The World Bank PY PRODERS Sustainable Agriculture & Rural Development (P088799) REPORT NO.: RES38654 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF PY PRODERS SUSTAINABLE AGRICULTURE & RURAL DEVELOPMENT APPROVED ON JANUARY 29, 2008 TO REPUBLIC OF PARAGUAY AGRICULTURE AND FOOD LATIN AMERICA AND CARIBBEAN Regional Vice President: J. Humberto Lopez Country Director: Jordan Z. Schwartz Regional Director: Anna Wellenstein Practice Manager/Manager: Preeti S. Ahuja Task Team Leader: Maurizio Guadagni The World Bank PY PRODERS Sustainable Agriculture & Rural Development (P088799) BASIC DATA Product Information Project ID Financing Instrument P088799 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 29-Jan-2008 29-Nov-2019 Organizations Borrower Responsible Agency Republic of Paraguay MAG/PRODERS Project Development Objective (PDO) Original PDO To improve the quality of life of Small-Scale Farmers and Indigenous Communities in the Project Area in a sustainable manner,through the support of actions to strengthen community organization and self governance, improve natural resources management andenhance the socio-economic condition of said farmers and communities. Current PDO To improve in a sustainable way the socio-economic condition of Small-Scale Farmers and Indigenous Communities in the Project Area,through the support of actions to strengthen their communityorganization, self-governance, and access to markets and value chains. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-83160 05-Dec-2013 06-Dec-2013 25-Sep-2014 29-Nov-2019 100.00 92.76 7.24 IBRD-75030 29-Jan-2008 24-Jun-2008 30-Jun-2009 31-Dec-2015 37.50 37.50 0 The World Bank PY PRODERS Sustainable Agriculture & Rural Development (P088799) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. The original Paraguay - Sustainable Agriculture and Rural Development Project (PRODERS) was approved on January 29, 2008 with a loan amount of US$37.5 million (Loan 7503) and it became effective on June 30, 2009. An Additional Financing (AF) in the amount of US$100 million (Loan 8316) was approved on December 5, 2013, which became effective on September 25, 2014. The original loan was fully disbursed and closed with a Moderately Satisfactory rating on December 28, 2015, after a two-year extension of its original closing date, which was approved together with the AF. As of November 6, 2019, the Project had disbursed a combined total of $129 million (100 percent of the original loan and 95 percent of the AF loan), leaving $8.5 million undisbursed. The current closing date is November 29, 2019. 2. The Project’s PDO, as revised, is “to improve in a sustainable way the socio-economic condition of Small-Scale Farmers and Indigenous Communities in the Project Area, through the support of actions to strengthen their community organization, self-governance, and access to markets and value chains”. Progress toward achieving the PDO and Implementation Progress (IP) are currently rated as Moderately Satisfactory. The Project has reached around 250,000 individual beneficiaries, including 50,000 indigenous people, building significant capacity in 615 decentralized community organizations to plan and execute local development interventions. The most remarkable project achievement is in terms of poverty reduction. Preliminary analyses, based on a statistically representative sample, show that both total and agricultural income of beneficiary households has increased significantly, bringing a large share of project beneficiaries above the poverty line (quantifications are being currently estimated. The challenge is to separate project effects to assure attribution). The PDO continues to be achievable and there is no overdue or unacceptable audit report. 3. Based on the achievements of the Project, the Government of Paraguay has requested a follow-up operation in the agricultural sector. With the Bank’s assistance, the Government is preparing the Productive Alliances Project (P168153), for which a Concept Review took place on November 5, 2018. The Government is working towards the goal of completing the preparation and negotiating the new project by January 2020, for an envisaged Board date of March 4, 2020. 4. On March 18, 2019, the Government of Paraguay asked for (i) a one-year extension of the Closing Date to November 30, 2020; (ii) a reallocation across disbursement categories based on the updated execution plans until project closing; and (iii) the inclusion of a new activity under the Project Management, Monitoring, and Evaluation component. The second and third requests were fully addressed with the May 31, 2019 restructuring. As for the extension of the closing date, based on an in- principle approval by the Regional Vice President of June 10, 2019, the World Bank provided an initial positive response, but indicated that the final decision would be taken closer to the current closing date, based on implementation progress and achievement of the following milestones: (i) completion of the transfers of funds to communities for pending subprojects; (ii) completion of RENABE field data recollection (RENABE = Registro Nacional Beneficiarios, that feeds into the monitoring system); (iii) finalization of the preliminary PRODERS evaluation report to be carried out by IICA; and (iv) distribution of “Family by Family technological packages” to selected beneficiaries. The World Bank PY PRODERS Sustainable Agriculture & Rural Development (P088799) 5. The extension of PRODERS will allow full achievement of the PDO, while enhancing sustainability of project outcomes and allowing proper measurement of final achievements. Most community investments were implemented in 2017-19, two years after the initial plan, and therefore additional time is required for such investments to produce the expected outcomes. The extension would provide the opportunity to strengthen the associative management capacity of subproject beneficiaries and increase the sustainability of subprojects, so that these may continue delivering the expected benefits even after project closing; It will also allow a smooth transition to the new operation under preparation, the Productive Alliances Project (PAP). The on-going project has built considerable implementation capacity within the Ministry of Agriculture and Livestock (MAG) and it is desirable that at least part of it can be leveraged for the new operation. The proposed extension would avoid the loss of human resources and implementation capacity that could be caused by a long gap between the closing of PRODERS and the approval of the new operation. 