The World Bank AR Flood Risk Management Support Project for the City of Buenos Aires (P145686) REPORT NO.: RES43051 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF AR FLOOD RISK MANAGEMENT SUPPORT PROJECT FOR THE CITY OF BUENOS AIRES APPROVED ON JUNE 22, 2016 TO BUENOS AIRES CITY Water Latin America And Caribbean Regional Vice President: Carlos Felipe Jaramillo Country Director: Jordan Z. Schwartz Regional Director: Anna Wellenstein Practice Manager/Manager: David Michaud Task Team Leader(s): Maria Catalina Ramirez, Nicolaas de Groot The World Bank AR Flood Risk Management Support Project for the City of Buenos Aires (P145686) ABBREVIATIONS AND ACRONYMS CABA Autonomous City of Buenos Aires (Ciudad Autónoma de Buenos Aires) NGO Non-Governmental Organizations PDO Project Development Objective PIU Project Implementation Unit The World Bank AR Flood Risk Management Support Project for the City of Buenos Aires (P145686) BASIC DATA Product Information Project ID Financing Instrument P145686 Investment Project Financing Original EA Category Current EA Category Full Assessment (A) Full Assessment (A) Approval Date Current Closing Date 22-Jun-2016 01-Mar-2022 Organizations Borrower Responsible Agency Buenos Aires City Chief Cabinet of Ministries Project Development Objective (PDO) Original PDO Strengthen the Autonomous City of Buenos Aires to efficiently manage flood risk and improve the drainage systems in the Cildanez Basin, Maldonado Basin, and Vega Basin. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-86280 22-Jun-2016 10-Nov-2016 07-Dec-2016 01-Mar-2022 200.00 157.77 42.23 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank AR Flood Risk Management Support Project for the City of Buenos Aires (P145686) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. PROPOSED RESTRUCTURING 1. The proposed restructuring will introduce modifications to the project, including an extension of the loan closing date by eighteen months, from March 1, 2022, to September 1, 2023, providing time for implementing key activities to achieve the Project Development Objective (PDO). These activities were delayed due to reasons beyond the Project Implementation Unit (PIU) control. This first extension of the closing date will allow the implementation of Subcomponents 2.2 and 2.3, Flood mitigation infrastructure in Maldonado and Vega Basins, which are critical to achieving the PDO. The delays in construction of activities under subcomponents 2.2 and 2.3 (secondary drainage networks) were affected by railway investments by the federal government on the San Martin, Mitre, and Sarmiento lines in the same area. These investments were not known by the city government during their original designs in 2015. As a result, the designs of the secondary drainage networks had to be adapted to reflect changes in topography due to the railroad construction. The extension will allow for the required advance on the construction of the secondary drainage networks in basins, for the city to be finalized, making it possible to achieve the targets on two PDO indicators: project beneficiaries, and land area protected from flooding. Additionally, the restructuring will permit the implementation of pilots for Nature- Based Solutions and will allow reaching more beneficiaries with education and communication activities under Subcomponent 1.3. B. PROJECT DESCRIPTION AND STATUS 2. The project was approved on June 22, 2016 and became effective on December 7, 2016. Progress towards achieving the PDO was recently downgraded to Moderately Unsatisfactory as the construction of the secondary drainage networks cannot be completed by the current closing date, jeopardizing the achievement of PDO. Overall implementation progress has been rated Moderately Satisfactory as the PIU has demonstrated the capacity to carry out the project, while the causes of the delays in the construction of the secondary drainage networks are beyond their control. The PIU has presented to the Bank a realistic action plan to complete key infrastructure by December 2024. To date, 74 percent of the Loan has been disbursed and 96 percent is committed. One contract is needed to complete activities under Subcomponent 2.2. and 2.3, that are in the critical route of project implementation and achievement of PDOs. Said contract was procured and will be signed before mid-November. 3. Compliance with World Bank policies. The project is rated Satisfactory for Safeguards, Financial Management and Procurement. It is in full compliance with environmental and social safeguards and fiduciary policies. Financial management is consistently assessed as Satisfactory and acceptable audits were received on time by the Bank. No audits are currently overdue. 4. PDO. The PDO is to strengthen the Autonomous City of Buenos Aires (Ciudad Autónoma de Buenos Aires, CABA) to efficiently manage flood risk and improve the drainage systems in the Cildañez Basin, Maldonado Basin, and Vega Basin. The World Bank AR Flood Risk Management Support Project for the City of Buenos Aires (P145686) The project consists of three components: (i) support institutional development; (ii) develop flood mitigation infrastructure, and (iii) manage the project. The current status is summarized below. 