Document of The World Bank FOR OFFICIAL USE ONLY 74353-CN RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF THE CHINA: HEAT REFORM AND BUILDING ENERGY EFFICIENCY PROJECT GEF TRUST FUND GRANT, NUMBER TF054687-CHA BOARD APPROVAL DATE: MARCH 17, 2005 TO THE PEOPLE’S REPUBLIC OF CHINA DECEMBER 12, 2012 China and Mongolia Sustainable Development Unit (EASCS) Sustainable Development Department East Asia and Pacific Region (EAP) This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. ABBREVIATIONS AND ACRONYMS CHA China GEF Global Environment Facility GEO Global Environmental Objectives IP Implementation Progress ISR Implementation Status Report M&E Monitoring & Evaluation MOF Ministry of Finance Ministry of Housing and Urban Rural MOHURD Development NA Not Applicable NOL No-Objection Letter TF Trust Fund Regional Vice President: Ms. Pamela Cox, EAPVP Country Director: Mr. Klaus Rohland, EACCF Sector Director/Manager: Mr. John Roome, EASSD Mr. Mark R. Lundell, EASCS Task Team Leader: Mr. Emmanuel Py, EASWE 2 Restructuring Status: Draft Restructuring Type: Level II Last modified on date : 1. Basic Information Project ID & Name P072721 – Heat Reform and Building Energy Efficiency Project Country China Task Team Leader Emmanuel Py Sector Manager/Director Mark R. Lundell / John Roome Country Director Klaus Rohland Original Board Approval Date March 17, 2005 Current Closing Date December 31, 2012 Proposed Closing Date [if applicable] October 31, 2013 EA Category Category B Revised EA Category No change EA Completion Date Not applicable Revised EA Completion Date Not applicable 2. Revised Financing Plan (US$m) Source Original Revised Global Environment Facility (GEF) 18.00 18.00 Total 18.00 18.00 3. Recipient Organization Department Location Ministry of Finance International Department Beijing, China 4. Implementing Agency Organization Department Location Ministry of Housing and Urban- Department of Building Beijing, China Rural Development Energy Efficiency, Science, and Technology 3 5. Disbursement Estimates (US$m) Actual amount disbursed as of 12/10/2012 10.01 Fiscal Year Annual Cumulative 2013 5.00 15.01 2014 2.99 18.00 Total 18.00 6. Policy Exceptions and Safeguard Policies Does the restructured project require any exceptions to Bank policies? N Have these been approved by Bank management NA Is approval for any policy exception sought from the Board? NA Does the scale-up of restructured projects trigger any new safeguard policies? If yes, N please select from the checklist below. 7a. Project Development Objectives/Outcomes Original/Current Project Development Objectives/Outcomes The project development objective is to achieve sustained and growing increases in energy efficiency in urban residential buildings and heating systems in China’s cold climate regions. 7b. Revised Project Development Objectives/Outcomes [if applicable] The PDO remains unchanged. 4 CHINA: HEAT REFORM AND BUILDING ENERGY EFFICIENCY PROJECT P072721 GEF TRUST FUND GRANT, NUMBER TF054687-CHA Restructuring Paper 1. The closing date for the China, Heat Reform and Building Energy Efficiency Project, GEF Trust Fund Grant, Number TF054687-CHA, P072721 will be extended from December 31, 2012 until October 31, 2013. 2. During the first extension period (calendar year 2012), the project has met goals set for restructuring in terms of new subprojects approved: from an agreed minimum of three, the project has initiated seven subprojects. All subprojects have received Bank NOL and have initiated procurement. The GEO and IP ratings of the last ISR are satisfactory. The project objectives continue to be achievable. 3. The auditor's opinion on the latest project audit report (for the year ending on December 31, 2011) was unqualified (clean). The Bank reviewed the audit report and found it acceptable. 4. Disbursements to date (as of December 12, 2012) are 55% but MOHURD is currently submitting disbursement requests to the Bank through MOF for 7% of the Grant amount. Therefore, disbursement is estimated to be at 62% by the end of December 2012 (depending on MOF’s turnaround time for processing ongoing MOHURD’s disbursement requests). 5. The proposed extension is necessary to procure and execute at least 28% of the Grant amount during the next 10 months. Payments for the ongoing subprojects will be made in three tranches: 20% when the goods are delivered, 60% when the goods are installed, 20% after an M&E summary report is produced. Goods that are being procured now cannot be installed during the current heating season (November 2012 to April 2013) as this would require shutting down heating systems. They will be installed, starting in April 2013. The total commitments for subprojects and technical assistance under the project represent 90.4% of the total GEF grant. 6. This will be the second extension of the project. 5