The World Bank Caribbean Regional Communications Infrastructure Program (P114963) REPORT NO.: RES38039 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF CARIBBEAN REGIONAL COMMUNICATIONS INFRASTRUCTURE PROGRAM APPROVED ON MAY 22, 2012 TO THE GOVERNMENT OF GRENADA,THE GOVERNMENT OF SAINT VINCENT AND THE GRENADINES,THE GOVERNMENT OF SAINT LUCIA DIGITAL DEVELOPMENT LATIN AMERICA AND CARIBBEAN Regional Vice President: J. Humberto Lopez Country Director: Tahseen Sayed Khan Regional Director: Boutheina Guermazi Practice Manager/Manager: Jane Lesley Treadwell Task Team Leader(s): Doyle Gallegos, Rocio Sanchez Vigueras The World Bank Caribbean Regional Communications Infrastructure Program (P114963) I. BASIC DATA Product Information Project ID Financing Instrument P114963 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 22-May-2012 01-Feb-2020 Organizations Borrower Responsible Agency Ministry of Finance, Econ. Planning, Sustainable Development and Information Technology THE GOVERNMENT OF GRENADA,THE GOVERNMENT OF (SVG),Ministry of Infrastructure Development, Public SAINT VINCENT AND THE GRENADINES,THE Utilities, Energy, Transport and Implementation GOVERNMENT OF SAINT LUCIA (GRE),Ministry of Finance, Econ. Growth, Job Creation, Ext. Affairs & Public Service (St. Lucia) Project Development Objective (PDO) Original PDO The development objective of CARCIP is to increase access to regional broadband networks and advance the development of an ICT-enabled services industry in the Caribbean Region. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-51170 22-May-2012 26-Jun-2012 11-Dec-2012 01-Feb-2020 6.00 5.51 0 IDA-51180 22-May-2012 26-Jun-2012 11-Dec-2012 01-Feb-2020 6.00 5.47 0 IDA-51190 22-May-2012 27-Jun-2012 18-Sep-2013 01-Feb-2020 10.00 7.29 1.86 IDA-H7720 22-May-2012 26-Jun-2012 15-Apr-2013 28-Feb-2019 2.97 2.82 0 The World Bank Caribbean Regional Communications Infrastructure Program (P114963) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES 1. The Project Development Objective (PDO) is to “increase access to regional broadband networks and advance the development of an ICT-enabled services industry in the Caribbean Region.” The three components under the Project are: (i) Regional Connectivity Infrastructure; (ii) ICT-led innovation; and (iii) Implementation Support. There will be no changes to the PDO, or any new safeguards policies triggered under the proposed Restructuring. 2. The proposed restructuring seeks an eleven-month extension of the closing date from February 1, 2020 to December 31, 2020. This would be the third and final extension of the Project, whose original closing date was February 01, 2017. As this restructuring implies a cumulative closing date extension going beyond 24 months, it requires RVP approval. The request for extension of the closing date considers the time needed for preparation and implementation of an Additional Financing (AF), and the need for additional time to ensure proper supervision of completed/accepted works to maximize development impact (i.e. PDO) of the infrastructure. The AF is processed separately and planned for later this FY, and to be funded from the three participating countries' respective national IDA18 envelops. 3. The Project has disbursed US$21.10 million as of December 30, 2019, corresponding to 92 percent of the total proceeds (including the SDR exchange loss). Progress towards achievement of the PDO and implementation progress are both rated 'Moderately Satisfactory'. Important progress has been made under the Project’s components to date with final completion of construction works, training, and incubation grants to be completed by June 2020. Progress to date includes the following: 4. Component 1, Regional Connectivity Infrastructure is nearing completion including: (i) laying of the Undersea Cable between Grenada (Grenada and Carriacou) and Saint Vincent and the Grenadines (Bequia, Mustique, Canouan, Union, and two landing points in Kingston); (ii) the construction of Beach Manholes in the landing points for the submarine cable in each of the islands to be connected; (iii) the roll out of all the fiber optic network planned, 330 km of terrestrial fiber cable in Grenada, 450 km in St. Lucia, and 290 km in SVG; and (iv) the connection of 154 (47 percent completed to date) official buildings (schools and Government offices) in Grenada, 192 buildings (54 percent completed to date) in St. Lucia, and 174 (99 percent completed to date) in SVG. The target number of public buildings/facilities connected to networks under the project, an intermediate results indicator, will be attained when final works are completed and accepted during the next six months. 5. Component 2, ICT-Led Innovation across all countries continues apace. In Grenada, both the incubation program and the ICT Skills training program are quickly closing out. The total number of people trained under the project are 1,993 which is below target but expected to significantly increase during the 11 months, with the number of certified individuals surpassing the target level. In SLU, training and incubation activities are close to completion, with a small part of funds left to disburse. Regarding ICT training activities in SVG, there has been an increase in the number of ICT trainees to 600 in a number of basic and advanced ICT skills. The business incubation program has been operating The World Bank Caribbean Regional Communications Infrastructure Program (P114963) within the Center of Excellence (COE) since May 2016. Approximately US$1 million was allocated under the Business Incubation grants program component with all funds being fully committed. 6. The complex broadband digital infrastructure (henceforth ‘broadband’) tender, financed under Component 1, aimed at bridging the remaining gaps in regional digital connectivity for the three countries. The implementation was carried out through a three - country-pooled procurement public-private partnership (PPP) arrangement. Once all the final connections are fully operational in June 2020, the Project is expected to become a model for pooled PPP infrastructure investment in the region, and a model for implementing fully in targeted regional government wide area networks (GWANs). Signature of the PPP contract took place in July 2018, when the second restructuring was approved, and the extension of the closing date confirmed to Clients. 7. There are no outstanding audit reports in the three countries, and all reports are deemed to be acceptable to the Bank. However, a determination of ineligible expenditures has been made related to SVG based on the results of the project audit report for the period from January 1, 2017 to July 31, 2018 and the subsequent Financial Management review carried out by the World Bank. A letter was sent on September 24, 2019 to the SVG declaring the ineligible expenses and indicating that on an exceptional basis, the Bank will allow the project to substitute the ineligible expenditures by eligible expenditures, by providing substitute documentation for the total amount confirmed ineligible. Currently, SVG has solved approximately 52% of the ineligible expenditures. II. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications 01-Aug-2018, 01-Feb- IDA-51170 Effective 01-Feb-2017 31-Dec-2020 30-Apr-2021 2020 01-Aug-2018, 01-Feb- IDA-51180 Effective 01-Feb-2017 31-Dec-2020 30-Apr-2021 2020 01-Aug-2018, 01-Feb- IDA-51190 Effective 01-Feb-2017 31-Dec-2020 30-Apr-2021 2020 01-Aug-2018, 28-Feb- IDA-H7720 Closed 01-Feb-2017 2019, 26-Jul-2019