The World Bank Regional Infrastructure Development Fund (P154947) REPORT NO.: RES47273 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF REGIONAL INFRASTRUCTURE DEVELOPMENT FUND APPROVED ON MARCH 10, 2017 TO REPUBLIC OF INDONESIA URBAN, RESILIENCE AND LAND EAST ASIA AND PACIFIC Regional Vice President: Victoria Kwakwa Country Director: Satu Kristiina Jyrintytar Kahkonen Regional Director: Benoit Bosquet Practice Manager/Manager: Ming Zhang Task Team Leader(s): Marcus John Jin Sarn Lee, Adri Asmoro Laksono Poesoro The World Bank Regional Infrastructure Development Fund (P154947) I. BASIC DATA Product Information Project ID Financing Instrument P154947 Investment Project Financing Original EA Category Current EA Category Financial Intermediary Assessment (F) Financial Intermediary Assessment (F) Approval Date Current Closing Date 10-Mar-2017 30-Nov-2022 Organizations Borrower Responsible Agency Republic of Indonesia PT Sarana Multi Infrastruktur Project Development Objective (PDO) Original PDO To increase access to infrastructure finance at the subnational level through a financially sustainable financial intermediary. Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed COFN-C1480 22-Mar-2017 07-Jun-2017 28-Sep-2017 30-Nov-2022 100.00 38.25 61.75 IBRD-87140 10-Mar-2017 12-May-2017 28-Sep-2017 30-Nov-2022 100.00 38.35 61.65 TF-A3871 10-Mar-2017 12-May-2017 28-Sep-2017 25-Jun-2021 3.00 2.60 .40 The World Bank Regional Infrastructure Development Fund (P154947) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES 1. This Restructuring Paper seeks approval for: (i) extension of the closing date of the Recipient Executed Trust Fund (RETF) grant (TF-A3871) under Component 2 of the Regional Infrastructure Development Fund (RIDF) Project from June 25, 2021 to May 31, 2022 (bringing the cumulative extension to 35 months since the original closing date of June 30, 2019); and (ii) amendment of the RETF Grant Agreement to expand the project description under Section 2.01 to include “Part 3. Early Response and Recovery Component (ERRC).” This RETF grant supports Component 2: RIDF Project Development Facility (PDF) of the RIDF Project and the proposed extension and amendment of the Grant Agreement will enable an uncommitted balance of about US$400,000 to be fully utilized to support the preparation of ERRC subprojects under Component 3 that would contribute to recovery from the COVID-19 pandemic. 2. Background. The US$100 million IBRD loan (Loan 8714-ID) for Component 1 of the RIDF Project, and the US$3 million RETF Grant for Component 2, were approved on March 10, 2017 with closing dates of December 31, 2020 and June 30, 2019 respectively. The closing dates have since been amended to November 30, 2022 and June 25, 2021 respectively. Additionally, through the project restructuring approved on June 30, 2020, a new Component 3: ERRC has been added to enable rapid response to emergencies, including COVID-19, and IBRD loan proceeds in the amount of US$25 million have been reallocated from Component 1 to Component 3. 3. The project development objective (PDO) of the RIDF Project is to increase access to infrastructure finance at subnational level through a financially sustainable financial intermediary. The PDO continues to be well aligned with the World Bank Group’s Indonesia Country Partnership Framework (CPF) for FY 2021-2025 and with Indonesia’s National Medium-Term Development Plan (RPJMN 2020-2024). 4. Project Status. The likelihood of achieving the project development objective (PDO) and overall implementation progress (IP) are both currently rated as Moderately Satisfactory. The project is in compliance with legal covenants, as well as Bank fiduciary and safeguard policies. There are no overdue audit reports and no unaddressed audit observations. In line with agreed measures, the implementing agency - PT. Sarana Multi Infrastruktur (PT.SMI), Ministry of Finance (MoF), and the World Bank held an anti-corruption workshop in February 2020 that discussed identified issues and raised awareness about “red flags” to monitor. PT. SMI continues to monitor and implement the agreed risk management plan. 5. Component 2: RIDF PDF. The performance of Component 2 is rated Satisfactory with all indicators achieving or exceeding targets. As indicated above, about US$400,000 of the grant remains currently uncommitted because of: (i) savings from procurement; (ii) US Dollar – Indonesian Rupiah exchange rate movements; and (iii) interest income. The PDF has been instrumental in improving subproject preparation for RIDF. PDF support includes, but is not limited to, the preparation of master plans, feasibility studies, detailed engineering designs, environmental and/or social impact assessment reports, resettlement plans, relocation action plans, coaching clinics, technical workshops, and hands-on support for the preparation of standard bid documents. Twenty-nine subprojects have been prepared with assistance from the PDF, exceeding the target set. To date, 46 capacity building events - six socialization events, seven focus group discussions, eighteen coaching clinics, eight technical trainings, and six workshops - have been delivered to over The World Bank Regional Infrastructure Development Fund (P154947) 85 participating Subnational Governments (SNGs), achieving the target set. The proposed extension of the RETF grant and amendment of the Grant Agreement would enable the utilization of the uncommitted funds to provide support for project preparation and capacity building for ERRC subprojects under Component 3. The eligible expenditures under Component 2 will remain the same, as this component will continue to provide technical assistance to SNGs for subproject preparation, regardless of whether the resulting subproject is subsequently financed under Component 1 or Component 3. There will be no specific disbursement condition for this restructuring. 6. Proposed Changes. The proposed restructuring will (i) extend the closing date of the RETF under the RIDF Project (TF-A3871) from June 25, 2021 to May 31, 2022 and (ii) amend the Grant Agreement to expand the project description under Section 2.01 to include “Part 3. Early Response and Recovery Component (ERRC).” The PDO remains unchanged and PT. Sarana Multi Infrastruktur will remain the RETF Grant recipient and the implementing agency. No other changes are proposed to the project and the section “III. DETAILED CHANGES” is kept blank due to operation portal system constraints. III. DETAILED CHANGES