The World Bank Somalia - Water for Agro-pastoral Productivity and Resilience (P167826) REPORT NO.: RES38675 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SOMALIA - WATER FOR AGRO-PASTORAL PRODUCTIVITY AND RESILIENCE APPROVED ON JULY 1, 2019 TO FEDERAL REPUBLIC OF SOMALIA WATER AFRICA EAST AND SOUTHERN Regional Vice President: Victoria Kwakwa Country Director: Keith E. Hansen Regional Director: Ayat Soliman Practice Manager/Manager: Catherine Signe Tovey Task Team Leader(s): Chantal Richey, James Muli Musinga The World Bank Somalia - Water for Agro-pastoral Productivity and Resilience (P167826) ABBREVIATIONS AND ACRONYMS FGS Federal Government of Somalia FMS Federal Member State MTR Mid Term Review NPCU National Project Coordination Unit PIU Project Implementation Unit The World Bank Somalia - Water for Agro-pastoral Productivity and Resilience (P167826) BASIC DATA Product Information Project ID Financing Instrument P167826 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 01-Jul-2019 28-Feb-2023 Organizations Borrower Responsible Agency Federal Republic of Somalia Project Development Objective (PDO) Original PDO Develop water and agricultural services among agro-pastoralist communities in dryland areas of Somalia. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-D4970 01-Jul-2019 08-Oct-2019 13-Dec-2019 28-Feb-2023 42.00 24.34 15.99 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Somalia - Water for Agro-pastoral Productivity and Resilience (P167826) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. The Somalia Water for Agro-pastoral Productivity and Resilience (Biyoole) project has the objective to develop water and agricultural services among agro-pastoralist communities in dry-land areas of Somalia. The project is financed by a Pre-Arrears Clearance IDA Grant in the amount of SDR 30.4 million (US$42.0 million equivalent). The project was approved by the World Bank on July 1, 2019, the financing agreement was signed on October 8, 2019, and closing date is February 28, 2023. The project targets Puntland, Galmudug, and South West Federal Member States (FMS) and Somaliland. Ministries of Planning in Mogadishu and each implementing state capital house a National Project Coordination Unit (NPCU) and Project Implementation Units (PIUs) respectively. 2. Effectiveness and Somaliland Financing Agreement delay. The signing of subsidiary agreements with participating states was set as a condition of effectiveness. Subsidiary agreements were signed between the Federal Government of Somalia (FGS) and Puntland State of Somalia (July 15, 2019), Galmudug State of Somalia (July 15, 2019) and Southwest State of Somalia (July 15, 2019). On December 13, 2019 the effectiveness was declared for the portion of the loan (US$28.0 million) for which subsidiary agreements were signed. Effectiveness of the Somaliland allocation (US$14.0 million) remained pending waiting for the signature of the subsidiary agreement between the FGS and Somaliland, which finally took place on January 21, 2022, and the remaining portion of the project achieved effectiveness on July 1, 2022. 3. Project implementation and Progress towards PDO are rated Moderately Satisfactory. The project remains relevant and despite significant challenges, it has been able to strive and set the foundation for the provision of water and agricultural services to agro-pastoral communities in Puntland, Galmudug and South West States. The project is framed around four components:  Component 1 - Support the Development of Multiple Use Water Sources: Across the three FMS, 11 new water points have been constructed, and works are on-going for additional 34 to be completed prior to project closing. Seven existing water points have been rehabilitated, and works are on-going for an additional 15. More than 134,575 people (54% of the target) have been provided with access to improved water sources, and the target of 250,000 (100%) is expected to be met by project closing. Due to delayed effectiveness, Somaliland will not see any water point constructed or rehabilitated.  Component 2 - Institutional and Capacity Development: Four PIUs (100% of the target) have been fully staffed, offices renovated, furnished, and equipped, new ministries building construction completed or at advanced stages, and capacity for civil works contracting and management enhanced. The National Inter-Ministerial Project steering committee is meeting regularly.  