The World Bank Enhancing Economic Opportunities for Rural Women (P171760) REPORT NO.: RES57954 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF ENHANCING ECONOMIC OPPORTUNITIES FOR RURAL WOMEN (P171760) APPROVED ON JULY 15, 2021 TO GOVERNMENT OF UZBEKISTAN SOCIAL SUSTAINABILITY AND INCLUSION EUROPE AND CENTRAL ASIA Regional Vice President: Antonella Bassani Country Director: Tatiana A. Proskuryakova Global Director: Louise J. Cord Practice Manager/Manager: Varalakshmi Vemuru Task Team Leader(s): Robert Wrobel, Gulrano Tlepova The World Bank Enhancing Economic Opportunities for Rural Women (P171760) ABBREVIATIONS AND ACRONYMS BPO Business Promotion Organization BWA Business Women’s Association CCI Chamber of Commerce and Industry CMP Community Mobilization Partner CPF Country Partnership Framework DA Dedicated Account EFAEP Every Family is an Entrepreneur ESCP Environmental and Social Commitment Plan ESS Environmental and Social Standard FAO Food and Agriculture Organization FHH Female-headed Household FM Financial Management GBV Gender Based Violence GoU Government of Uzbekistan GRM Grievance Redress Mechanism GRS Grievance Redress Service ICR Implementation Completion Report ICT Information and Communication Technologies IFR Interim Financial Report IPV Intimate Partner Violence JSDF Japan Social Development Fund LMP Labor Management Procedure L2CU Listening to the Citizens of Uzbekistan MCA Mahalla Citizens Assembly ME&L Monitoring, Evaluation and Learning MI Mobilization Instructor MIS Management Information System MHH Male-headed Household MMFA Ministry of Support to Mahalla and Family Affairs MoEDPR Ministry of Economic Development and Poverty Reduction MoELR Ministry of Employment and Labor Relations NGO Non-Governmental Organization NPF New Procurement Framework PMU Project Management Unit POM Project Operations Manual PPSD Project Procurement Strategy for Development RFP Request for Proposals RIDP Rural Infrastructure Development Project SEP Stakeholder Engagement Plan SM Social Mobilizer TOR Terms of Reference WCU Committee for Family and Women of Uzbekistan WLG Women’s Livelihood Group The World Bank Enhancing Economic Opportunities for Rural Women (P171760) BASIC DATA Product Information Project ID Financing Instrument P171760 Investment Project Financing Environmental and Social Risk Classification (ESRC) Moderate Approval Date Current Closing Date 15-Jul-2021 31-Dec-2024 Organizations Borrower Responsible Agency Committee for Family and Women under the Cabinet of Committee on Women and Family Ministers Financing (in USD Million) FIN_SUMM_PUB_TBL SUMMARY Total Project Cost 0 Total Financing 0 Financing Gap 0 DETAILS -NewFin3 Project Development Objective (PDO) Original PDO The project’s development objective is to increase economic opportunities for vulnerable rural women in the project areas through skills development and improved access to finance and markets. OPS_TABLE_PDO_CURRENTPDO The World Bank Enhancing Economic Opportunities for Rural Women (P171760) Summary Status of Financing (US$, Millions) Net TF Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-B6248 15-Jul-2021 27-Jul-2021 23-Nov-2021 31-Dec-2024 2.73 .67 2.06 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project Status 1. The project is making moderately satisfactory progress towards achieving its Project Development Objective (PDO). Implementation support missions held in June and November 2023, confirmed that Project implementation progress has accelerated significantly since early 2023. The Project Management Unit (PMU) is fully staffed, two Community Mobilization Partners (CMP) have been contracted and are fully operational in the 56 targeted villages in Ferghana and Jizzakh regions, and the Business Promotion Organization (BPO) has been contracted and is starting up its business development support activities. Project design and implementation processes have been streamlined and introduced through revisions to the Project Operations Manual (POM) and Subgrants Manual approved by the Bank in July 2023. The CMPs have recruited and trained Social Mobilizers (SMs) in each of the 56 targeted villages, who are carrying out community outreach and Women’s Livelihood Group (WLG) formation and capacity building activities. As of November 2023, 750 low income, economically vulnerable women have been mobilized into 120 WLGs. Over 30 percent of the WLG members are from female-headed households, while the remaining are living with a disability or caring for a child in the household living with disabilities. The first set of subgrants is expected to be disbursed to WLGs in March 2024 to support enterprise activities identified in business plans. Another set of subgrants are expected to be disbursed to WLGs by April- May 2024. Project does not have any outstanding audits, the recent draft audit report was cleared by the Bank on February 23, 2024 and to be submitted by PMU via Client Connection. 