The World Bank Special Financing Facility for Local Development (P156257) REPORT NO.: RES37460 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SPECIAL FINANCING FACILITY FOR LOCAL DEVELOPMENT APPROVED ON JANUARY 11, 2016 TO MINISTRY OF FINANCE SOCIAL, URBAN, RURAL AND RESILIENCE GLOBAL PRACTICE AFRICA Regional Vice President: Makhtar Diop Country Director: Bella Bird Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez Practice Manager/Manager: Meskerem Brhane Task Team Leader: Zishan Faiza Karim, Bernard Harborne The World Bank Special Financing Facility for Local Development (P156257) ABBREVIATIONS AND ACRONYMS BRCiS Building Resilient Communities in Somalia CERC Contingent Emergency Response Component DA Designated Bank Account EAFS External Agency for Fiduciary Support FGS Federal Government of Somalia FMS Federal Member State ICR Implementation Completion Report IFRs Interim Unaudited Financial Reports MPF Multi Partner Fund PIU Project Implementation Unit SPF State and Peacebuilding Fund USD United States Dollar The World Bank Special Financing Facility for Local Development (P156257) Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. BASIC DATA Product Information Project ID Financing Instrument P156257 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 11-Jan-2016 30-Jun-2019 Organizations Borrower Responsible Agency Ministry of Finance Ministry of Finance Project Development Objective (PDO) Original PDO To support the construction and reconstruction of infrastructure and the development of public service delivery capacity in targeted areas of Somalia and support the Federal Government and Interim Administration capacity to respond to an eligible crisis or emergency. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-A4904 12-Apr-2017 25-Jul-2017 25-Jul-2017 31-Aug-2018 2.53 2.53 0 TF-A1715 11-Jan-2016 25-Jan-2016 25-Jan-2016 30-Jun-2019 6.00 5.35 .65 The World Bank Special Financing Facility for Local Development (P156257) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Background 1. The Special Financing Facility for Local Development (SFF-LD) has been effective since January 25, 2016 and has a current project closing date of June 30, 2019. The project is financed by the Somalia Multi-Partner Fund (MPF) (TF0A1715) (USD 6 million) as well as the State and Peace Building Trust Fund (SPF) (TF0A2683) (USD 2.8 million). While the main objective of the project is to support the construction and reconstruction of infrastructure in the newly formed Federal Member States (FMS), the SPF funding activated the project’s Contingent Emergency Response Component (CERC) and allowed for a government-led emergency drought/flood response through the ongoing project. 2. There have been five restructurings of the project to date – (i) in September 2016 to increase the Grant amount from USD 4 million to USD 6 million; (ii) in July 2017 to include the USD 2.8 million from the SPF Grant (iii) in November 2017 to extend the project closing date from December 31, 2017 to August 31, 2018; (iv) in January 2017 to extend the project closing date from August 31, 2018 to March 31, 2019 and (v) in March 2019 to extend the project closing date to June 30, 2019. This would be the sixth restructuring of the project. B. Project Status 3. The project has made good implementation progress with (i) phase I civil works in two urban areas (Baidoa, Jowhar) completed and the subprojects handed over to the respective State administrations and (ii) all five of the phase 2 civil works in three urban areas (Burtinle, Garbaharey and Xudur) completed and handed over to State administrations. Table 1 below provides more details on both phase 1 and 2 subprojects. Table 1: Subproject Implementation Progress Region Subproject Overall Budget Status Jowhar, Middle Rehabilitation of 5km $616,919.00, Project completed and Shabelle Region Jowhar Gravel Road handed over to the Hirshabelle state Hirshabelle Administration on February 24, 2018 The World Bank Special Financing Facility for Local Development (P156257) Baidoa, Bay Region, Rehabilitation of $ 617,994.85 Project completed and South West State handed over to the 3.5 km Baidoa Asphalt South West State Road Administration on May 8, 2018. Garbaharey, Gedo Installation of 42 solar $112,702.6 Project completed and Region, Jubbaland street lights along handed over to State Garbaharey Main Road Jubbaland Administration on February 13, 2019 Garbaharey, Gedo Rehabilitation and $462,213 Project completed and Region, Jubbaland construction of handed over to State Garbaharey Governor's Jubbaland compound Administration on February 13, 2019. Burtinle, Nugal Installation of 58 solar $154,120.3 Project completed and Region, Puntland