6. As of October 31, 2019, the first three milestones have been fully accomplished. As for the distribution of “Family by Family” technological packages, the evaluation of proposals has been completed and the World Bank has provided no objection to the contract award for a total cost of $4.3 million. Once the contract has been awarded, the team is confident that distribution will be completed by the end of the year. 7. Considering the above achievements, the team is proposing to extend the closing date for a 12-month period (as requested), setting the new project closing date to November 30, 2020. II. DESCRIPTION OF PROPOSED CHANGES The proposed changes are the extension of closing date from November 29, 2019 to November 30, 2020 and adjusting the Results Framework to extend the end of project target date. III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Loan Closing Date(s) ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Components and Cost ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ The World Bank PY PRODERS Sustainable Agriculture & Rural Development (P088799) Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications 31-Dec-2015, 29- IBRD-75030 Closed 28-Dec-2013 Jun-2016 28-Dec-2018, 29- IBRD-83160 Effective 29-Dec-2017 30-Nov-2020 30-Mar-2021 Nov-2019 . The World Bank PY PRODERS Sustainable Agriculture & Rural Development (P088799) . Results framework COUNTRY: Paraguay PY PRODERS Sustainable Agriculture & Rural Development Project Development Objectives(s) To improve in a sustainable way the socio-economic condition of Small-Scale Farmers and Indigenous Communities in the Project Area,through the support of actions to strengthen their communityorganization, self-governance, and access to markets and value chains. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline End Target To improve socio-economic condition of Small-Scale Farmers and Indigenous Communities 1. Number of targeted farms that increase their agricultural 0.00 10,000.00 income by at least 30% (Number) Action: This indicator has been Revised 2. Number of targeted families that are able to pass above the poverty line (with per-capita income above Gs.446.798 per 0.00 10,000.00 month in rural areas – expressed in Guaranies October 2016) OLD: At least 50% i (Number) Action: This indicator has been Revised 3. Percentage of farms with land productivity (by ha) increased at least by 25 percent through the application of productive 0.00 25.00 practicespromoted by the project (Percentage) Action: This indicator has been Revised 4. Direct project beneficiaries (Number) 0.00 213,900.00 Action: This indicator has been Revised The World Bank PY PRODERS Sustainable Agriculture & Rural Development (P088799) RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline End Target 5. Female beneficiaries (Percentage) 0.00 40.00 Action: This indicator has been Revised 6. Associative management capacity increased:80% Community Development Groups and 50% of indigenous groups with 0.00 80.00 business proposals oriented to business plans to access markets and inclusive value chai (Percentage) Action: This indicator has been Revised PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target C1 -- Community Organization Development and Capacity Building 7. Number of technicians trained and operating in the project 0.00 345.00 areas (Number) Action: This indicator has been Revised 8. Number of people reached by Environmental Education 0.00 24,000.00 Program (Number) Action: This indicator has been Revised 22. Number of indigenous communities which gained access to 0.00 60.00 water and/or electricity thanks to the project (Number) Action: This indicator has been Revised 23. Number of indigenous people to whom a formal identity card 0.00 4,000.00 has been provided (Number) The World Bank PY PRODERS Sustainable Agriculture & Rural Development (P088799) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target Action: This indicator has been Revised 24. Number of indigenous communities that have received land 0.00 80.00 titling support (Number) Action: This indicator has been Revised C2 -- Rural Extension and Adaptive Research 12. Number of producers trained as promoters in sustainable 0.00 2,500.00 production and financial/commercial matters (Number) Action: This indicator has been Revised 13. Percentage of beneficiaries trained that have adopted diversification and new sustainable technologies to increase 0.00 80.00 production & produciivity (Percentage) Action: This indicator has been Revised 14. Ha under good forestry practices (Hectare(Ha)) 0.00 6,000.00 Action: This indicator has been Revised C3 --Sustainable Rural Development Fund (FDRS) 9. Families/farms with investment proposals (Number) 21,641.00 30,000.00 Action: This indicator has been Revised 10. Community Investment Proposals financed and implemented 0.00 1,200.00 (PIC) (Number) Action: This indicator has been Revised 11. Number of Indigenous Communities Development Plans 0.00 180.00 financed and implemented (PICI) (Number) Action: This indicator has been Revised The World Bank PY PRODERS Sustainable Agriculture & Rural Development (P088799) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target 15. Percentage of subprojects that complete disbursements and investments targets established in their management plan 0.00 80.00 (Percentage) Action: This indicator has been Revised 16. Percentage of subprojects that achieve 80% of their intended 0.00 80.00 results from the investment plan (Percentage) Action: This indicator has been Revised 17. Percentage of subprojects that are functional 2 years after 0.00 75.00 their closing date (Percentage) Action: This indicator has been Revised 21. Families with improved housing (improved toilets, ovens, 0.00 8,000.00 roof, etc.) (Number) Action: This indicator has been Revised C4 -- Animal Health Improvement 18. SIGOR (Geographic Information System for SENACSA Regional No Yes Offices) local units connected (Yes/No) Action: This indicator has been Revised 19. SIGOR (Geographic Information System for SENACSA Regional No Yes Offices) on line coverage (Yes/No) Action: This indicator has been Revised 20. Biotery lab improved/rehabilitated (Yes/No) No Yes Action: This indicator has been Revised IO Table SPACE The World Bank PY PRODERS Sustainable Agriculture & Rural Development (P088799) The World Bank PY PRODERS Sustainable Agriculture & Rural Development (P088799)