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The World BankFATA Temporarily Displaced Persons Emergency Recovery Project (P154278)

REPORT NO.: RES31577

RESTRUCTURING PAPER

ON A

PROPOSED PROJECT RESTRUCTURING

OF

FATA TEMPORARILY DISPLACED PERSONS EMERGENCY RECOVERY PROJECT

APPROVED ON AUGUST 26, 2015

TO

ISLAMIC REPUBLIC OF PAKISTAN

SOCIAL PROTECTION & LABOR

SOUTH ASIA

Regional Vice President: Ethel SennhauserCountry Director: Patchamuthu Illangovan

Senior Global Practice Director: Michal J. RutkowskiPractice Manager/Manager: Stefano Paternostro

Task Team Leader: Amjad Zafar Khan, Ali Nadeem Qureshi

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ABBREVIATIONS AND ACRONYMS

AF Additional Financing

CWG Child Wellness Grant

DoH Department of Health

EAD Economic Affairs Division

ERP Emergency Recovery Project

ERG Early Recovery Grant

FATA Federally Administered Tribal Areas

FDIHS FATA Development Indicators Household Survey

FDMA FATA Disaster Management Authority

FSRRS FATA Sustainable Return and Rehabilitation Strategy

GoP Government of Pakistan

LSG Livelihood Support Grant

NADRA

OSS

National Database and Registration Authority

One-Stop Shop

TA Technical Assistance

TDP

WA

Temporarily Displaced Person

Withdrawal Application


BASIC DATA

Product Information

Project ID Financing Instrument

P154278 Investment Project Financing

Original EA Category Current EA Category

Partial Assessment (B) Partial Assessment (B)

Approval Date Current Closing Date

26-Aug-2015 30-Jun-2019

Organizations

Borrower Responsible Agency

Islamic Republic of Pakistan National Database and Registration Authority (NADRA)

Project Development Objective (PDO)

Original PDOThe Project Development Objective is to support the early recovery of families affected by the militancy crisis, promote child health, and strengthen emergency response safety net delivery systems in the affected areas of FATA.

OPS_TABLE_PDO_CURRENTPDOSummary Status of Financing

Ln/Cr/Tf Approval Signing Effectiveness ClosingNet

Commitment Disbursed Undisbursed

IDA-61390 21-Sep-2017 24-Oct-2017 07-Dec-2017 30-Jun-2019 114.00 8.47 106.89

IDA-57190 26-Aug-2015 23-Sep-2015 21-Dec-2015 28-Feb-2019 75.00 73.35 .01

Policy Waiver(s)

Does this restructuring trigger the need for any policy waiver(s)?No


I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING

1. The World Bank, through FATA Temporary Displaced Persons (TDP) Emergency Recovery Project (ERP), supported the Government of Pakistan (GoP)’s program for early recovery of families affected by the militancy crisis, to promote child health, and strengthen emergency response safety net delivery systems in affected areas of FATA. About 326,000 TDP families and all families in affected areas with children between 0-2 years of age are entitled to benefit under the World Bank supported GoP program providing cash transfers to TDPs families who voluntarily return to their region of origin once it is deemed safe to do so. The Project has three main components: (a) Reimbursement of Early Recovery Grant (ERG) and provision of Livelihood Support Grant (LSG); (b) piloting of a Child Wellness Grant (CWG); and, (c) Technical Assistance (TA) for strengthening program management and oversight. The original Credit of SDR 53.4 million and its additional financing of SDR 81 million became effective on December 21, 2015 and December 7, 2017 respectively.

2. Project implementation progress: The project is continuing to make considerable progress with “Satisfactory” performance towards achieving its objectives. Overall implementation progress, including across all components, also remains Satisfactory. As of June 8, 2018, around 276,000 TDP families had benefited from LSG, 204,000 families from CWG and over 199,000 cases were processed for reimbursement of ERG. The project has disbursed 43 percent of the total commitment, while disbursement under the original Credit has reached 99 percent. The project has no overdue audit reports. The project has was found to be in compliance with legal covenants, fiduciary and safeguard performance standards.

3. Funds allocation under the original Credit for the ERG reimbursements were fully utilized and hence additional funds were made available through additional financing. The additional financing of the project allows retroactive financing up to an aggregate amount of SDR 16.2 million for payments made prior to signing date of the Financing Agreement (FA) but on or after July 1, 2017. The FA of the original credit had stipulated that all expenses made prior to the date of signing but on or after January 1, 2017 would be eligible for retroactive financing. The government had erroneously requested a different eligible date for retroactive reimbursement for the new credit. The retroactive financing supports reimbursements to the GoP pertaining to payments of the ERG made by the Government using their own funds. The process for verification for reimbursement of these payments, involves collecting biometric evidence through the in-person appearance of each beneficiary at designated One-Stop Shop (OSS).

