The World Bank Strengthening Safety Nets Systems - MASAF IV (P133620) REPORT NO.: RES35953 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF STRENGTHENING SAFETY NETS SYSTEMS - MASAF IV APPROVED ON DECEMBER 18, 2013 TO GOVERNMENT OF MALAWI SOCIAL PROTECTION & LABOR AFRICA Regional Vice President: Hafez M. H. Ghanem Country Director: Bella Bird Senior Global Practice Director: Michal J. Rutkowski Practice Manager/Manager: Robert S. Chase Task Team Leader: Ivan Drabek, Colin Andrews The World Bank Strengthening Safety Nets Systems - MASAF IV (P133620) I. BASIC DATA Product Information Project ID Financing Instrument P133620 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 18-Dec-2013 31-Dec-2019 Organizations Borrower Responsible Agency Government of Malawi National Local Government Finance Committee Project Development Objective (PDO) Original PDO The Project Development Objective of the proposed project is to strengthen Malawi’s social safety net delivery systems and coordination across programs. Current PDO The Project Development Objective is to improve resilience among poor households and to strengthen Malawi s social safety net delivery systems and coordination across programs. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-59220 08-Nov-2016 23-Jan-2017 07-Mar-2017 31-Dec-2019 22.32 0 22.20 IDA-D1480 08-Nov-2016 23-Jan-2017 07-Mar-2017 31-Dec-2019 47.68 28.99 18.60 IDA-56100 26-Mar-2015 18-Aug-2015 16-Sep-2015 31-Dec-2018 6.77 6.74 0 IDA-D0450 26-Mar-2015 18-Aug-2015 16-Sep-2015 31-Dec-2018 68.22 67.00 0 IDA-53430 18-Dec-2013 13-Aug-2014 16-Sep-2014 30-Jun-2018 32.80 30.41 0 The World Bank Strengthening Safety Nets Systems - MASAF IV (P133620) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES A. Progress towards Achievement of the Project Development Objective (PDO) 1. The project is progressing relatively well towards the achievement of the PDO. The PDO indicator for the number of direct beneficiaries has been reached, and the progress on the other PDO indicators is notable. It is expected that all project indicators will be largely met by the current closing date of December 31, 2019, or the later date, to be established through this project restructuring. B. Assessment of the Implementation Progress 2. Overall project disbursements are at 75 percent. The original project financing and the First Additional Financing (AF1) have been fully disbursed, and all remaining financing is under the Second Additional Financing (AF2). AF2 has disbursed 41.4 %. The National Local Government Finance Committee (NLGFC) continued to provide grants to the district councils for implementation of Public Works Program (PWP) and the Social Cash Transfers Program (SCT). Funds amounting to US$80.9 million for PWP and US$19.7 million for Social Cash Transfer have so far been transferred to the district councils under the project. In addition, US$9.6 million have been disbursed for Livelihoods and Skills Development activities to the Community Savings and Investment Promotion (COMSIP) Union. The PWP has completed the final round of the regular PWP under the project. The Social Cash Transfer program resources will cover the program to the end of the Project, with residual funds available up to September 2020 (requiring a 9-month extension of the closing date), while the COMSIP Livelihoods and Skills Development subcomponent resources will cover the program up to December 2019. 3. Notable progress has been achieved with the implementation of the SCT program in the 9 new districts, where 97,864 SCT beneficiary households have been enrolled. This represents 95.28% of the targeted 102,712 households. The remaining households mainly relate to areas with missing data, or households that are not showing up for late enrolment or data mix up due to coding errors (these are in process of being resolved). 4. Finally, the Livelihoods and Skills Development (LISD) work has progressed well, with 164,138 members (of which 67% are women) mobilized into 6,053 COMSIP Clusters. Of these members, 131,252 have been trained in financial literacy, business management, and environmental and social safeguards, against an end of Project target of 120,808 members. LISD has also started implementing the integration activities with the SCT, working directly with SCT beneficiaries in target communities to help design and implement graduation strategies. 5. Local Development Fund (LDF) and the National Local Government Finance Committee (NLGFC) Merger. As of April 1, 2018, the LDF and the NLGFC were merged into one institution under the name of NLGFC. This change and the issues stemming from it were described in detail in the aide memoire from June 2018. The Bank cautioned NLGFC about potential issues and required additional information to be able to assess the implications of the institutional change. During the past period, the Bank received a communication on the merger process from the Ministry of Local Government and Rural Development in November, indicating changes from the project implementation perspective, organizational structure of the NLGFC with positions and information on placements and the budget for NLGFC for FY 18/19. Overall, the NLGFC managed to stabilize its operations after the restructuring, and general implementation and project management are considered not to be negatively affected by the merger. That is why the rating for Project has The World Bank Strengthening Safety Nets Systems - MASAF IV (P133620) been upgraded back to Moderately Satisfactory, while implementation Progress remains overall Moderately Satisfactory as well. C. Rationale for the Restructuring 6. The Bank received from the Government on January 22, 2019, a restructuring request for extending the Closing Date of the MASAF IV Second Additional Financing (IDA CREDIT NO. 59220 AND GRANT NO. D1480) from December 31, 2019 to September 30, 2020. This request is in line with the recommendation from a recent Project Implementation Support Mission, which observed that by the current closing date (December 31, 2019) there would be a balance in undisbursed resources meant to be applied towards the Social Cash Transfer Program (SCTP) under Component I. This balance is the result of a nine-month delay in the start-up processes o f the SCTP during the rolling out of the Unified Beneficiary Registry (UBR), for which the exact implementation timing could not have been foreseen at the Second Additional Financing design stage. The estimated balance for SCTP after December 31, 2019 will be US$ 11.8 million, which would allow the SCTP to run until the end of June 2020. Financing of the SCTP in 2020 would support the fuller achievement of the project development objectives. Subject to availability of resources, part of the extended time could also be used for the proper finalization of the enhanced public works pilot, which is a new activity designed to inform an improved public works program in Malawi. II. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IDA-53430 Closed 30-Jun-2018 IDA-56100 Closed 30-Jun-2018 31-Dec-2018 IDA-59220 Effective 31-Dec-2019 30-Sep-2020 30-Jan-2021 IDA-D0450 Closed 30-Jun-2018 31-Dec-2018 IDA-D1480 Effective 31-Dec-2019 30-Sep-2020 30-Jan-2021