The World Bank Exploring High-Value, Socially Inclusive and Water-Efficient Agriculture (P170476) REPORT NO.: RES60272 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF EXPLORING HIGH-VALUE, SOCIALLY INCLUSIVE AND WATER-EFFICIENT AGRICULTURE APPROVED ON MAY 9, 2020 TO HASHEMITE KINGDOM OF JORDAN AGRICULTURE AND FOOD MIDDLE EAST AND NORTH AFRICA Regional Vice President: Ferid Belhaj Country Director: Jean-Christophe Carret Global Director: Renaud Seligmann Practice Manager/Manager: Marianne Grosclaude Task Team Leader(s): Faiza Hesham Hael Ahmed, Tobias Baedeker The World Bank Exploring High-Value, Socially Inclusive and Water-Efficient Agriculture (P170476) ABBREVIATIONS AND ACRONYMS ADM Accountable Decision Maker CPF Country Partnership Framework DA Designated Account ESCP Environmental and Social Commitment Plan ESF Environmental and Social Framework ESIA Environmental and Social Impact Assessment FM Financial Management GDP Gross Domestic Product GPD General Procurement Department GRM Grievance Redress Mechanism GRS Grievance Redress Service GTD Governmental Tender Directorate IFR Interim Unaudited Financial Reports ILO International Labour Organization IPM Integrated Pest Management IRR Internal Rate of Return JOD Jordanian Dinar LMP Labor Management Procedures M&E Monitoring and Evaluation MENA Middle East and North Africa MNXTA Middle East and North Africa Region-wide Technical Assistance Multi-Donor Trust Fund MOA Ministry of Agriculture NFT Nutrient Film Technique NGO Non-Governmental Organization NLFD Multi-Donor Trust Fund for Forced Displacement NSAD National Strategy for Agricultural Development PDO Project Development Objective SEP Stakeholder Engagement Plan STEP Systematic Tracking of Exchanges in Procurement The World Bank Exploring High-Value, Socially Inclusive and Water-Efficient Agriculture (P170476) BASIC DATA Product Information Project ID Financing Instrument P170476 Investment Project Financing Environmental and Social Risk Classification (ESRC) Moderate Approval Date Current Closing Date 09-May-2020 28-Mar-2024 Organizations Borrower Responsible Agency HASHEMITE KINGDOM OF JORDAN Ministry of Agriculture 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 To pilot an environmentally sustainable, commercially viable and socially-inclusive hydroponic agriculture business model. OPS_TABLE_PDO_CURRENTPDO The World Bank Exploring High-Value, Socially Inclusive and Water-Efficient Agriculture (P170476) Summary Status of Financing (US$, Millions) Net TF Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-B2626 09-May-2020 02-Dec-2020 02-Dec-2020 28-Mar-2024 1.00 .69 .31 TF-B2638 09-May-2020 02-Dec-2020 02-Dec-2020 30-Jun-2021 .43 .43 0 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. This Restructuring Paper seeks approval to extend the closing date of the Multi-Donor Trust Fund for Forced Displacement NLFD Grant (TF-B2626) for Exploring High-Value, Socially Inclusive and Water-Efficient Agriculture Project (the Project) from March 28, 2024, to September 30, 2024. 2. A US$600,000 Multi-Donor Trust Fund for Forced Displacement (NLFD) Grant (TF-B2626) for the Project was approved on May 9, 2020, and became effective on December 2, 2020; the closing date of the Grant was April 30, 2022. In addition, a US$430,000 Grant from the Middle East and North Africa Regionwide Technical Assistance Multi- Donor Trust Fund Grant (TF-B2638) was approved on the same date with a closing date of June 30, 2021. The Project Development Objective (PDO) is to pilot an environmentally sustainable, commercially viable, and socially inclusive hydroponic agriculture business model. 3. Additional Financing and Restructuring. The closing date of the Grant was extended on April 25, 2022, to December 31, 2022, because of implementation delays caused by the impact of the COVID-19 pandemic, changes in government, and a new procurement law. The closing date was subsequently extended to March 28, 2024, to complete project activities and enhance the Grievance Redress Mechanism (GRM). On September 26, 2023, an additional US$400,000 was allocated from the Multi-Donor Trust Fund for Forced Displacement (NLFD) Grant (TF-B2626) to improve project design, strengthen the GRM, and achieve the PDO. 4. Status of Implementation. Progress towards the achievement of the Project Development Objective (PDO) and Implementation Progress (IP) are rated Moderately Satisfactory due to delays in implementation. The Project has developed two innovative social enterprises for producing fruits and vegetables using hydroponic technology in Karak and Tafila, which are two of the poorest governorates in southern Jordan. In Tafila Governorate, repair and maintenance works are underway and are expected to be completed by the end of May 2024. In Karak Governorate, The World Bank Exploring High-Value, Socially Inclusive and Water-Efficient Agriculture (P170476) the construction of the hydroponic greenhouses has been completed and the first planting season is underway. There have been delays in the procurement of solar energy systems, cold storage facilities and transportation at both governorates. The procurement process for these activities has been relaunched, as the financial offers of the previous bids were double the estimated cost. Delivery of two transport vehicles, two cooling trucks, and the planting trays for seed crops in Tafilah and Al-Karak is expected by the end of May 2024. The installation of the solar systems in both governorates is anticipated to be completed by the end of June 2024. 