2. Promoting women’s social and economic inclusion remains a high priority for the Government of Uzbekistan, including developing approaches tailored to the needs of low-income rural women as supported by the Project. Objective 1.3 of the recently approved National Development Strategy (NDS) through 2030 aims to “enhance a system for support of women, including enforcement of their rights and legal interests; increasing social, economic, political activity of women; and ensuring gender equality.” This includes improving the quality, transparency and public oversight of the implementation of programs in support of women included in the Women’s Notebook. The Project and its package of financial and non-financial services tailored to the needs of low-income rural women, partnership-building between GoU agencies and civil society organizations active in supporting women’s economic empowerment, and support for community participatory monitoring and oversight thus remain highly relevant and an important source of learning for GoU to achieve its NDS 2030 objectives. The World Bank Enhancing Economic Opportunities for Rural Women (P171760) B. Rationale for Restructuring 3. Multiple and repeated changes to the project implementing agency have significantly delayed project implementation. The project became effective on November 23, 2021, with on-the ground-implementation anticipated to commence in early 2022, thereby allowing for the planned 3-year implementation cycle. However, the original implementing agency, the Ministry of Mahalla and Family Affairs, was restructured in March 2022, and the Committee for Family and Women of Uzbekistan (WCU) was (re)established as a stand-alone entity with the mandate to provide socio- economic support to poor and vulnerable women. As such, the Government requested that the WCU be made the implementing agency for the project on May 23, 2022. The project designated account was transferred to the WCU on August 15, 2022, after which other administrative processes needed for WCU and PMU staff to execute project activities were completed. All project-related activities were put on hold during this transition and several PMU staff left the project. Then, as part of the administrative reforms announced in December 2022, the WCU was moved to the new Ministry of Employment and Poverty Reduction. And in a subsequent round of administrative reforms announced in December 2023, the WCU was moved to the Cabinet of Ministers. As a result of these restructurings, Project implementation was only able to commence on-the-ground in early 2023, leaving less than two years to complete project activities designed to be implemented over a 3-year timeframe. The proposed restructuring would extend the Project closing date to July 15, 2025, thereby allowing for around 2.5 years for on-the-ground Project implementation. 4. Changes to the Government of Uzbekistan’s approach to supporting women’s economic inclusion introduced after Grant approval, reflected in its poverty reduction, entrepreneurship support, and self-employment programs and implementation arrangements, require design changes to enable the Project to remain relevant and address persistent gaps in reaching rural women most at risk of economic exclusion. Important changes include: (a) the introduction of grant-based and in-kind forms of support (in addition to existing subsidized credit programs) targeted towards individual women identified in the Women’s Notebook; and (b) the introduction in all mahallas (communities) throughout the country of seven mahalla specialists, including the Hokim’s Assistant for Entrepreneurship and the Women’s Activist, the latter of which is responsible for providing referral services to women seeking entrepreneurship, self-employment, training, and other social services. While detailed program impact evaluations are not available, some administrative data suggests that these measures have improved women’s access to certain types of financial and non-financial services.1 However, recent qualitative research supported by the World Bank found that rural women continue to face high time burdens due to obligations to provide unpaid care services, other household responsibilities, and lack of access to reliable basic services such as water supply and electricity , which limit the effectiveness of entrepreneurship and self-employment programs that do not account for such constraints.2 Young women, often recently married; female-headed households; and elderly women continue to face challenges in accessing programs tailored to their needs. The proposed restructuring will introduce design changes to address these gaps, as reflected in changes to the results indicators, and described in greater detail in section II below. 1Data from the Entrepreneurship Agency (Mahallabay) under the Ministry of Employment and Poverty Reduction shows that in 2022, 53 percent of the loans allocated under the Every Family is an Entrepreneur Program went to women. 44 percent of the total loan volume in 2022 consisted of loans issues to women. 2 World Bank (2023). “Promoting Women’s Economic Empowerment through Local Development Platforms in Uzbekistan.” Unpublished manuscript. The World Bank Enhancing Economic Opportunities for Rural Women (P171760) II. DESCRIPTION OF PROPOSED CHANGES 5. The Restructuring proposes changes to the Project’s technical analysis, results framework, Project closing date, implementation schedules and associated disbursement estimates, and updates the name of the designated Recipient’s Representative and the Implementing Agency. No changes are proposed to the PDO. The proposed changes were discussed and agreed with the Implementing Agency during the February and June 2023 implementation support missions. The Recipient communicated its formal request for the proposed changes to the Bank in a letter from the Ministry of Economy and Finance (MEF) dated January 29, 2024. 