The World Bank Local Governance Support Project - 3 (P159683) REPORT NO.: RES52962 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF LOCAL GOVERNANCE SUPPORT PROJECT - 3 APPROVED ON JANUARY 31, 2017 TO THE PEOPLE'S REPUBLIC OF BANGLADESH URBAN, RESILIENCE AND LAND SOUTH ASIA Regional Vice President: Martin Raiser Country Director: Dandan Chen Regional Director: John A. Roome Practice Manager/Manager: Meskerem Brhane Task Team Leader(s): Shenhua Wang, Ishita Alam Abonee The World Bank Local Governance Support Project - 3 (P159683) ABBREVIATIONS AND ACRONYMS BBG: Basic Block Grant BDT: Bangladesh Taka SDR: Special Drawing Right UP: Union Parishad The World Bank Local Governance Support Project - 3 (P159683) BASIC DATA Product Information Project ID Financing Instrument P159683 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 31-Jan-2017 31-Dec-2022 Organizations Borrower Responsible Agency The People's Republic of Bangladesh Project Development Objective (PDO) Original PDO The project development objectives are to institutionalize the Union Parishad (UP) fiscal transfer system, and introduce a fiscal transfer system for Pourashavas on a pilot basis. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-59460 31-Jan-2017 06-Mar-2017 29-Mar-2017 31-Dec-2022 300.00 299.44 8.58 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Local Governance Support Project - 3 (P159683) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING The project implementation is on track and will be closed on December 31, 2022. The Project Development Objective is achievable. The present allocation of some categories became insufficient as the rate of conversion of SDR to USD and BDT has been decreasing since last few months. To document remaining expenditure, the present allocations of the categories are required to re-adjust. Moreover, the project could not disburse Basic Block Grant (BBG) under Part-1 of the project (Category-5) to the Union Parishads in FY 2021-22 as mentioned in Financing Agreement due to unavailability of budget allocation in revised Annual Development Program, which is required to disburse in FY 2022-23. In view of above, Government has prepared a Revised Withdrawal Table showing re-adjustment of allocation within categories keeping the amount of total credit unchanged and also shifting the disbursement timeline of BBG under Category-5 from FY 2021-22 to FY 2022-23. II. DESCRIPTION OF PROPOSED CHANGES The proposed changes are as follows: i) Reallocation between disbursement categories; slight adjustment of the component cost; and ii) shifting disbursement timeline of BBG under Category-5 from FY 2021-22 to FY 2022-23. III. SUMMARY OF CHANGES Changed Not Changed Components and Cost ✔ Reallocation between Disbursement Categories ✔ Disbursement Estimates ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ The World Bank Local Governance Support Project - 3 (P159683) Results Framework ✔ Loan Closing Date(s) ✔ Cancellations Proposed ✔ Disbursements Arrangements ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ 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_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Institutionalization of UP Fiscal Institutionalization of UP Fiscal 661.68 Revised 662.68 Transfers Transfers Audits and Performance Audits and Performance Assessments, and Assessments, and Management 9.43 No Change 9.43 Management Information Information Systems Systems Expanded Block Grants to Pilot Expanded Block Grants to Pilot 9.76 No Change 9.76 Pourashavas Pourashavas The World Bank Local Governance Support Project - 3 (P159683) Capacity Development Capacity Development and Project Implementation 27.03 Revised and Project Implementation 26.03 Support Support TOTAL 707.90 707.90 OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IDA-59460-001 | Currency: XDR iLap Category Sequence No: 1A Current Expenditure Category: Gds ex veh,NCS ex aud,CS,IOC,Trng 17,700,000.00 11,275,151.21 15,120,000.00 100.00 100.00 iLap Category Sequence No: 1B Current Expenditure Category: UP Audit 5,955,000.00 4,593,247.85 5,640,000.00 100.00 100.00 iLap Category Sequence No: 1C Current Expenditure Category: Pourashava Audit 25,000.00 15,596.40 20,000.00 100.00 100.00 iLap Category Sequence No: 2 Current Expenditure Category: BBG Part1 FY16-17,17-18,18-19 102,500,000.00 101,482,348.71 104,420,000.00 47.70 47.70 iLap Category Sequence No: 3A Current Expenditure Category: PBG Part1 FY16-17, 17-18 26,500,000.00 26,498,158.69 26,550,000.00 100.00 100.00 iLap Category Sequence No: 3B Current Expenditure Category: PBG Part1 , FY18-19 15,000,000.00 14,830,352.04 14,950,000.00 100.00 100.00 iLap Category Sequence No: 3C Current Expenditure Category: PBG Part1 FY19-20 The World Bank Local Governance Support Project - 3 (P159683) 15,700,000.00 15,675,799.90 16,300,000.00 100.00 100.00 iLap Category Sequence No: 3D Current Expenditure Category: PBG Part1 FY20-21 15,500,000.00 6,791,837.34 16,200,000.00 100.00 100.00 iLap Category Sequence No: 4 Current Expenditure Category: EBG Part3FY17-18 to 20-21 3,420,000.00 2,286,563.29 3,500,000.00 50.00 50.00 iLap Category Sequence No: 5 Current Expenditure Category: Additional Allocation to UPs for FY 2022-23 19,400,000.00 0.00 19,000,000.00 100.00 100.00 Total 221,700,000.00 183,449,055.43 221,700,000.00 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2017 0.00 0.00 2018 0.00 0.00 2019 0.00 0.00 2020 0.00 0.00 2021 50,000,000.04 45,770,000.04 2022 15,000,000.00 16,200,000.00 2023 15,970,000.00 19,000,000.00 . 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