The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
REPORT NO.: RES41075
RESTRUCTURING PAPER
ON A
PROPOSED PROJECT RESTRUCTURING
OF
ECUADOR RISK MITIGATION AND EMERGENCY RECOVERY PROJECT
APPROVED ON MARCH 15, 2016
TO
MINISTRY OF ECONOMY AND FINANCE
URBAN, RESILIENCE AND LAND
LATIN AMERICA AND CARIBBEAN
Regional Vice President: J. Humberto Lopez (Acting)
Country Director: Marianne Fay
Regional Director: Anna Wellenstein
Practice Manager/Manager: Ming Zhang
Task Team Leader(s): Diana Marcela Rubiano Vargas, Alexander
Agosti
The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
ABBREVIATIONS AND ACRONYMS
CD Country Director
ERL Emergency Recovery Project (ERL)
GoE Government of Ecuador
MAG Ministerio de Agricultura y Ganadería (Ministry of Agriculture and Livestock)
MEF Ministerio de Economía y Finanzas (Ministry of Economy and Finance)
MINEDUC Ministerio de Educación (Ministry of Education)
PDO Project Development Objective
MIES Ministerio de Inclusión Económica y Social (Ministry of Economic and Social Inclusion)
VAT Value Added Tax
MSP Ministerio de Salud Pública (Ministry of Public Health)
UCP Unidad Coordinadora del Proyecto (Project Coordination Unit)
The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
BASIC DATA
Product Information
Project ID Financing Instrument
P157324 Investment Project Financing
Original EA Category Current EA Category
Partial Assessment (B) Partial Assessment (B)
Approval Date Current Closing Date
15-Mar-2016 07-Sep-2020
Organizations
Borrower Responsible Agency
Ministry of Economy and Finance Ministry of Finance
Project Development Objective (PDO)
Original PDO
The Project Development Objective is to reduce the potential effects of the El Niño phenomenon and the
Cotopaxi volcano, and support the recovery of basic and production services in affected areas in case of an Eligible
Disaster, in selected sectors.
Current PDO
To support the recovery of basic and productive services in selected sectors in affected areas in case of an Eligible
Disaster and strengthen resilience to natural disasters and macroeconomic shocks
OPS_TABLE_PDO_CURRENTPDO
Summary Status of Financing
Net
Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed
IBRD-85910 15-Mar-2016 22-Apr-2016 19-Jul-2016 07-Sep-2020 59.59 6.57 53.01
The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
Policy Waiver(s)
Does this restructuring trigger the need for any policy waiver(s)?
No
I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING
1. The Ecuador Risk Mitigation and Emergency Recovery Project (ERL, Project) was approved by the Bank on March
15, 2016 and declared effective on July 19, 2016. Its revised Project Development Objective (PDO) is to “support
the recovery of basic and productive services in selected sectors in affected areas in case of an Eligible Disaster and
strengthen resilience to natural disasters and macroeconomic shocks”. The first restructuring was approved on April
23, 2019 and covered the following changes: (i) PDO change to remove the reference to the mitigation of risks from
the El Niño phenomenon and Cotopaxi volcano and add the reference to strengthening resilience to natural
disasters and macroeconomic shocks; (ii) revision in description of components and costs; (iii) reallocation of funds
between components and disbursement categories to reflect a cancellation of US$58.2 million, as requested by the
Government of Ecuador (GoE) on September 27, 2018; (iv) change in the Results Framework; (v) update of
disbursement estimates, and (vi) update of implementation arrangements to include the Ministry of Education
(MINEDUC) and the Works Contracting Service (SECOB), and exclude the Ministry of Agriculture and Livestock
(MAG). The second restructuring was approved on September 9, 2019 and covered the following changes: (i)
cancellation of further US$32.2 million requested by the GoE due to delays in Project implementation, the
approaching Project closing date, and the desire to reprogram funds to address emerging national priorities; (ii)
changes in investments and decrease of funding for Component 2; (iii) changes in Disbursement Categories; (iv)
update of Disbursement Estimates, adjusted based on the agreed revised definition of the Project scope. The third
restructuring was approved on March 12, 2020 and included the amendment of the Project’s Loan Agreement to
finance value-added tax (VAT) fees under Components 2 and 3, as requested by the GoE, and the associated changes
in the scope of the Project.
2. The Project´s disbursement rate as of March 27, 2020 is 11 percent (US$6.57 million). The progress towards
achievement of the PDO and the Overall Implementation Progress (IP) are both rated Moderately Unsatisfactory
(MU) due to the slow implementation.
3. The status of the Project’s components is as follows:
Component 1: Disaster Preparedness and Risk Mitigation (US$3.78 million): This component aimed to mitigate
the potential impacts of the hazards expected from El Niño. To date, the Project financed and completed
successfully the construction of six flood mitigation works totaling US$3.78 million, which protected a total of
173,000 hectares of crops and 203,600 people. In addition, flood control works mitigated the effects of heavy rains
during the first half of 2016. No further activities are expected to be financed under Component 1.
