61305 v1 1 Document of The World Bank Report No: RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SCIENCE & TECHNOLOGY PROJECT LOAN July 7, 2005 TO THE REPUBLIC OF CROATIA March 31, 2011 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. ABBREVIATIONS AND ACRONYMS BICRO Business Innovation Centre in Croatia UKF Unity through Knowledge Fund Regional Vice President: Philippe Le Houerou Country Director: Peter Harrold, Sector Manager / Director: Lalit Raina Task Team Leader: Paulo Guilherme Correa Page 1 SCIENCE & TECHNOLOGY PROJECT RESTRUCTURING PAPER Reallocation of Proceeds CROATIA — SCIENCE & TECHNOLOGY PROJECT P080258 LOAN 7320-HR Restructuring Paper 1. Proceeds for Croatia, Science & Technology Project, [Loan No 7320-HR], P080258 will be reallocated as follows: Category of Expenditure Allocation % of Financing Current Revised Current Revised Current EURO EURO Goods Goods 3,102,824 2,779,517 100% of foreign expenditures, 100% of local expenditures (ex factory) and 80% of local costs for other items procured locally Consultants’ Consultants’ 4,479,702 3,867,714 100% of foreign Services Services expenditures, and 75% of local expenditures Training Training 720,063 713,592 100% Sub-financing Sub-financing (a) under Part B.3 (a) under Part B.3 0 0 100% of Sub-project of the Project of the Project amount (b) under Part B.5 (b) under Part B.5 2,000,000 2,000,000 100% of Sub-project of the Project of the Project amount (c) under Part (c) under Part 15,652,915 16,766,350 80% of Sub-project B.2, B.4 and B.2, B.4 and amount for withdrawal C.2 of the C.2 of the applications received by Project Project the Bank before July 16, 2009, 100% of Sub- project amount under Part B.2 of the Project for withdrawal applications received by the Bank on or after July 16, 2009, and 80% of Sub-project amount under Parts B.4 and C.2 of the Project for withdrawal applications received by the Bank on or after July 16, 2009 Severance Severance 68,677 68,677 100% Payments Payments Operating Costs Operating costs 2,160,546 2,107,961 75 % Fee Fee 77,500 77,500 Amount due under Section 2.04 of this Agreement Premia for Premia for 0 0 Amount due under Interest Rate Caps Interest Rate Caps Section 2.09 (c) of this and Interest Rate and Interest Rate Agreement Collars Collars Innovation Innovation 1,733,397 1,614,313 100% of the amount Financing Financing paid Unallocated Unallocated 0 0 TOTAL TOTAL 29,995,624 29,995,624 2. The Project has been restructured in August 2009 and December 2010. Since then it successfully launched activities that enabled the commercialization of research results and research capacity and increased the ability of small and medium sized companies to invest in research and development activities. The project rating is satisfactory. 3. The project will close on May 31, 2011, and proposed reallocation is necessary to optimize the use of funds until the project closing date. The percentage of financing under the loan expenditure categories remains the same. The funds are being reallocated to the sub-financing programs funded by BICRO, as follows: Revised allocation for the RAZUM Program amounts to EURO 7,193,124 Revised allocation for the TechCro Program amounts to EURO 5,387,656