Document of
                The World Bank


                                        Report No: 56657-PE




            RESTRUCTURING PAPER

                     ON A

        PROPOSED PROJECT RESTRUCTURING
                       OF
 INSTITUTIONAL CAPACITY FOR SUSTAINABLE FISCAL
DECENTRALIZATION TECHNICAL ASSISTANCE PROJECT
                (LOAN NO. 7255-PE)
                DECEMBER 16, 2004


           IN THE INITIAL AMOUNT OF
                US$8.8 MILLION

                     AND

          A RESTRUCTURED AMOUNT OF
                US$ 6.64 MILLION


                    TO THE

               REPUBLIC OF PERU


                 October 7, 2010
                  ABBREVIATIONS AND ACRONYMS
MEF   Ministry of Economy and Finance




         Regional Vice President:       Pamela Cox
               Country Director:        C. Felipe Jaramillo
                 Sector Director:       Marcelo Giugale
              Task Team Leader:         Oscar Calvo-Gonzalez



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                                        INSERT

                                   DATA SHEET

                                          HERE



                 AFTER APPROVAL BY THE COUNTRY DIRECTOR

           THE DATA SHEET SHOULD BE INSERTED IN THIS SECTION

                             MANUALLY IN HARD COPY

               BEFORE SENDING A FINAL RP TO THE PRINT SHOP.

  DO NOT INCLUDE THIS INSTRUCTION PAGE IN THE RP SENT TO THE
                          PRINT SHOP.

NOTE: The Data Sheet can be found in the "Data Sheet" tab of the RP section of the
Operations Portal. Information in it is updated whenever such information is manually
changed in the "Data Sheet" tab at any stage during project restructuring. Prior to
sending the final RP to the Print Shop, it is best practice to confirm the information in the
data sheet before printing it out and inserting it here.




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           PERU -- INSTITUTIONAL CAPACITY FOR SUSTAINABLE FISCAL
             DECENTRALIZATION TECHNICAL ASSISTANCE PROJECT
                                  P088809
                                LOAN 7255-PE
                                      Restructuring Paper

1.     Proceeds for Peru, Institutional Capacity for Sustainable Fiscal Decentralization
Technical Assistance Project, Loan No. 7255-PE, P088809 will be reallocated as follow:

        Category of Expenditure                           Allocation              % of Financing
       Current           Revised                      Current    Revised         Current Revised
(1) Goods and            (1) Goods and
                                                      1,935,000     1,962,00        80          80
equipment                equipment

(2) Consultants'         (2) Consultants'
                                                      3,006,000    2,847,000        80          80
services and audits      services and audits

(3) Training             (3) Training                  820,000       940,000        80          80

(4) Operating Costs      (4) Operating Costs           835,000       847,000        80          80

(5) Front-end fee        (5) Front-end fee              44,000        44,000       100         100
NB. The original loan amount was US$ 8,800,000. It was reduced in the amount of US$ 2,160,000 as of
April 14, 2008.

2.      Project implementation has progressed satisfactorily. Financial disbursements
have continued in line with the disbursement schedule and fiduciary arrangements also
continue to be satisfactory. In particular, the audit of 2009 accounts raised no issue, the
financial information report of the project for the first semester of 2010 was satisfactorily
completed on September 1, 2010, and an ex post evaluation of procurement completed on
May 19, 2010 was also satisfactory.

3.      The proposed reallocation is necessary due to a shift to prioritize activities
involving training on results-based budgeting tools and instruments developed by the
Ministry of Economy and Finance (MEF) under component 2 (supporting the design and
implementation of tools for enhancement of public expenditure efficiency) of the project
in line with what had been agreed during a supervision mission in February 2010. The
authorities in MEF formally submitted the request for this final reallocation of expense
categories in a letter dated September 15, 2010 ahead of the Project closing on September
30, 2010.




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