The World Bank Competitiveness for Tourism Development (P146666) REPORT NO.: RES32828 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF COMPETITIVENESS FOR TOURISM DEVELOPMENT APPROVED ON MAY 10, 2016 TO REPUBLIC OF CABO VERDE FINANCE, COMPETITIVENESS AND INNOVATION AFRICA Regional Vice President: Hafez M. H. Ghanem Country Director: Louise J. Cord Senior Global Practice Director: Sebastian-A Molineus Practice Manager/Manager: Consolate K. Rusagara Task Team Leader: Laurent Olivier Corthay The World Bank Competitiveness for Tourism Development (P146666) ABBREVIATIONS AND ACRONYMS CD Country Director DDO Deferred Drawdown Option EA Environmental Assessment FCI Finance Competitiveness & Innovation IDA International Development Association MEE Ministry of Economy and Employment MF Ministry of Finances MTIE Ministry of Tourism, Investment and Business Development MTT Ministry of Tourism and Transports SESA Strategic Environmental and Social Assessment UGPE Unidade de Gestao de Projectos Especiais WB World Bank The World Bank Competitiveness for Tourism Development (P146666) BASIC DATA Product Information Project ID Financing Instrument P146666 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 10-May-2016 31-May-2021 Organizations Borrower Responsible Agency Ministério das Finanças Unidade de Gestao de Projectos Especiais (UGPE) Project Development Objective (PDO) Original PDO The project development objective is to create the conditions necessary to increase investment into and diversification of the tourism sector. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-58010 10-May-2016 17-Jun-2016 15-Nov-2016 31-May-2021 5.00 1.13 4.01 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Competitiveness for Tourism Development (P146666) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project Status 1. Changes in implementation arrangements. After effectiveness on November 15, 2016, several Government reorganizations have affected the implementation arrangements for the Project: a. The line technical counterpart at Board approval - the Ministry of Tourism, Investment and Business Development (MTIE) - was restructured as Ministry of Economy and Employment (MEE) shortly after the new Government was vested in April of 2016; b. After a new reorganization in January of 2018, the MEE was then divided into two, and the Tourism sector was included under a new Ministry of Tourism and Transports (MTT); c. Finally, the Government operated changes in the institutional localization of the UGPE (the project implementing unit), which has been placed under the mandate of the Ministry of Finance (MF) through a Council of Ministers Decree. 2. Implementation progress: Notwithstanding the above-mentioned factors, implementation has since picked up and the key project ratings currently rank as satisfactory. The Strategic Environmental and Social Assessment (SESA), a dated covenant, has been finalized, adopted and disclosed by the authorities. The recruitment of the External Auditor was also completed, thus meeting the second dated covenant which was still outstanding. As a result, all dated covenants have been met, though with a slight delay for the two cited above. B. Rationale for the Level II Restructuring 3. Update the institutional arrangements. Seeking to harmonize and streamline the implementation of projects financed by development partners, the Government decided to move and centralize its main implementation unit (UGPE – Unit for the Management of Special Projects), from the line Ministry of Economy and Employment into the Ministry of Finance. This effectively brings together the procurement and fiduciary responsibilities in one unit, UGPE, which is now handling several projects across sectors, including this Project. The UGPE keeps the same team, and handles other WB projects, and hence this change is not expected to affect its fiduciary capacity, which remains adequate to implement the Project. II. DESCRIPTION OF PROPOSED CHANGES A. Change in the institutional arrangement of the Implementation Agency The Financing Agreement between the Republic of Cabo Verde and IDA will be amended as follows, to reflect the institutional change: 1. Paragraph 1 of Section I. A of Schedule 2 is amended to read as follows: “1. The Recipient’s Ministry of Finance shall have the overall responsibility for the Project.” 2. Paragraph 3.(a) of Section I of Schedule 2 is amended to read as follows: “(a) The Recipient shall maintain, throughout the implementation of the Project, the UGPE, with functions, staffing and resources satisfactory to the Association.” 3. Paragraph 8 of the Appendix is amended to read as follows: The World Bank Competitiveness for Tourism Development (P146666) “8. “Ministry of Finance” means the Recipient’s ministry responsible for finance, or any successor thereto.” All other provisions of the Agreement, except as herein amended, shall remain in full force and effect. III. SUMMARY OF CHANGES Changed Not Changed Implementing Agency ✔ Institutional Arrangements ✔ DDO Status ✔ Project's Development Objectives ✔ Results Framework ✔ Components and Cost ✔ Loan Closing Date(s) ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ The World Bank Competitiveness for Tourism Development (P146666) IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_IA_TABLE IMPLEMENTING AGENCY Implementing Agency Name Type Action Unidade de Gestao de Projectos Especiais Implementing New (UGPE) Agency .