The World Bank Lao Road Sector Project 2 (LRSP2) (P158504) REPORT NO.: RES60389 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF LAO ROAD SECTOR PROJECT 2 (LRSP2) APPROVED ON DECEMBER 13, 2016 TO LAO PEOPLE'S DEMOCRATIC REPUBLIC TRANSPORT GLOBAL PRACTICE EAST ASIA AND PACIFIC Regional Vice President: Manuela V. Ferro Country Director: Mariam J. Sherman Regional Director: Sudeshna Ghosh Banerjee Practice Manager: Benedictus Eijbergen Task Team Leaders: Chanin Manopiniwes, Sombath Southivong The World Bank Lao Road Sector Project 2 (LRSP2) (P158504) ABBREVIATIONS AND ACRONYMS CRRCIP Climate Resilience Road Connectivity Improvement Project GoL Government of Lao IDA International Development Association INT Integrity Vice Presidency LRSP2 Lao Road Sector Project 2 MPWT Ministry of Public Works and Transport OPBRC Output and Performance-Based Road Contract PBC Performance-Based Contract PDO Project Development Objective The World Bank Lao Road Sector Project 2 (LRSP2) (P158504) BASIC DATA Product Information Project ID Financing Instrument P158504 Investment Project Financing Original EA Category Current EA Category Full Assessment (A) Partial Assessment (B) Approval Date Current Closing Date 13-Dec-2016 31-Dec-2025 Organizations Borrower Responsible Agency Lao People's Democratic Republic (Lao PDR) Project Development Objective (PDO) Original PDO The Project Development Objective (PDO) is to strengthen maintenance systems to improve reliable road connectivity in Lao PDR, and to provide immediate and effective response in case of an Eligible Crisis or Emergency. Current PDO The Project Development Objective (PDO) is to improve climate resilience and strengthen maintenance systems for a reliable road network in Lao PDR, and to provide immediate and effective response in case of an Eligible Crisis or Emergency. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-65150 13-Dec-2019 28-Jan-2020 20-Mar-2020 31-Dec-2025 25.00 19.56 4.90 IDA-59200 13-Dec-2016 07-Feb-2017 23-Mar-2017 31-Dec-2025 25.00 22.82 1.96 The World Bank Lao Road Sector Project 2 (LRSP2) (P158504) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. This restructuring paper seeks the approval of the Country Director for a level 2 restructuring for the Lao Road Sector Project 2 (LRSP2). The proposed restructuring responds to a request from the Ministry of Finance, dated March 27, 2024, to add additional activities to the project that would support the preparation of the proposed Lao Climate Resilient Road Connectivity Improvement Project (CRRCIP), and to revise the results framework. 2. LRSP2 was approved on December 13, 2016, with a financing of US$25 million from the International Development Association (IDA), and became effective on March 23, 2017. The original Project Development Objective (PDO) is to strengthen maintenance systems to improve reliable road connectivity in Lao PDR, and to provide immediate and effective response in case of an Eligible Crisis or Emergency. An additional financing of US$25 million was approved on December 13, 2019 and became effective on March 20, 2020. As part of the additional financing, the PDO was revised to include climate resilience. The revised PDO is to improve climate resilience and strengthen maintenance systems for a reliable road network in Lao PDR, and to provide immediate and effective response in case of an Eligible Crisis or Emergency. The Project is implemented by the Ministry of Public Works and Transport (MPWT) and the closing date is December 31, 2025. A. Project Status 3. Progress towards achievement of the PDO is Satisfactory and overall implementation progress is Moderately Satisfactory. All PDO indicators (6) have met their targets. All contracts for local road improvement financed by IDA have been completed, and 1,221 km have received routine maintenance through the Performance-Based Contract (PBC). All PBCs under the first three-year are completed. The improvement of National Road No. 13 South (NR13S) under the Output and Performance-Based Road Contract (OPBRC) has been completed and is now in the maintenance phase. Sectoral planning tools developed has been established and institutionalized. Overall Disbursement for original IDA is at 92 percent, and AF is 77 percent, respectively. There are no outstanding audit reports. The project is in compliance with all issues related to legal, fiduciary, safeguards, and INT. B. Rationale for Restructuring 4. The Government of Lao (GoL) has expressed interest in a follow-up project, Climate Resilient Road Connectivity Improvement Project (CRRCIP; P179284) based on the achievements, results and lessons learned under the LRSP2. Specifically, the GoL has requested to utilize LRSP2 remaining funds to commence preparation work for the proposed CRRCIP, which would also expand to three new provinces. This would include the preparation of an Environmental and Social management Framework and feasibility analysis of CRRCIP. This preparatory work will further support in strengthening maintenance systems to improve reliable road connectivity in Lao PDR, achieved in LRSP2. The proposed activity will also be well within the budget and implementation