The World Bank BR Marine Protected Areas Project (P128968) REPORT NO.: RES28958 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF BR MARINE PROTECTED AREAS PROJECT APPROVED ON SEPTEMBER 19, 2014 TO BRAZILIAN BIODIVERSITY FUND - FUNBIO ENVIRONMENT & NATURAL RESOURCES LATIN AMERICA AND CARIBBEAN Regional Vice President: Jorge Familiar Calderon Country Director: Martin Raiser Senior Global Practice Director: Karin Erika Kemper Practice Manager/Manager: Valerie Hickey Task Team Leader: Adriana Goncalves Moreira The World Bank BR Marine Protected Areas Project (P128968) I. BASIC DATA Product Information Project ID Financing Instrument P128968 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 19-Sep-2014 31-Oct-2019 Organizations Borrower Responsible Agency Brazilian Biodiversity Fund - FUNBIO Brazilian Ministry of Environment - MMA Project Development Objective (PDO) Original PDO The Project's Global Environmental Objective (GEO) is the same as the Project's Development Objective (PDO), namely, (a)to supportthe expansion of globally significant, representative and effective Marine and Coastal Protected Area System in Brazil, and (b) to identify mechanisms for its financial sustainability. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-18151 26-Sep-2014 26-Sep-2014 18-Dec-2014 31-Oct-2019 18.20 5.57 12.63 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES The World Bank BR Marine Protected Areas Project (P128968) (a) Project Overview The Project was approved by the Board and signed on September 26, 2014, and became effective on December 18, 2014. The expected project closing date is October 31, 2019. The development objectives of the Project are: (a) to support the expansion of globally significant, representative, and effective marine and coastal PA (MCPA) system in Brazil, and (b) to identify mechanisms for its financial sustainability. The project comprises of four components. The first component, creation and consolidation of marine and coastal PAs will include: (i) establishing new marine PAs (MRPAs) to achieve 5 percent of areas under protection and identifying seasonal or permanent no-take fishing zones in selected MRPA; and (ii) strengthening biodiversity protection in at least 9,300km of selected MCPAs, including capacity-building, training, and communication activities to strengthen management of other marine and coastal PAs. The second component is identification and design of financial mechanisms to support MCPAs of, at least, two potential financing mechanisms for the MCPAs to ensure long term financial sustainability. The third component will support monitoring and evaluation (M and E) activities through: (i) the development and implementation of an integrated M and E system to track key marine and coastal environmental and biodiversity indicators in MCPAs supported by the project as well as of other marine and coastal PAs; and (ii) an assessment of marine biodiversity conservation status and conservation requirements of the MCPA system. The fourth component will strengthen coordination, management, and communication for the carrying out of the project. (b) Status Project Implementation Progress has been considered satisfactory. The project has achieved important results to date, such as the creation and consolidation of Marine and Coastal Protected Areas; Identification and design of financial mechanisms to support Marine and Coastal Protected Areas; establishment of the monitoring and evaluation system and improved the quality of the Project coordination and management. The grant has an undisbursed balance of USD14,84 million and is currently 21% disbursed. The Project’s development objective remains achievable; the performance of the implementing agency is satisfactory. The government transition has slowed down project implementation and had an impact on the composition of the Project Coordination Unit (PCU), with the removal of the Project Coordinator. The new coordinator has been appointed and participated in the field mission. The Brazilian Congress, for the first time since the 1988 Constitution recently approved the reduction and degazettement of Federal Protected Areas in the Amazon and Atlantic Forest regions. This precedent might impact on the current efforts by the Ministry of Environment and the Protected Areas Agency (ICMBio) to promote the creation of new marine protected areas, one of the PDO indicators for this project. The Project Implementation, Management and Government Commitment ratings were maintained as "moderately satisfactory" to reflect these impacts. (c) Proposed changes There are no relevant procurement issues to be signaled. Procurement rating remains as "satisfactory". However, it is necessary to incorporate the changes of the Bank’s Procurement Guidelines to reflect the Procurement Regulations for IPF Borrowers dated July 2016. These new guidelines will be effective upon this Restructuring Approval, and consequent signed Amendment to the Grant Agreement. All goods, works, non-consulting services and consulting services required for the Project, to be financed out of the proceeds of the Loan, and for which the procurement process starts on or after the date of the countersignature of this Amendment Letter, shall be procured in accordance with the requirements set forth or referred to in the Procurement Regulations and the provisions of the Procurement Plan. The World Bank BR Marine Protected Areas Project (P128968) This restructuring fully complies with OP/BP 10.00 as: (a) the Project’s DO remain achievable; (b) the performance of the Recipient remains satisfactory; (c) the Bank and the Recipient agree on actions that will be undertaken by the recipient to complete the Project; (d) the Project is not subject to suspension of disbursements; and (e) the Recipient does not have any outstanding audit reports nor there are audit reports which are not satisfactory to the Bank. III. DETAILED CHANGES