organizations Borrower Responsible Agency Republic of Liberia Civil Service Agency Project Development Objective (PDO) Original PDO To improve pay and performance management in participating ministries, and strengthen payroll management in the Civil Service in Liberia. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-53590 10-Feb-2014 08-Apr-2014 08-Apr-2014 30-Sep-2019 2.00 1.92 .03 TF-A1263 19-Dec-2016 19-Dec-2016 19-Dec-2016 31-Jul-2019 4.33 3.63 .70 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES The World Bank Liberia: Public Sector Modernization Project (P143064) Project Status 1. The Liberia Public Sector Modernization Project (PSMP) was approved by the Board on February 10, 2014. The project has overall allocation of US$10.71 million which consists of International Development Association (IDA) credit of SDR1.4 million (US$2 million equivalent), and a Multi-Donor Trust Fund (MDTF) of US$8.71 million from the United States Agency for International Development (USAID) and the Government of Sweden through the Swedish International Development Agency (SIDA). Grant Agreement for the Recipient Executed Trust Fund (RETF) in the amount of US$4.3 million was signed between the Government of Liberia and the Bank for the recipient executed portion of the project. The balance of US$4.38 million is yet to be transferred from the Bank to the Government of Liberia (GoL). 2. The project is supporting the GoL through the combination of a Program-based Investment Lending (PBIL) instrument and a Technical Assistance (TA). The PBIL is disbursing against the achievement of Disbursement Linked Indicators (DLIs), which are a combination of results and key steps on defined reform paths. The TA is supporting specific activities for technical support to GoL’s reform program on pay, payroll and performance. The project has been providing support through the following components: • Component 1: Improved Pay Management; • Component 2: Strengthened Payroll Management; • Component 3: Improved Performance; and • Component 4: Project and Program Management. 3. Due to the outbreak of the Ebola Virus Disease (EVD), the project effectiveness date was delayed for one year after Board approval. It thus became effective on February 4, 2015. 4. A mid-term review (MTR) on the PSMP was carried out in September 2017. The review confirmed the relevance of the Project Development Objective (PDO), as well as the overall adequacy of the project’s institutional and implementation arrangements. The MTR noted progress made towards execution of project activities across components and achievement of agreed results, despite the outbreak of EVD and economic slowdown. The project implementation slowed down in the last two years, mainly due to the presidential elections in October and December 2017 and its resultant transitional activities. Subsequently, the recent implementation Status and Results Report (ISR), approved on February 13, 2019 rated both PDO and Implementation Progress as Moderately Satisfactory. 5. In terms of progress towards achieving project results, out of nine DLIs, one DLI was fully achieved and disbursed, and four DLIs are currently under verification by the M&E Unit of the Civil Service Agency (CSA) and will then be subject to a third-party verification by end-2019. As of now, out of the US$6.33 million that were made available to GoL, the project has disbursed US$5.55 million (88.3 percent), leaving an available balance of US$0.73 million (11.62 percent). To date, there are no outstanding audit reports. 6. This project restructuring will extend the closing date of the RETF from July 31, 2019 to August 31, 2019 (previously extended twice, from March 31, 2019 to May 31, 2019 and to July 31, 2019), to allow for additional time to finalize the amendment to the RETF (MDTF) Administration Agreement (AA), and process an overall project restructuring and extension of the closing date (of both IDA and RETF) to December 31, 2020. Changes The World Bank Liberia: Public Sector Modernization Project (P143064) 7. Two official requests (on December 3, 2018 and March 7, 2019) were sent to the Bank by the Government to extend the closing date of the project, and reallocate funds among the various components and disbursement categories. In order to prepare and complete the restructuring process, the AAs with SIDA and USAID would need to be amended. While the donors have agreed in principle to extend the AAs, internal consultations within the donor agencies took time to reach an agreement on the areas to be restructured. In the interim and since the RETF is closing on July 31, 2019, this Restructuring Paper seeks an extension of the closing date of the RETF by one month, from July 31, 2019 to August 31, 2019. As soon as Donors countersign the amendment to the AAs, full project restructuring will be processed to introduce the other changes, as requested by and agreed with the Client. II. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IDA-53590 Effective 30-Sep-2019 30-Sep-2019 30-Jan-2020 31-May-2019, 31-Jul- TF-A1263 30-Mar-2019 31-Aug-2019 31-Aug-2019 2019