6. Proposed changes to the Project’s technical analysis identified design adjustments to streamline Project implementation and focus the Project’s financial and non-financial services on group-based activities targeted towards women most vulnerable to economic exclusion, thereby maintaining the Project’s relevance and avoiding duplication with other individually targeted government employment and entrepreneurship support programs and referral services. The proposed design adjustments, described in greater detail in Table 1, include: (a) prioritizing vulnerable women from female-headed households for WLG membership; (b) focusing the Project's financial and non-financial services on group-based activities and limiting subgrant eligibility to group-based enterprise activities; (c) focusing the project’s non-financial and financial services on a smaller number of WLGs (180) to: (i) avoid spreading resources thinly across a large number of WLGs and individuals, thereby providing WLGs the intensive support needed to establish and sustain successful enterprise activities, and (ii) removing referral services from the scope of services provided by SMs as these are the responsibility of Women’s Activists; and (d) reducing the WLG mobilization and business development support cycles from four to one to accelerate Project implementation. 7. Proposed changes to the Project results framework reflect the streamlined focus on group-based activities. Table 1 also describes the changes to the relevant PDO and intermediate results indicators required as a result of the design adjustments. End target dates for all indicators are revised to the new Project closing date of July 15, 2025. TABLE 1: PROPOSED DESIGN ADJUSTMENTS, RATIONALE, AND RELEVANCE FOR RESULTS INDICATORS Design Adjustment Rationale Revisions to Relevant Results Indicators 1. Prioritize vulnerable Through discussions with community-level stakeholders, the N/A women from female-headed implementation support missions found that the Project households for WLG does not have the capacity or resources required to membership. mobilize all women included in the Women’s Notebooks into WLGs. These discussions also showed that women in the first two categories of Women’s Notebook3, unemployed and interested in entrepreneurship, include women that are less vulnerable than women in the other four categories of the Notebook. The Implementing Agency thus agreed to prioritize engaging women from female- headed households (the third category of the Women’s Notebook) as WLG members as a means to prioritize the use of limited Project resources to a highly vulnerable group of women, promote greater transparency in WLG membership criteria, and minimize exclusion risks. 3 Resolution of Cabinet of Ministers, No 145, March 31, 2022 The World Bank Enhancing Economic Opportunities for Rural Women (P171760) 2. Limit eligibility for project Originally, the project foresaw providing non-financial and PDO 1 revised to focus on group- financial services (subgrants) financial services to both individual and group-based based enterprises only. End target to group-based enterprises. enterprises proposed by WLG members. However, since increased from 10% to 60% Grant approval, the government has introduced a program that provides “subsidies,” or grants, to individuals included PDO 2 revised to focus on in the Women’s Notebook. The program is implemented by collective enterprises only. No the Hokim’s Assistant for the development of changes to end target. entrepreneurship, employment facilitation and poverty reduction, a position which was introduced in December IRI 6: Target for number of 2021 in all mahallas.4 To avoid duplicating this program, the women-led enterprises (group- project will limit subgrant eligibility to group-based based only) reduced from 350 to enterprises proposed by WLGs. This measure will also 120. reduce the number of subgrants to be issued, thereby reducing the subgrant processing requirements and accelerating implementation. 3. Focus the Project’s non- The original Project design foresaw mobilizing a large IRI 1: Target for number of financial services on group- number of WLGs (600) from which a small number of Women's Livelihood Groups based activities (WLG members (10 percent) would receive subgrant funding to (WLGs) supported by the Project formation, training, capacity establish individual or group-based enterprises and ongoing reduced from 600 to 180. building, and enterprise business development support services. The remaining WLG development) on a smaller members would receive non-financial support in the form of IRI 3: Target for number of direct number of WLGs (180), and referral services to social assistance, job training, or beneficiaries of Project remove referral services to entrepreneurship support programs. However, in March intervention reduced from 3,500 individuals interested in job 2022,5 the government created the Women’s Activist to 1,000. training, social assistance, or position in all mahallas tasked with providing social entrepreneurship programs protection case management, and employment support and IRI 8: Target for percentage of from the scope of non- referral services to women from poor and vulnerable enterprises supported by the financial services provided by households. The Hokim’s Assistant also plays a role in project linked to Government- project Social Mobilizers assisting women to access entrepreneurship support operated training programs and (SMs). programs. To avoid duplicating the referral services ongoing business incubation responsibilities assigned to the Women’s Activists and activities reduced from 60 to 25 as Hokim’s Assistants, the project will focus instead on WLG a higher percentage of WLG formation and capacity