Document of
            The World Bank


                                        Report No: 56780 v1




         RESTRUCTURING PAPER

                 ON A

    PROPOSED PROJECT RESTRUCTURING
                  OF
   EDUCATION MODERNIZATION PROJECT
                 LOAN

                TO THE

FORMER YUGOSLAV REPUBLIC OF MACEDONIA

             September 2010
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              MACEDONIA, FORMER YUGOSLAV REPUBLIC OF
                  EDUCATION MODERNIZATION PROJECT
                              P066157

                             RESTRUCTURING PAPER


                               Extension of Closing Date


1. The closing date for Macedonia, FORMER YUGOSLAV REPUBLIC OF,
   Education Modernization PROJECT, Loan No 4723, P066157 will be extended from
   September 30, 2010 until January 31, 2011.

2. Project implementation picked up considerably in the last 12 months. Progress is
   notable and the likelihood the PDO will be met is high, with the exception of one
   indicator (primary education enrollment rate). The reason for the slight reduction of
   primary education enrollment rate could be related to data issue (old census data;
   emigration). The World Bank team has encouraged the Ministry of Education and
   Science to analyze the issue more in-depth and see what might be the reason for the
   slight decline. The Project Development Objective is rated Moderately Satisfactory
   while its Implementation Progress is rated Satisfactory. Most of envisaged activities
   have been implemented but the Ministry of Education and Science (MoES) has asked
   for a four month extension of closing date (September 30, 2010) in order to finalize
   the second round of the School Improvement Grants Program. Specifically, the
   extension is needed to complete the distribution of the procured goods (teaching aids
   and books) to each of the 246 beneficiary schools, and to conclude the procurement
   process of audio visual equipment. Disbursement has reached 87% of total loan
   amount and the remaining loan proceeds will be used for distribution of goods and
   procurement of audio visual equipment.

3. It is the Bank' assessment that a four month extension would be prudent to ensure the
   completion of all activities undertaken in the second round of the School
   Improvement Grants Program and to allow loan proceeds to be fully disbursed. The
   Ministry of Education and Science has prepared an Action Plan for completion of the
   remaining activities reflecting the proposed extension of four months. The plan has
   been closely reviewed by the Bank team during the supervision visit in the week of
   September 11, 2010 and has been found acceptable. There are no outstanding audits
   for this Project.

4. This will be the second extension of the project for a total of sixteen months from the
   original closing date. The World Bank concurred with borrower's request for one
   year extension dated March 31, 2009.
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