Document of
          The World Bank


                                     Report No: 55598-MX




      RESTRUCTURING PAPER

               ON A

 PROPOSED PROJECT RESTRUCTURING
                OF
A SUPPORT TO OPORTUNIDADES PROJECT

           LOAN 7708-MX
            April 9, 2009


              TO THE

      UNITED MEXICAN STATES


            July 8, 2010
               MEXICO SUPPORT TO OPORTUNIDADES PROJECT (P115067)

                                         Loan 7708-MX

                                      Restructuring Paper

1.      Proceeds for Mexico Support to Oportunidades Project Ln. 7708-MX (P115067), will be
reallocated as follow:

       Category of Expenditure                     Allocation                      % of Financing
      Current           Revised              Current        Revised             Current         Revised
(1) Oportunidades                         1,498,500,000 1,498,860,000            100%
Grants

(2) Consultants                               1,500,000         1,140,000        100%
services

(3) Front-end fee                             3,759,398        3,759,398

(4) Premia for                                       -0-              -0- Amount payable
Interest Rate Caps                                                        pursuant to
and Interest rate                                                         Section 2.03 of
Collars (amounts                                                          this Agreement in
due under section                                                         accordance with
2.07 (c) of this                                                          Section 2.07 (b) of
Agreement)                                                                the General
                                                                          Conditions
Total amount                              1,503,759,398    1,503,759,398




2.     The loan was approved on April 9, 2009, signed on April 25, 2009 and declared effective on
September 1st, 2009. Implementation of the Project, including compliance with its loan covenants
is satisfactory. There are no outstanding audit reports. The outcomes and results recorded in the
most recent supervision reports are either consistent with or exceed the expectations set out in
the Project Appraisal Document. As a large program with a demonstrated ability to reach a wide
share of the poor and to have a positive impact on human capital formation, Oportunidades has
been central in the domestic policy response of the Government of Mexico to the global
economic crisis, reflected in both increases in transfer levels and higher coverage. In early 2010,
the Government expanded the number of families in the Program from 5.0 to 5.4 million.
Performance on the main monitoring indicators, including compliance with health and education
conditionalities and transition rates to secondary and upper secondary school are in line with the
targets set out at the time of Project appraisal. The ratings since effectiveness of the Project on
September 1, 2009, have been satisfactory. Supported by technical assistance from the World
Bank and the Inter-American Development Bank, the Program revised its targeting instrument,
thereby reducing both inclusion and exclusion errors.


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3.      As requested by the Borrower, the proposed reallocation is necessary in order to complete
disbursements by the closing date of December 31, 2010. As of On April 30, 2010 the full
amount for US$1,498, 500 under Category 1, Oportunidades Grants had been fully disbursed.
Although some important studies are being implemented currently or planned to be carried out
during the second half of the year, some delays have been experienced in this technical
assistance component of the Project. In addition, budgetary restrictions delayed implementation
of a pilot activity on early child development and its planned evaluation. As of June 2010, only
US$273,578.3 had been disbursed under Category 2, Consulting Services, leaving a remaining
balance of US$1,226,421.70. According to the latest update to the Procurement Plan only
US$866,421.69 is required to finance the remaining estimated commitments for work that can be
completed before the end of 2010. Therefore, a project restructuring is proposed to reallocate
US$360,000 from Category 2, Consulting Services, to Category 1, Oportunidades Grants. The
reallocation will not affect the Project's satisfactory performance on the achievement of the
Project's Development Objectives.




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