The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
Component 2: Post-Disaster Recovery and Reconstruction (US$52.53 million): This component aims to provide
recovery and reconstruction support to selected sectors, should an Eligible Disaster1 occur. Two disasters hit
Ecuador after the Project was approved and based on which the component was activated: (i) a M7.8 earthquake
that struck the country’s northwest coast; and (ii) a series of flooding events and landslides induced by the El Niño
phenomenon. Following a series of damage assessments2, the GoE decided to use the ERL mainly to finance the
recovery and reconstruction efforts. In April 2019, the following were confirmed as the Bank-funded activities for
recovery and reconstruction prior to the second Project restructuring: (i) acquisition of 40 ambulances and purchase
of various types of medical supplies and equipment by the Ministry of Public Health (MSP), purchase of various
types of medical supplies and equipment -including a mobile hospital tent; (ii) rehabilitation of a provincial road
between Abdón Calderón-El Quingue and reconstruction of a fishing and cabotage terminal of the Port of Manta by
the Ministry of Transport and Public Works (MTOP); and (iii) construction of a school called Plan Masa by the
Ministry of Education (MINEDUC) and the Works Contracting Service (SECOB). The construction of the school and
the rehabilitation of the road and were canceled through formal letters dated on October 14, 2019 and January 23,
2020, respectively. During the last mission in February 2020, the Bank team was informed that the signing of the
contract for the reconstruction of the docking terminal at the Port of Manta would take place in March 2020, after
which the works would be initiated, while the procurement process of the ambulances was still ongoing. To date,
US$1.97 million have been disbursed from Component 2 for the reimbursement of medical supplies to strengthen
86 health units in response to health needs after the disasters.
Component 3: Technical Assistance (TA) to MEF and Project Implementation, Monitoring and Evaluation (US$3.27
million): This component supports TA activities to MEF and operational support to the PCU and the co-executing
agencies to implement, monitor and evaluate the Project. These include: (i) hiring a Project Coordinator and
specialists in financial management, procurement, and monitoring and evaluation for the PCU; (ii) hiring temporary
technical staff as needed during Project implementation (e.g. environmental and social specialists); (iii) carrying out
Project audits; (iv) financing goods and equipment as needed for efficient Project implementation, and (v) carrying
out TA to build the GoE’s capacity to advance macroeconomic and structural reforms that are critical to increasing
Ecuador’s macroeconomic resilience. Since early stages of Project implementation, the PCU has remained fully
staffed and Component 3 has disbursed US$0.59 million.
4. The Project’s safeguards performance has been rated Moderately Satisfactory to date. The Project is categorized
as B under the Bank Operational Policy 4.01 on Environmental Assessment. It has an Environmental and Social
Screening Assessment Framework (ESSAF) that the MEF prepared with Bank support and was originally disclosed
on April 22, 2016. The ESSAF includes an Indigenous Peoples’ Planning Framework (IPPF), a Resettlement
Framework (RF) and guidelines for communication with stakeholders, including for Grievance Redress Mechanisms
(GRM). The Project has no on-going or pending safeguards-related work.
1 As defined in the Loan Agreement 8591-EC: “Eligible disaster means any natural disaster, national or localized in scope, that poses
or is likely to imminently pose a threat to life, assets, or productive capacity of the Borrower, which can be originated by: (a) geological
hazards, an extreme natural event originated in the crust of the earth such as earthquakes, volcanic eruptions, tsunamis (tidal waves),
and landslides (as a secondary event after an earthquake); (b) hydro-meteorological hazards, events produced by the climate
variability as heavy rains, flooding, and landslides; and (iii) intensified El Niño phenomenon causing heavy rains, floods, storms surge
or landslides.
2 Damage information on the earthquake can be found in: SENPLADES. 2016. “Reconstruction Cost Assessment” Retrieved on May
2018. http://www.planificacion.gob.ec/wp-content/uploads/downloads/2017/04/Evaluacion-de-los-Costos-de-Reconstruccion-
Libro-Completo.pdf. Damage information on the 2015-16 El Niño can be found in: CIFEN 2016. “Informe de evaluación de impactos
del Fenómeno del Nino 2015-2016 – Contexto Regional” http://www.prasdes-ciifen.org/index.php/publicaciones/doc_download/46-
estudio-tecnico-sobre-impactos-del-enso-2015-2016 (Retrieved on May 2018).
The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
5. Procurement of major works is underway but remains in the initial stages. Despite the efforts of the PCU and the
Bank to provide support to the co-executing agencies, the procurement of most works/shopping is still in an early
stage although the process for the rehabilitation of the Manta Port and the acquisition of 40 ambulances has seen
some progress in the past months/early in 2020. The Project has only managed to complete a few processes for
small amounts and is yet to sign any contracts for works.
