The World Bank West Africa Regional Communications Infrastructure Project - APL-1B (P122402) REPORT NO.: RES34372 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF WEST AFRICA REGIONAL COMMUNICATIONS INFRASTRUCTURE PROJECT - APL-1B APPROVED ON JUNE 21, 2011 TO MINISTRY OF ECONOMY AND FINANCE,MINISTER OF FINANCE AND ECONOMIC AFFAIRS,MINISTÈRE DE L’ECONOMIE ET DES FINANCES DU BURKINA FASO DIGITAL DEVELOPMENT AFRICA Regional Vice President: Hafez M. H. Ghanem Country Director: Deborah L. Wetzel Senior Global Practice Director: Boutheina Guermazi Practice Manager/Manager: Boutheina Guermazi Task Team Leader: Jerome Bezzina The World Bank West Africa Regional Communications Infrastructure Project - APL-1B (P122402) I. BASIC DATA Product Information Project ID Financing Instrument P122402 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 21-Jun-2011 30-Jun-2021 Organizations Borrower Responsible Agency Ministry of Digital Economy and Post,Ministry of Information and Comminications Ministry of Economy and Finance,Minister of Finance and Infrastructure,Ministere du Developpement de Economic Affairs,Ministère de l’Economie et des Finances l'Economie Numerique et des Postes,Autorite de du Burkina Faso Regulation des Communications Electroniques et des Postes,Secretariat Permanent du Programme Sectoriel des Transports Project Development Objective (PDO) Original PDO The development objective of WARCIP is to increase the geographical reach of broadband networks and reduce costs of communications services in West Africa. For APL1B, the Project's development objectives are to contribute to increasing the geographical reach of broadband networks and to reducing the costs of communications services in each of the territories of The Gambia, Guinea and Burkina Faso. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-62220 25-Apr-2018 11-May-2018 05-Sep-2018 30-Jun-2021 20.00 1.11 17.29 IDA-H7120 21-Jun-2011 04-Jul-2011 22-Dec-2011 30-Sep-2018 23.00 19.95 .07 The World Bank West Africa Regional Communications Infrastructure Project - APL-1B (P122402) IDA-H7130 21-Jun-2011 29-Jun-2011 31-Oct-2011 31-Dec-2016 34.76 32.56 0 IDA-H7140 21-Jun-2011 29-Jun-2011 19-Dec-2011 31-Dec-2016 33.87 31.76 0 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES Context 1. As part of the West Africa Regional Communications Infrastructure Project - APL-1B (P122402), the contract No. 31/00/01/01/01/80/2017 for the Provision of international bandwidth capacity was signed on February 21, 2018 in Ouagadougou, Burkina Faso. The amount of the contract was CFA Francs (CFAF) 2,444,634,945 payable (i) in CFAF 1,693,477,815 on one hand and (ii) in US Dollars (USD) 1,227,000 on the other hand (1 USD = 612.19 CFA francs). The purchase of the capacity was included in the Financing Agreement of the parent WARCIP Project (Financing Agreement – Grant Number H712 – BF), which also included several other important activities. 2. The cost of these activities, carried out before the acquisition of the bandwidth, was higher than expected, resulting in a lack of IDA resources in the initial WARCIP Project to fund the purchase of international capacity and advocating for an Additional Financing. During AF preparation and negotiation, it was then considered to finance 65% of the bandwidth on the initial IDA Grant H712 and the remaining 35% under the additional funding given the progress of the preparation of this project. A letter from the Minister of the Digital Economy attached to the above-mentioned purchase capacity contract was sent to TOGO TELECOM for this purpose. 3. The parent WARCIP project made an initial payment of CFAF 1,589,012,714 (CFAF 1,100,760,580 and USD 797,550) representing 65% of the contract upon presentation of TOGO TELECOM's invoices. This payment was made possible after the project released the disbursement conditions attached to the category 1 of the parent project (see below documentation). 4. After the payment of all invoices due and before the closing date, the parent project generated a CFAF 195,000,000 surplus which made possible to make a partial payment on the 35% tranche. At the closing of the parent project  the total amount paid to TOGO TELECOM was therefore CFAF1,784,012,715 (CFAF 1,589,012,714 + CFAF 195,000,000).  The balance due to TOGO TELECOM is CFAF 660,622,231:  CFAF 397,717,234  USD 429,450 Rationale for Project Restructuring The World Bank West Africa Regional Communications Infrastructure Project - APL-1B (P122402) 5. As part of the Additional Financing negotiations, it was agreed to finance under the Category 1 of the Additional Financing (i) the balance due to TOGO TELECOM under the contract concluded February 21, 2018 (detailed above) and (ii) additional purchase of additional capacity to be negotiated as part of a new contract. The assessment made by team, at the time of negotiations, did not indicate that category 1 should distinguish between (i) and (ii), which therefore implied that any amounts received under Category 1 will have to meet the new disbursement conditions under the AF without differentiating between amounts requested under the initial funding agreement and those committed after the additional funding is signed. 6. The WARCIP project requested a DRF in January 2019 to finance the sums due to Togo Telecom under the initial contract on the basis of Article B.1.a of the financing agreement relating to the retroactivity of sums due up to a maximum of EUR2,500,000 made before the date of signature of the additional financing. 7. This DRF was rejected on the basis of non-compliance with the disbursement conditions of category 1 of the IDA Credit No.6222 - BF financing agreement and the provision of Article B.1.b (i), (ii), and (iii). 8. As mentioned in Para 3 above, all disbursement conditions related to Category 1 of the parent project have been fulfilled and partial payment up to 65% has been made. The Project should not be asked to meet disbursement conditions they have already satisfied in the parent project for a contract, which spreads/splits expenses between the parent project and the AF. 9. Therefore, It is necessary to amend the Schedule 2, Section III.B.1.a of the Financing Agreement IDA No. 6222-BF for the additional financing, to stipulate that under Category (1) no disbursement condition is required in order to allow the payment of the remaining amounts due to Togo Telecom under the initial contract prior to the signature of the financing agreement, for which the conditions of disbursement have already been met. 10. Any other disbursement conditions of the Financing Agreement IDA No. 6222-BF of the Schedule 2, Section III. B1.b (i), (ii) and (iii), relate only to new contracts entered into after the signing of the FA of the additional financing, including contract for additional purchase of additional capacity, and for which the disbursement conditions have not been met yet. 11. It should be noted that the team with the Governement pays a special attention to the completion of the purchase of bandwidth activity, and is preparing an implementation strategy in order to make sure the activity will be completed before the closing date of the project. II. DETAILED CHANGES REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Current Current Actuals + Proposed Disbursement % Ln/Cr/TF Expenditure Allocation Committed Allocation (Type Total) Category The World Bank West Africa Regional Communications Infrastructure Project - APL-1B (P122402) Current Proposed IDA-62220- (1) Lease of 001 Capacity under Currency: Part 1.1.1 of the EUR Project for 5,000,000.00 0.00 1,100,000.00 100.00 100 payments owed before June 6, 2018 GD,WK,OC, NCS,CS - PT (see 10,400,000.00 0.00 10,400,000.00 100.00 100.00 details) GD,WK,OC, 1,000,000.00 0.00 1,000,000.00 100.00 100.00 NCS,CS - PT 3 (4) Lease of Capacity under Part 1.1.1 of the Project for 0.00 0.00 3,900,000.00 100 payments owed after June 6, 2018. Total 16,400,000.00 0.00 16,400,000.00