timeframe of LRSP2. The World Bank Lao Road Sector Project 2 (LRSP2) (P158504) II. DESCRIPTION OF PROPOSED CHANGES 5. The proposed project restructuring includes the following changes: (a) To conduct Feasibility Study and Environmental and Social Frameworks for CRRIP as part of project preparation activities. These activities will be implemented under Component 2 of LRSP2. (b) To revise a PDO indicator in line with the new corporate scorecard from Direct Beneficiary to People benefiting from improved access to sustainable transport infrastructure and services. III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ PBCs ✔ Components and Cost ✔ Loan Closing Date(s) ✔ 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 ✔ Implementation Schedule ✔ The World Bank Lao Road Sector Project 2 (LRSP2) (P158504) Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) . The World Bank Lao Road Sector Project 2 (LRSP2) (P158504) . Results framework COUNTRY: Lao People's Democratic Republic Lao Road Sector Project 2 (LRSP2) Project Development Objectives(s) The Project Development Objective (PDO) is to improve climate resilience and strengthen maintenance systems for a reliable road network in Lao PDR, and to provide immediate and effective response in case of an Eligible Crisis or Emergency. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 To strengthen maintenance systems Preparation and implementation of three-year rolling climate resilient No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes road maintenance plans, on annual basis (Yes/No) To improve reliable road connectivity in Lao PDR Share of total provincial and district road network in Project 50.00 50.00 55.00 60.00 65.00 65.00 65.00 65.00 65.00 65.00 65.00 area in good and fair condition (Percentage) The World Bank Lao Road Sector Project 2 (LRSP2) (P158504) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 Share of rural population with access to an all- 56.00 56.00 56.00 57.00 57.00 57.00 57.00 57.00 57.00 57.00 57.00 season road (National) (Percentage) Share of rural population with access to an all- 53.00 53.00 55.00 56.00 57.00 57.00 57.00 57.00 57.00 57.00 57.00 season road in project area (Percentage) People benefiting from improved access to sustainable 0.00 0.00 609,000.00 700,000.00 1,000,000.00 1,600,000.00 1,600,000.00 1,600,000.00 2,134,000.00 2,134,000.00 2,134,000.00 transport infrastructure and services (Number) Action: This indicator has been Revised Female beneficiaries 0.00 0.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 (Percentage) To improve climate resilience Kilometers of road 0.00 0.00 0.00 232.00 290.00 597.00 597.00 655.00 655.00 655.00 655.00 improved with The World Bank Lao Road Sector Project 2 (LRSP2) (P158504) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 climate resilient measures and receive maintenance (Kilometers) PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 Climate Resilient Road Maintenance Length of road receiving climate resilient periodic 0.00 0.00 0.00 232.00 290.00 597.00 597.00 655.00 655.00 655.00 655.00 maintenance (Cumulative) (Kilometers) Length of road receiving routine PBC 1 0.00 0.00 0.00 1,305.00 1,305.00 1,595.00 1,902.00 1,960.00 1,960.00 1,960.00 1,960.00 maintenance (Kilometers) Share of women participating in paid 0.00 0.00 5.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 jobs related to the implementation of The World Bank Lao Road Sector Project 2 (LRSP2) (P158504) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 road work contracts (Percentage) Grievances registered related to delivery of project 0.00 0.00 75.00 80.00 80.00 80.00 80.00 80.00 80.00 80.00 80.00 benefits addressed (%) (Percentage) Kilometers of roads where road safety audit was performed and 0.00 0.00 0.00 0.00 290.00 348.00 655.00 655.00 655.00 655.00 655.00 recommendations were considered (Kilometers) Kilometers of NR13 S transferred to performance-based 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 58.00 58.00 58.00 maintenance phase under OPBRC (Kilometers) Community participation in monitoring of PBC No Yes routine maintenance contracts (Yes/No) Institutional Strengthening The World Bank Lao Road Sector Project 2 (LRSP2) (P158504) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 Data on road condition and vulnerability to natural hazard No No Yes Yes Yes Yes Yes Yes Yes Yes Yes collected for preparation of three-year rolling plan (Yes/No) Updated Road Safety Strategy and No No No No Yes Yes Yes Yes Yes Yes Yes Action Plan (Yes/No) Climate Resilient Road Improvement and Maintenance for NR13 South Roads rehablitated 0.00 0.00 0.00 0.00 20.00 30.00 40.00 58.00 58.00 58.00 58.00 (CRI, Kilometers) Roads rehabilitated - 0.00 0.00 0.00 0.00 20.00 30.00 40.00 58.00 58.00 58.00 58.00 rural (CRI, Kilometers) Roads rehabilitated - 0.00 0.00 non-rural (CRI, Kilometers) Number of beneficairies benefitting from the 0.00 0.00 0.00 0.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 provision of boats during flooding (Number) The World Bank Lao Road Sector Project 2 (LRSP2) (P158504) IO Table SPACE Click here to enter text. The World Bank Lao Road Sector Project 2 (LRSP2) (P158504)