6. Financial Management has been rated Moderately Satisfactory. The Project has faced weaknesses on planning
Project activities (POA and budget), high fiduciary staff turnover in co-implementing entities (which demands close
follow-up by the UCP team) and the audit contracting process for CY2019 is ongoing. The audit report for CY2018
arrived in a timely manner and was considered acceptable to the Bank. The report issued an unqualified audit
opinion. The auditor recommended to improve frequency of inventories of fixed assets at the Ministry of Public
Health (MSP) and the recommendation is being implemented. Currently, there are no overdue audits. Other aspects
related to funds flow, internal controls and financial reporting are working well.
7. Rationale for Restructuring. This Restructuring Paper seeks Country Director (CD) approval to Project support for
response and recovery during the health emergency related to COVID-19, as requested by the GoE in two letters:
one dated March 23, 2020 and the other one dated March 25, 2020. The inclusion of new eligible expenditures and
the extension of the closing date from September 7, 2020 to September 7, 2021 will allow for the full use of the
total remaining loan amount of US$59,585,551.59, no additional financing is anticipated.
8. An outbreak of COVID-19 caused by the 2019 novel coronavirus (SARS-CoV-2) has been spreading rapidly across
the world since December 2019, following the diagnosis of the initial cases in Wuhan, Hubei Province, China.
Since the beginning of March 2020, the number of cases outside China has increased rapidly and the number of
affected countries and people continues to grow. On March 11, 2020, the World Health Organization (WHO)
declared COVID-19 a global pandemic. As of March 27, WHO data showed that the outbreak has resulted in an
estimated 595,800 confirmed cases and 27,324 deaths in 176 countries/regions3. Current pandemic trends indicate
that some population sub-groups are at higher risk of increased COVID-19 related morbidity and mortality, including
older adults, and people who have serious chronic medical conditions like heart disease, diabetes, and lung disease.
The actual prevalence of COVID-19 infection remains unknown in most countries. Therefore, it poses an
unparalleled challenge with respect to global containment and mitigation. The virus and response interventions will
behave differently in higher-resource than in lower-resource countries, depending on crowding, capacity for
diagnosis and treatment, and ability to reduce spread.
9. The GoE declared a national emergency due to the rapid spread of COVID-19 on March 16, 2020. On March 11,
MSP declared a health emergency (Ministerial Resolution N. 00126-2020), and on March 16, President Moreno
signed Presidential Decree N. 1017 declaring a national emergency to contain the spread of the disease. On March
20, President Moreno announced two payments of a US$60 emergency cash transfer (one in April and other in May)
for 400,027 vulnerable families affected by the COVID-19 quarantine, which will be administered by the Ministry of
Economic and Social Inclusion (MIES). As of March 28, 2020, there were 1,823 confirmed cases, 2,503 suspected
cases and 48 deaths related to of COVID-19 in Ecuador. Around 74 percent of all cases were confirmed in the state
of Guayas.4
3https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html#/bda7594740fd40299423467b48e9ecf6
4https://www.salud.gob.ec/el-ministerio-de-salud-publica-del-ecuador-msp-informa-situacion-coronavirus/. Daily updates on the
COVID-19 situation globally is available for example at the following website of the Johns Hopkins University:
The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
10. The World Bank Group (WBG) is taking urgent action to support countries in responding to the global health crisis
generated by COVID-19. WBG senior management has supported the establishment of a US$14 billion WBG Fast
Track COVID-19 Facility (FTCF) to assist International Bank for Reconstruction and Development (IBRD) and
International Bank for Reconstruction and Development (IDA) eligible countries in their efforts to prevent, detect
and respond to the threat posed by COVID-19 and strengthen national systems for public health preparedness. The
WBG is committed to supporting its clients through this platform and the existing lending operations.
11. The COVID-19 response must support the imperative of healthy populations. Available evidence now shows that
COVID-19 is causing mild and self-limiting disease in most people who are infected, with severe disease among
individuals from higher risk groups. Governments have an obligation to protect their population’s wellbeing by
adopting population-based disease prevention measures as fiscal and regulatory measures, in addition to providing
medical care to those who fall ill. This can result in major gains for public health and countries’ social and economic
development. A reduced ratio of healthy to sick workers or older dependents would increase the odds of future
economic slowdowns and pose a significant social challenge to countries. Keeping people healthy is vital for the
future development of countries in an aging world where skills shortages are a growing challenge.
12. Negative impact of COVID-19 on poverty reduction and vulnerable groups. The COVID-19 outbreak can further set
back the fight against poverty. The potential tightening of credit conditions, weaker growth and the diversion of
expenditures to fight the outbreak are likely to cut into government revenues and governments’ ability to invest in
infrastructure, education and health, and meet gender goals. The poor will be hit particularly hard. In countries
without universal health coverage, the financial impact of COVID-19 on the population, particularly low-income
groups, could be significant or even catastrophic due to increased out-of-pocket payments needed to access medical
care. Current estimates suggest that a one percent decline in developing country growth rates traps an additional
20 million people into poverty. Regarding food security, the impacts of COVID-19 will likely be felt through multiple
impacts (the income effects of economic slowdown, the impact on incomes of farmers and rural laborers, the latter
through supply chain/trade disruptions) and will particularly affect vulnerable populations including children,
women, the elderly, and the poor.
