$ Report No: RES00571 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF Emergency Social Protection Enhancement and COVID-19 Response Project APPROVED ON 17-Dec-2020 TO United Nations Children's Fund (UNICEF), United Nations Development Programme (UNDP) Social Protection & Jobs Middle East And North Africa Regional Vice President: Ousmane Dione Regional Director: Fadia M. Saadah Country Director: Stephane Guimbert Practice Manager: Cristobal Ridao-Cano Task Team Leader(s): Andras Bodor The World Bank Emergency Social Protection Enhancement and COVID-19 Response Project (P173582) ABBREVIATIONS AND ACRONYMS AF Additional Financing ESAP Environmental and Social Action Plan ESCP Environmental and Social Commitment Plan ESF Environmental and Social Framework ESMF Environmental and Social Management Framework IDA International Development Association ISR Implementation Status Report PDO Project Development Objective PWP Public Works Project SFD Social Fund for Development UNDP United Nations Development Programme UNICEF United Nations Children’s Fund The World Bank Emergency Social Protection Enhancement and COVID-19 Response Project (P173582) @#&OPS~Doctype~OPS^dynamics@restrhybridbasicdata#doctemplate BASIC DATA Product Information Operation ID Operation Name Emergency Social Protection Enhancement and COVID- P173582 19 Response Project Product/Financing Instrument Geographical Identifier Investment Project Financing (IPF) Yemen, Republic of Approval Date Current Closing Date 17-Dec-2020 31-Dec-2026 Environmental and Social Risk Classification (ESRC) High Organizations Borrower Responsible Agency United Nations Children's Fund (UNICEF), United Nations Public Works Project, Social Fund for Development Development Programme (UNDP) @#&OPS~Doctype~OPS^dynamics@restrhybridoperationstatus#doctemplate OPERATION STATUS Project Development Objective (DO) Original Development Objective The project development objective is to provide cash transfers, temporary employment, and increased access to basic services and economic opportunities to food-insecure populations affected by COVID-19, the conflict and climate- related shocks, as well as to strengthen the capacity of national institutions. Disbursement Summary (in USD million) i The World Bank Emergency Social Protection Enhancement and COVID-19 Response Project (P173582) Source of Funds Net Commitment Disbursed Undisbursed % Disbursed IBRD -- -- -- 0 IDA 846.94 759.87 85.43 89.89 Grants -- -- -- 0 Policy Waivers Does this restructuring trigger the need for any policy waiver(s)? No @#&OPS~Doctype~OPS^dynamics@restrhybridmpa#doctemplate @#&OPS~Doctype~OPS^dynamics@restrhybridmpa#doctemplate ii The World Bank Emergency Social Protection Enhancement and COVID-19 Response Project (P173582) TABLE OF CONTENTS I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING ........................................................................................1 II. DESCRIPTION OF PROPOSED CHANGES ....................................................................................................................2 III. PROPOSED CHANGES ................................................................................................................................................2 IV. DETAILED CHANGE(S) ...............................................................................................................................................3 The World Bank Emergency Social Protection Enhancement and COVID-19 Response Project (P173582) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING PROJECT STATUS. The project continues to make solid progress despite a highly volatile environment. The last Implementation Status Report (ISR) (September 2024) rated Progress towards achievement of Project Development Objective and Implementation Progress Satisfactory. In June 2024, the Board of Directors approved a third Additional Financing (AF3) for the project, amounting to US$150 million. AF3 was allocated to the Unconditional Cash Transfer component (Component 1), implemented by the United Nations Children’s Fund (UNICEF) in partnership with the Social Fund for Development (SFD). This restructuring pertains to Component 2: Geo-focused Bundles to Reduce Food Insecurity and Malnutrition, implemented by the United Nations Development Program (UNDP) in partnership with SFD and the Public Works Project (PWP). KEY RESULTS. The project continues to make progress toward achieving its Project Development Objective (PDO). The PDO level indicators are on track, with around 111,153 households benefiting from the cash for nutrition program (PDO 1), including 119,858 women and 175,744 children. Under PDO 2, 79,297 workers benefited from the wage employment interventions, including 21,528 women and 10,463 internally displaced people (IDPs). Under PDO indicator 3, 873,395 people were provided with access to basic services, including around 436,698 women. For PDO 4, 7,283 micro, small, and