The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) REPORT NO.: RES40831 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF THE TRANSFORMATION OF THE TERTIARY TECHNICAL AND TECHNOLOGICAL INSTITUTES PROJECT APPROVED ON NOVEMBER 23, 2016 TO THE REPUBLIC OF ECUADOR May 29, 2020 EDUCATION LATIN AMERICA AND CARIBBEAN Regional Vice President (acting): J. Humberto Lopez Country Director: Marianne Fay Regional Director: Luis Benveniste Practice Manager/Manager: Emanuela Di Gropello Task Team Leader(s): Diego Angel-Urdinola, Nelson Gutierrez The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) ABBREVIATIONS AND ACRONYMS EOD Deconcentrated Operating Entity EOD-PRETT Deconcentrated Operating Entity for the Program of Transformation of Tertiary Technical and Technological Public Education in Ecuador (Entidad Operativa Desconcentrada Proyecto de Reconversión de la Educación Técnica y Tecnológica Superior Pública del Ecuador) IMF International Monetary Fund INEC National Institute of Statistics (Instituto Nacional de Estadística y Censos) IST Tertiary Technical and Technological Institutes (Institutos de Educación Terciaria Técnica y Tecnología) MEF Ministry of Economy and Finance (Ministerio de Economía y Finanzas) PRETyT Program of Transformation of Tertiary Technical and Technological Public Education in Ecuador. Also called PRETT (Programa de Reconversión de la Educación Técnica y Tecnológica Superior Pública del Ecuador) SECOB Works Contracting Service (Servicio de Contratación de Obras) SENESCYT Secretariat of Higher Education, Science and Technology (Secretaría de Educación Superior, Ciencia y Tecnología) SENPLADES National Secretariat for Planning and Development (Secretaría Nacional de Planificación y Desarrollo) The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) BASIC DATA Product Information Project ID Financing Instrument P157425 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 23-Nov-2016 31-Dec-2021 Organizations Borrower Responsible Agency SENESCYT,Deconcentrated Operating Entity (EOD) - Ministry of Economy and Finance PRETT SENESCYT Project Development Objective (PDO) Original PDO The objectives of the Project are: to increase enrollment and persistence in public technical and technological programs designed and implemented in collaboration with Employers, and to strengthen the institutional management of Tertiary Technical and Technological Education. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-86670 23-Nov-2016 22-Dec-2016 22-Mar-2017 31-Dec-2021 72.50 3.92 68.58 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project Status 1. Overall Project Implementation. The Project was approved by the Board on November 23, 2016 and became effective on March 22, 2017. The Project was first restructured on April 29, 2019. The restructure included: (i) a partial loan cancellation of US$18 million; (ii) a revision of the Project's institutional arrangements; (iii) a revision of Eligible Expenditure categories; (iv) changes in budget allocation across Eligible Expenditure categories; and, (v) changes in the results framework. The Project was restructured a second time on March 19, 2020 to include the financing of Value Added Taxes (VAT) as an eligible expenditure in the Loan Agreement, to address the Borrower’s lack of liquidity and fiscal resources to finance VAT fees and to optimize the use of its financial resources. 2. A primary aspect of the first restructuring approved in April 2019 was the Government’s decision to revise the original institutional arrangements for the Project to give SENESCYT more implementation autonomy. As a result, the Government created a Deconcentrated Operating Entity for the Program of Transformation of Tertiary Technical and Technological Public Education in Ecuador (Entidad Operativa Desconcentrada del Proyecto de Reconversión de la Educación Técnica y Tecnológica Superior Pública del Ecuador, EOD-PRETT), under the Secretariat of Higher Education, Science, and Technology (Secretaría de Educación Superior, Ciencia y Tecnología, SENESCYT), to execute the entire Project, including the construction and rehabilitation of targeted Institutes. This function was originally attributed to Ecuador’s Works Contracting Service (Servicio de Contratación de Obras, SECOB), an institution facing both capacity and governance constraints. The total number of civil works to be supported by the Project was also reduced from eleven to six. 3. Despite the efforts to restructure the Project, significant delays in the implementation of all components have continued, and disbursement rates remain critically low. As of April 2020, only US$3.92 million has been disbursed (a disbursement rate of 5.4 percent), and the Project has been in problem status since May 2018 due to limited progress towards the achievement of the Project Development Objectives (PDO) and a consistent lack of implementation progress. These delays are a result of two main factors, which are being mitigated. At the structural level, projects managed by the central government have complex budget allocation procedures that require interactions with other ministries, including Planifica Ecuador (formerly the National Secretariat for Planning and Development (Secretaría Nacional de Planificación y Desarrollo, SENPLADES) and the Ministry of Economy and Finance (Ministerio de Economía y Finanzas, MEF). To ease these interactions, MEF designated a project focal point to speed up and monitor the timely budgeting and administrative process of Project activities. An additional factor causing delays was the high turnover of counterparts in SENESCYT, which has affected the continuity of interventions during implementation. New teams face a steep learning curve, as they become familiar with the Project design and with World Bank procedures. Also, the kick-off of construction works has been delayed as changes in SENESCYT's administration have contributed also to changing decisions regarding the scope of the interventions and the location of the civil works. Currently, the staff of EOD-PRETT has become familiarized with World Bank processes and procedures related to Project implementation, procurement, and financial management, and there is a clear understanding of the scope and location of civil works. Also, the EOD PRETT has developed a careful and credible plan to execute civil works and has The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) in place a team capable of managing adequately infrastructure contracts. The Bank and the technical teams in SENESCYT have reached a common policy and technical ground in all planned Project activities. 