development such that WLG members are expected to members develop the internal cohesion and acquire the establish group-based enterprises skills and information needed to develop high quality and therefore receive both business plans for group-based enterprises suitable for financial and non-financial support subgrant financing. This approach is thus expected to result directly through the Project. in the mobilization of well-performing WLGs whose members are able to access both non-financial and financial IRI 9: Target for percentage of services offered by the Project and operate successful WLG members who gain access to enterprise activities. The Project SMs will coordinate closely employment support or referral with the Women’s Activists and Hokim’s Assistants services reduced from 60 to 25 as throughout project implementation. provision of referral services to individuals has been removed from the scope of non-financial services provided by the SMs. Provision of such referral services 4 Presidential Decree No. 29, December 12, 2021. 5 Presidential Decree No. 81, March 1, 2022. The World Bank Enhancing Economic Opportunities for Rural Women (P171760) is the responsibility of the Women’s Activists, with SMs playing an indirect supporting role. IRI 11: Target for number of WLGs providing feedback through participatory community monitoring reduced from 175 to 90 to reflect the new target of 180 WLGs to be supported by the Project. 4. Condense the WLG The original Project design foresaw mobilizing WLGs and N/A mobilization and business awarding subgrants in four phases over a 30-month development support cycle implementation period in line with the capacity of SMs and from four phases to one. the Business Promotion Organization (BPO). By reducing the number of WLGs targeted to 180, the CMPs and BPO can mobilize, build the capacity, and support business plan development for all WLGs by Q1 of the 2024 calendar year. 8. The restructuring will extend the Project closing date by seven months to July 15, 2025. The closing date extension will bring the Project implementation period to a total of 4 years which is the maximum implementation period allowed as per JSDF guidelines. The extension will provide additional time lost due to the repeated implementing agency restructurings described above to provide business development support to WLG enterprises for at least 12 months after subgrant disbursement as per the original Project design, the PDO-level indicator 2 target, and in line with international experience in supporting the start-up of women-led microenterprises. The closing date extension is in compliance with the Investment Policy Financing (IPF) Directive requirements on closing date extensions. The PDO remains achievable, performance is satisfactory, and the WCU has agreed on an action plan, including the design adjustments described in Table 1, for completing Project activities prior to the new closing date. 9. The restructuring will revise the Project implementation schedule and associated disbursement estimates to reflect that all microenterprise support subgrants will be disbursed to WLGs in FY24 and FY25. As a result of the design adjustment to reduce the WLG mobilization and business development from four phases to one, it is anticipated that around 80 percent of the microenterprise support grants will be disbursed to WLGs in FY24, with the remaining 20 percent to be disbursed in Q1 FY25. The CMPs and BPOs will provide non-financial services in support of WLG enterprises through to the new Project closing date. 10. Finally, the restructuring will update the name of the designated Recipient’s Representative and Implementing Agency. As per the letter from the Minister of Economy and Finance to the Bank dated January 29, 2024, the Committee for Family and Women under the Cabinet of Ministers was designated as the Grant Recipient and the Project implementing agency. The personnel, mandate and capacity of the Committee for Family and Women are unchanged. The Grant Agreement will be amended to reflect this change in name. E&S risks and impacts changes. The project recognizes the following standards: ESS 1, ESS 2, ESS3, ESS4 and ESS10. Environmental and social risks are rated 'Moderate'. The project aims to increase economic and market opportunities for women from low-income households in rural areas of Ferghana and Jizzakh regions. Activities will deliver community outreach and mobilization, The World Bank Enhancing Economic Opportunities for Rural Women (P171760) livelihoods group formation, enterprise support, enhanced market knowledge sharing, skills development, trainings, etc. Simultaneously, micro-entrepreneurship support grants will support various micro and small-scale women-led businesses such as poultry farming, backyard farming, handicrafts production, food processing, horticulture, apiculture, childcare, wellness or tourism services and others identified by women during project implementation. As a result, this is expected to result in huge positive social benefits. However, apart from exclusion related risks, some minor adverse environmental and social disturbances could occur: increased environmental pollution from wastes, dust, noise, air pollution, health hazards and OHS issues, during installation and operation of new equipment are expected from these grant-funded activities, but they are likely not to be significant. Impacts are expected to be small-scale, site-specific, predictable, and controlled if appropriate precautionary measures are taken. To manage