13. In an effort to provide immediate relief to those families that will be most affected by the COVID-19, the GoE will
implement cash transfers. A total estimated of 854,000 households live in poverty and most of these families do
not have formal employment and neither receive a salary, thus they need to live with the income they make from
their daily activities.
14. On March 20, the President announced the first economic measures to attend households vulnerable to COVID-
19 pandemic that include temporary two-time emergency bonus of US$60. To finance this monetary transfer, MEF
has conducted an analysis aimed at optimizing resources and prioritizing assistance to those most affected by the
crisis. Some of the households that will receive a total of US$120 cash transfers in April and May 2020 have been
identified by the Social Registry (RS). The 400,027 households that will receive the Family Protection Bonus for the
Emergency will be targeted to informal sector workers that depend on daily work to support their households
(street vendors, construction workers, farm workers, among others).
15. The eligibility criteria to receive the cash transfers are the following5: (i) Household registered in the Social Registry
in a situation of economic vulnerability, below the revised moderate poverty line with an index value of 38/100; (ii)
https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html#/bda7594740fd40299423467b48e9ecf6
The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
Household does not receive cash transfer(s) from other social programs, such as Human Development Bonus; and
(iii) Household generates less than US$400 of monthly income (a reference to filter households if in the official social
security database, a household appears with contributions above a salary level of US$ 400).
16. In letters on March 23 and 25, 2020, MEF formally requested the Bank to restructure the Project to redirect its
efforts to respond to the COVID-19-related crisis. The MEF had identified the possibility of (i) using US$50 million
from the ERL to finance an emergency cash transfer under Component 2 for the first group of 400,027 households,
and (ii) leaving some funds in Component 3 to cover costs related to the TA provided for MEF and Project
management by the PCU. To accomplish this, activities considered under Component 2 since the last restructuring
request, will be cancelled in favor of urgent assistance in response to the COVID-19 crisis. The cash transfers for the
second group (of about 454,000 households) will not be financed with the ERL.
17. The proposed restructuring will allocate Project funds for a response activity to the national health emergency,
which is closely aligned with the Project’s PDO. The GoE has requested the reallocation of US$50 million to finance
critical means so that most vulnerable groups can better cope during the national health emergency. The current
health emergency in Ecuador qualifies as an “Eligible Disaster” under the Project’s PDO, in accordance with the
definition provided in the Loan Agreement. This interpretation has been endorsed by the World Bank’s Legal Vice
Presidency. With the proposed restructuring, the Project will support the GoE through contingency bonus to
minimize the impact of the social, health and economic crisis provoked by the COVID-19 among the most vulnerable
groups in Ecuador. This will complement the ongoing efforts of a Bank-financed Social Safety Net (SSN) Project
(P167416) approved in April 2019, which is showing solid implementation and performance, and has provided
critical support to the implementation of the Bono de Desarrollo Humano, Pension del Adulto Mayor and programs
for the elderly in Ecuador.6 It will also complement the Health Emergency Response Project (P173773) financed
through the first round of COVID-19 (FTCF). The reallocation of this funds implies the cancellation of the current
procurement processes related to the construction and supervision of the reconstruction of a fishing and cabotage
terminal of the Port of Manta and the acquisition of 40 ambulances.
II. DESCRIPTION OF PROPOSED CHANGES
1. Summary of changes. The proposed changes are to: (i) revise the Project description and the necessary social risk
management arrangements and instruments to allow using the ERL to respond to COVID-19 (Component 2, post-
disaster recovery and reconstruction) and cancel other investments planned under Component 2, except the
purchase of a mobile hospital tent ; (ii) reallocate funds between components and Disbursement Categories; (iii)
update the institutional and implementation arrangements to include the Ministry of Economic and Social
Inclusion (MIES); (iv) extend the closing date by a year to September 7, 2021; and (v) update the Results
Framework.
2. A Financial Management (FM) assessment was conducted to the MIES with the objective of identifying the
main risks and associated mitigating measures. The FM Risk of the restructured Project is assessed as Moderate.
MIES has considerable experience in the implementation of cash transfer processes, including under the on-going
Bank-financed SSN Project. Further, it has an adequate normative framework and robust systems and controls,
5As March 27, 2020
6Programs for the elderly include: Pensión Para Adultos Mayores, a monthly transfer for seniors over 65 years old who lack access to
the social security system; and Pensión Para Adultos Mayores en Extrema Pobreza - Mis Mejores Años (PMMA), which provides non-
conditional income support targeted to low-income households with seniors over 65 years old.