4. The COVID-19 pandemic is having an impact on the project. The sanitary emergency is expected to cause delays in the signature of infrastructure contracts and may affect the timeline of infrastructure construction (component 1). Mobility restrictions imposed to control the spread of the COVID-19 have delayed planned activities of the Consultative Councils for the year 2020 (component 2). Teacher professional development activities (component 2) are also delayed as the intervention requires normal academic conditions (i.e. in-person teaching), while many teachers from the system are currently teaching online. As a result, Project outcomes are expected to be affected. The government and the team are managing these delays pro-actively, including through a credible implementation plan and adjusting the interventions to virtual learning modalities. Still, even taking account the efforts being made to counter the effects of the health emergency, it will be impossible to implement the project as planned. The proposed restructuring is also an opportunity to factor in these delays. 5. Component 1: Optimizing and Upgrading the Supply of Technical Programs and Courses in Targeted Provinces. This component supports civil works in six of the targeted institutes, as detailed in Table 1. The architectural studies for three of these civil works (Machala, Manta, and Lago Agrio) are completed. The architectural studies for the Technical and Technological institutes (ISTs) of Chimbo and Yavirak are close to completion. A pertinence study for the IST Saberes Ancestrales has been launched and will be completed in May 2020. The study aims to identify the type of academic programs that would be offered by the institute, which aim to (ii) develop students’ technical skills based on cultural practices of the indigenous communities (e.g. alternative health), and (ii) assure that such skills are demanded locally to assure a smooth transition of graduates into the labor market. Table 1: Infrastructure Interventions Activity\Province Pichincha Manabí El Oro Bolívar Sucumbíos New infrastructure and IST Saberes IST Machala IST Chimbo equipment Ancestrales Rehabilitation and IST Lago IST Yavirak IST Manta equipment Agrio 6. Since early 2019, the EOD-PRETT has been preparing the documents for the bids of four ISTs, Machala, Manta, Lago Agrio, and Yavirak. After accounting for COVID-19 pandemic related delays, all the bidding processes for the ISTs Lago Agrio, Manta, and Machala are expected to be completed, contracts signed, and initial disbursements made (20 percent of total contract amounts) by July 31, 2020. The IST Yavirak is expected to achieve similar milestones by September 30, 2020. The construction time for the Machala IST is expected to last ten months. The construction time for the ISTs of Lago Agrio, Manta, and Yavirak sites is expected to last eight months, under normal conditions. The sanitary emergency resulting from the COVID-19 may restrict the number of workers allowed in the construction sites, which may contribute to extend construction times by 2 to 3 additional months. If construction works begin between August and October 2020, national mobility restrictions imposed to address the COVID-19 pandemic are expected to be lifted by then. Some local governments have started to lift mobility restrictions since May 11 (moving from a “red” to a “yellow code”). The state of “Sanitary Emergency” is expected to finish by mid- June. Also, the Government launched the implementation of a national initiative on April 20, 2020, to reactivate the construction sector. The effort will include the implementation of 25 new infrastructure projects nationwide to revive the economy, as well as prioritization or acceleration of the implementation The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) of planned construction sites1. These efforts are expected to become critical drivers for the economic recovery at the local level in the coming months. Finally, the SENESCYT has produced a credible implementation plan to complete planned civil works (infrastructure and equipment) by the Project closing date, factoring-in COVID-19 delays. 7. Component 2: Improving Programs’ Relevance, Quality of Teaching and IST Management Capacity. As a direct result of the Project, consultations with employers have started through newly implemented Consultative Councils at the local level, whose mandate is to adapt current programs to the needs of the productive sector, and which are then regulated by a Ministerial Decision. The existence of such Ministerial Decision will contribute to the sustainability of the Councils as it regulates the attributions and responsibilities of its members. Due to the mobility restrictions placed in response to the COVID-19 emergency, the development of 19 macro-curricula for new technological careers has been delayed until mobility restrictions are lifted, as the process entails consultations at the local level. If mobility restrictions continue, the SENESCYT will explore possibilities to undertake virtual consultations with local actors. These consultations aim to assure that programs offered by the ISTs, as well as their curricula, is pertinent to the needs of local employers. The work of the Consultative Councils under Subcomponent 2.1 (Development of Relevant Programs) is also expected to resume after mobility restrictions are lifted. Under Subcomponent 2.2 (Training of Teachers and Management Staff of ISTs), SENESCYT has developed terms of reference for in-service professional development activities, which are expected to begin in October 2020. Professional development activities will be evaluated using a Randomized Controlled Trial to explore their effects on the learning outcome of students, as well as on their self-regulation, communication, information management, and problem-solving skills. Finally, under Subcomponent 2.3 (Administrative and Academic Management System), the Project supported the development of the first information and administration system for ISTs (the Integrated Administrative and Academic Management System - SIGA 1.0 System). The software was completed in December 2019. The Project is currently supporting hardware purchases and software installation to assure the information system becomes operational in all institutes countrywide by December 2020. 