The World Bank Sudan Family Support Project (P173521) REPORT NO.: RES47556 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF THE SUDAN FAMILY SUPPORT PROJECT APPROVED ON OCTOBER 8, 2020 TO THE REPUBLIC OF THE SUDAN SOCIAL PROTECTION & JOBS EASTERN AND SOUTHERN AFRICA Regional Vice President: Victoria Kwakwa Country Director: Ousmane Dione Regional Director: Daniel Dulitzky Practice Manager: Robert S. Chase Task Team Leader(s): Suleiman Namara, Endeshaw Tadesse The World Bank Sudan Family Support Project (P173521) BASIC DATA Product Information Project ID Financing Instrument P173521 Investment Project Financing Environmental and Social Risk Classification (ESRC) Substantial Approval Date Current Closing Date 08-Oct-2020 31-Dec-2023 Organizations Borrower Responsible Agency Republic of Sudan Project Development Objective (PDO) Original PDO The objective is to deliver cash transfers and improve safety net systems to support the Sudanese families in the Recipient's territory affected by expected economic reforms and other short-term shocks. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-D7700 16-Mar-2021 24-Mar-2021 30-Apr-2021 31-Dec-2023 210.00 0 195.29 IDA-D7350 08-Oct-2020 23-Oct-2020 07-Dec-2020 31-Dec-2023 200.00 100.64 94.55 TF-B4259 08-Oct-2020 23-Oct-2020 07-Dec-2020 31-Dec-2023 350.00 80.76 269.24 The World Bank Sudan Family Support Project (P173521) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Background 1. The World Bank Board of Executive Directors approved the Sudan Family Support Project (SFSP) on October 8, 2020, and the legal agreements with the Republic of the Sudan (“Recipient”) were signed on October 23, 2020. The project was declared effective on December 7, 2020. The SFSP was launched on February 24, 2021, immediately after the government of Sudan unified the exchange rate. The project was funded by a grant from the International Development Association (IDA )(US$200 million, IDA-D7350) and donor contributions (US$350 million) via the Sudan Transition and Recovery Support (STARS)1 Trust Fund, TF-B4259). An IDA additional grant of US$210 million was approved in March 2021 (IDA-D7700), bringing the total financing to US$760 million. 2. The SFSP aims to lay the foundations of a targeted permanent social safety net to support the most vulnerable and provide the foundations for a modern, adaptive social protection system built upon a comprehensive social registry and digital payment infrastructure. It aims to cushion the effects of economic reforms by providing direct cash transfers of US$5 per person (at the prevailing exchange rate in Sudanese pounds) to 80 percent of households across the country. The project was rolled out geographically in waves, starting implementation in 14 out of Sudan’s 18 states, with the government of Sudan starting piloting systems in the four remaining states (Gezeira, Gadarif, Northern State, and River Nile). 3. In October 2021, due to a military takeover in Sudan, the World Bank triggered Operational Policy (OP) 7.30 (Dealings with De Facto Governments). In accordance with such policy, the World Bank paused disbursements to the Recipient in all of its operations in Sudan. It halted processing new operations with the Recipient as the World Bank closely monitors and assesses the situation. The closing dates of the IDA-D7350, IDA-D7700, and TF-B4259 grants were subsequently extended to December 31, 2023, to adjust to the fluid situation in the country. This extension was intended to allow for additional implementation time and provide an opportunity to repurpose the remaining resources under the Sudan Family Support Project to help meet the urgent needs of the people of Sudan and promote medium-term resilience and livelihood support of vulnerable communities. 4. To respond to the food security crisis, as well as the compounding effects of the COVID-19 pandemic and Russia's invasion of Ukraine, the Sudan Emergency Safety Nets Project (P178989) (“SESNP”) with the World Food Programme as the direct recipient was approved in July 2022 and became effective in August 2022. The implementation of the SESNP is rated satisfactory, and so far, 2.15 beneficiaries have received cash or in-kind support to cope with the immediate shock. B. Project Status 1the European Union, United Kingdom, Canada, Finland, France, Germany, Ireland, Italy, the Kingdom of Saudi Arabia, Netherlands, Norway, Spain, Sweden, State and Peace Building Trust Fund The World Bank Sudan Family Support Project (P173521) 5. Since October 25, 2021, disbursements under the SFSP are paused in accordance with OP 7.30. The latest ratings for Project Development Objective (PDO) and Implementation Progress (IP) are Moderately Satisfactory. This is based on the project implementation achievements as of October 25, 2021, and proportional to the resources disbursed. However, the PDO is still relevant and attainable, as long as the outcomes already achieved can be consolidated when the project's activities may resume. Once the requirements set forth in Operational Policy (OP) 7.30 are met to the satisfaction of the World Bank, there would be no obstacle to a rapid resumption of project implementations as the Project Implementation Units can be quickly reinstated, building on the project achievements before the pause, and additional experiences and systems developed under the SESNP. In the meantime, the Bank is exploring alternatives to meet the urgent needs of the people of Sudan and promote medium-term resilience and livelihood support of vulnerable communities, including through direct financing to third parties like UN agencies. 