The World Bank Madagascar Pilot Program for Climate Resilience Phase I (P158816) REPORT NO.: RES39805 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF MADAGASCAR PILOT PROGRAM FOR CLIMATE RESILIENCE PHASE I APPROVED ON JUNE 29, 2017 TO THE REPUBLIC OF MADAGASCAR Urban, Resilience and Land Global Practice Africa Region Regional Vice President: Hafez M. H. Ghanem Country Director: Mark R. Lundell Regional Director: Ede Jorge Ijjaz-Vasquez Practice Manager/Manager: Meskerem Brhane Task Team Leader: Michel Matera The World Bank Madagascar Pilot Program for Climate Resilience Phase I (P158816) ABBREVIATIONS AND ACRONYMS AFD Agence Française de Développement (French Development Agency) AfDB African Development Bank BNCCC Bureau National pour la Coordination du Changement Climatique BNGRC Bureau National de Gestion des Risques et des Catastrophes (National Disaster Risk Management Bureau) Cat DDO Catastrophe Deferred Drawdown Option CIF Climate Investment Funds CPGU Cellule de Prévention et Gestion des Urgences (Emergency Prevention and Management Unit) DPF Development Policy Financing DRM Disaster Risk Management FM Financial Management GCF Green Climate Fund GoM Government of Madagascar GRS Grievance Redress Service MFB Ministry of Finance and Budget M&E Monitoring and Evaluation PDO Project Development Objective PIU Project Implementation Unit PPCR Pilot Program for Climate Resilience SPCR Strategic Plan for Climate Resilience STEP Systematic Tracking of Exchange in Procurement TA Technical Assistance ToR Terms of Reference The World Bank Madagascar Pilot Program for Climate Resilience Phase I (P158816) BASIC DATA Product Information Project ID Financing Instrument P158816 Investment Project Financing Original EA Category Current EA Category Approval Date Current Closing Date 29-Jun-2017 31-Dec-2019 Organizations Borrower Responsible Agency The Republic of Madagascar Cellule de Prevention et Gestion des Urgences Financing (in USD Million) FIN_SUMM_PUB_TBL SUMMARY Total Project Cost 0 Total Financing 0 Financing Gap 0 DETAILS -NewFin3 Project Development Objective (PDO) Original PDO The Project Development Objective (PDO) is to support Madagascar in the formulation of a Strategic Program for Climate Resilience (SPCR) and the development of a programmatic multi-sector and climate resilient investment plan, and to establish the enabling environment for its implementation. OPS_TABLE_PDO_CURRENTPDO The World Bank Madagascar Pilot Program for Climate Resilience Phase I (P158816) Summary Status of Financing Net TF Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-A5362 29-Jun-2017 18-Jul-2017 18-Jul-2017 31-Dec-2019 1.50 1.03 .47 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. The project, benefiting from a USD 1.5 million grant from the Climate Investment Funds (CIF) under the Pilot Program for Climate Resilience (PPCR), was approved on June 29, 2017 and signed by the Ministry of Finance and Budget (MFB) on August 2, 2017. 2. The Project was restructured in December 2018 (Level 2 restructuring) to extend by 12 months the project closing date, until December 31, 2019. This extension was required to provide adequate time to implement PPCR activities while supporting the implementation of the DRM and Climate Resilience related policy reforms proposed as part of the preparation of Madagascar Development Policy Financing (DPF) with a Catastrophe Deferred Drawdown Option (Cat DDO) (P167941). 3. Main deliverables to date include: a. Strategic Program for Climate Resilience, and its Investment Plan, developed and adopted by the GoM and successfully endorsed by the PPCR sub-committee on December 12, 2017; b. Diagnostic on the policy, institutional and legal DRM and climate resilience framework in Madagascar completed. It identifies the main policy and institutional gaps and was the basis for the preparation of the 3 decrees recently adopted as a prior action to the Cat DDO, to regulate the National DRM Law for improved institutional and decentralized arrangements for disaster preparedness and response; c. Climate projections at national and regional level developed, based on the most recent Global Climate Models, to better inform climate resilience and climate adaptation activities in Madagascar; d. Capacity of the National Met Agency (DGM) strengthened, including the upgrading of their meteorological and climate mapping platform (MAPROOM), through a partnership with the International Research Institute for Climate and Society of Columbia University; e. Review and update of cyclone-resilient construction standards for public buildings which led to the adoption of a new decree as a prior action under the Cat DDO; The World Bank Madagascar Pilot Program for Climate Resilience Phase I () f. Methodological guide developed and adopted to mainstream climate resilience in regional development planning; g. Study on the Economic and Fiscal Impact of Disasters in Madagascar developed, informing the development of a National Disaster Risk Financing Strategy and design of the National Disaster Management Fund. 4. On-going activities to be finalized in the coming months include: (i) the national disaster risk atlas for Madagascar; (ii) climate resilient road construction norms; (iii) regulation for climate resilient traditional housing construction; (iv) vulnerability studies in coastal cities; (v) implementation plan for the DRM national strategy; and (vi) business continuity plans for basic services delivery in case of a disaster emergency. All these activities are either under implementation or at an advance procurement stage. 