The World Bank Public Finance Management Modernization Project 2 (P150381) REPORT NO.: RES46683 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF PUBLIC FINANCE MANAGEMENT MODERNIZATION PROJECT 2 APPROVED ON JUNE 1, 2015 TO REPUBLIC OF TAJIKISTAN GOVERNANCE EUROPE AND CENTRAL ASIA Regional Vice President: Anna M. Bjerde Country Director: Lilia Burunciuc Regional Director: Lalita M. Moorty Practice Manager/Manager: Daniel J. Boyce Task Team Leader(s): Hassan Aliev The World Bank Public Finance Management Modernization Project 2 (P150381) I. BASIC DATA Product Information Project ID Financing Instrument P150381 Investment Project Financing Original EA Category Current EA Category Not Required (C) Not Required (C) Approval Date Current Closing Date 01-Jun-2015 30-Jun-2025 Organizations Borrower Responsible Agency Republic of Tajikistan Ministry of Finance Project Development Objective (PDO) Original PDO The development objective of the project is to improve effectiveness, control and accountability of public expenditure of the Republic of Tajikistan. Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-D7500 02-Dec-2020 30-Jun-2025 6.00 0 6.18 IDA-56310 01-Jun-2015 17-Feb-2016 10-May-2016 30-Jun-2021 5.50 .69 5.06 IDA-D0550 01-Jun-2015 17-Feb-2016 10-May-2016 30-Jun-2021 4.50 4.47 0 TF-A1735 17-Feb-2016 17-Feb-2016 10-May-2016 30-Jun-2021 9.66 6.94 2.72 The World Bank Public Finance Management Modernization Project 2 (P150381) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES This Restructuring Paper seeks to extend the closing date of the DFID/FCDO grant (TF0A1735) for three months from June 30, 2021 to September 30, 2021, and to shorten the standard grace period for submitting withdrawal applications of four months to one month. This is based on the Ministry of Finance’s letter No. 19/45 dated April 30, 2021. This would be the first grant closing date extension. Background and Project Status. The achievement of the Project Development Objective remains moderately satisfactory. The project is financed by IDA (IDA-56310, IDA-D0550, and IDA-D7500) in the amount of US$ 16 million and the DFID/FCDO grant (TF0A1735) in the amount of US$9.66 million through recipient executed trust fund (RETF). The RETF has been disbursed US$6.92 million (72%), and the undisbursed balance is US$2.72 million. The activities completed under the RETF are: (i) development of three modules of budget execution; (ii) enhancement of State- Owned Enterprises monitoring capacities; (iii) development of public sector accounting reform roadmap; and (iv) development of e-government roadmap. The only remaining activity is the establishment of a back-up data processing center for the Ministry of Finance (MoF). Rationale for Restructuring. The contract for establishing a back-up data processing center was signed in April 2020, and its end date is June 30, 2021. However, the implementation was delayed due to the pandemic and the need to change the physical location of the center, taking into consideration the best international practices for establishing disaster recovery/backup data centers. Therefore, the company will not be able to complete the remaining works by the contract end date as planned. The remaining works are the delivery and installation of servers and provision of trainings to the MoF staff. The company has already ordered the servers from Spain, which will arrive to Tajikistan in mid-July. With the servers in place, the company will be able to conduct required trainings by September 30, 2021. Therefore, a 3-month contract extension of the contract is crucial to allow the remaining work to be fully completed. To extend the contract end date, the grant closing date of June 30, 2021 is required to be extended first. This extension will also allow to disburse an additional estimated amount of US$2.72 million. The task team has explored the possibility of TF extension with DFID/FCDO through an amendment of the administrative agreement. However, the donor has informed the Bank that they have officially closed their PFM program in the country on March 31, 2021. Hence, in the absence of an active program, there is no basis for DFID/FCDO management to justify an amendment to the administrative agreement. Therefore, extending the grant closing date for three months and shortening the grace period to one month is the only option available given the current TF’s end-disbursement date of December 31, 2021. The World Bank Public Finance Management Modernization Project 2 (P150381) III. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IDA-56310 Effective 30-Jun-2021 IDA-D0550 Effective 30-Jun-2021 IDA-D7500 Not Effective 30-Jun-2025 TF-A1735 Effective 30-Jun-2021 30-Sep-2021 31-Oct-2021