The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
including the daily reconciliations of transfers to eligible beneficiaries. MIES will implement the Project using
country systems for budgeting, transfer of payments to beneficiaries and financial reporting. However, in order
to maintain a consistency with the original Project design, the MEF’s UCP in coordination with MIES will keep the
overall responsibility for requesting Project disbursements to the Bank, and preparing the consolidated financial
reports and coordinating the Project audit. The specific FM arrangements designed for Component 2 are described
in Annex 2 .
3. Operations Manual (OM) will be revised to include the new cash transfer activity, covering the: (i) eligibility
criteria for the selection of beneficiaries; (ii) amount and temporality of the cash transfers; (iii) improvements
needed in the existing payment system to mitigate potential risks of further spread of COVID-19; (iv) technical
verification procedure of the payments provided to eligible population; (v) adoption and adaptation of the social
management instruments of the SSN Project, which will be disclosed for the purposes of the present Project
restructuring; (vi) institutional arrangements related to inclusion of MIES as a new co-implementing entity; and
(viii) additional processes related to the funds flow, disbursement and auditing arrangements for Component 2.
The Project’s overall fiduciary arrangements will remain the same.
4. Change in Components and Cost. With the shift of priorities to respond to COVID-19, the GoE has chosen to focus
Component 2 on the emergency cash transfer instrument to minimize the impact of the social, health and
economic crisis provoked by the COVID-19 among the most vulnerable groups in Ecuador. The proposed changes
in the Project components and their costs are presented in Table 1.
TABLE 1. PROPOSED CHANGES IN COMPONENT COSTS
Proposed Cost
Component Current Cost (US$) Action
(US$)
Component 1. Disaster Preparedness and Risk Mitigation 3,776,367.31 3,776,367.31
Component 2. Post-Disaster Recovery and Reconstruction 50,034,314.39 52,534,576.96 Revised
Component 3. Technical Assistance to MEF and Project
5,774,869.89 3,274,607.32 Revised
Monitoring and Evaluation
Total 59,585,551.59 59,585,551.59
TABLE 2. PROPOSED GOVERNMENT COUNTERPART FUNDING
Component Bank Local Contribution
The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
Component 1. Disaster Preparedness and Risk
Mitigation
3,776,367.31 481,093.27
Disaster Preparedness and Risk Mitigation Emergency
Measures in the Water and Flood Protection Sector
under EPA
Component 2. Post-Disaster Recovery and
Reconstruction 52,534,576.96 260,093.37
(a) Emergency Expenditures for Emergency Recovery,
50,000,000.00 -
including Cash Transfers
(c) Recovery and reconstruction in the health sector
2,534,576.96 260,093.37
under MSP
Component 3. Technical Assistance to MEF and Project
Implementation, Monitoring and Evaluation
Hiring project coordinator and specialists in financial
3,274,607.32 183,683.60
management, procurement, monitoring and
evaluation and other technical temporary staff. The
carrying out of project audits. The financing of the
necessary goods and equipment
Subtotal 59,585,551.59 924,870.24
TOTAL 59,585,551.59 924,870.24
5. Reallocation between Disbursement Categories. The proposed reallocation reflects the changes to Component 2
(associated with Category 2), (i) increasing the amount from US$50.03 million to US$52.53 million to cover the
projected first group cash transfers under Component 2, and (ii) decreasing the amount from US$5.77 million to
US$3.27 million to Component 3 (associated with Category 3).
TABLE 3. PROPOSED CHANGE BY CATEGORY
Category Amount of the Loan Allocated
(expressed in USD)
(1) Goods, works, non-consulting services, consultants’ services and
3,776,367.31
Training for Part 1 of the Project
The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
Category Amount of the Loan Allocated
(expressed in USD)
(2) Emergency Expenditures including Cash Transfers, for Part 2 of the
52,534,576.96
Project
(3) Goods, non-consulting services, Training, and consultants’ services
3,274,607.32
(including audits) for Part 3 of the Project
TOTAL AMOUNT 59,585,551.59
6. Update of Disbursement Estimates. The proposed restructuring will adjust the disbursement estimates based on
the agreed Project changes.