4. In December 2017, the government submitted a withdrawal application (WA) to the World Bank for the amount of Rs. 2,752,867,085 for ERG payments made to the beneficiaries. The reimbursement was made for Rs. 934,830,891 only for payments incurred on or after July 1, 2017, the retroactive financing date noted in the AF, but the payments made prior to July 1, 2017 were not reimbursed. Following discussions, in view of the full disbursement of the ERG grant allocated from the original Credit, the proposed solution was to extend the withdrawal period of additional financing from ‘on or after July 1, 2017’ to ‘on or after January 1, 2017’ in order to include the ERG payments made during January 1 - June 30, 2017.

5. During the preparation of the additional financing, the project was designed to reach closure by June 2020. At the Negotiations, the government requested that the project closing date be changed to June 2019, despite the challenges that could hinder completion of implementation one year earlier. Despite the sound progress, it is now clear that an


additional year is required to complete all project activities and meet project targets. Hence, Government requested, in a letter dated June 8, 2018, that the project closing date is extended from June 30, 2019 to June 30, 2020, in line with the original estimates.

II. DESCRIPTION OF PROPOSED CHANGES

6. GoP’s letter dated June 8, 2017, communicated the requests to: (i) modify the date for eligible retroactive reimbursement of ERG under the additional financing to start from January 1, 2017; and (ii) extend the project closing date to June 30, 2020. As a result, the amendments to the FA are proposed: (i) To replace “July 1, 2017” with “January 1, 2017” in the Section III. B. 1 of Schedule 2 of the FA dated October 24, 2017; and, (ii) To replace “June 30, 2019” with “June 30, 2020” in the Section III. B. 2 of Schedule 2 of the FA dated October 24, 2017

7. These amendments shall permit the government to claim reimbursement against ERG payments under Component 1 of the project made during the period of January 1, 2017 and June 30, 2017. The pending reimbursement request of Rs. 1,818,036,194 (equivalent to USD 15.7 million) may be released once the FA is amended to reflect the proposed changes. The government has indicated their urgent need for the release of the remaining funds. In addition, the project closure date is being amended to June 30, 2020. The extension of the closing date will apply to both IDA-61390 for the additional financing and IDA-57190 for the original credit. A modification of the disbursement estimates is being proposed in line with the change in project closure dates.

8. The proposed modification will not affect the approved amount of retroactive financing, allocation of funds across categories and all other aspects.

III. SUMMARY OF CHANGES

Changed Not Changed

Change in Loan Closing Date(s) ✔

Change in Disbursement Estimates ✔

Other Change(s) ✔

Change in Implementing Agency ✔

Change in DDO Status ✔

Change in Project's Development Objectives ✔

Change in Results Framework ✔

Change in Components and Cost ✔

Cancellations Proposed ✔

Reallocation between Disbursement Categories ✔


Change in Disbursements Arrangements ✔

Change in Overall Risk Rating ✔

Change in Safeguard Policies Triggered ✔

Change of EA category ✔

Change in Legal Covenants ✔

Change in Institutional Arrangements ✔

Change in Financial Management ✔

Change in Procurement ✔

Change in Implementation Schedule ✔

Change in Economic and Financial Analysis ✔

Change in Technical Analysis ✔

Change in Social Analysis ✔

Change in Environmental Analysis ✔

IV. DETAILED CHANGE(S)

OPS_DETAILEDCHANGES_LOANCLOSING_TABLE

LOAN CLOSING DATE(S)

Ln/Cr/Tf StatusOriginal Closing

Revised Closing(s)

Proposed Closing

Proposed Deadline for Withdrawal

Applications

IDA-57190 Effective 28-Feb-2019 30-Jun-2020 30-Oct-2020

IDA-61390 Effective 30-Jun-2019 30-Jun-2020 30-Oct-2020

OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE

DISBURSEMENT ESTIMATES

Change in Disbursement EstimatesYes

Year Current Proposed

2016 7,763,000.00 7,763,000.00

2017 50,780,366.98 50,780,366.98

2018 52,000,000.00 36,096,606.00


2019 72,000,000.00 45,830,013.51

2020 3,756,633.02 45,830,013.51

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