medium enterprises (MSMEs) were supported by the project, including 851 SMEs led by women. Under PDO indicator 5, around 72,610 people were provided with access to improved sanitation services to reduce water-borne diseases exacerbated by climate change. DISBURSEMENT STATUS. To date, according to World Bank records, total disbursements under Component 2 stand at US$156.83 million out of the allocated amount of US$232.9 million (Original, AF, and AF2). An undisbursed balance of US$76.07 million remains under this component. RATIONALE. This restructuring proposes an amendment to the Financing Agreement for AF2 (IDA E1640) to remove the disbursement condition related to the preparation and adoption of site-specific Environmental and Social Action Plans (ESAPs), in accordance with the Environmental and Social Commitment Plan (ESCP). The restructuring also proposes a modification to the project’s ESCP to reflect this revision. Disbursements for expenses under the following categories are subject to the preparation and disclosure of Environmental and Social Management Plans (ESMPs) and ESAPs: Categories 1(a) (cash for nutrition under subcomponent 2.1), 1(b) (Cash-for-work under subcomponent 2.2), 1(c) (YLG Subgrants, MSME Subgrants, Business Association Subgrants, and Entrepreneurship Subgrants under subcomponent 2.4), and 1(d)(i) (goods and works under subcomponent 2.3). Given that at the time of appraisal/negotiations, the specific types and levels of risk associated with project interventions were not yet clearly defined, the Bank included a disbursement condition as a precautionary measure to ensure that any potential risks would be adequately assessed and managed prior to any disbursement of funds. This uncertainty stemmed from the community-driven nature of the project interventions, which made it difficult to predict the risk levels of the activities in advance. However, as implementation of activities progressed, it became evident that the nature of interventions did not warrant a disbursement condition. A rationale for the proposed amendment is thus outlined below: i. The complexity of preparing ESAPs in small batches associated with the unique nature of each site and the complex nature of the Geobundling approach. The condition is also creating delays in subproject implementation in an environment where a swift response is critical due to significant needs and the sensitive context. ii. Given that the subprojects under Categories 2.2 (a) (Cash for Work) and 2.3 (Community Assets), have been identified and are classified as either Low or Moderate risk, as outlined in the project’s Environmental and Social Management Framework (ESMF), this disbursement condition is disproportionate to the level of risk. Schedule 2, Page 1 The World Bank Emergency Social Protection Enhancement and COVID-19 Response Project (P173582) N. of the Financing Agreement reinforces the necessary Environmental and Social (E&S) obligations and establishes compliance with the ESCP, which ensures ESAPs are prepared as/when appropriate as a precondition for subproject implementation. iii. The disbursement condition was introduced during the approval of Additional Financing 2 (AF2) and before the World Bank reassessed its Environmental and Social Framework (ESF) requirements. The Bank has since introduced new principles that emphasize flexibility and proportionality in the ESF. These changes aim to simplify the framework, making it more adaptable to various project contexts and scales. The new principles allow for a more tailored approach to E&S risk management, ensuring that the requirements are appropriate to the specific circumstances of each project. As a result of these updates, the original condition has become misaligned with the current ESF standards, which now prioritize a more flexible and proportionate approach to managing environmental and social impacts. Given the above, a level 2 restructuring is proposed to amend the Financing Agreement with UNDP and the Project ESCP, to remove the condition related to the preparation of ESAPs and ESMPs for Category 1 (Part 2). This amendment is in line with the request received from UNDP dated October 31, 2024, and attached to this restructuring. The amendment was also discussed and agreed upon by the World Bank task team, including the Environmental and Social specialists assigned to the Project during the latest Implementation Support Mission held in Cairo over the period October 29-31, 2024. No other revisions are required under the proposed restructuring. II. DESCRIPTION OF PROPOSED CHANGES PROPOSED CHANGES. This restructuring proposes an amendment to the Financing Agreement for IDA-E164-RY implemented by UNDP, to omit the following clause in Schedule 2, Section IV: Withdrawal of the Proceeds of the Financing, Part B: Withdrawal Conditions; Withdrawal Period; paragraph 1 (b): “For payments under Categories (1)(a), 1(b), 1(c) and (1)(d)(i), unless and until the