7. Integrated Safeguards Data Sheet (ISDS). The proposed restructuring does not require triggering of any new
safeguard policy. In fact, only OP 4.01 and OP 4.10 will apply to the new cash transfer activities. The other policies
remain triggered as they apply to the previously planned or executed activities. The cash transfers imply lower
safeguards risks, and fewer required measures than the previously planned civil works. The new activities will
have no environmental or resettlement-related risks or impacts. The ISDS was updated to revise (i) the description
of the components and co-executing agencies; (ii) update the Project’s environmental and social risks and impacts;
(iii) present the related safeguards implications, including description of the corresponding updates necessary to
the social management measures and instruments. The cash transfers under Component 2 under the current
restructuring will apply to eligible beneficiaries across the country, including Indigenous Peoples and other ethnic
minorities. As MIES is already implementing the SSN Project, it has prepared and published social safeguards
instruments that comply with the World Bank Environmental and Social Framework (ESF). The cash transfers
under the restructured ERL will rely on the SSN Project’s social management instruments: Social Assessment (SA),
IPPF and Stakeholder Engagement Plan (SEP), disclosed in-country and at the Bank external website on February
27, 2019, to ensure compliance with the applicable safeguards under the Bank Operational Policies. These
instruments will be immediately adopted as part of the restructured ERL OM. Latest by two weeks after the
restructuring effectiveness, the instruments will be updated as pertinent in terms of the COVID-19 cash transfers
and disclosed as the restructured ERL Project’s final safeguards instruments. The updates will address any needed
improvements in culturally appropiate dissemination of information (use of clear messages and native languages
when needed, and the channels to share information, etc.), as well as how to access and use the GRM to provide,
receive and handle complaints relating to exclusion and inclusion errors during beneficiary targeting, and the
overall delivery of Project benefits.
8. The updated draft ISDS was cleared by the Regional Safeguards Advisor (RSA) on March 29, 2020.
9. Change in Results Framework. Following the changes in the Project scope, some indicators will be adjusted
(added, deleted or modified), and the target values will be updated accordingly. PDO indicators will be adjusted
to reflect the Project activities associated with the COVID-19 health emergency. Intermediate indicators will be
revised as well to reflect the activities related to the health, social protection and macroeconomic TA subprojects.
Annex 1 presents the table with the changes proposed to the Results Framework. If the agreed action plan and
timeline are followed, the Project will likely achieve the PDO and intermediate outcome indicators by the
extended Project closing date.
The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
III. SUMMARY OF CHANGES
Changed Not Changed
Results Framework ✔
Components and Cost ✔
Loan Closing Date(s) ✔
Reallocation between Disbursement Categories ✔
Disbursement Estimates ✔
Institutional Arrangements ✔
Financial Management ✔
Implementation Schedule ✔
Economic and Financial Analysis ✔
Technical Analysis ✔
Social Analysis ✔
Implementing Agency ✔
DDO Status ✔
Project's Development Objectives ✔
DLIs ✔
Cancellations Proposed ✔
Disbursements Arrangements ✔
Overall Risk Rating ✔
Safeguard Policies Triggered ✔
EA category ✔
Legal Covenants ✔
Procurement ✔
Other Change(s) ✔
Environmental Analysis ✔
The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
IV. DETAILED CHANGE(S)
OPS_DETAILEDCHANGES_COMPONENTS_TABLE
COMPONENTS
Current
Current Proposed Proposed
Cost Action
Component Name Component Name Cost (US$M)
(US$M)
Component 1: Disaster
Component 1: Disaster
4.23 No Change Preparedness and Risk 4.23
Preparedness and Risk Mitigation
Mitigation
Component 2: Post-Disaster Component 2: Post-Disaster
56.04 Revised 52.80
Recovery and Reconstruction Recovery and Reconstruction
Component 3: Technical Component 3: Technical
Assistance to MEF and Project Assistance to MEF and Project
6.47 Revised 3.46
Implementation, Monitoring and Implementation, Monitoring
Evaluation and Evaluation
TOTAL 66.74 60.49
OPS_DETAILEDCHANGES_LOANCLOSING_TABLE
LOAN CLOSING DATE(S)
Original Revised Proposed Proposed Deadline
Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal
Applications
IBRD-85910 Effective 07-Sep-2020 07-Sep-2021 07-Jan-2022
OPS_DETAILEDCHANGES_REALLOCATION _TABLE
REALLOCATION BETWEEN DISBURSEMENT CATEGORIES
Financing %
Current Allocation Actuals + Committed Proposed Allocation
(Type Total)
Current Proposed
IBRD-85910-001 | Currency: USD
iLap Category Sequence No: 1 Current Expenditure Category: GO, CW, NCS, CS and TR - Part 1
3,776,367.31 3,776,367.31 3,776,367.31 100.00 100.00
iLap Category Sequence No: 2 Current Expenditure Category: Emergency Expenditures - Part 2
The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
50,034,314.39 1,974,576.96 52,534,576.96 100.00 100.00
iLap Category Sequence No: 3 Current Expenditure Category: GO,NCS,TR & CS (inc audit) - Part 3
5,774,869.89 594,929.05 3,274,607.32 100.00 100.00
Total 59,585,551.59 6,345,873.32 59,585,551.59
OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE
DISBURSEMENT ESTIMATES
Change in Disbursement Estimates
Yes
Year Current Proposed
2016 0.00 29,000.00
2017 994,465.00 5,511,231.00
2018 5,052,141.00 627,474.00
2019 455,800.00 405,700.00
2020 28,130,000.00 50,000,000.00
2021 24,953,145.59 3,012,145.94
.
The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
.