5. Component 1: Institutional Development for Flood Risk Management. This component has already achieved their original goal and the extension would solidify and further increase the impacts. This will be reflected by adjustments on the end targets in the results framework. The progress can be summarized as follows: (a) The Hydrometeorological Observation, Surveillance, and Alert System (Subcomponent 1.1) is fully operational. In this final phase, the contract (fully financed by CABA’s funds) includes the operation of the system, and the training of CABA’s staff to do it. Once the contract finalizes in mid-2022, the system will be transferred from the PIU to the CABA’s Ministry of Public Space and Urban Hygiene. (b) The CABA has requested to drop Subcomponent 1.2: Flood Risk Financing and Protection Scheme. This activity aimed at developing a flood risk model and strategy for flood risk financing at CABA’s level. After careful analysis, CABA’s authorities decided to drop the activity, given the limited options to develop financial tools to cope with the residual risks of flooding, taking into account these needed to be developed only at CABA’s level. Dropping this activity does not affect achieving the PDO. (c) The impacts of the Subcomponent 1.3. Flood Risk Social Communication and Education have far exceeded expectations, in terms of quality and reach-out of the communication and education products (participatory workshops in Cildañez, teacher training in flood risk and associated training materials, pedagogic materials for children, risk awareness workshops with the community, among others). The proposed extension of the closing date will allow reaching more beneficiaries with education and communication activities than was foreseen. (d) Subcomponent 1.4. Capacity Building for Flood Risk Management has supported the Flood Risk Management Council and organized exchanges with international experts. It also increased the CABA’s capacity to respond to emergencies, including natural disasters and more recently the COVID-19 pandemic. Contingency plans were disseminated to communities through the “centro vivencial” funded by the project. Under this subcomponent, the CABA is developing pilots for nature-based solutions. 6. Component 2. Flood Mitigation Infrastructure. Under this component, the 8.4 kilometers second emissary tunnel of the Vega Stream and the first stage of drainage infrastructure in the Cildañez Basin were completed, and significant progress has been made on the second stage, which is expected to be completed by February 2022. 7. However, the construction of secondary drainage networks in the Maldonado and Vega basins were delayed and cannot be completed by the current closing date. This will affect the achievement of the PDO as the project will not reach the target number of beneficiaries and area protected from flooding. The World Bank AR Flood Risk Management Support Project for the City of Buenos Aires (P145686) 8. The delays in construction of these drainage networks were affected by railway investments by the federal government on the San Martin, Mitre, and Sarmiento lines in the same area. These investments were not known by the city government during their original designs in 2015. As a result, the designs of the secondary drainage networks had to be adapted to reflect changes in topography due to the railroad construction. The procurement process for the secondary drainage networks was launched in May 2021 and the contract was finally signed on November 8, 2021. The works will start by the end of November 2021. 9. Component 3. Project Management. This Component has allowed, among others, for a gender disaggregated data collection and analysis, which has helped to better understand the differentiated roles and impacts of flood by gender and to design a framework to incorporate a gender dimension on flood risk management in CABA. The results and experiences gained on gender aspects have been shared widely and a summary of the finding is available in a knowledge repository.1 C. RATIONALE FOR RESTRUCTURING 10. The restructuring and extension are necessary to achieve the PDO. If the project is not extended, the construction of the secondary drainage networks will not progress sufficiently to reach the PDO. The contract has a duration of 40 months, with estimated completion by March 2025. With the proposed extension of the loan closing date the CABA will be able to complete significant part of the works, and by accelerating construction and prioritizing drainage conduits that have the highest impact the achievement of targets for number of beneficiaries and area protected areas will be expedited. CABA agreed to complete the remaining works with its own funds after the new loan closing date and will ensure planned targets are met. The final results will be captured and assessed in the Implementation Completion Report. At the same time, innovative solutions for flood risk management, such as nature-based solutions, will be piloted in the city to enable adaption to climate change. This restructuring was discussed during the Mid-Term Review and formally requested by the government on September 1, 2021. 