Component 3 - Supporting Sustainable Land Management and Livelihoods Development Around Water Points: Linking with water infrastructure and community planning and mobilization interventions under Components 1 and 2, this component is catalyzing priority investments, facilitated by participating FMS line ministries, to create and strengthen productive livelihoods among target communities. The component is stimulating the growth and development of productive and sustainable income-generating activities through two subcomponents that (a) improve the health and sustainability of the natural resource base (that is, land, water, and vegetative cover), which underpins all agriculture and pastoralist livelihoods and (b) facilitates communities’ access to productive assets and extension services needed for agriculture and livestock production. Almost 18,228 farmers/clients (17% of the target) have adopted improved technologies, and a total of 104,363 out of the original target of 110,000 The World Bank Somalia - Water for Agro-pastoral Productivity and Resilience (P167826) are expected to be reached by project closing (more than 95% of the target, and as such the end target will not be changed in this project restructuring). Due to the delayed effectiveness, Somaliland will not see any provision of agricultural services.  Component 4 - Project Management, M&E, Knowledge Management, and Learning: This component provides finance for the operational costs of the Project Management Units in participating FMS and Somaliland, as well as project coordination and fiduciary support at the FGS level. The component is also responsible for M&E, knowledge management and learning, and evidence-based policy input. 4. Commitment and disbursement stand at US$21.03 million and US$20.00 million respectively. These correspond to 50% and 48% respectively of the project funds; or 75% and 71% if excluding the Somaliland allocation. II. DESCRIPTION OF PROPOSED CHANGES 5. Considering that the great majority of the Somaliland activities were significantly delayed and cannot be completed by the closing date, a restructuring is proposed to cancel most of the Somaliland allocation, undertake a reallocation between disbursement categories, revise components and costs, change disbursement estimates for the remaining funds and revise the results framework to reflect the cancellation of funds. The restructuring involves the cancellation of SDR 8.18 million (US$101 million equivalents at current exchange rates) out of the SDR 9.76 million allocated to Somaliland , as the delays in effectiveness resulted in only a small portion of the activities in Somaliland expected to be completed by the closing date. Amount across the four components has been brought from US$39.5 million (plus US$2.5 contingency) down to US$32 million. The allocation by component is revised accordingly. All other aspects of the project (PDO, Safeguard’s arrangement, Fiduciary arrangements, overall risk ratings and others) remain unchanged. 1The initial restructuring request was for the cancellation of $12 million equivalent, leaving about $2 million equivalent unutilized allocation for Somaliland, which continues to be needed by the project. Given the strengthening US Dollar against the SDR, the proposed cancellation is now US$10 million equivalent, in order to maintain the US$2 million equivalent unutilized allocation. The World Bank Somalia - Water for Agro-pastoral Productivity and Resilience (P167826) III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Components and Cost ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursement Estimates ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ PBCs ✔ Loan Closing Date(s) ✔ Disbursements Arrangements ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) The World Bank Somalia - Water for Agro-pastoral Productivity and Resilience (P167826) OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Component 1: Support the Component 1: Support the Development of Multiple Use 15.00 Revised Development of Multiple Use 12.00 Water Sources Water Sources Component 2. Institutional and Component 2. Institutional and 6.00 Revised 5.00 Capacity Development Capacity Development Component 3: Supporting Component 3: Supporting Sustainable Land Management Sustainable Land Management 9.50 Revised 8.00 and Livelihoods Development and Livelihoods Development Around Water Points Around Water Points Component 4: Project Component 4: Project Management, M & E, Management, M & E, Knowledge 9.00 Revised 7.00 Knowledge Management and Management and Learning Learning TOTAL 39.50 32.00 OPS_DETAILEDCHANGES_CANCELLATIONS_TABLE CANCELLATIONS Value Reason Current Cancellation New Ln/Cr/Tf Status Currency Date of for Amount Amount Amount Cancellation Cancellation BORROWER' S REQUEST IDA-D4970- Disburs XDR 30,400,000.00 8,180,000.00 01-Oct-2022 22,220,000.00 FOR 001 ing COUNTRY REASONS OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IDA-D4970-001 | Currency: XDR iLap Category Sequence No: 1A Current Expenditure Category: States-GD,WK,NCS,TR,CS-Pt 1,2,3.2.. The World Bank Somalia - Water for Agro-pastoral Productivity and Resilience (P167826) 18,945,000.00 12,997,065.33 18,945,000.00 100.00 100.00 iLap Category Sequence No: 1B Current Expenditure Category: States-GD,WK,NCS,TR,CS-Pt 3.1 1,695,000.00 528,739.67 1,695,000.00 100.00 100.00 iLap Category Sequence No: 2A Current Expenditure Category: Somaliland-GD,WK,NCS,TR,CS-Pt 1,2.. 