Results framework
COUNTRY: Ecuador
Ecuador Risk Mitigation and Emergency Recovery Project
Project Development Objectives(s)
To support the recovery of basic and productive services in selected sectors in affected areas in case of an Eligible Disaster and strengthen resilience to
natural disasters and macroeconomic shocks
Project Development Objective Indicators by Objectives/ Outcomes
RESULT_FRAME_TBL_PDO
Indicator Name DLI Baseline End Target
Support the recovery in affected areas and in selected sectors in case of an Eligible Disaster
Direct project beneficiaries (Number) 0.00 2,442,215.00
Action: This indicator has been Revised
Female beneficiaries (Percentage) 0.00 50.00
Number of people benefiting from new equipment in the health
0.00 1,838,615.00
sector after an Eligible Disaster occurs (Number)
Action: This indicator has been Revised
Number of tons of fish discharged through the Fishing and
43,254.00 70,000.00
Cabotage Terminal (Metric tons/year)
Action: This indicator has been Marked for Deletion
Number of households receiving emergency cash transfers
0.00 400,027.00
through the GoE payment delivery mechanisms (Number)
Action: This indicator is New
Strengthen resilience to natural disasters and macroeconomic shocks
The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
RESULT_FRAME_TBL_PDO
Indicator Name DLI Baseline End Target
Number of people protected through flood mitigation works
0.00 203,600.00
(Number)
Drafting of a program of fiscal and structural reforms to improve
No Program Program designed
macroeconomic resilience (Text)
PDO Table SPACE
Intermediate Results Indicators by Components
RESULT_FRAME_TBL_IO
Indicator Name DLI Baseline End Target
Component 1: Disaster Preparedness and Risk Mitigation
Number of hectares of crops protected against flooding
0.00 173,500.00
(Number)
Number of preventive works (Number) 0.00 6.00
Component 2: Post-Disaster Recovery and Reconstruction
Roads rehabilitated, Rural (Kilometers) 0.00 34.00
Action: This indicator has been Marked for Deletion
Health facilities equipped (number) (Number) 0.00 289.00
Action: This indicator has been Revised
Number of students with improved school infrastructure
0.00 1,806.00
(Number)
Action: This indicator has been Marked for Deletion
Fishing vessel dock reconstructed (Meter(m)) 0.00 900.00
Action: This indicator has been Marked for Deletion
The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
RESULT_FRAME_TBL_IO
Indicator Name DLI Baseline End Target
Number of schools constructed (Number) 0.00 1.00
Action: This indicator has been Marked for Deletion
Component 3: Technical Assistance to MEF and Project Monitoring and Evaluation
Grievances registered related to delivery of project benefits
0.00 80.00
addressed (%) (Percentage)
Grievances related to delivery of project benefits that are
0.00 10.00
addressed-(number) (Number)
Preparation of a strategy to strengthen public financial
management: including improvements to budget preparation, No strategy Final strategy document completed
execution and control. (Text)
IO Table SPACE
The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
Annex 1 – Detail of Changes to the Results Framework and Theory of Change
New
Comments Baseline
Original Proposed Indicator End Target
Objective (Justification of (Final
Indicators Change (if New or (Final value)
Proposed Change) value)
Revised)
PDO Indicators
Support the 1. Direct Project
Targets adjusted to reflect
recovery in beneficiaries
Revised the new activities to be 0.00 2,442,215
selected sectors (Number) -
financed.
and in affected (Core)
areas in case of Female
an Eligible beneficiaries
Targets adjusted to reflect
Disaster (Percentage -
Revised the new activities to be 0.00 51.00
Sub-Type:
financed.
Supplemental) -
(Core)
3. Number of
people
benefiting from
new equipment Name adjusted to reflect
in the health Revised new estimates for the 0.00 1,838,615
sector, after an number of beneficiaries.
Eligible Disaster
occurs.
(Number)
4. Number of
households
receiving
emergency cash
transfers
through the GoE New New activity 400,027
payment
delivery
mechanisms
already in place
and improved
4. Number of
tons of fish
discharged
through the
Deleted Activity canceled
Fishing and
Cabotage
Terminal (metric
tons/year)
The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
New
Comments Baseline
Original Proposed Indicator End Target
Objective (Justification of (Final
Indicators Change (if New or (Final value)
Proposed Change) value)
Revised)
Strengthen 2. Number of
resilience to people protected
natural disasters through flood Continued 203,600.00
and mitigation
macroeconomic works. (Number)
shocks 5. Drafting of a
program of fiscal
and structural
Program
reforms to Continued
designed
improve
macroeconomic
resilience
Intermediate Results Indicators
1. Number of
hectares of crops
protected against Continued 0.00 173,500.00
flooding
(Number)
2. Number of
preventive Continued 0.00 6.00
works. (Number)
Component 2: 5. Roads
Post-Disaster rehabilitated,
Recovery and Rural Deleted Activity canceled 0.00
Reconstruction (Kilometers) -
(Core)
Indicator adjusted to reflect
the health facilities
equipped for disaster
6. Health
recovery. End target
facilities
Revised modified to reflect the 0.00 289
equipped
change in activities
(Number)
financed under Component
2.
