Document of
The World Bank
66085
Report No:_________
RESTRUCTURING PAPER
ON A
PROPOSED PROJECT RESTRUCTURING
OF
SUSTAINABLE FORESTRY FOR RURAL DEVELOPMENT PROJECT
CREDIT 3802; GRANT H4460
BOARD APPROVAL DATE: JUNE 24, 2003
ADDITIONAL FINANCING APPROVAL DATE: DECEMBER 18, 2008
TO THE
LAO PEOPLE’S DEMOCRATIC REPUBLIC
December 12, 2011
ABBREVIATIONS AND ACRONYMS
IDA International Development Agency
IOC Incremental Operating Costs
PDR (Lao) People’s Democratic Republic
SUFORD Sustainable Forestry for Rural Development (Project)
XDR Special Drawing Rights
Regional Vice President: James W. Adams, EAPVP
Country Director: Annette Dixon, EACTF
Acting Sustainable Development Leader: Julia Fraser, EASTS
Task Team Leader: Peter Jipp, EASTS
2
LAO PEOPLE'S DEMOCRATIC REPUBLIC
SUSTAINABLE FORESTRY FOR RURAL DEVELOPMENT PROJECT
P064886
CONTENTS
Page
A. SUMMARY ............................................................................................................... 4
B. PROPOSED CHANGES .......................................................................................... 4
3
SUSTAINABLE FORESTRY FOR RURAL DEVELOPMENT PROJECT
RESTRUCTURING PAPER
SUMMARY
1. This Restructuring Paper proposes to introduce changes in the Lao People's
Democratic Republic, SUSTAINABLE FORESTRY FOR RURAL DEVELOPMENT
PROJECT, IDA-38020, IDA-H4460, P064886 and accompanying amendments to the
project’s legal documents.
2. Specifically this proposal seeks to extend the closing date of the IDA financing
for the above-referenced project by twelve (12) months from the current closing date of
December 31, 2011 to December 31, 2012 to provide more time for completion of on-
going activities especially in ethnic group communities that have been delayed due to
factors outside the control of the Government and the project implementing agency. The
restructuring also includes changes to the financing plan and a minor reallocation of grant
proceeds amongst expenditure categories.
PROPOSED CHANGES
3. Rationale for Closing Date Extension. The proposed extension is necessary to
provide more time for completion of on-going activities especially in ethnic group
communities that have been delayed due to factors outside the control of the Government
and the project implementing agency. The undisbursed amount of the IDA grant
(US$1.37M) is small relative to the extension period however the requested extension of
12 months is justified because a gradual pace of implementation is necessary to establish
and maintain high quality engagement with ethnic groups.
4. Reallocation of Proceeds Ministry of Finance has requested that grant proceeds
be reallocated as follows:
Category of Expenditure Allocation XDR % of Financing
Current Revised Current Revised
Works 370,000 405,000 100% 100%
Goods 1,620,000 1,308,000 100% 100%
Consultant’s Services 200,000 163,000 100% 100%
Village Development 1,300,000 1,235,000 100% 100%
Project Grants
Incremental Operating Costs 2,200,000 3,057,000 100% 100%
Training and Workshops 1,110,000 632,000 100% 100%
Total Amount 6,800,000 6,800,000
4
5. The proposed reallocation is necessary to cover a relatively small (1%) increase in
the cost of Civil Works and a substantial (13%) increase in Incremental Operating Costs
(IOC). The increase in IOC comes as a result of increasing the frequency and duration of
field visits to communities. The project has more than doubled the number of villages
involved in SUFORD implementation in the last three years and most of these are ethnic
villages. The rapid scale-up has required an intensive engagement to develop a common
understanding with local communities of project objectives. IOC funds for engagement
at community level have increased to support sustained engagement with communities in
order to maintain quality while accelerating the pace of project implementation.
5