5. Environmental and Social (E&S). The Project is in compliance with the Environmental and Social Commitment Plan (ESCP) and the Environmental and Social Impact Assessment (ESIA). Project E&S performance is rated Satisfactory, and the E&S risk is rated Moderate. 6. Fiduciary. Financial management (FM) performance is rated Satisfactory. Financial reports of the Project are up-to- date and are deemed satisfactory. There are no overdue project financial audits. The audit reports are unqualified and are acceptable to the Bank. Procurement performance is rated Moderately Satisfactory. B. Rationale for Restructuring 7. The Project requires an additional six months beyond the current closing date of March 28, 2024, to: (i) complete the procurement of critical support infrastructure (solar energy, cold storage, and transport) that was added to the Project during the September 2023 AF; and (ii) ensure that all assets are transferred to beneficiaries and are used sustainably prior to closing. 8. An action plan prepared by the Project to complete the remaining work by the proposed extended closing date has been reviewed by the Bank and is considered realistic. The proposed extension will not affect the PDO, project components, project management, and monitoring and evaluation, as well as the Project's Results Framework. No changes are required to the Project’s current environmental and social instruments. The PDO remains achievable by the proposed extended closing date. II. DESCRIPTION OF PROPOSED CHANGES C. Description 9. The proposed restructuring would extend the closing date of the Multi-Donor Trust Fund for Forced Displacement NLFD Grant (TF-B2626) from March 28, 2024, to September 30, 2024. This would be the third extension of the grant closing date. The timeline for the achievement of results in the Results Framework would be adjusted to reflect the revised closing date. In addition, the disbursement forecasts will be revised based on disbursements so far and anticipated disbursements based on the proposed revised closing date; see Section IV Detailed Changes. ES Explanation Table Describe any E&S issues and impacts associated with the change in project design. Identify and describe any potential large scale, significant and/or irreversible impacts. The World Bank Exploring High-Value, Socially Inclusive and Water-Efficient Agriculture (P170476) The E&S risks of the Project remain unchanged at Moderate and the risk mitigation measures included in the E&S instruments remain valid. Describe any potential indirect and/or long-term impacts due to anticipated future activities in the project areas. No potential indirect and/or long-term impacts are anticipated as a result of the proposed closing date extension. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. Not applicable Describe measures taken by the borrower to address E&S policy issues. Provide an assessment of borrower capacity to plan and implement the measure described. The E&S capacity building measures agreed with MoA remain applicable and will be continued during the time extension. Identify key stakeholders and describe the mechanism for consultation and disclosure on E&S policies, with an emphasis of potentially affected people. The restructuring does not entail any change to the key stakeholders or the affected people. The Stakeholder Engagement Plan remains applicable, and no changes are needed. III. SUMMARY OF CHANGES Changed Not Changed Loan Closing Date(s) ✔ Disbursement Estimates ✔ Implementation Schedule ✔ Implementing Agency ✔ Project's Development Objectives ✔ Results Framework ✔ Components and Cost ✔ Cancellations Proposed ✔ Additional Financing Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Change in Overall Risk Rating ✔ Legal Covenants ✔ Institutional Arrangements ✔ The World Bank Exploring High-Value, Socially Inclusive and Water-Efficient Agriculture (P170476) Financial Management ✔ Procurement ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline TF Status Closing Closing(s) Closing for Withdrawal Applications 31-Dec-2022, 28- TF-B2626 Effective 30-Apr-2022 30-Sep-2024 30-Jan-2025 Mar-2024 TF-B2638 Closed 30-Jun-2021 01-Apr-2022 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Expected Disbursements (In US$) Fiscal Year Annual Cumulative 2019 0.00 0.00 2020 2,564.70 2,564.70 2021 79,223.48 81,788.18 2022 140,501.27 222,289.45 2023 293,545.88 515,835.33 2024 449,715.51 965,550.84 2025 464,449.16 1,430,000.00 The World Bank Exploring High-Value, Socially Inclusive and Water-Efficient Agriculture (P170476)