8. Component 3: Strengthening Mechanisms for Institutional Coordination, Boosting Students’ Demand for Technical Educational Services, and Management, Monitoring and Evaluation of the Project. The Consultative Councils supported under Subcomponent 3.1 (Institutional Partnership with Employers and Private ISTs) were established in all 22 provinces on a limited scale (i.e., not covering all ISTs). The intervention will continue to be supported by the Project until it reaches all ISTs in July 2021. The Project supported a consultancy to estimate labor demand in 7 provinces, which was completed in December 2019 under Subcomponent 3.2 (Estimation of Labor Market Demand). The information resulting from this consultancy will serve to make more informed decisions on the offering of demand- based academic programs in targeted institutes. Moreover, the National Institute of Statistics (Instituto Nacional de Estadística y Censos, INEC) completed in 2019 an ambitious and far-reaching statistical operation to assess labor demand nationally, also under Subcomponent 3.2. Finally, the SENESCYT hired a consultancy firm in October 2019 to design a communication strategy to promote technical and technological education nationally, as per the activities planned under Subcomponent 3.3 (Boosting the Demand for ISTs). However, the contract was suspended due to the contractor’s lack of compliance with the contract commitments. The SENESCYT decided to cancel this activity and reallocate the budget for the 1None of the infrastructures for the ISTs are part of this pilot program. However, the authorities at SENESCYT are considering requesting the National Service for Risk and Emergency Management (COE) to include the civil works supported by the Project in the pilot program. The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) communications strategy to activities aimed to address the COVID-19 sanitary emergency. 9. There are no outstanding audit reports. Audit Report (March 22, 2017 to December 31, 2018) was considered acceptable to the Bank. B. Rationale for Restructuring 10. On March 10, 2020, the Bank received a request from MEF to process a partial loan cancellation in the amount of US$20.4 million, mainly affecting investments in infrastructure under component 1. The request for cancellation of funds was due to the fiscal constraints and the need to reduce debt levels within the context of the International Monetary Fund’s (IMF) Article IV program. The ongoing fiscal crisis, coupled with the outbreak of the COVID-19 pandemic, required a thorough revision of the country’s portfolio, as the Government’s financing priorities have shifted to budget support models. Given this complex context, authorities are seeking to improve the efficiency of the country’s portfolio of externally financed projects and define realistic execution plans and financing scope for all the projects, especially for non-performing projects and those facing significant implementation delays. As such, the proposed restructuring comprises a partial loan cancellation of US$20.4 million, changes in budget allocation across Eligible Expenditure categories, and changes in the results framework. 11. The proposed Restructuring also constitutes a valuable opportunity to factor in the effects of the COVID-19 pandemic on student enrollment in technical institutes and their persistence in the system. The Restructuring will also allow to make project milestones achievable in the remaining 20 months with the new allocations and expected delays in key activities, and to exclude activities that are unlikely to be completed in the Project’s lifespan or that are no longer a priority given the current context. Additionally, the restructuring will be an opportunity to further increase the relevance of the Project to the COVID-19 response. The Project will support access to virtual learning, assessment of students’ skills, and provision of student remediation services; all which are high-priority interventions in contexts where educational services have been distorted due to shocks, such as a sanitary emergency. Moreover, the Project is already highly relevant through its focus on (a) making tertiary education offerings more relevant to labor market needs and therefore supporting Ecuador’s youth and employers rebound from the crisis; (b) producing information systems for ISTs to align academic programs to the needs of employers; and, (c) supporting construction of infrastructure, in a context where construction is a key driver for local economic recovery and employment generation. The Restructuring will consolidate this potential by continuing to prioritize these activities and add new ones to finance rapid-response activities to help mitigate the drop-out rates that will result from the COVID-19 / fiscal crisis, including the implementation of student remediation programs, improving the connectivity of ISTs, and improving students’ access to virtual learning modalities (classes and laboratories) II. DESCRIPTION OF PROPOSED CHANGES A. Partial Loan Cancellation 12. A partial loan cancellation is being processed for a total amount of US$ 20.4 million. This cancellation mainly affects investments in infrastructure specified under Subcomponent 1.1, as detailed below. Annex 1 presents the detailed Project budget after the proposed restructuring. The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) B. Changes in Components Cost 13. Due to the Borrower’s partial cancellation request, the Project’s components would be modified as described below: i. Component 1: The number of civil works supported by the Project would be reduced from 6 to 4, as detailed in Table 2. In line with the cancellation, civil works without a complete (or almost complete) architectural study are excluded from the Project. As a result of not pursuing the construction of the Chimbo and Saberes Ancestrales ISTs, the number of direct project beneficiaries would be reduced from 6,180 students to 5,490. The details on student enrollment by IST are presented in Table 3. Table 2: Proposed Infrastructure