The World Bank GH:Sustainable Rural Water & Sanit Serv (P120026) REPORT NO.: RES39747 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF GHANA: SUSTAINABLE RURAL WATER & SANITATION PROJECT APPROVED ON JUNE 23, 2010 TO THE REPUBLIC OF GHANA WATER GLOBAL PRACTICE AFRICA REGION Regional Vice President: Hafez M. H. Ghanem Country Director: Pierre Frank Laporte Regional Director: Ede Jorge Ijjasz-Vasquez Practice Manager: Maria Angelica Sotomayor Araujo Task Team Leaders: Emmanuel Nkrumah, Yitbarek Tessema Mammo The World Bank GH:Sustainable Rural Water & Sanit Serv (P120026) ABBREVIATIONS AND ACRONYMS AF Additional Financing CWSA Community Water and Sanitation Agency DA District Assembly DP Development Partner EA Environmental Assessment ESMF Environmental and Social Management Framework GOG Government of Ghana GRS Grievance Redress Service ICT Information and Communications Technology IDA International Development Association IMF International Monetary Fund IPF Investment Project Financing M&E Monitoring and Evaluation MDG Millennium Development Goal MMDA Metropolitan, Municipal and District Assemblies MOF Ministry of Finance MSWR Ministry of Sanitation and Water Resources MS Moderately Satisfactory O&M Operations and Maintenance ODF Open Defecation Free PAD Project Appraisal Document PDO Project Development Objective P-RAMS Procurement Risk Assessment and Management System RCC Regional Coordinating Council REHO Regional Health Environmental Offices RPF Resettlement Policy Framework SDG Sustainable Development Goal SDR Special Drawing Rights SIS Sector Information System SRWSP Sustainable Rural Water Sanitation Project STEP Systematic Tracking of Exchanges in Procurement USD United States Dollar WB World Bank The World Bank GH:Sustainable Rural Water & Sanit Serv (P120026) Results framework COUNTRY: Ghana GH:Sustainable Rural Water & Sanit Serv Project Development Objectives(s) The objective of the Project is to expand access to, and ensure sustainable water supply and sanitation services in rural and small town communities in six regions of Ghana. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline End Target Number of people with access to improved water supply under the project Direct project beneficiaries (Number) 0.00 800,000.00 Female beneficiaries (Percentage) 0.00 52.00 Number of people in rural areas provided with access to Improved Water Sources under the 0.00 800,000.00 project (Number) Reliability of water supply services under the project area Reliability of water supply services under the 0.00 16.00 project area (Hours) Percentage of installed water supply system 0.00 100.00 functional (Percentage) Number of people with access to improved sanitation under the project People provided with access to "improved sanitation facilities” under the proj. (CRI, 0.00 600,000.00 Number) People provided with access to ?improved 0.00 600,000.00 sanitation facilities?- rural (Number) Number of communities in project area declared free of open defecation Communities in project area declared free of 0.00 550.00 open defecation (number) (Number) Water systems with ratio of revenues over O&M costs (including depreciation) equal or greater than 1 Water systems in project areas with ratio of revenues over O&M costs (including 1.00 0.90 depreciation) >=1.0(percent) (Percentage) Direct project beneficiaries of which (percentage) are females percentage of female beneficiaries (Percentage) 0.00 52.00 PDO Table SPACE The World Bank GH:Sustainable Rural Water & Sanit Serv (P120026) Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target Rural and Small Town Water Supply Orphan boreholes rehabilitated (Number) 0.00 300.00 Former GWCL systems transferred to 0.00 15.00 communities rehabilitated (Number) New community water systems fed from 0.00 5.00 GWCL (Number) New water systems based on boreholes fitted 0.00 1,200.00 with hand pumps operational (Number) New mechanized boreholes operational 0.00 60.00 (Number) New water systems for small towns 0.00 60.00 operational (number) (Number) Rural and Small Town Integrated Sanitation & Hygiene Promotion Improved latrines constructed under the 0.00 40,000.00 project (Number) Communities sensitized about hygiene practices and eradication of open free 0.00 600.00 defecation (Number) New Institutional toilet facilities constructed 0.00 400.00 and operational (Number) Institutional Strengthening and Project Management Key institutions (CWSA, MOFEP, MSWR, MMDAs) trained in the use Sector Information 0.00 4.00 Systems (Number) District Assemblies operating DiMES (Number) 0.00 94.00 Timely submittal of clean (unqualified) FM audit reports (percent for each participating 0.00 1.00 DA) (Percentage) Acceptable implementation (including safeguards) quarterly reports delivered on 0.00 1.00 time (percent for each participating DA) (Percentage) Subproject implementation in accordance with timetable in procurement plan (percent 0.00 0.95 for each participating DA) (Percentage) The World Bank GH:Sustainable Rural Water & Sanit Serv (P120026) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. Background: This memorandum seeks approval of the Regional Vice President for a second extension of the closing date of Ghana’s Sustainable Rural Water and Sanitation Project (SRWSP) (P120026/IDA credit 47890 and Additional Financing P163846/IDA credit 61280-GH). The current closing date for this project approved on June 23, 2010, is December 31, 2019, which includes a previous 30-month extension associated with the on-going Additional Financing (AF). The present request will extend the project by a further six months to June 30, 2020, thus accruing to an overall extension of 36 months, and requiring RVP approval. With this extension, the project will be 10 years old at closing. Through the Ministry of Finance (MOF), the Government of Ghana (GOG) requested such a six months extension due to the completion risk on important contracts for small-town water supply in the Northern and Northeast regions. These contracts experienced launch and implementation delays resulting from the communal conflicts affecting the regions, and its works may not be fully completed let alone adequately transferred by the current closing date. 2. The Project is financed through IDA credits amounting to a total of SDR82.70 million (US$120.7 million equivalent) including an AF of SDR33 million (US$45.70 million equivalent). The Project Development Objective (PDO) is “to expand access to and ensure sustainable water supply and sanitation services in rural and small-town communities in six regions of Ghana.” The Project has three components: Component A - Rural and Small-Town Water Supply, supports access to improved water supply services through the construction and rehabilitation of onsite and piped water supply systems; Component B - Rural and Small-Town Integrated Sanitation and Hygiene Promotion, aims at accelerating the attainment of open-defecation-free (ODF) status in rural communities and small towns; and Component C - Institutional Strengthening and Project Management, supports capacity building and technical assistance for effective project implementation, operation, monitoring and supervision. 