6. As of October, 2021, the SFSP reached 2.6 million families, comprising over 6.5 million individuals registered out of a target of 9 million and overall disbursement rate for the project is close to 25 percent. A total of 148 million Euros (at the time US$181 million equivalent) had been disbursed to the Recipient’s Designated Account for the SFSP, of which 82 million Euros from IDA and 66 million Euros from the STARS Trust Fund. As of October 31, 2022, the remaining balance on the Designated Account is US$71.2 million. Furthermore, and as of October 2021, the program had promoted innovative and impactful reforms including: the expansion of the financial sector services, as a catalyst for the expansion of the national ID, the promotion of Covid vaccines at the registration centers, the inclusion of youth as local ambassadors and enumerators for program registration, the establishment of local grievance and complaint mechanisms staffed by social workers of the Ministry of Social Development, and, the intensive use of technology. The first draft of Sudan’s new Data Governance and Privacy framework was completed and submitted to the Ministry of Justice (MoJ) for endorsement. 7. As of now, there are no overdue audits for the project. The audit due date for IDA Grant No. D735-SU and IDA-D7700- SU was June 30, 2023. However, due to the ongoing war in the country, the deadline was extended to June 30, 2024. The audit due date for Grant No. TF0B4259 is June 30, 2024. C. Rationale for the Restructuring 8. This restructuring follows an official request issued by the de facto authorities on November 9, 2023, to restructure the existing portlofio to support vulnerable populations through third-party entities. Given the continued uncertainties and to respond to multiple shocks in Sudan, the Bank agreed on an action plan to repurpose remaining SFSP resources in three phases: (i) the first phase to focus on the immediate and food insecurity needs of the vulnerable population; (ii) the second phase to focus on immediate needs and promoting medium-term resilience and livelihood support of vulnerable communities, and (iii) the third phase to focus on long term development needs of vulnerable communities. The first phase has been addressed under the SESNP (P178989), while phase two is under preparation. This approach is consistent with the World Bank’s overall strategy in fragile contexts as it allows to remain engaged while striving to build sustainable institutional capacity that can be transferred to Sudan when OP7.30 is lifted. It also allows for a proactive engagement to help build and protect human capital in the country, as well as support households facing the coumpounding effects of economic crisis, conflit and violence, and climate change, strengthen their long term resilience. 9. This restructuring will cancel MDTF resources under SFSP project to be repurposed through a new project under preparation through third-party recipients, with a corresponding adjustment in the SFSP results framework. This approach is aligned with the World Bank’s Country Engagement Note, the donor partners’ priority areas for the country, as well as the de facto government of Sudan’s request. It will help continue the effort to build resilience along several dimensions: (i) by addressing considerable indirect conflict impacts and needs of the population in volatile and peaceful parts of Sudan; (ii) strengthening institutions highly relevant for a post-conflict stabilization; (iii) supporting The World Bank Sudan Family Support Project (P173521) better overall preparedness and adaptation through information sharing and community engagement which can increase households’ awareness of valuable information they need to cope with this shocks and the future ones; and (iv) by avoiding delays in provision of development impacts after a peace agreement by rapid scale-up of already piloted interventions. II. DESCRIPTION OF PROPOSED CHANGES D. Proposed Changes 10. The proposed restructuring will cancel US$269,235,800 under the TF-B4259 of which US$160 million are proposed to be repurposed through the Sudan Enhancing Community Resilience Project (P181490). The revised withdrawal table is provided in the Annex to this restructuring paper. 11. The project closing date for IDA-D7350, IDA-D7700, and TF-B4259 will also be extended to June 30, 2024. This brings the cumulative project closing date extension to 18 months. 12. The proposed restructuring includes changes in the results framework. The following changes are proposed: (a) Two PDO indicators will be revised downwards due to the amount of funds canceled, and the number of beneficiaries will be adjusted downwards as follows: (i) The number of families receiving cash/income support will be reduced from 4,400,000 to 2,200,000. (ii) The number of beneficiaries of SFSP will be reduced from 24,700,000 to 12,350,000. (b) Three intermediate indicators will be revised: (i) The number of beneficiaries enrolled in basic bank accounts will be reduced from 3.6 million to 1.6 million. (ii) The number of beneficiaries enrolled in mobil money will be reduced from 2,350,000 to 1 million. (iii) Average number of days for funds to reach beneficiary accounts increased from 15 days to 30 days (c) Two intermediate indicators will be marked for deletion as implementing the two activities is not feasible. (i) National data protection and privacy law is submitted to the governing council and, (ii) ME&L impact evaluation baseline & follow-up survey conducted. III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Loan