Interventions Activity Pichincha Manabí El Oro Sucumbíos New infrastructure IST Machala and equipment Rehabilitation and IST Yavirak IST Manta IST Lago Agrio equipment Table 3: Original number of beneficiaries by IST IST Total enrollment Manta 1,440 Lago Agrio 720 Machala 2,880 Yavirak 450 Chimbo 450 Saberes Ancestrales 240 Total 6,180 ii. To mitigate risks of further delays in civil works, the EOD-PRETT has developed a plan, including a detailed timetable, for each of the remaining civil works under the Project and has strengthened the technical teams responsible for Project implementation. Also, several activities necessary to ensure the timely implementation of the civil works have been completed: (i) the architectural studies for the civil works to be supported by the Project are completed or close to completion; (ii) the micro-planning for each of the 4 institutes, which provides the optimal size and course offerings for the institutes; (iii) the preparation of the bidding documents for all civil works, equipment, and audits; (iv) the availability of labor demand survey information to align the academic offering of institutes to employers’ needs at the local level; and, (v) the operation of local Consultative Councils to make the curricula offered in the intervened institutes more pertinent. Additionally, authorities are actively developing a quality assurance model for technical and technological institutes and are undertaking efforts to estimate the real cost for their provision of educational services and maintenance, which are considered vital aspects to guarantee the sustainability of the investments. The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) iii. Safeguards. A safeguard response plan will address the reduction in the number of Project interventions. The plan includes the Government's commitment to (i) publish in digital form the action plans to mitigate the social impacts resulting from the elimination of civil works; and, (ii) update (and disseminate) the environmental management plans for the civil works supported by the Project. Consultations with indigenous populations will take place to identify possibilities for the development of culturally adapted curricula for technical programs offered in ISTs. No additional changes in safeguards are envisioned. iv. Component 2: The total number of teachers benefiting from in-service training interventions would decrease as a cost-cutting measure to ensure enough budget to continue with the four infrastructure interventions. Moreover, given that this is the first time the SENESCYT is providing in-service training to its teachers, the reduced scope would allow them to pilot, evaluate, and revise the intervention before increasing it to the initially envisioned scale. The SENESCYT also decided to cancel the training program targeted to 80 ISTs principals and vice-principals on the development of a dual training program after the bidding process was unsuccessful, despite many attempts to attract bidders. Furthermore, the high turnover of IST principals would have resulted in weak sustainability of the training as there was a significant risk of training principals that would leave the system shortly after receiving the training, undermining the impacts of the intervention. Also, the SENESCYT will now undertake a new and essential consultancy to design a more transparent financing mechanism for ISTs. As a result, the budget allocation for this component would be US$7.58 million, including the financing of taxes (from the current allocation of US$8.61 million). This reduction will cause a decrease in the targets for teachers trained from 1,450 to 600. v. Component 3: SENESCYT will use Project funds to finance rapid-response activities to curtail the dropout rates that will likely result from the pandemic and fiscal crisis. The Project will redirect approximately US$1.5 Million to implement computer-assisted student remediation programs, equip institutes with higher connectivity capabilities, and develop more virtual content for students. The computer-assisted remediation program will benefit all first-year students entering the system in October 2020 and May 2021 and will be carefully evaluated. These US$1.5M were originally allocated to finance consultancies that are of less priority, given the current context (e.g., the development of a national communications strategy, training of IST principals, among others). This redirection of funds will serve better to achieve the Project's PDO (i.e., to promote student enrollment and progression in relevant programs). SENESCYT will also collect data on skills and competences (communications, problem-solving, and information analysis) for all new students entering the system to identify, target, and support students with the most significant skills gaps, which are also those most likely to drop out. Finally, SENESCYT has agreed to use resources from this component to evaluate teacher training interventions supported under component 2. The evaluation would include conducting classroom observations on a sample of the teachers who will be trained and the application of “skills” tests to their students to assess the extent to which students’ skills and competences changed as a result of improved pedagogy. This component will also include an allocation of US$4.1 million for the activities developed by the INEC to scale up its efforts to monitor labor demand at the provincial level and to use administrative data to track the transition of graduates into the labor market. C. Reallocation across Eligible Expenditure Categories The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) 14. As a result of the changes in budget allocation across components and activities, there will be a budget reallocation across eligible expenditure categories. The allocation for category 1 would be reduced from the current allocation of US$58.4 million to US$37.37 million. The allocation for category 2 would be reduced from the current allocation of US$11.96 million to US$9.66 million. The allocation for category 3 would be increased from the current allocation of US$2.14 million to US$5.06 million. Please see the section reallocation between disbursement categories in the datasheet for further details. D. Changes to Results Framework 15. Revisions of the results framework reflect the proposed changes arising from the partial cancellation of the Loan, which directly affects the population that will benefit from the Project’s investments in civil works, and the expected effects of the COVID-19 pandemic on outcomes and activities. More specifically, the proposed changes in the results framework reflect (i) recalibration of targets, (ii) revisions to the implementation plan, and, (iii) revisions to the activities to be included and financed under components 1, 2, and 3. 