Recipient has prepared, disclosed and adopted site-specific environmental and social management plans and environmental and social assessment plans, in accordance with the Environmental and Social Commitment Plan”. This restructuring also proposes a revision of the ESCP for the Project to omit the following section as described below: 1.3 Management Tools and Instruments: Plans or instruments to be prepared and implemented immediately after selecting/approving subprojects and before carrying out any project activity. No disbursement will be undertaken under Part 2 of the Project until site-specific ESMPs/ESAP instruments are prepared, disclosed and adopted (by UNDP). The project implements the procedures and arrangements as per the Environmental and Social Management Framework (ESMF), including timely environmental and social (E&S) screening and assessment of the project’s interventions. UNDP and the IPs continue the capacity-building program on E&S safeguards, OHS, as well as community health and safety aspects. @#&OPS~Doctype~OPS^dynamics@restrhybridsummarychanges#doctemplate Summary changes III. PROPOSED CHANGES Page 2 The World Bank Emergency Social Protection Enhancement and COVID-19 Response Project (P173582) Operation Information Proposed Changes Operation Information Proposed Changes Conditions Yes Loan Closing Date Extension No Development Objective No Loan Cancellations No Summary Description No Reallocations No (Operation Abstract) Legal Operational Policies No Financial Management No MFD/PCE No Procurement No Results No Institutional Arrangement No Risks No Implementation Schedule No Legal Covenants No Implementation Modalities No Disbursements Estimates No Disbursements Arrangements No DDO No Clients No Appraisal Summary No Components No @#&OPS~Doctype~OPS^dynamics@restrhybriddetailedchanges-disclose#doctemplate IV. DETAILED CHANGE(S) COSTS & FINANCING Private Capital Facilitation Is this an MFD-Enabling Project (MFD-EP)? Is this project Private Capital Enabling (PCE)? LOANS ENVIRONMENTAL & SOCIAL Environmental & Social Assessment Page 3 The World Bank Emergency Social Protection Enhancement and COVID-19 Response Project (P173582) According to the E/S Specialist are there changes proposed to the operation’s design that No would impact the Bank’s E&S assessment?” Conditions Type Description of Conditions Action UNICEF. Schedule 2. Section IV B. (a) no withdrawal shall be made for payments made for expenditures prior to the signature date of the Financing Agreement; (b) under Category (1)(d) for payments for the Digital Payment Pilot under Part 1.2 of the Project, unless and until the Recipient has conducted an assessment to inform the design of the Digital Payment Pilot and updated the POM with a relevant section on the Digital Payment Pilot, including inter alia, an action plan, eligibility criteria for Digital Payment Beneficiaries, in form and substance satisfactory to the Association. under Category (3), for Emergency Expenditures, under Part 4 of the Project, unless and until the Association is satisfied, and notified the Recipient of its satisfaction, that all of the following Disbursement conditions have been met in respect of said No Change expenditures: (i) (A) the Recipient has determined that an Eligible Crisis or Emergency has occurred, and has furnished to the Association a request to withdraw Financing amounts under Category (3); and (B) the Association has agreed with such determination, accepted said request and notified the Recipient thereof; and (ii) the Recipient has adopted the CERC Manual and Emergency Action Plan, in form and substance acceptable to the Association. (d) for the purpose of any payment to persons or entities, or for any import of goods, if such payment or import, to the Association’s knowledge, is prohibited by a decision of the United Nations Security Council taken under Chapter VII of the Charter of the United Nations. UNDP. The Financing Agreement shall not become effective until evidence satisfactory to the Association Effectiveness has been furnished to the Association that the Recipient No Change has updated and submitted the Project Operations Manual under terms satisfactory to the Association. UNDP. Schedule 2. Section IV. B. 1. no withdrawal shall Disbursement Revised be made: (b) under Category (3), for Emergency Page 4 The World Bank Emergency Social Protection Enhancement and COVID-19 Response Project (P173582) Expenditures, under Part 4 of the Project, unless and until the Association is satisfied, and notified the Recipient of its satisfaction, that all of the following conditions have been met in respect of said expenditures: (i) (A) the Recipient has determined that an Eligible Crisis or Emergency has occurred, and has furnished to the Association a request to withdraw Financing amounts under Category (3); and (B) the Association has agreed with such determination, accepted said request and notified the Recipient thereof. Page 5