3. Current Status: The Project Development Objective outlook has been rated as “Moderately Satisfactory” in the last two supervision missions. Overall Implementation Progress (IP) has also been rated “Moderately Satisfactory”, as affected by a slow pace of implementation and disbursement of the water supply works contract in the Northern and Northeast regions affected by communal conflicts. To date, the cumulative disbursement amounts to US$112.41 million (93 percent) and the undisbursed balance is US$8.14 million. 4. Results: The Project has already substantially achieved if not exceeded its results metrics. Over 755,000 people already benefit from new access to improved water supply provided by the project. When the ongoing works contracts are completed, an additional 50,000 people are expected to receive improved water supply, thus exceeding the 800,000 beneficiaries targeted by the Project. Up to 600 communities have already achieved “open-defecation free” (ODF) status, and another 132 are awaiting ODF-status verification, which promises to substantially exceed the Project target of 550 ODF-free communities. Over 650,000 people in the project areas have also been provided with access to improved sanitation services through the construction of more than 40,000 household toilets. An additional 6,230 household toilets are expected to be completed by the end of December 2019. Furthermore, 568 teachers’ toilets would have been completed in schools by that date. The Project has also successfully pioneered the introduction of innovative technologies to improve the sustainability, efficiency and resilience of rural and small-town water supply. “Smart” technology, such as remotely monitored and controlled solar-powered pumping systems, and token activated pre-paid public water stand pipes have been demonstrated and are being considered for roll-out to other regions. 5. Program Management and institutional strengthening: Capacity building provided to the Ministry of Sanitation and Water Resources (MSWR), Regional Coordination Councils (RCCs), and to Metropolitan Municipal and District Assemblies (MMDAs) to assure achievement of targets and to improve sustainable operations and maintenance (O&M) in the sector. The World Bank GH:Sustainable Rural Water & Sanit Serv (P120026) 6. Rationale for Extension: The project had encountered delays in the launch and implementation of project activities in the Northern and Northeast regions, following the vandalism or destruction of boreholes during local communal conflicts. Such delays have pushed completion of some of the contracts too close to the project closing date, with no buffer to accommodate possible slippages and adequate transfer of assets to operators. Given GOG’s current fiscal situation, such works and tasks are thus at risk of not being finalized after the closing date. The extension request is thus to allow the completion of these contracts and proper transfer of the new assets. 7. The GOG has requested a 6-month extension of the closing date to June 30, 2020. In addition to ensuring that the number of people provided with access to improved water supply and the project disbursements are maximized, the extension will serve the following sustainability measures: a. To better support and monitor implementation of MSWR’s efforts to professionalize the small-town water supply operation, b. To better monitor post commissioning operation of the smart water supply systems introduced under the Project, and c. To better support and monitor the operationalization of the new sector information systems 8. Implementation enhancements. The project will complete all the ongoing contracts in the first four months of the extension period by April 30, 2020, leaving the last two months for proper closure, handing over, and quality assurance. No new procurement will be engaged during the extension period. To address these needs, GOG will take the following supportive actions: a. The Community Water and Sanitation Agency (CWSA) will establish a roving technical team to support regions and district councils in contract management; b. The MSWR will establish fortnightly progress review meetings, coupled with monthly reviews at the regional level; c. The MSWR will analyze the reasons for delay in effecting payment to executed contracts and establish a mechanism to improve Project disbursements. II. DESCRIPTION OF PROPOSED CHANGES 9. Based on the above, this paper recommends the 6-month extension of the closing date from December 31, 2019 to June 30, 2020. The proposed extension (i) will enable completion of the remaining activities and ensure the full utilization of Project funds towards increasing the number of people provided with access to improved water supply; and (ii) allow time for the project to support government’s initiative to professionalize the new small town water supply systems management which won’t be possible after the project is closed. 10. The Task Team also confirms that the requirements of Investment Project Financing Policy and Directive regarding extension of closing dates have been met, specifically, (i) the PDO continues to be achievable; (ii) the performance of the Borrower remains satisfactory; and (iii) the Bank and the Borrower agree on actions that will be undertaken by the Borrower to complete the Project including provision of a revised comprehensive implementation action plan. The World Bank GH:Sustainable Rural Water & Sanit Serv (P120026) III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Loan Closing Date(s) ✔ Implementation Schedule ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Components and Cost ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_LOANCLOSING_TABLE The World Bank GH:Sustainable Rural Water & Sanit Serv (P120026) LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications 30-Jun-2017, 31- IDA-47890 Closed 30-Jun-2016 Dec-2017, 03-Aug- 2018 IDA-61280 Effective 31-Dec-2019 30-Jun-2020 30-Oct-2020 . The World Bank GH:Sustainable Rural Water & Sanit Serv (P120026) Click here to enter text. The result framework will be updated to reflect the revised closing date. The updated activity implementation schedule indicates that all activities will be completed by June 30, 2020.