11. The restructuring and extension will allow civil works worth close to US$40 million to be completed, guaranteeing work for an average of 240 construction workers monthly during the 40 months contract duration at a time when the local economy is suffering significantly from the crises caused by the COVID pandemic. COVID-19 has placed an enormous strain on the development of the country. The impact of the pandemic underlines the importance of continuing the efforts towards improving livelihood and creation of jobs. II. DESCRIPTION OF PROPOSED CHANGES 12. The proposed changes include: (a) adjustment to the project description; (b) revision of the institutional arrangements and change in implementing agency; (c) an 18-month extension in the Loan’s closing date; (d) update of the results framework; (e) modification of the loan financing percentage for disbursement Category 2 (f) review of the 1 https://openknowledge.worldbank.org/handle/10986/34375 The World Bank AR Flood Risk Management Support Project for the City of Buenos Aires (P145686) project's procurement arrangements to reflect the new policy framework, and (g) update the risk assessment considering the proposed extension, and project implementation progress. The operating manual will be adjusted to reflect some of the above-mentioned changes. (a) Adjustments to the project description: (i) Cancelling the provision of grants to Non-Governmental Organizations (NGOs). Communication activities will be carried out through the CABA´s administration, with the participation of stakeholders, including NGOs; and (ii) CABA has also requested the elimination of Subcomponent 1.2. Flood Risk Financing and Protection Scheme. (b) Revision of the institutional arrangements and change in implementing agency to reflect the administrative changes in CABA, but the flow of funds and Statement of Expenditure formats will remain the same. (c) Extension in the Loan’s closing date. An 18-month extension is proposed from March 1, 2022, to September 1, 2023, to allow for the implementation of project activities, especially those critical works involving the construction of the secondary drainage networks. (d) Update of the results framework. As a result of the adjustments to the project and significant progress to date, especially communication and education program, two indicators will be dropped and end targets of seven indicators will be adjusted, as shown in the table below. Table. Proposed changes for end targets in Results Framework Original Indicators Comments (Justification of proposed Change) PDO Indicators2 Vulnerable population protected Adjusted end target according to the extended closing date and the construction from flooding (Number, Custom) of the secondary drainage networks. Current end target: 20,000. New end target: 47,000. Land area protected from flooding Adjusted end target according to the extended closing date and the construction after rainstorm events with an of the secondary drainage networks. intensity of up to the equivalent of Current end target: 8.00. Tr=10 years (Square kilometer (km²)) New end target: 18.00. Intermediate Results Indicators People reached by communications Adjusted end target according to the extended closing date, and that reflects the campaigns on flood risk management progress in the communications strategy. carried out by the city of Buenos Current end target: 3,000 Aires (Number, Custom) New end target: 10,000. Vulnerable population trained on Adjusted end target according to the extended closing date, and that reflects the flood risk management issues progress in the education’s strategy. (Number, Custom) Current end target: 670. New end target: 800. 2These changes in the end targets of the PDO indicators are the results of the improvement of the hydrodynamic modeling tool, changes in the CABA’s topography, and the redesign of the secondary drainage networks. The World Bank AR Flood Risk Management Support Project for the City of Buenos Aires (P145686) Table. Proposed changes for end targets in Results Framework Original Indicators Comments (Justification of proposed Change) Participants of participatory Adjusted end target according to the extended closing date, and that reflects the workshops related to flood risk progress in the communications strategy. management (Number, Custom) Current end target: 150. This current end target is already achieved. New end target: 600. Beneficiaries of educational Adjusted end target according to the extended closing date, and that reflects the programs on flood risk management progress in the communications strategy. in schools (Number, Custom) Current end target: 400. This current end target is already achieved. New end target: 3,200. Beneficiaries’ satisfaction with Adjusted end target that reflects a more realistic goal. complete water works (1 to 5) (Text, Current end target: 4. Custom) New end target: 3.2. (e) Modify the percentage to be financed by the loan for disbursement Category 2 from “100 percent until withdrawals under this Category have reached an aggregate amount of US$150 million and 30 percent thereafter” to 100 percent. This will expedite loan disbursements and alleviate counterpart cash contributions during these difficult fiscal times. Counterpart contribution will be provided in kind with other works that are been implemented. (f) Project's procurement arrangements. The procurement arrangements will be reviewed to reflect the new policy framework. (g) Project’s risk assessment. The risk assessment has been updated to reflect on one