16. The Restructuring includes revisions of the original PDO indicator targets to reflect the partial cancellation of the loan as well as the effects of the COVID-19 and of the ongoing economic crises. PDO indicators aim to improve student enrollment (PDO indicator 1) and progression (PDO Indicator 2) in more pertinent technical and technological programs. The sanitary emergency, coupled with the poor economic performance of the country (aggravated further by the oil price plunge), is likely to have a substantial adverse effect on student enrollment and persistence in these programs, as well as on SENESCYT’s capacity to collaborate more actively with employers at the local level. SENESCYT expects a 30% reduction in enrollment of first-year students in technical institutes and drop-out rates of about 50% in the academic year 2020/21 for all students in the system. While the interventions supported by the Project contribute to revert these trends through a subset of programs intervened by the project, all indicators were adjusted to account for the foreseen adverse enrollment shocks and the mobility constraints imposed by the COVID-19 sanitary emergency. E. Legal Covenants 17. Legal covenants in the Loan Agreement will be revised to include a withdrawal condition under Category 3 for which the Borrower ought to provide a fully executed Amendment to the “INEC Agreement” as described in Section I.B 2 of Schedule 2 of the Loan Agreement. This amendment will reflect changes in the scope of the current activities, as well as the inclusion of new activities to develop a graduate tracer system. Legal covenant related to counterpart funds will be revised considering only VAT paid thus far by the Borrower; no further Borrower contributions are expected. F. New definition of Targeted provinces 18. As a result of a reduction in project interventions, the definition of targeted provinces would need to be revised as: “Targeted Provinces” means the following provinces: Bolivar, El Oro, Manabí, Pichincha, and Sucumbíos.” The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Components and Cost ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursement Estimates ✔ Legal Covenants ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ PBCs ✔ Loan Closing Date(s) ✔ Disbursements Arrangements ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) 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: Optimizing and Component 1: Optimizing and Upgrading the Supply in Targeted 58.40 Revised Upgrading the Supply in 37.38 Provinces. Targeted Provinces. Component 2: Improving Component 2: Improving Programs Relevance, Quality of Programs Relevance, Quality of 8.61 Revised 7.58 Teaching and IST Management Teaching and IST Management Capacity. Capacity. Component 3: Strengthening Component 3: Strengthening Mechanisms for Institutional Mechanisms for Institutional Coordination, Boosting Coordination, Boosting Demand, 5.49 Revised 7.14 Demand, and Management, and Management, Monitoring Monitoring and Evaluation of and Evaluation of the Project. the Project. TOTAL 72.50 52.10 OPS_DETAILEDCHANGES_CANCELLATIONS_TABLE CANCELLATIONS Value Reason Current Cancellation New Ln/Cr/Tf Status Currency Date of for Amount Amount Amount Cancellation Cancellation BORROWER' S REQUEST IBRD- Disburs USD 72,500,000.00 20,400,000.00 10-Mar-2020 52,100,000.00 FOR 86670-001 ing COUNTRY REASONS OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IBRD-86670-001 | Currency: USD The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) iLap Category Sequence No: 1 Current Expenditure Category: GO,CW,CS - Part 1 - SENESCYT (tax inclusive) 58,400,000.00 91,962.12 37,374,855.00 100.00 100.00 Current Expenditure Category: GO,CS,NCS,OP,TRN-Pt.2;3A;3Bi,3Biii-3Biv;3C,3Dii- iLap Category Sequence No: 2 3Dv-SENESCYT (tax inclusive) 11,958,874.00 835,993.74 9,660,698.00 100.00 100.00 Current Expenditure Category: GO,CS,Survey Costs,TR -Pt 3Bii-3Biv & 3Di - INEC iLap Category Sequence No: 3 (Tax inclusive) 2,141,126.00 1,110,650.88 5,064,447.00 100.00 100.00 Total 72,500,000.00 2,038,606.74 52,100,000.00 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2017 0.00 0.00 2018 223,525.96 223,525.96 2019 1,285,677.68 1,285,677.68 2020 8,870,796.36 20,895,203.37 2021 41,480,000.00 29,695,592.99 2022 20,640,000.00 0.00 2023 0.00 0.00 OPS_DETAILEDCHANGES_LEGCOV_TABLE LEGAL COVENANTS Loan/Credit/TF Description Status Action SCHEDULE 2, Section I, A (i) Operate and maintain the IBRD-86670 EOD-PRETT, until the completion of the Project, Complied with No Change comprised of key staff with functions, experience, and The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) qualifications acceptable to the Bank, as described in the Operational Manual (OM) including a Project coordinator, and specialists for the monitoring and evaluation, procurement, financial management, social, environment, and infrastructure. SCHEDULE 2, Section I, A (ii) INEC until the completion of the Project will maintain a separate Project team comprised of key staff with functions, experience, and IBRD-86670 qualifications acceptable to the Bank, as set in the OM, Complied with Revised including: a Technical Coordinator, a Financial Management Specialist (FM), and a Labor Market & Statistical Specialist. SCHEDULE 2, Section I, A (ii) INEC until the completion of the Project will maintain a separate Project team comprised of key staff with functions, experience, and Proposed qualifications acceptable to the Bank, as set in the OM, Not yet due including: a Technical Coordinator, a Financial Management Specialist (FM), and a Labor Market & Statistical Specialist. SCHEDULE 2: Section I, A (iii), not later than thirty (30) days after the effective date of this Amendment Letter, ensure that EOD-PRETT key staff have been assigned to Marked for IBRD-86670 work full time; Section I, A (iv), not later than ninety (90) Complied with Deletion days after the effective date of this Amendment Letter, ensure that INEC key staff have been assigned to work full time. SCHEDULE 2, Section I, A (ii) Not later than thirty (30) days after the effective date of the Amendment Letter, ensure that the Technical Coordinator, Financial IBRD-86670 Complied with Revised Management and Labor Market & Statistical Specialist in (ii) above, in respect of INEC have been assigned to work full time. SCHEDULE 2, Section I, A (iv) Not later than sixty (60) days after the effective date of the Amendment Letter, ensure that the Technical Coordinator, Financial Proposed Not yet due Management and Labor Market & Statistical Specialist in (ii) above, in respect of INEC have been assigned to work full time. The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) SCHEDULE 2, Section I, A (v) Not later than one hundred twenty (120) days after the effective date of the Amendment Letter, ensure that a complementary IBRD-86670 Complied with No Change financial management system has been established in SENESCYT and is operational, all in a manner acceptable to the Bank. SCHEDULE 2, Section 1, C (1) -INEC AGREEMENT To facilitate the carrying out of Subcomponent 3.2 of the Project, the Borrower, through SENESCYT shall enter into an agreement with INEC (the INEC Agreement) under terms and conditions acceptable to the Bank including, among other things: (a) the Borrower’s IBRD-86670 obligation to transfer, on a non-reimbursable basis, part Complied with No Change of the proceeds of the Loan to INEC and; (b) INEC’s obligations to carry out the activities of Subcomponent 3.2 of the Project in accordance with the relevant provisions of this Schedule, including the provisions of Sections I.D, I.E, I.F and Section III of the Loan Agreement. SCHEDULE 2, Section I, D (1) The Borrower shall adopt and carry out the Project in accordance with the provisions of a manual (the Operational Manual), acceptable to the Bank, which shall include, inter alia: (a) a detailed description of Project activities and institutional arrangements for the Project; (b) the Project administrative, budgeting, accounting, auditing, reporting, financial (including cash IBRD-86670 flow aspects), procurement and disbursement Complied with No Change procedures; (c) the monitoring indicators for the Project; (d) the institutional and administrative mechanisms established to ensure inter-institutional coordination; (e) the regulations concerning the design and micro-planning for IST consolidation ; and (f) the ESMF, IPPF and RPF [and the Existing EMPs, the Existing IPPs and the Existing SMP. IBRD-86670 SCHEDULE 2, Section I, F (6) Complied with No Change The Borrower, through SENESCYT shall, not later than ninety (90) days after the Effective Date, develop, in The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) form and substance acceptable to the Bank, and following the guidelines set forth in the Operational Manual, a grievance redress mechanism that encompasses transparent, timely and fair procedures, for the purposes of ensuring that all complaints received from beneficiaries and other interested stakeholders related to any activity under the Project are properly and timely addressed in a manner acceptable. SCHEDULE 2, Section II, B (1) The Borrower, through SENESCYT, shall, and shall cause INEC to maintain or IBRD-86670 cause to be maintained a financial management system Expected soon No Change in accordance with the provisions of Section 5.09 of the General Conditions. SCHEDULE 2, Section II, B (2) The Borrower, through SENESCYT, shall prepare and furnish to the Bank not later than forty five (45) days Partially complied IBRD-86670 after the end of each calendar semester, interim No Change with unaudited financial reports for the Project covering the pertinent calendar semester, in form and substance satisfactory to the Bank. SCHEDULE 2, Section II, B (3) The Borrower, through SENESCYT, shall have its Financial Statements audited in accordance with the provisions of Section 5.09 (b) of the General Conditions. Each audit of the Financial Statements shall cover the IBRD-86670 Complied with No Change period of one fiscal year of the Borrower, or any other period acceptable to the Bank. The audited Financial Statements for each such period shall be furnished to the Bank not later than six months after the end of such period. SCHEDULE 2, Section II, B (4) The Borrower, through EOD PRETT under SENESCYT, shall, not later than 120 days before the end of: (i) the first calendar year of IBRD-86670 Project implementation or (ii) the period subject to Complied with No Change audits, (whichever occurs first), submit to the Bank for its no-objection the terms of reference for the hiring of an independent auditor. The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) SCHEDULE 2, Section V (1) Without limitation to the provision of Section 5.03 of the General Conditions, the Borrower shall provide the counterpart funds required Partially complied IBRD-86670 for Project implementation estimated in nine million six Revised with hundred thousand million Dollars (US$9, 600,000), detailed in the OM and distributed in accordance with the table set forth in the Agreement. Without limitation to the provision of Section 5.03 of the General Conditions, the Borrower shall provide, promptly, as needed, the counterpart funds required Proposed for Project implementation estimated at two hundred Complied with ninety-six thousand two hundred twenty-four United States Dollars (US$296,224), as further detailed and distributed in accordance with the Operational Manual. SCHEDULE 2, Section V (2) the Borrower through EOD- PRETT not later than 16 months after the effective date of the Amendment Letter, select and contract an entity, independent from the Borrower with IBRD-86670 Not yet due Revised experience& qualifications acceptable to the Bank, in accordance with TORs satisfactory to the Bank, to carry out the technical reviews referred in the Subcomponent 2.1 of the Project. SCHEDULE 2, Section V (2) the Borrower through EOD- PRETT not later than 12 months after the effective date of the Amendment Letter, select and contract an entity, independent from the Borrower with experience& Proposed NYD qualifications acceptable to the Bank, in accordance with