The World Bank Public Expenditure Management Network in Asia - Phase 2 (P175749) REPORT NO.: RES52628 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF PUBLIC EXPENDITURE MANAGEMENT NETWORK IN ASIA - PHASE 2 APPROVED ON JUNE 30, 2021 TO KOREAN INSTITUTE OF PUBLIC FINANCE GOVERNANCE EAST ASIA AND PACIFIC Regional Vice President: Manuela V. Ferro Regional Director: Lalita M. Moorty Practice Manager: Alma Kanani Task Team Leader(s): Quyen Hoang Vu The World Bank Public Expenditure Management Network in Asia - Phase 2 (P175749) ABBREVIATIONS AND ACRONYMS EC European Commission EDD End of Disbursement Date KIPF Korean Institute for Public Finance MDTF Multi-Donor Trust Fund MOEF Ministry of Economy and Finance PEMNA Public Expenditure Management Network in Asia RE Recipient-Executed WB World Bank The World Bank Public Expenditure Management Network in Asia - Phase 2 (P175749) Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. BASIC DATA Product Information Project ID Financing Instrument P175749 Investment Project Financing Environmental and Social Risk Classification (ESRC) Low Approval Date Current Closing Date 30-Jun-2021 31-Dec-2023 Organizations Borrower Responsible Agency Korean Institute of Public Finance Korean Institute of Public Finance Financing (in USD Million) FIN_SUMM_PUB_TBL SUMMARY Total Project Cost 0 Total Financing 0 Financing Gap 0 DETAILS -NewFin3 The World Bank Public Expenditure Management Network in Asia - Phase 2 (P175749) Project Development Objective (PDO) Original PDO The overall objective of PEMNA2 is to facilitate knowledge exchange among budget and treasury officials to increase their capacity for better Public Financial Management. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net TF Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-B6223 30-Jun-2021 20-Aug-2021 20-Aug-2021 31-Dec-2023 2.92 1.99 .93 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Rationale The restructuring paper seeks to extend the closing date of the Public Expenditure Management Network in Asia (PEMNA) Project by four months from December 31, 2023, to April 30, 2024. This would enable the completion of Recipient Executed activities, including face-to-face peer learning events, that were originally planned to deliver on the planned objectives. It might also help maintain the network’s continuity, ensuring a smooth transition to its subsequent phase, the preparation of which is under discussion. This is the third restructuring of this project.1 It does not propose any additional financing. No changes are proposed to the Project Development Objective (PDO). The Recipient is in compliance with all legal covenants. B. Project Status PEMNA is a peer-learning network for the Asia-Pacific region. The first phase of the network came to completion on June 30, 2020, and a second phase was launched with the establishment of a new PEMNA II MDTF with total signed 1 The first restructuring (December 2022) was to extend the project closing date to December 31, 2023 due to COVID-19-related restrictions preventing face-to-face peer learning activities. The second restructuring (June 2023) was to revise the grant amount, from US$ 1.50 million to US$ 2.92 million as per the intended and approved amount in the concept note. The original grant at project effectiveness was based on available funds and hence adjusted to a lower amount of US$ 1.50 million. Since the total approved grant amount for the project is US$ 2.92 million, an amendment to the grant amount was required to accommodate additional installments to the recipient. The need for this change was foreseen and documented at the concept stage in the project document. The World Bank Public Expenditure Management Network in Asia - Phase 2 (P175749) contributions of approximately US$4.6 million from the European Commission (EURO 2 million) and the Government of Korea (US$2.3 million). The TF supports Recipient Executed (RE) activities and Bank Executed (BE) activities. The RE grant is being implemented by the PEMNA Secretariat housed within the Korean Institute of Public Finance (KIPF), while the main beneficiaries are the fourteen member countries in the region. While the TF was established in October 2020, the preparation and approval of the PEMNA2 RE grant were delayed due to the COVID-19 pandemic and its impact on Bank operations. Despite the lockdown and travel restrictions imposed amid COVID-19, strong progress has been made on all of the components of the RE grant. Successful events included the Annual Conference in September 2021 on ‘Sustainable and Resilient Capital Expenditures for a Post-COVID Recovery’; and right after business-as-usual was resumed, the Annual Plenary Conference in September 2022 in Seoul on ‘Fiscal Soundness and Sustainability for the Post COVID-19 Era’, as well as multiple online as well as face-to-face Budget CoP (B- CoP) and Treasury CoP (T-CoP) events; and several virtual Knowledge Exchanges. Most recently, since June 2023, PEMNA has successfully conducted the Plenary Conference in November 2023 in Vientiane on ‘Making Fiscal Decentralization Work for Growth and Better Service Delivery’, the T-CoP Meeting in Manila on ‘Adapting to Change: Managing Fiscal and Disaster Risks in a Digital World’ (July 2023), and the B-CoP Meeting in Dili on ‘Public Spending Efficiency and Transparency’ (October 2023). In addition to these multilateral exchanges, there have been several bilateral study visits to drill deeper down into some of the practices presented at the CoP meetings. These include the T-CoP visit to Malaysia by Cambodia (June 2023), the B-CoP visit to Korea by the Philipinnes (September 2023), and the T-CoP visit to Korea by Malaysia (September 2023). Events organized by PEMNA focus on capacity building and require ample time for preparation and follow-up by member countries. In 2023, PEMNA maintains its emphasis on peer knowledge sharing, and engaging higher-level technical officials. The themes of these activities align with regional and national priorities, with evaluations conducted to ensure program quality and accountability. Additionally, PEMNA integrates activities such as peer-learning and research activities to enhance synergies, providing a comprehensive understanding of PFM challenges and opportunities for member countries. Furthermore, PEMNA explores ways to strengthen partnerships beyond the region to leverage the knowledge and expertise of other organizations, such as OECD and the IMF, and networks, such as PEMPAL2. Through these partnerships, the network fosters the development of PFM capacity and enhance public service delivery in the region. Progress towards achievement of PDO and Implementation Progress are both rated Satisfactory. The achievements of the project, are evidenced by the beneficiary survey. In response to a survey issued by the Secretariat, 92% of respondents agreed (50% strongly, 42% agreed) that PEMNA had helped PFM reform in the region, exceeding the 75% end target. Member countries have also expressed keen requests that the core organizers consider sustaining the platform and avoid gaps in between phases to the extent possible. There are no pending audit reports and IFRs for the project. II. DESCRIPTION OF PROPOSED CHANGES The change proposed under this restructuring is a no-cost extension of the closing date by four months, to April 30, 2024. The recipient’s request for extension was for a longer six months until June 30, 2024. Given internal limitations, four months are granted instead through a reduction of the grace period between the Closing Date and the Donor End Disbursement Date (DEDD). No objection to the reduction of the grace period have been provided by both WFA and DFI 2 PEMPAL: Public Expenditure Management Peer Assisted Learning Network (in Europe). The World Bank Public Expenditure Management Network in Asia - Phase 2 (P175749) before processing this request. The proposed extension of the closing date is until April 30, 2024, however, the Disbursement Deadline Date (DDD) under the grant will remain until April 30, 2024. The extension is required in response to the strong demand of member countries for the network’s continuity and learning on emerging PFM issues, and to minimize the implementation gap before a potential Phase Three operation. The extension does not include any additional financing, as the existing balances remain sufficient for the planned activities. The results framework will remain unchanged. There are no changes to the Summary from the ESMS. The recipient—the Korea Institute of Public Finance (KIPF)— has developed a time-bound action plan for activities to be executed during the extended period from January to April 2024. As such, with the support from the Bank team, preparatory work is underway for both peer learning and complementary research activities. Research activities will be composed of policy briefs directly related to the themes covered in the peer-learning activities. Peer learning activities in turn will be composed of CoP meetings (one for Budget and one for Treasury), as well as organizing several bilateral study visits as per direct requests by the members—all are set to be completed by April, 2024. The planned activities continue to be demand-driven and are expected to contribute to the PDO and specifically the outcome indicator on the “Number of PFM practices in member countries that have improved as a result of knowledge shared in PEMNA” which is currently below the end target. These activities will also serve as a final opportunity to reflect, with direct input from the beneficiaries, on the achieved results and the value addition by the network. They will be accompanied by beneficiary surveys to update the results framework. The exact dates for CoP meetings and study visits are being finalized. The recipient also committed to finalize the associated payment requests and submit all of them by the DDD of April 30, 2024. KIPF has continued to implement material measures and actions in a way that PEMNA is implemented in accordance with the ESCP agreed upon in June 2021. KIPF already has a dedicated working unit with qualified staff and resources to support the management of environmental, social, health, and safety risks and impacts while ensuring timely and quality implementation of the Project. KIPF provides suitable working conditions for staff working on the Project and adheres to Korean national laws and regulations regarding labor and working conditions. It also has a grievance/feedback mechanism established for all staff and contract consultants who are involved in the PEMNA project. 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 ✔ The World Bank Public Expenditure Management Network in Asia - Phase 2 (P175749) Cancellations Proposed ✔ Additional Financing Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Change in Overall Risk Rating ✔ 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 LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline TF Status Closing Closing(s) Closing for Withdrawal Applications TF-B6223 Effective 31-Dec-2022 31-Dec-2023 30-Apr-2024 30-Apr-2024 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Expected Disbursements (In US$) Fiscal Year Annual Cumulative 2021 0.00 0.00 The World Bank Public Expenditure Management Network in Asia - Phase 2 (P175749) 2022 0.00 0.00 2023 0.00 0.00 2024 0.00 0.00 2025 0.00 0.00