The World Bank Kyrgyz Republic Regional Economic Development Project (P167428) REPORT NO.: RES45594 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF KYRGYZ REPUBLIC REGIONAL ECONOMIC DEVELOPMENT PROJECT APPROVED ON MARCH 12, 2020 TO KYRGYZ REPUBLIC URBAN, RESILIENCE AND LAND EUROPE AND CENTRAL ASIA Regional Vice President: Anna M. Bjerde Country Director: Lilia Burunciuc Regional Director: Steven N. Schonberger Practice Manager/Manager: Christoph Pusch Task Team Leader(s): Rosanna Nitti, Melissa Brown, Tengiz Gogotishvili The World Bank Kyrgyz Republic Regional Economic Development Project (P167428) ABBREVIATIONS AND ACRONYMS GoKR: Government of the Kyrgyz Republic RED-P: Regional Economic Development Project The World Bank Kyrgyz Republic Regional Economic Development Project (P167428) Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. BASIC DATA Product Information Project ID Financing Instrument P167428 Investment Project Financing Environmental and Social Risk Classification (ESRC) Substantial Approval Date Current Closing Date 12-Mar-2020 18-Dec-2026 Organizations Borrower Responsible Agency Kyrgyz Republic Community Development and Investment Agency (ARIS) Project Development Objective (PDO) Original PDO The Project Development Objective is to support the Recipient to enhance regional economic development through targeted interventions in the selected sectors in the Osh region. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-65580 12-Mar-2020 12-May-2020 07-Dec-2020 18-Dec-2026 30.00 0 31.43 IDA-D5700 12-Mar-2020 12-May-2020 07-Dec-2020 18-Dec-2026 30.00 1.00 30.33 The World Bank Kyrgyz Republic Regional Economic Development Project (P167428) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No Note to Task Teams: End of system generated content, document is editable from here. I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. The Regional Economic Development Project (RED-P) became effective on 7 December 2020. Following effectiveness, the Government of the Kyrgyz Republic (GoKR) was required to meet three (3) legal covenants. Two of these have been met, and one requires an extension. B. The GoKR has requested an extension to the dated covenant relating to the finalization of the Small Grants Program Committee to be formed for the implementation of Component 4. The fulfilment of this dated covenant has been delayed due to uncertainty regarding the implementation of this Component. A revolving fund methodology was initially proposed to be used by the Government to implement Component 4. Following inter-ministerial discussions and consultations with the World Bank, it was agreed to revert to the original implementation mechanism – the use of a Small Grants Program Committee. This uncertainty has impacted the Government’s ability to establish the Small Grants Program Committee, which was required to have been completed 60 days after the effectiveness of the project (i.e. 5 February 2021). As a result, the Government has requested additional time to establish this committee. II. DESCRIPTION OF PROPOSED CHANGES C. The Government of the Kyrgyz Republic has requested to extend the deadline for meeting the dated covenant from February 5, 2020 to April 1, 2021. Given the types of changes to be made to the government structure, the extension of the deadline for the covenant is proposed as follows: (a) To facilitate the carrying out of Part 4 of the Project, the Recipient shall establish through a Ministry of Economy decree, no later than May 15, 2021, and thereafter maintain, throughout the Project implementation period, a Small Grants Program Committee ES NOTE TABLE Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. The World Bank Kyrgyz Republic Regional Economic Development Project (P167428) III. SUMMARY OF CHANGES Changed Not Changed Legal Covenants ✔ Implementing Agency ✔ 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 ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_LEGCOV_TABLE LEGAL COVENANTS The World Bank Kyrgyz Republic Regional Economic Development Project (P167428) Loan/Credit/TF Description Status Action The Recipient shall establish, no later than sixty (60) days from the Effective Date, and thereafter maintain, IDA-65580 Complied with No Change throughout the Project implementation period, a Steering Committee. To facilitate the carrying out of Part 2 of the Project, the Recipient shall establish through a MAFIM decree, no later than sixty (60) days from the Effective Date, and IDA-65580 Not yet due Revised thereafter maintain, throughout the Project implementation period, a Committee for ProductivePartnerships. To facilitate the carrying out of Part 2 of the Project, the Recipient shall establish through a MAFIM decree, by Proposed Complied with May 15 2021, and thereafter maintain, throughout the Project implementation period, a Committee for Productive Partnerships. To facilitate the carrying out of Part 4 of the Project, the Recipient shall establish through a Ministry of Economy decree, no later than sixty (60) days from the Effective IDA-D5700 Not yet due Revised Date, and thereafter maintain, throughout the Project implementation period, a Small Grants Program Committee. To facilitate the carrying out of Part 4 of the Project, the Recipient shall establish through a Ministry of Economy Proposed decree, no later than May 15, 2021, and thereafter NYD maintain, throughout the Project implementation . period, a Small Grants Program Committee