8,925,000.00 0.00 1,500,000.00 100.00 100.00 iLap Category Sequence No: 2B Current Expenditure Category: Somaliland-GD,WK,NCS,TR,CS-Pt 3.1 835,000.00 0.00 80,000.00 100.00 100.00 iLap Category Sequence No: 3 Current Expenditure Category: Emergency Expenditures Pt 4.3 0.00 0.00 0.00 100.00 100.00 Total 30,400,000.00 13,525,805.00 22,220,000.00 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2019 832,840.00 0.00 2020 6,895,120.00 1,380,535.70 2021 9,921,480.00 4,864,413.25 2022 13,717,040.00 11,633,404.18 2023 10,633,520.00 7,000,000.00 2024 0.00 5,121,646.87 2025 0.00 0.00 . The World Bank Somalia - Water for Agro-pastoral Productivity and Resilience (P167826) . Results framework COUNTRY: Somalia Somalia - Water for Agro-pastoral Productivity and Resilience Project Development Objectives(s) Develop water and agricultural services among agro-pastoralist communities in dryland areas of Somalia. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline End Target People provided with access to improved water sources under the project, of which 50 percent are fem People provided with access to improved water sources under 0.00 250,000.00 the project (Number) Action: This indicator has been Revised of which female (Percentage) 0.00 50.00 Rationale: Action: This indicator is New Revision is purely to properly reflect gender disaggregation in the RF of the Operations Portal. Farmers/clients (number) adopting improved technology, share of which are female (percent) Farmers/clients (number) adopting improved technology 0.00 110,000.00 (Number) Action: This indicator has been Revised of which female (Percentage) 0.00 50.00 The World Bank Somalia - Water for Agro-pastoral Productivity and Resilience (P167826) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline End Target Rationale: Action: This indicator is New Revision is purely to properly reflect gender disaggregation in the RF of the Operations Portal. Target beneficiaries satisfied with project investments (percentage). Target beneficiaries satisfied with project investments. 0.00 60.00 (Percentage) PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name PBC Baseline End Target Component 1. Support the development of multiple use water sources Improved community water points constructed under the project 0.00 45.00 (Number) Rationale: Action: This indicator has been Revised Removed Somaliland portion (30 waterpoints). Improved community water points rehabilitated under the 0.00 22.00 project (Number) Rationale: Action: This indicator has been Revised Removed Somaliland portion (10 waterpoints), while added additional water points for the 3 FMS. Component 2. Institutional and Capacity Development (Action: This Component has been Revised) The World Bank Somalia - Water for Agro-pastoral Productivity and Resilience (P167826) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline End Target Number of PIUs established under the project and functioning 0.00 4.00 (Number) of which female (Percentage) 0.00 50.00 Rationale: Action: This indicator is New Revision is purely to properly reflect gender disaggregation in the RF of the Operations Portal. Number of Community Management Systems Established 0.00 45.00 (Number) Action: This indicator has been Revised Number of PIU members trained disaggregated by (male/female) 0.00 40.00 (Number) of which female (Number) 0.00 30.00 Rationale: Action: This indicator is New Revision is to reduce the share of women part of the PIU from 50%. Component 3. Supporting Sustainable Land Management and Livelihoods Development Around Water Points Farmers/clients reached with Agricultural services (Percentage) 0.00 80.00 Action: This indicator has been Revised of which female (Percentage) 0.00 50.00 Rationale: Action: This indicator is New Revision is purely to properly reflect gender disaggregation in the RF of the Operations Portal. IO Table SPACE The World Bank Somalia - Water for Agro-pastoral Productivity and Resilience (P167826) The World Bank Somalia - Water for Agro-pastoral Productivity and Resilience (P167826)