street lights along handover is expected State Burtinle Main Road by end April, 2019 Burtinle, Nugal District Administration $ 276,745.86 Project to be completed Region, Puntland building rehabilitation by April 13, 2019 and State handed over expected by end April, 2019 Xudur, Bakool Secondary school $ 524,367 Project completed and Region, South West rehabilitation handed over on March State 6, 2019 4. The SPF financing channeled through the project CERC, enabled a government-led response to a drought that brought Somalia to the brink of famine in 2017. These emergency response activities were implemented through an NGO consortium – Building Resilient Communities in Somalia (BRCiS) in seven districts.1 Activities included the provision of clean water through water trucking, procurement of water storage tanks and bladders and rehabilitation of boreholes; provision of non-essential food items such as hygiene kits, shelter, food and medical supplies; chlorination of water sources; and training of water user committees. This component reached over 236,123 beneficiaries and is the first time in Somalia that NGOs have been contracted to the Federal Government of Somalia (FGS) for a government-led emergency response. 5. The TF supporting the CERC (TF0A2683) closed on August 31, 2018 and USD 2.6 million of the USD 2.8 million was fully disbursed. Of the MFP Grant (TFA1715), USD 5.35 million has been disbursed to date, representing an 89 percent disbursement rate. The remaining balance would be used to finance costs related to the beneficiary feedback survey and would contribute to costs for key PIU staff until end November 2019. 6. The PIU performance is satisfactory and there are no overdue audit reports for this project. While there has been good implementation progress and all civil works have now been completed, the project the overall rating for the project is rated as Moderately Satisfactory due to the initial delays faced in implementing subprojects. C. Rationale for Restructuring 1Xudur district in Bakool; Baardheere and Belet Hawal district in Gedo; Adado district in Galguduud; Iskhushuban district in Bari, and Mataaban district in Hiraan; Beledweyne district, in Hiraan and Xudur district, in Bakool. The World Bank Special Financing Facility for Local Development (P156257) 7. The poor 2018 Deyr rains (October – December) and the poor rainfall forecast in the 2019 Gu Season (March – June) is resulting in a moderate to severe drought crisis in most of Somalia. Food security outlook has deteriorated between April and June 2019 due with further deterioration anticipated through September 2019.The UN Integrated Food Security Classification Phase Classification (IPC) projects that over 2.2 million people in Somalia are expected to be in emergency or crisis phase between July and September 2019. Given the SFF-LD’s successful pilot of a government led and managed drought response in 2017 through the CERC component, a management decision has been taken to restructure the project and provide additional financing of USD 10 million to enable a scale up of the drought response activities. The restructured project will also incorporate measures to build the capacity of the government to analyze data, manage an emergency response and plan for early recovery. This will involve support to the Ministries of Planning and Humanitarian, Disaster Management. An extension until November 30th, 2019 would allow sufficient time for this wider restructuring/additional financing to be processed. While it is expected that the restructuring would be completed by August 2019, a longer closing date extension is being requested to ensure adequate time is provided for processing. II. DESCRIPTION OF PROPOSED CHANGES 8. The key change being brought to the project is an extension of the project closing date from June 30, 2019 to November 30, 2019. This project extension will provide sufficient time to process the additional financing of USD 10 million to the project. Government request letter for a project extension until end November 30, 2019 is attached. The project component costs have been updated to reflect the actual component costs, Table 2 below shows the comparison between the original project costs as per the PAD and the actual. Finally, the target dates in the Results Framework across all indicators has also been revised to November 30, 2019. No changes have been brought to the indicators. Table 2: Revised Project Cost by Component (USD) Actual Cost (as of 30th Balance Total estimated Components Cost as per original PAD June 2019) remaining costs Component 1 - Small-Scale Regional Infrastructure 3,900,000 3,307,635.41 442,364 3,750,000 Component 2 - Program Operations and Capacity Building 2,100,000 2,094,869.8 155,130 2,250,000 Component 3 – Emergency Contingent Component 0 2,800,000 0 2,800,000 Total 6,000,000 5,402,505 597,495 8,800,000 I. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ The World Bank Special Financing Facility for Local Development (P156257) Components and Cost ✔ Loan Closing Date(s) ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ 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_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Small-Scale Infrastructure 3.90 Revised Small-Scale Infrastructure 3.75 The World Bank Special Financing Facility for Local Development (P156257) Program Operations, Capacity Program Operations, Capacity 2.10 Revised 2.25 Building, and Contingencies Building, and Contingencies Emergency Contingency Emergency Contingency 2.80 No Change 2.80 Component Component TOTAL 8.80 8.80 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-Aug-2018, 31- TF-A1715 Effective 31-Dec-2017 Mar-2019, 30-Jun- 30-Nov-2019 30-Mar-2020 2019 31-Aug-2018, 31- TF-A4904 Closed 31-Dec-2017 Jan-2019 . The World Bank Special Financing Facility for Local Development (P156257) . Results framework COUNTRY: Somalia Special Financing Facility for Local Development Project Development Objectives(s) To support the construction and reconstruction of infrastructure and the development of public service delivery capacity in targeted areas of Somalia and support the Federal Government and Interim Administration capacity to respond to an eligible crisis or emergency. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 To support the construction and reconstruction of infrastructure Direct project beneficiaries (Number) 0.00 1,000,000.00 Action: This indicator has been Revised Female beneficiaries (Percentage) 51.00 51.00 51.00 51.00 Financed sub-projects that are functioning/ delivering services to 0.00 3.00 communities three months after completion (#) (Number) Action: This indicator has been Revised To support the Federal Government and Federal Member State Government ability to respond to a crisis Beneficiaries under the activated crisis 0.00 230,000 response component (#) (Text) Action: This indicator has been Revised To support public service delivery capacity The World Bank Special Financing Facility for Local Development (P156257) RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 Sub-projects for which community/ or local authority engagement in post- 0.00 2.00 5.00 5.00 project sustainability and/ or O&M plan is established (#) (Number) Action: This indicator has been Revised Perceptions of Regional Administrations or federal government performance on 0.00 0.00 60.00 60.00 sub-project activity (%) (Percentage) Action: This indicator has been Revised PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 Small-Scale Infrastructure Roads rehabilitated, Non-rural 0.00 14.00 14.00 30.00 (Kilometers) Action: This indicator has been Revised Sub-projects completed as planned and 0.00 2.00 5.00 5.00 within budget (#) (Number) Action: This indicator has been Revised Local Project Oversight Committees 0.00 2.00 5.00 5.00 established (#) (Number) Action: This indicator has been Revised The World Bank Special Financing Facility for Local Development (P156257) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 Work days created for short term employment in the sub-projects (of 0.00 150.00 which female) (#) (Number) Action: This indicator has been Revised Work days created for short term employment in the sub-projects for 0.00 51.00 51.00 20.00 women (Number) Action: This indicator has been Revised Program Operations, Capacity Building, and Contingencies Grievances registered related to project 0.00 100.00 100.00 100.00 are addressed (%) (Percentage) Action: This indicator has been Revised Interim Regional Administrations accompanying project design and implementation (consultation, 0.00 2.00 5.00 5.00 identification, procurement and implementation processes) (#) (Number) Action: This indicator has been Revised Government officials participating in capacity building measures under the 0.00 100.00 project (#) (Number) Action: This indicator has been Revised Emergency Contingency Component The World Bank Special Financing Facility for Local Development (P156257) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 Specific Project Operation Manual for the contingency component (Component 3) No Yes has been adopted (Yes/No) Action: This indicator has been Revised IO Table SPACE The World Bank Special Financing Facility for Local Development (P156257) Note to Task Teams: End of system generated content, document is editable from here. 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