Fishing vessel
dock
Deleted Activity canceled 0.00
reconstructed.
(Meters)
Number of
students with Deleted Activity canceled 0.00
improved school
The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
New
Comments Baseline
Original Proposed Indicator End Target
Objective (Justification of (Final
Indicators Change (if New or (Final value)
Proposed Change) value)
Revised)
infrastructure
(Number)
Number of
schools
Deleted Activity canceled 0.00
constructed
(Number)
Component 3: 10. Grievances
Project registered related
Implementation, to delivery of
Monitoring and project benefits Continued 0.00 80.00
Evaluation addressed (%)
(Percentage) -
(Core)
Grievances
related to
delivery of
Project benefits
that are
addressed- Continued 0.00 10.00
(number)
(Number - Sub-
Type:
Supplemental) -
(Core)
Preparation of a
strategy to
strengthen public
financial
management: Final strategy
including Continued No strategy document
improvements to completed
budget
preparation,
execution and
control.
The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
Annex 2 – Financial Mangement (FM)
This annex describes the FM arrangements for the restructuring of the Ecuador Risk Mitigation and Emergency Recovery
Project. The assessment following measures will apply for Component 2, as the arrangements for Components 1 and 3
will keep their original design.
Organization and staffing. From the point of view of FM institutional arrangements under component 2, the main
counterpart within MIES will be the Undersecretary for Non-Contributory Insurance, Contingencies and Operations
(Subsecretaria de Aseguramiento no Contributivo, Contingencias y Operaciones) in coordination with Transfer Directorate
(Dirección de Transferencias), Database Administration Directorate (Dirección de Administración de Bases de Datos) and
Insurance Directorate (Dirección de Aseguramiento no Contributivo), thus it will be important to maintain adequate
coordination during the implementation stage.
Budgeting. The budget allocation for the temporary emergency bonus COVID will be subject to the approval of the
Ministry of Economy and Finance (MEF) through a decree that is expected to be submitted before the signature of loan
agreement. Nevertheless, the most recent Public Financial Management assessments on Ecuador (most notably the PEFA
report 2019) pointed out various deficiencies in the budgeting area, including the need to strengthen the budget
management and control framework, and the associated internal control mechanisms. Such deficiencies may impact this
project (as it is the case of other projects in Ecuador) and reflect in delays in getting the budget approved in time, and the
process of payments, with an overall impact in project implementation. Considering such problems, the Bank and ERL in
coordination with MIES should keep continuous monitoring and follow-up, flagging any potential budget delays to the
corresponding authorities.
Accounting and financial reporting. With regards to the interim financial reports (IFRs), the format of the IFRs will be
adjusted in order to reflect the transactions related to the implementation of the temporary emergency bonus COVID-19.
Moreover, the report will include a section with key information on the program performance from the FM point of view,
including the consolidated amount of transfers made during the period, descriptions of the conciliatory measures taken
and the exceptions found as a result of such exercise. The IFR will continue covering calendar semester and submitted to
the Bank not later than 45 calendar days after the end of each reported period. The IFR content will be amended to reflect
restructuring needs. The revised forms will be reflected in the POM (project operational manual).
Internal Controls. MIES has an important experience implementing cash transfer operations and has established processes
and systems that allows for an orderly implementation of such transfers. The project operational manual will be amended
to reflect financial management arrangements designed for component 2 including funds flow and disbursement
arrangements; the revised content of the IFR and customized report to document expenditures under this component
and revised version of audit TORS.
Flow of funds and disbursements. The temporary emergency bonus COVID-19 will use the disbursement method of
advance to the Designated Account (DA). Under the advance method, the DA has a variable ceiling, consequently
disbursement of loan proceeds will be made on the basis of monthly forecast prepared by MEF’s UGP and MIES and send
for Bank’s approval. Withdrawal from the DA will be done exclusively to reimburse payments of COVID monetary bonus
pre-financed by Concentradores and its financial institutions and cooperatives associated. These reimbursements will be
processed through the Interbank Payment System (SPI). Expenditures will be documented using a customized report
designed for this purpose and additional supporting documentation reconciled on a daily basis by MIES “Reporte de Pagos
a las Transferencias Monetarias” will be annexed to the customized report. Expenditures will be documented through the
The World Bank
Ecuador Risk Mitigation and Emergency Recovery Project (P157324)
disbursement category 2 (which will cover bank fees including VAT7). The customized report will be included in the
Disbursement and Financial Information Letter (DFIL).
External Audit. Audit of annual financial statements of the ERL project will continue to be conducted by an external audit
firm acceptable to the Bank and under terms of reference, which scope will include the review of the temporary
emergency bonus COVID-19 and to confirm the existence of adequate controls and audit tracking in the information
system managed by MIES under the reconciliation process of databases of planned beneficiaries and payees.
7 Value Added Tax