TORs satisfactory to the Bank, to carry out the technical reviews referred in the Subcomponent 2.1 of the Project. SCHEDULE 2: Section I, A (vi), Not later than sixty (60) days after the effective date of this Amendment Letter, ensure that only ISTs that have a legalized land title will Partially complied IBRD-86670 No Change be included in the Project implementation plan, as set with forth in the activities described under Schedule 1 to the Loan Agreement. The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) Withdrawal Condition: Under Category (3) Section IV.B.1 (c) of Schedule 2 -No withdrawal shall be made IBRD-86670 until the AMENDMENT to the “INEC Agreement” has Not yet due New been fully executed in accordance with Section I.B (2) of . Schedule 2 to the Loan Agreement. The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) . Results framework COUNTRY: Ecuador Transformation of the Tertiary Technical and Technological Institutes Project Project Development Objectives(s) The objectives of the Project are: to increase enrollment and persistence in public technical and technological programs designed and implemented in collaboration with Employers, and to strengthen the institutional management of Tertiary Technical and Technological Education. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 Increase enrollment & persistence in public IST programs designed and implemented. PDO Indicator 1: Enrollment in public technical and technological programs 10,629.00 15,491.00 13,229.00 16,740.00 13,165.00 14,613.00 designed and implemented in collaboration with employers. (Number) Rationale: Two main forces determine changes in the indicator: (i) the direct actions of the consultative councils to make careers more pertinent, and (ii) the enrollment rate of students in these careers, which raises under normal conditions. The activation of the consultive councils for the year 2020, initially planned for March Action: This indicator has been 2020, is being delayed until July due to mobility restrictions imposed by the COVID-19 emergency. Nonetheless, the planned actions of the consultative Revised councils will have a positive effect on the indicator in the years 2020 and 2021. However, the sanitary emergency, coupled with the poor economic performance of the country (aggravated further by the oil price plunge), is likely to have a substantial adverse effect on student enrollment in these careers. SENESCYT expects (i) a 30% reduction in enrollment of first-year students in technical institutes and (ii) a drop-out rate of 32% of students enrolled in pertinent careers (i.e., those revised by the consultative councils) in the academic year 2020/21. Expected drop-out rates are higher, at 50%, for students The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) RESULT_FRAME_TBL_PDO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 enrolled in other careers. As a result, targets were reduced from 22,201 to 13,165 for the year 2020 and from 25,376 to 14,613 for the year 2021 – a reduction mainly attributed to the foreseen negative enrollment shocks. PDO Indicator 2: Persistence rate in technical and technological programs 0.00 0.00 0.00 68.00 68.00 68.00 designed and implemented in collaboration with employers. (Percentage) Rationale: The COVID-19 sanitary emergency, coupled with the poor economic performance of the country (aggravated further by the oil price plunge), is likely to have a substantial adverse effect on student progression rates. SENESCYT estimates that average student drop-out rates in technical and technological institutes Action: This indicator has been will reach 50% in the academic year 2020/21. Due to the Project interventions (development of more pertinent careers and introduction of student Revised remediation programs), drop out rates in pertinent careers (i.e. those revised by the consultative councils) are expected to remain unchanged (at 32%) in the academic year 2020/21. As a result, the indicator has been revised from 71% to 68% in year 2020 and from 74% to 68% in year 2021 – which assumes that Project interventions will maintain progression rates at pre-crisis levels. Strengthen the institutional management. PDO Indicator 3: Availability of reliable data produced by the new integrated administrative and academic management No No No No Yes Yes system, is used for decision making by main stakeholders. (Yes/No) PDO Table SPACE The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 Component 1: Optimizing and Upgrading the Supply in Targeted Provinces. IRI 1: Percentage of students enrolled in the transformed public ISTs in the Targeted 0.00 0.00 0.00 0.00 0.00 78.00 Provinces related to the total capacity of the intervened IST (Percentage) Rationale: Action: This indicator has been This indicator has been marked for deletion. Civil works are expected to be finalized in the last quarter of 2021. Full student transition into the new sites Marked for Deletion will occur after project closing. IRI 2: Number of ISTs built or rehabilitated in the targeted 0.00 0.00 0.00 0.00 0.00 4.00 provinces. (Number) Rationale: Action: This indicator has been The number of civil works would be reduced from 6 to 4 as a result of the partial cancellation of the loan. Revised IRI 3: Number of ISTs fully equipped in the targeted 0.00 0.00 0.00 0.00 0.00 4.00 provinces. (Number) Rationale: Action: This indicator has been The number ISTs that will be fully equipped would be reduced from 6 to 4 as a result of the partial cancellation of the loan. Revised Component 2: Improving Programs Relevance, Quality of Teaching and IST Management Capacity. The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 IRI 4: Number of teachers and management staff trained. 