potential E&S risks the following instruments were prepared: simplified environmental and OHS risk management plan, Stakeholder Engagement Plan (SEP), Labor Management Plan (LMP) as part of the Project Operational Manual and related actions and obligations are spelled out in the Environmental and Social Commitment Plan (ESCP). Following the restructuring, these ES management instruments need to be updated to reflect the change in the reporting line of the Implementing Agency and redisclosed on their current website in-country. Per ESCP, the first 2 subgrants E&s assessment documents should be sent to the WB team for prior review. Other changes in the project design are not expected to bear any impact on E&S issues and due diligence. ES NOTE TABLE Note: The Summary of Performance of E&S Risk Compliance is populated from the ESMS and is editable. It flows to the Restructuring paper once. Please remember to update the paper if there are changes to the Summary from the ESMS.” Please delete this note when finalizing the document. III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Loan Closing Date(s) ✔ Disbursement Estimates ✔ Implementation Schedule ✔ Other Change(s) ✔ Technical Analysis ✔ Implementing Agency ✔ Project's Development Objectives ✔ Components and Cost ✔ The World Bank Enhancing Economic Opportunities for Rural Women (P171760) Cancellations Proposed ✔ Additional Financing Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Change in Overall Risk Rating ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Economic and Financial Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_RESULTS_TABLE RESULTS FRAMEWORK Project Development Objective Indicators PDO_IND_TABLE Share of women who joined the Women Livelihood Groups starting up group based enterprises Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 60.00 Revised Date 31-May-2021 05-Dec-2023 15-Jul-2025 Enterprises (group-based) functioning after 12 months of project support Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 75.00 Revised Date 31-May-2021 05-Dec-2023 15-Jul-2025 Increase in average gross sales revenue of the enterprises supported under the project over the baseline value Unit of Measure: Percentage The World Bank Enhancing Economic Opportunities for Rural Women (P171760) Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 10.00 Revised Date 31-May-2021 05-Dec-2023 15-Jul-2025 Intermediate Indicators IO_IND_TABLE Women's Livelihood Groups (WLGs) supported by the project Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 120.00 180.00 Revised Date 31-May-2021 05-Dec-2023 15-Jul-2025 Women beneficiaries trained in interpersonal communication skills Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 56.30 80.00 Revised Date 31-May-2021 05-Dec-2023 15-Jul-2025 Direct beneficiaries of project intervention Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 735.00 1000.00 Revised Date 31-May-2021 05-Dec-2023 15-Jul-2025 Women beneficiaries belonging to Female Headed Households Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 31.42 20.00 Revised Date 31-May-2021 05-Dec-2023 15-Jul-2025 Amount of microentrepreneurship grants provided to women enterprises The World Bank Enhancing Economic Opportunities for Rural Women (P171760) Unit of Measure: Amount(USD) Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 1505000.00 Revised Date 31-May-2021 05-Dec-2023 15-Jul-2025 Women led enterprises (group-based only) set up under the project Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 120.00 Revised Date 31-May-2021 05-Dec-2023 15-Jul-2025 Women led enterprises trained in sales volumes, product and quality improvement Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 80.00 Revised Date 31-May-2021 05-Dec-2023 15-Jul-2025 Enterprises supported by the project linked to Government operated business incubation activities and training programs Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 25.00 Revised Date 31-May-2021 05-Dec-2023 15-Jul-2025 Share of Women Livelihood Group (WLG) members who gain access to employment support or referral services Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 25.00 Revised Date 31-May-2021 05-Dec-2023 15-Jul-2025 Mahalla Citizens Assembly (MCA) staff trained and deployed Unit of Measure: Number The World Bank Enhancing Economic Opportunities for Rural Women (P171760) Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 56.00 56.00 Revised Date 31-May-2021 05-Dec-2023 15-Jul-2025 Women's Livelihood Groups (WLGs) providing feedback through participatory community monitoring Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 90.00 Revised Date 31-May-2021 05-Dec-2023 15-Jul-2025 Women beneficiaries satisfied with the quality of services provided under the project Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 75.00 Revised Date 31-May-2021 05-Dec-2023 15-Jul-2025 Registered grievances addressed Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 100.00 80.00 Revised Date 31-May-2021 05-Dec-2023 15-Jul-2025 OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline TF Status Closing Closing(s) Closing for Withdrawal Applications TF-B6248 Effective 31-Dec-2024 15-Jul-2025 15-Nov-2025 The World Bank Enhancing Economic Opportunities for Rural Women (P171760) OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Expected Disbursements (In US$) Fiscal Year Annual Cumulative 2021 0.00 0.00 2022 0.00 0.00 2023 0.00 0.00 2024 0.00 0.00 2025 0.00 0.00 2026 0.00 0.00 Note to Task Teams: End of system generated content, document is editable from here.