Document of
               The World Bank
          FOR OFFICIAL USE ONLY



                                         Report No: 75641-RO




            RESTRUCTURING PAPER

                     ON A

     PROPOSED PROJECT RESTRUCTURING
                  OF THE
HEALTH SECTOR REFORM PROJECT - PHASE II (APL2)

               LOAN NO. 4760-RO

               December 16, 2004


                      TO

                  ROMANIA


                 March 12, 2013
Regional Vice President:   Philippe Le Houérou
      Country Director:    Mamta Murthi
        Sector Director:   Ana Revenga
       Sector Manager :    Daniel Dulitzky
     Task Team Leader:     Richard Florescu
                   HEALTH SECTOR REFORM PROJECT – (APL 2)
                                          (P078971)
                               RESTRUCTURING PAPER
                                   (LOAN NO. 4760-RO)
This Restructuring Paper seeks approval to extend the current closing date of the Project from
March 15, 2013 to December 31, 2013. With this proposed extension, the Project will have a
cumulative extension of the closing date of 48 months. This extension was requested by the
Government through a letter from the Ministry of Public Finance dated February 19, 2013.

The proposed nine and a half-month extension is required to complete a few ongoing
activities, necessary for the full attainment of the overall APL Program Development
Objectives (PDOs). In addition, the extension will allow the completion of technical
assistance activities needed to support the Ministry of Health’s commitment in fulfilling
requirements under the precautionary stand-by agreement with the International Monetary
Fund. These activities suffered an implementation delay due to changes in the Government
following the general election of December 2012, and this is why an additional extension of
the Project is being sought.

The Project was approved on December 16, 2004 and became effective on June 27, 2005. The
Project was restructured in November 2008, and a first closing date extension of 12 months
was granted from December 31, 2009 to December 31, 2010. This was followed by a second
extension (in two-steps) up to December 15, 2011, by a third extension to December 15, 2012,
and by a fourth extension up to March 15, 2013.

Overall progress towards achieving the Project Development Objectives (PDO) remains
satisfactory. All of the PDO Indicators are achieved as well as most of the Intermediate
Outcome Indicators. Project implementation progress is rated satisfactory.

To date, EURO 61.5 million of the Loan proceeds are disbursed (almost 94.5 percent of the
total Loan) while the total level of disbursements and commitments reached EUR 64 million
(98.3 percent of the total Loan). It is expected that the total Loan amount will be fully
disbursed provided the requested extension of 9 months is granted.

This fifth extension of the Project closing date from March 15, 2013 to December 31, 2013
will enable the preparation of the financial impact assessment of the envisaged health sector
reforms, under revised Terms of Reference prepared by the new Government. This assessment
is a performance criterion included in the precautionary stand-by agreement with the
International Monetary Fund and in the Memorandum of Understanding agreed with the
European Commission. This extension will also allow the preparation of additional technical
assistance activities to support the design and implementation of the next generation of
reforms in the health sector in Romania.

The requirements of OP/BP 13.30 have been met, namely, (i) the project objectives are
achievable; (ii) the performance of the Borrower and other project implementing agencies is
satisfactory; and (iii) the Borrower has prepared a specific Action Plan acceptable to the Bank
for the completion of the Project within the proposed extended timeframe, i.e. December 31,
2013. There are no outstanding audits for this Project.