The World Bank Tunisia Governance, Financial Sector and Local Governments Trust Fund (P163624) REPORT NO.: RES41627 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF TUNISIA GOVERNANCE, FINANCIAL SECTOR AND LOCAL GOVERNMENTS TRUST FUND APPROVED ON MAY 28, 2019 TO MINISTRY OF DEVELOPMENT, INVESTMENT AND INTERNATIONAL COOPERATION URBAN, RESILIENCE AND LAND MIDDLE EAST AND NORTH AFRICA Regional Vice President: Ferid Belhaj Country Director: Jesko S. Hentschel Global Director: Sameh Naguib Wahba Tadros Practice Manager/Manager: Jaafar Sadok Friaa Task Team Leader(s): Salim Rouhana The World Bank Tunisia Governance, Financial Sector and Local Governments Trust Fund (P163624) ABBREVIATIONS AND ACRONYMS  CdC: Cour des Comptes (Court of Accounts)  CGSP: Contrôleur Général des Services Publics (Controller General of Public Services)  CPSCL : Caisse des Prêts et de Soutien aux Collectivités Locales (Municipal Development Fund)  MDICI: Ministry of Development, Investment and International Cooperation  MOP: Operational Handbook  MDTF: Multi Donor Trust Fund  TF: Trust Fund The World Bank Tunisia Governance, Financial Sector and Local Governments Trust Fund (P163624) BASIC DATA Product Information Project ID Financing Instrument P163624 Investment Project Financing Original EA Category Current EA Category Not Required (C) Not Required (C) Approval Date Current Closing Date 28-May-2019 30-Jun-2020 Organizations Borrower Responsible Agency MINISTRY OF DEVELOPMENT, INVESTMENT AND Caisse des Prêts et de Soutien aux Collectivités Locales INTERNATIONAL COOPERATION (CPSCL) Financing (in USD Million) FIN_SUMM_PUB_TBL SUMMARY Total Project Cost 0 Total Financing 0 Financing Gap 0 DETAILS -NewFin3 Project Development Objective (PDO) Original PDO The objective of the Project is to strengthen the operational capacity of the Recipient’s relevant central and local authorities responsible for moving forward the decentralization agenda. OPS_TABLE_PDO_CURRENTPDO The World Bank Tunisia Governance, Financial Sector and Local Governments Trust Fund (P163624) Summary Status of Financing Net TF Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-B0363 28-May-2019 08-Jul-2019 08-Jul-2019 30-Jun-2020 2.13 .50 1.63 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING Project Objective 1. The objective of the Project is to strengthen the operational capacity of the Recipient’s relevant central and local authorities responsible for moving forward the decentralization agenda. It will do so by financing the provision of basic equipment supplies, e.g. desks, computers, telephones and fax, heating and air-conditioning to local governments and several central agencies (CPSCL, CDC, CGSC). It is expected that the supplied basic equipment will provide the beneficiaries with the physical ability to perform their function and to provide expected services to citizens. Project Background and Status 2. The project was approved on May 28, 2019 and the grant agreement was signed by the Ministry of Development, Investment and International Cooperation (MDICI) on July 8, 2019. At the time of the signing of the grant agreement, parties were already aware that the project would not be completed by June 30, 2020. However, according to World Bank procedures, the grant agreement had to reflect the parent fund’s closing date, which at the time was June 30, 2020. As the extension of the parent fund was already planned, the rationale was that a request to extend the grant’s closing date would be drafted once the parent fund had been extended. 3. Once the grant agreement was signed, regular meetings were held in order to launch the procurement process for the acquisition of the various pieces of equipment and draft the Operational Handbook (MOP) for the acquisition of equipment. The Handbook was finalized in the first half of 2020. 4. With the current Covid-19 sanitary crisis, the beneficiaries’ equipment needs have to be re-evaluated and included in the procurement plan. This unexpected update of the procurement plan is causing slight delays. 5. The project’s PDO indicators were also set to reflect the June 30, 2020 closing date, with the understanding that the project would not be completed by then. Indeed, the project’s current PDO indicator states that “all items included in The World Bank Tunisia Governance, Financial Sector and Local Governments Trust Fund (P163624) the procurement plan have been acquired before 31-March-2020.” This has not been the case as the procurement plan is in the process of being updated. This PDO indicator will need to be adapted to the new closing date as will the intermediate result indicator which measures the “% of items indicated in the procurement plan for which purchasing contracts have been signed before 31-Aug-2019.” While contracts have yet to be signed, steps are being taken to launch the procurement process now that the MOP has been finalized. 