5. As indicated above, the PPCR has played a critical role in supporting the Government in preparing the reforms initiated under the Madagascar Cat DDO. Following its approval by the Board on December 12, the Cat DDO is in place and could disburse during the next 3 years following a national disaster or health emergency. Nonetheless, the Government remains responsible for implementing the reforms and achieving the results listed in the Program Document. Lessons learned from an IEG analysis of development policy lending shows that close supervision, coupled with technical assistance, is instrumental for achieving results in a one-off DPO. Therefore, matching the Madagascar Cat DDO with parallel technical assistance and capacity building would enhance the DRM policy dialogue and ensure that the reforms are followed through. 6. As indicated in the Program Document, the risks associated with limited institutional capacity for implementation, especially in sector ministries, are rated substantial. Successful implementation of the reforms supported by the program requires a significant strengthening of the GOM across various sectors as well as important improvements in coordination among ministries relevant for DRM. The Program Document states that to mitigate risks associated with low technical capacity, Technical Assistance from AFD and the World Bank has been mobilized to support the Government with all reforms and TA will continue to be provided throughout implementation to ensure targeted results are achieved. In the short term, and while we will do our best to mobilize additional technical assistance in the coming months, the PPCR Phase 1 financing would be critical to fast track: i) the preparation of the Operations Manual and relevant regulations for the newly established National Disaster Fund; (ii) the development of a plan for the decentralization of BNGRC at regional level; and (iii) the dissemination of the new climate resilient standards for Public Buildings and the new guidelines for mainstreaming DRM in territorial planning. 7. The last Implementation Status and Results Report (ISR) in June 2019 rated the Project as moderately satisfactory on progress towards achievement of the Project Development Objective (PDO) and moderately satisfactory towards implementation progress. There are no overdue audit reports for this project. This 6-month extension would indeed bring the total implementation period to 3 years. Please note however that the support to Cat DDO preparation was not part of the RETF original design. We used the opportunity of having PPCR financing to support the preparation of key reforms for the Cat DDO once it was requested by the Government. The World Bank Madagascar Pilot Program for Climate Resilience Phase I () 8. Almost all the prior actions of the Cat DDO were supported by the PPCR for preparing technical studies, institutional analysis, drafting all the draft decrees, conducting the consultation. It is important to look at these achievements when assessing the performance of the PPCR. For Small RETF grants, ISRs are due once a year so the project ratings have not upgraded since the last supervision in June 2019. The Team proposes to prepare an ISR in January 2020 to record the important achievements of PPCR in the recent months to get all the prior actions ready. 9. A detailed workplan has been developed for the remaining 6-month implementation period and CPGU is committed to achieve the remaining activities according to this revised workplan. II. DESCRIPTION OF PROPOSED CHANGES This Restructuring Paper recommends a 6 months extension of the project closing date until June 30, 2020 to provide adequate time to fully complete PPCR (Phase 1) activities while supporting the early implementation of the DRM and Climate Resilience related policy reforms proposed as part of the recently approved Madagascar Cat DDO. This will bring the total project duration to 3 years. III. SUMMARY OF CHANGES Changed Not Changed Loan Closing Date(s) ✔ Implementing Agency ✔ Project's Development Objectives ✔ Results Framework ✔ Components and Cost ✔ Cancellations Proposed ✔ Additional Financing Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Change in Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ The World Bank Madagascar Pilot Program for Climate Resilience Phase I () Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline TF Status Closing Closing(s) Closing for Withdrawal Applications TF-A5362 Effective 31-Dec-2018 31-Dec-2019 30-Jun-2020 30-Oct-2020 Note to Task Teams: End of system generated content, document is editable from here.