hand side the project implementation progress, and current situation using the latest assessment at the latest Implementation Status and Result Report of August 2021, and on the other hand, considering the proposed extension of the closing date, that will lower the risk of not achieving the PDO. The World Bank AR Flood Risk Management Support Project for the City of Buenos Aires (P145686) III. SUMMARY OF CHANGES Changed Not Changed Implementing Agency ✔ Results Framework ✔ Loan Closing Date(s) ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Institutional Arrangements ✔ Procurement ✔ DDO Status ✔ Project's Development Objectives ✔ PBCs ✔ Components and Cost ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Financial Management ✔ APA Reliance ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ The World Bank AR Flood Risk Management Support Project for the City of Buenos Aires (P145686) IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_IA_TABLE IMPLEMENTING AGENCY Implementing Agency Name Type Action Ministry of Urban Development and Implementing Marked for Deletion Transport (MUD) Agency Chief Cabinet of Ministries Implementing New Agency 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-86280 Effective 01-Mar-2022 01-Sep-2023 01-Jan-2024 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2016 0.00 0.00 2017 9,999,999.96 50,000,000.00 2018 39,999,999.96 73,000,000.00 2019 39,999,999.96 15,000,000.00 2020 39,999,999.96 0.00 2021 39,999,999.96 10,000,000.00 2022 29,999,999.97 17,000,000.00 2023 0.00 28,000,000.00 2024 0.00 7,000,000.00 OPS_DETAILEDCHANGES_SORT_TABLE The World Bank AR Flood Risk Management Support Project for the City of Buenos Aires (P145686) SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Rating at Approval Current Rating Political and Governance  Moderate  Moderate Macroeconomic  Moderate  Moderate Sector Strategies and Policies  Substantial  Moderate Technical Design of Project or Program  Substantial  Moderate Institutional Capacity for Implementation and  Moderate  Moderate Sustainability Fiduciary  Substantial  Moderate Environment and Social  Substantial  Moderate Stakeholders  High  Substantial Other Overall  High  Moderate . The World Bank AR Flood Risk Management Support Project for the City of Buenos Aires (P145686) . Results framework COUNTRY: Argentina AR Flood Risk Management Support Project for the City of Buenos Aires Project Development Objectives(s) Strengthen the Autonomous City of Buenos Aires to efficiently manage flood risk and improve the drainage systems in the Cildanez Basin, Maldonado Basin, and Vega Basin. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline End Target Strengthen the CABA to efficiently manage flood risk CABA's Flood Risk Management Interministerial Council complies No Yes with its functions as foreseen in its creational decree (Yes/No) Weather forecasting warnings based on data from the No Yes hydrometeorological network (Yes/No) Improve drainage systems in the Cildanez, Maldonado and Vega Basins Direct project beneficiaries (Number) 200,000.00 3,000,000.00 Female beneficiaries (Percentage) 50.00 50.00 Vulnerable population protected from flooding (Number) 0.00 47,000.00 Action: This indicator has been Revised Increased drainage capacity in the targeted areas from 0.00 60.00 infrastructure out in place (flow m3/sec) (Number) Land area protected from flooding after rainstorm events with an intensity of up to the equivalent of Tr=10 years (Square 0.00 18.00 kilometer(km2)) Action: This indicator has been Revised The World Bank AR Flood Risk Management Support Project for the City of Buenos Aires (P145686) PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 Institutional Development for Flood Risk Management Implementation progress of the SIHVIGILA (Text) NO 33.00 CABA's probabilistic flood risk model calibrated No Yes, used for decision making and used as a basis for decision making (Text) Action: This indicator has been Marked for Deletion Risk financing mechanism developed (Yes/No) No Yes Action: This indicator has been Marked for Deletion People reached by communications campaings on flood risk management carried out by the city of 0.00 10,000.00 Buenos Aires (Number) Action: This indicator has been Revised Vulnerable population trained on flood risk 160.00 800.00 management issues (Number) Action: This indicator has been Revised Participants of participatory workshops related to 0.00 600.00 flood risk management (Number) Action: This indicator has been Revised Beneficiaries of educational programs on flood 0.00 3,200.00 risk management in schools (Number) Action: This indicator has been Revised The World Bank AR Flood Risk Management Support Project for the City of Buenos Aires (P145686) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 Flood Mitigation Infrastructure Secondary and tertiary drainage conduits 11.00 41.00 constructed (Kilometers) Length of Vega drainage tunnel constructed 0.00 8.40 (Kilometers) Beneficiaries’ satisfaction with complete water 0.00 3.20 3.20 works (1 to 5) (Text) Action: This indicator has been Revised Flood resilience (1 to 5) (Text) 2.85 3.12 3.42 Project Management Neighbors' requests responded (Percentage) 0.00 80.00 IO Table SPACE The World Bank AR Flood Risk Management Support Project for the City of Buenos Aires (P145686)