6. The project has no overdue audit reports as of June 2020. Rationale for restructuring 7. As explained above, when the grant agreement was signed in July 2019, parties were already aware that the project would not be completed by June 30, 2020. However, according to World Bank procedures, the grant agreement had a to reflect the parent fund’s closing date, which at the time was June 30, 2020. Now that the grant’s parent fund has been extended to December 31, 2021, the grant can also be extended to the same date. The results framework and the project expected disbursements will also have to be updated to reflect this new proposed closing date. 8. In addition, the current sanitary crisis has required an update of the procurement plan to take into account new needs in equipment for municipalities. Re-evaluating the needs of beneficiaries and updating the procurement plan accordingly will require more time than was originally planned for the execution of the project. 9. This issue was discussed with the recipient during the April 2020 virtual mission, and it was agreed to extend the project closing date to December 31, 2021. II. DESCRIPTION OF PROPOSED CHANGES 10. Summary of changes. The proposed changes are to: (a) extend the project closing date, (b) make the corresponding required changes to the project results framework, and (c) update disbursement estimates. The PDO, safeguard and fiduciary arrangements will remain the same. 11. Extension of the closing date. The new proposed closing date is December 31, 2021. 12. Changes to the Results Framework. These include changing the sole PDO level and Intermediate Results Indicators’ names and end target dates. As described in the tables bellow: Project Development Objective Indicators Indicator Name Baseline End Target “All items included in the procurement plan have been acquired before N Y 30-Sept-2021” Intermediate Results Indicators Indicator Name End Target “% of items indicated in the procurement plan for which purchasing contracts have been 100 signed before 31-March-2021” The World Bank Tunisia Governance, Financial Sector and Local Governments Trust Fund (P163624) 13. Changes to Disbursement Estimates. The proposed adjustment of the project disbursement estimates is as described in the table below. Following OPCS advise the new disbursement estimates will be introduced in the project core data section following the approval of the proposed restructuring. Fiscal Year 2019 2020 2021 Annual (in USD Million) US$0,5m US$1m US$0,63m Cumulative (in USD US$0,5m US$1,5m US$2,13m Million) III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Loan Closing Date(s) ✔ Disbursement Estimates ✔ Implementation Schedule ✔ Implementing Agency ✔ Project's Development Objectives ✔ Components and Cost ✔ Cancellations Proposed ✔ Additional Financing Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Change in Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Other Change(s) ✔ The World Bank Tunisia Governance, Financial Sector and Local Governments Trust Fund (P163624) Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_RESULTS_TABLE RESULTS FRAMEWORK Project Development Objective Indicators PDO_IND_TABLE All items included in the procurement plan have been acquired before 30-Sept-2021 Unit of Measure: Yes/No Indicator Type: Custom Baseline Actual (Current) End Target Action Value No No Yes Revised Date 15-Jan-2019 18-Dec-2019 30-Sep-2021 Intermediate Indicators IO_IND_TABLE % of items indicated in the procurement plan for which purchasing contracts have been signed before 31-March- 2021 Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 100.00 Revised Date 15-Jan-2019 18-Dec-2019 31-Mar-2021 OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline TF Status Closing Closing(s) Closing for Withdrawal Applications TF-B0363 Effective 30-Jun-2020 31-Dec-2021 30-Apr-2022 The World Bank Tunisia Governance, Financial Sector and Local Governments Trust Fund (P163624) OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Expected Disbursements (In US$) Fiscal Year Annual Cumulative 2018 0.00 0.00 2019 0.00 0.00 2020 0.00 0.00 Note to Task Teams: End of system generated content, document is editable from here.