The World Bank MW: Mining Governance and Growth Support Project (P120825) REPORT NO.: RES28827 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF MW: MINING GOVERNANCE AND GROWTH SUPPORT PROJECT APPROVED ON MARCH 31, 2011 TO GOVERNMENT OF MALAWI ENERGY & EXTRACTIVES AFRICA Regional Vice President: Makhtar Diop Country Director: Bella Bird Senior Global Practice Director: Riccardo Puliti Practice Manager/Manager: Sheila Khama Task Team Leader: Javier Aguilar The World Bank MW: Mining Governance and Growth Support Project (P120825) ABBREVIATIONS AND ACRONYMS MGGSP Malawi Governance and Growth Support Project The World Bank MW: Mining Governance and Growth Support Project (P120825) 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 P120825 Specific Investment Loan Original EA Category Current EA Category Approval Date Current Closing Date 31-Mar-2011 31-Mar-2018 Organizations Borrower Responsible Agency Government of Malawi Ministry Of Natural Resources Energy and Mining Project Development Objective (PDO) Original PDO To improve the efficiency, transparency and sustainability of mining sector management OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-49010 31-Mar-2011 02-Nov-2011 23-Aug-2012 31-Mar-2018 25.00 20.76 2.50 TF-12935 13-Aug-2012 22-Aug-2012 23-Aug-2012 15-Oct-2017 3.40 3.58 0 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank MW: Mining Governance and Growth Support Project (P120825) Note to Task Teams: End of system generated content, document is editable from here. I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING The MGGSP was approved on March 31, 2011 and is co-financed by an IDA credit of SDR 16, 100,000 (USD 25 million equivalent) (Credit No. 4901-MW) and an EU grant (TF-12935) of EUR 2,918,686 (US$5.66 million, equivalent at the time of Board approval). The project has been effective since August 23, 2012, with a current IDA disbursement rate of 80 percent. Overall project implementation and progress towards achieving the development objective are rated as Moderately Satisfactory. Work is in progress to establish a modern computer-based cadastral system with efficient and transparent management of mineral exploration and mining rights with some of Malawi’s mining licenses already visible online. The 1981 Mines and Minerals Act has been reviewed and the Bill and associated regulations have been finalized. The process suffered delays but the Bill is expected to be tabled in brief to the Parliament. Key activities are well advanced. The safeguards rating is Satisfactory. In the project design, EU funding was expected to come in three tranches. An earlier retroactive extension Restructuring had to be processed so that the undisbursed trust fund balance was made available to the client. It was noted in the Restructuring that the third tranche was available when called upon and was essential to the successful achievement of the project’s PDO. Call of Funds from EU have been processed and completed. CTRTF has received and recorded EUR 1,037,500 to TF-12935. This restructuring is needed for making these funds from the third tranche available to the project. The third tranche that would be available for the project is EUR 995,325 (approximately USD 1.1 million), and is essential to the successful achievement of the project’s PDO. As the performance of the implementing team has been good (Project Management rated as Moderately Satisfactory and Procurement as Satisfactory), there is confidence that once this restructuring is completed and the funds available to the project, all funds will be fully utilized. The project is on its way to achieving the PDO and project's results are on target and on track. The World Bank MW: Mining Governance and Growth Support Project (P120825) II. DESCRIPTION OF PROPOSED CHANGES The proposed changes are as follows: 1. Amend the Grant Agreement to include the third remaining tranche of EU funding in the amount of EUR 995,325. 2. Amend both the Grant Agreement and the Financial Agreement to redefine the proportion to be funded by EU and IDA for the respective categories. The proposed higher percentages for the EU grant at 100% for categories 1 , 2 and category 3 are aimed at accelerating consumption of the EU funding, considering the very close date to closure which is October 15, 2017. The percentages shall apply up to the point of closure of the EU grant or when EU trust fund allocation is exhausted, whatever occurs earlier, at which IDA is expected to finance the project at 100% in all categories. 3. Amend the Financial Agreement for confirming a minor reallocation of funds (XDR 243,113) from category 3 part C to category 4 part D. Reallocation under the IDA 049010 is aimed at realigning the available resources to the demands of the project as per revised work plan. I. SUMMARY OF CHANGES Changed Not Changed 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 ✔ Change in Loan Closing Date(s) ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Change in Disbursements Arrangements ✔ Change in Disbursement Estimates ✔ Change in Overall Risk Rating ✔ Change in Safeguard Policies Triggered ✔ The World Bank MW: Mining Governance and Growth Support Project (P120825) 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)