Closing Date(s) ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Implementing Agency ✔ DDO Status ✔ The World Bank Sudan Family Support Project (P173521) Project's Development Objectives ✔ PBCs ✔ Components and Cost ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ 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 Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IDA-D7350 Effective 31-Dec-2022 31-Dec-2023 30-Jun-2024 30-Oct-2024 IDA-D7700 Effective 30-Jun-2023 31-Dec-2023 30-Jun-2024 30-Oct-2024 30-Jun-2023, 31- TF-B4259 Effective 31-Dec-2022 30-Jun-2024 30-Oct-2024 Dec-2023 OPS_DETAILEDCHANGES_CANCELLATIONS_TABLE The World Bank Sudan Family Support Project (P173521) CANCELLATIONS Value Reason Current Cancellation New Ln/Cr/Tf Status Currency Date of for Amount Amount Amount Cancellation Cancellation IDA-D7350- Disburs 141,000,000.0 141,000,000.0 XDR 0.00 001 ing 0 0 IDA-D7700- Effectiv 146,900,000.0 146,900,000.0 XDR 0.00 001 e 0 0 BORROWER' S REQUEST TF-B4259- Disburs 350,000,000.0 269,235,800.0 USD 09-Nov-2023 80,764,200.00 FOR 001 ing 0 0 COUNTRY REASONS OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed TF-B4259-001 | Currency: USD iLap Category Sequence No: 1 Current Expenditure Category: GDS,WRKS,NCS,CS,TR,OC excp Prt1 18,100,000.00 1,991,128.77 18,100,000.00 50.00 50 iLap Category Sequence No: 2 Current Expenditure Category: Cash Transfers Program part 1.1 319,600,000.00 25,424,127.97 50,364,200.00 50.00 50 iLap Category Sequence No: 3 Current Expenditure Category: Payment Agent Serv Prov fees prt1.2 12,300,000.00 9,366,427.68 12,300,000.00 50.00 50 Total 350,000,000.00 36,781,684.42 80,764,200.00 . The World Bank Sudan Family Support Project (P173521) . Results framework COUNTRY: Sudan Sudan Family Support Project Project Development Objectives(s) The objective is to deliver cash transfers and improve safety net systems to support the Sudanese families in the Recipient's territory affected by expected economic reforms and other short-term shocks. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline End Target Deliver cash transfer to Sudanese families affected by econimic reforms and short-term shocks Number of families receiving cash/income support (Number) 0.00 2,200,000.00 Action: This indicator has been Revised of which females are heads of families (Percentage) 0.00 2.40 Number of beneficiaries of SFSP (Number) 0.00 12,350,000.00 Action: This indicator has been Revised of which female (Percentage) 0.00 50.00 Improve Sudan's safety net systems National registry platform that functions across the country is National platform is functioning, but has low coverage National registry platform is covering 80% of the strengthened (Text) and needs efficiency improvements. population in the regions covered by the project. PDO Table SPACE The World Bank Sudan Family Support Project (P173521) Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name PBC Baseline End Target Component 1: Provision of Cash Transfers Average number of days for funds to reach beneficiary accounts 0.00 15.00 (Days) Action: This indicator has been Revised Number of beneficiaries enrolled in basic bank accounts 0.00 1,600,000.00 (Number) Action: This indicator has been Revised Time in days between generation of payroll and fund transfer to 8.00 5.00 PSPs (Days) Number of beneficiaries enrolled in mobile money (Number) 0.00 1,000,000.00 Action: This indicator has been Revised Component 2: Establish Delivery Systems and Build Institutional Capacity SFSP MIS system has been developed and deployed (Yes/No) No Yes National data protection and privacy law is submitted to No Yes governing council (Yes/No) Action: This indicator has been Marked for Deletion Number of states covered by the SFSP program (Number) 0.00 12.00 SFSP branded as a national, well-defined and quasi universal No Yes program (Yes/No) Communication campaigns have been launched (Yes/No) No Yes A hybrid system for tracking enquiries, complaints, and No Yes grievances (GRM) has been established (Yes/No) The World Bank Sudan Family Support Project (P173521) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline End Target Percentage of complaints resolved in 15 days or less through 0.00 80.00 GRM (Percentage) Gender-focused behavioral science integrated into the community strategy for the SFSP in areas where women are not No Yes designated primary beneficiaaries (Yes/No) Component 3: Project Management, Monitoring and Evaluation, and Learning ME&L impact evaluation baseline & follow-up survey conducted. No Yes (Yes/No) Action: This indicator has been Marked for Deletion ME&L lessons drawn from Sudan’s experience in an evaluative No Yes report (Yes/No) IO Table SPACE . The World Bank Sudan Family Support Project (P173521) Grant No. TF0B4259 Revised Withdrawal Table under Section III.A of Schedule 2 to the Grant Agreement between the Republic of the Sudan and the International Development Association acting as administrator of the Sudan Transition and Recovery Support Multi-Donor Trust Fund dated October 23, 2020 as amended Amount of the Grant Percentage of Expenditures to be Category Allocated (expressed in Financed. USD) (inclusive of Taxes) (1) Goods, works, 18,100,000.00 50% non-consulting services, consulting services, Training and Operating Costs under the Project, (except Part 1 of the Project). (2) Cash Transfer 50,364,200.00 50% Program under Part 1.1 of the Project (3) Payment Agent 12,300,000.00 50% service provider fees under Part 1.2 of the Project Amount Cancelled as 269,235,800.00 of November 9, 2023 TOTAL AMOUNT 350,000, 000.00