The World Bank Malawi Floods Emergency Recovery (P154803) REPORT NO.: RES39618 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF MALAWI FLOODS EMERGENCY RECOVERY APPROVED ON MAY 7, 2015 TO MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT URBAN, RESILIENCE AND LAND AFRICA Regional Vice President: Hafez M. H. Ghanem Country Director: Bella Bird Regional Director: Ede Jorge Ijjasz-Vasquez Practice Manager/Manager: Meskerem Brhane Task Team Leader(s): Francis Samson Nkoka, Nicholas James Callender The World Bank Malawi Floods Emergency Recovery (P154803) I. BASIC DATA Product Information Project ID Financing Instrument P154803 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 07-May-2015 31-Dec-2019 Organizations Borrower Responsible Agency Ministry of Finance, Economic Planning and Development Government of Malawi Project Development Objective (PDO) Original PDO The Project Development Objective is to “sustainably restore agricultural livelihoods, reconstruct critical public infrastructure to improved standards in the flood-affected districts, and improve the Government of Malawi’s disaster response and recovery capacities”. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-56360 07-May-2015 03-Jun-2015 20-Aug-2015 31-Dec-2019 40.00 34.85 5.49 IDA-D0580 07-May-2015 03-Jun-2015 20-Aug-2015 31-Dec-2019 40.00 37.64 3.05 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Malawi Floods Emergency Recovery (P154803) I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES 1. The MFERP has made good progress against achieving its development objectives. Progress towards achievement of PDO and Overall Implementation Progress are both rated Moderately Satisfactory. The project has reached 2,070,402 direct beneficiaries, representing 131% of the target of 1,580,000 and has supported the restoration of agricultural livelihoods for 208,753 households, surpassing the PDO target by 16%. The project has also supported infrastructure restoration in the health and education sectors, (i) having rehabilitated 5 health centers and institutionalizing disaster resilient designs based on safer-school guidelines and (ii) having rebuilt 152 classrooms, 11 staff houses and 2 administration blocks across 42 schools in 9 districts. The extension of time would allow for the continued advancement of Component 2, sub-component 2.1 – Rehabilitation of Roads and Bridges -- which remains critical for the achievement of the Project development objective. So far the Project has only graded 26.7 km of road against a target of 90km. The main remaining activity to be completed under the MFERP is the ongoing road, bridge and drainage construction works at the Thabwa Chitseko Seveni road. 2. The Thabwa-Chitseko-Seveni road is 59km long and lies at the bottom of an escarpment which receives regular torrential rains that gives rise to flash floods. The road is in a state of disrepair negatively impacting transportation and the local/national economy. The two districts served by the road (Chikwawa and Nsanje) have the highest incidence of poverty and ultra-poverty in Malawi. The area is largely dependent on agriculture for income, where access to market challenges currently exist. The road connects the high agricultural productive areas within Chikwawa and Nsanje to markets within the Chikwawa, Nsanje and Blantyre districts. Furthermore, the upgrading of the road is critical for access to health services, education centers and other facilities. 3. Progress on the rehabilitation of the road was hindered by the partial suspension of financing due major safeguard issues with the primary contractor (China Railway No.5 Engineering Group Co., Ltd - CRECG). Due to non- compliance with the implementation of the Safeguards instruments in effect, a stop order for works was issued by the Government of Malawi (GoM), on July 19, 2019 and a partial suspension of financing for the contract was issued by the World Bank on August 3, 2019. The Government of Malawi cancelled the contract with CRECG on November 25, 2019. Due to the 5-month delay experienced resulting from the stoppage of works and contract termination, the Government of Malawi, through a letter dated November 20, 2019, has requested the extension of the Project to accommodate the completion of the critical works at the site and ensure the continued strengthening of the safeguards system. 4. A Safeguards Action Plan, dated August 29, 2019, was prepared and agreed with the Government of Malawi to restore compliance to the Safeguards requirements of the Association. The Government has demonstrated their strong commitment to restore project compliance by taking swift action and meeting most of the actions agreed in the action plan. To date, the Roads Authority (RA) has (i) recruited a Social Expert and (ii) has amended the Gender Based Violence service provider contract to allow for full time project site presence. The GoM and RA have also (i) expanded roles of the Grievance committees to include the addressal of other forms of grievances related to both the community (such as grievances arising from GBV/SEA and community health and safety) and contracted labour (including health and safety as well as labor issues) arising from the implementation of the road works themselves, with training ongoing (ii) established safe and confidential reporting mechanisms for SEA and SH; (iii) involved critical departments and the Ministry of Gender, Children and Social Welfare in reducing GBV risks; (iv) reviewed terms of employment and working conditions and ensured all employees have signed codes of conduct and employment contracts; (v) developed a Personal Protective Equipment policy for all workers. The Government has also committed to longer term structural changes as part of the action plan including inter alia, establishing an environmental and social unit within the RA as well as updating its environmental and social management guidelines. The World Bank Malawi Floods Emergency Recovery (P154803) 5. The subproject GRM has been revamped by establishing a 3 tier system (contractor, community and federation), scaling up representation of the committees to include more women (40- 60% gender representation) and the Community Development Services under the Ministry of Gender, Children and Social Welfare, undertaking orientation training and community sensitization training (with a total of 10 committees trained), and having its ToRs updated to address other forms of grievances related to both the community (such as grievances arising from GBV/SEA and community health and safety) and contracted labour (including health and safety as well as labor issues) arising from the implementation of the road works themselves. 6. The proposed changes are to extend the Project closing date from December 31, 2019 to September 30, 2020, following the formal Government request for project extension. Given the rainy season has begun in Malawi, it is anticipated that works will recommence at the end of March 2020, allowing for a 6 month period for completion of works at the Thabwa Chitseko Seveni Road utilizing remaining Project resources (US$5,236,000). The additional time also ensures the completion and resolution of the agreed upon Safeguards Action Plan. II. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IDA-56360 Effective 31-Dec-2019 30-Sep-2020 30-Jan-2021 IDA-D0580 Effective 31-Dec-2019 30-Sep-2020 30-Jan-2021