0.00 0.00 0.00 0.00 150.00 600.00 (Number) Rationale: Changes in targets resulted of the partial cancellation of the loan. Some of the resources initially allocated to teacher professional development will be used to finance the civil works of the 4 institutes supported by the Project. The reduction in targets also considers that this is the first time SENESCYT is providing in-service teacher training to its teachers. A less far-reaching intervention would allow SENESCYT to pilot, evaluate, and revise the intervention before scaling Action: This indicator has been it up. Targets were reduced from 1000 to 150 for the year 2020 and from 1475 (cumulative) to 600 for the year 2021. The reduction in target for the year Revised 2020 accounts considers that some teachers will deliver their classes virtually in the academic year 2020 due to the COVID-19 crisis. The intervention seeks to train teachers in the classroom (i.e., using mentoring models), which requires normal academic conditions. IRI 5: Percentage of programs designed in collaboration with 34.00 34.00 34.00 34.00 34.00 40.00 employers. (Percentage) Rationale: Targets were adjusted to reflect the delays in the activation of the consultative councils caused by the national mobility restrictions imposed by the COVID-19 Action: This indicator has been emergency. The change in targets also considers the risk of less active participation of employers in the Councils as a result of the economic conjuncture. Revised IRI 6: Development and implementation of the administrative and academic No No No No Yes Yes management system of ISTs. (Yes/No) Component 3: Strengthening Mechanisms for Institutional Coordination, Boosting Demand, and Management, Monitoring and Evaluation of the Project. The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 IRI 7: Development and implementation of the module No No No No Yes Yes to track graduates. (Yes/No) IRI 8: Percentage of programs implemented that have been 0.00 0.00 0.00 0.00 34.00 34.00 designed in collaboration with employers (Percentage) Rationale: Action: This indicator has been Targets were revised to be consistent with the revisions introduced in the IRI 5. Revised IRI 9: Percentage of graduates tracked out of total graduates in the administrative and 0.00 0.00 0.00 0.00 10.00 70.00 academic management system (Percentage) Rationale: Targets for 2020 were revised from 35 to 10 percent. The graduates’ tracer system will only be piloted in 10 Institutes due to mobility restrictions imposed by Action: This indicator has been the COVID-19 sanitary emergency. Revised -Diagnostic of access, Monitoring access, persistence and persistence, and Very Limited gender Very Limited gender Very Limited gender graduation rates graduation by gender and IRI 10: Implementation of specific information specific information specific information Very limited information disaggregated by gender program through the Gender Plan. (Text) available available available and program-Design, administrative and based on the diagnostic academic management results, of gender system. The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 specific actions to guarantee equality of opportunities in technical and technological education for women and men as needed-Implementation of the gender specific actions previously defined. Rationale: Action: This indicator has been Targets were revised to reflect changes in the national roll out the administrative and academic management system for technical institutes, which will take Revised place in the year 2021. IRI 11: Survey on beneficiary communities’ satisfaction in the targeted provinces Four published reports. regarding: (a) the process of Not available Not available Not available Not available Not available social management and (b) the results of the implemented new ISTs (Text). (Text) Rationale: Action: This indicator has been Targets were revised reflecting the reduction in the number of civil works (from 6 to 4), as a result of the partial cancellation of the loan. Revised IRI 13: Percentage of public ISTs where management 0.00 0.00 0.00 0.00 0.00 25.00 standards have been implemented (Percentage) The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) RESULT_FRAME_TBL_IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 Rationale: Action: This indicator has been This indicator is marked for deletion. The development of management standards for institutes is duplicative to the ongoing systemic efforts (currently Marked for Deletion undertaken by the National HE Council, with technical support from the CAF) to develop national quality standards for ISTs. IO Table SPACE . The World Bank Transformation of the Tertiary Technical and Technological Institutes Project (P157425) Annex 1 Proposed Budget by Component (To be updated in the Operational Manual) Part of the Project Bank Loan Taxes Total cost % % (including Project expenditures) (US$ million) financed by Bank Borrower the Bank Part 1. Optimizing and upgrading the supply in targeted Provinces: Consulting services (feasibility and technical 33,403,250 3,971,605 37,374,855 100% 0% studies, and supervision); works and goods (equipment and furniture) Part 2. Improving program relevance, quality of teaching and IST management capacity 6,936,356 647,473 7,583,829 100% 0% 2.(a): Consulting services: design and review of TTE programs and the review process in collaboration with 1,362,855 163,423 1,526,278 100% 0% employers 2.(b): Consulting services; non-consulting services and Training (design of training programs and training for 3,468,623 242,866 3,711,488 100% 0% teachers and administrative staff, and design of the selection process and the careers of teachers) 2.(c): Goods, Consulting services, non-consulting services (design and implementation of the academic and 2,104,877 241,185 2,346,063 100% 0% administrative management system) Part 3. Strengthening Mechanisms for Institutional Coordination, Boosting Demand and Management, 6,480,091 661,224 7,141,315 100% 0% Monitoring and Evaluation of the Project 3.(a) Consulting services and non-consulting services (institutional strengthening with the Association of 168,940 18,000 186,940 100% 0% Employers and private ISTs) 3.(b) Consulting services, Survey Costs, goods and Training (update of the methodology for estimating labor 4,550,326 514,122 5.064,447 100% 0% market demand) 3.(c) Consulting services, non-consulting services and Training (communication campaigns to boost the 291,077 32,143 323,220 100% 0% demand for higher technical education) and design and implementation of the awareness program 3.(d) Consulting services, goods, non-consulting services, Operating Costs and Training (administration, 1,469,749 96,960 1,566,709 100% 0% monitoring, audits and studies and impact evaluation of the Project) Subtotal 46,819,697 5,280,303 52,100,000 100% 0% Cancelled amount effective March 10, 2020 20,400,000 0 20,400,000 100% 0% TOTAL 67,219,697 5,280,303 72,500,000 100% 0%