The World Bank
   Public Sector Modernization Project III (P149913)




                                                                                       REPORT NO.: RES37161

                                     DOCUMENT OF THE WORLD BANK




                                          RESTRUCTURING PAPER
                                                   ON A
                                   PROPOSED PROJECT RESTRUCTURING

                                                       OF

                               PUBLIC SECTOR MODERNIZATION PROJECT III
                                   APPROVED ON SEPTEMBER 30, 2015
                                                       TO

                                          REPUBLIC OF ARMENIA


GOVERNANCE

EUROPE AND CENTRAL ASIA




                           Regional Vice President:     Cyril E Muller
                                  Country Director:     Mercy Miyang Tembon
                    Senior Global Practice Director:    Edward Olowo-Okere
                       Practice Manager/Manager:        Daniel J. Boyce
                                Task Team Leader:       Davit Melikyan, Arman Vatyan
           The World Bank
           Public Sector Modernization Project III (P149913)



I. BASIC DATA

Product Information

Project ID                                                     Financing Instrument
P149913                                                        Investment Project Financing

Original EA Category                                           Current EA Category
Not Required (C)                                               Not Required (C)

Approval Date                                                  Current Closing Date
30-Sep-2015                                                    31-Dec-2020




Organizations

Borrower                                                       Responsible Agency
Republic of Armenia                                            Office of the Government



Project Development Objective (PDO)
Original PDO
The project development objective (PDO) is to improve quality of the public financial reporting and to improve access
to selected enhanced e-government services.


Summary Status of Financing


                                                                                       Net
Ln/Cr/Tf                  Approval         Signing Effectiveness        Closing Commitment Disbursed Undisbursed

IBRD-85390             30-Sep-2015 18-Nov-2015 06-May-2016 31-Dec-2020                    21.00     3.28          17.72


Policy Waiver(s)

Does this restructuring trigger the need for any policy waiver(s)?
No


I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES
       The World Bank
       Public Sector Modernization Project III (P149913)




Project Status:
The Third Public Sector Modernization Project was approved on September 30, 2015 in the amount of US$ 21 million
(Loan No. 8539-AM). The project, approaching the mid-term review (MTR), experienced issues related to timely
commencement of a number of planned activities. The implementation delays which were initially due to various
fiscal, regulatory and capacity constraints, were followed by political turmoil related to Velvet Revolution in May 2018
and the period of political transition and parliamentary elections in December 2018. The adverse impact of the recent
political developments on the implementation progress and risks resulted with downgrading the main project ratings.
Nevertheless, as of December 2018, the project succeeded in initiating several tasks, most importantly (i)
development of e-Consulate System, and (ii) technical assistance on strengthening policy and institutional setup of e-
governance management in Armenia. The e-Consulate System was successfully launched in May 2018 making online
consular services available for citizens who are abroad. The procurement of a platform for electronic citizen feedback
on public services and electronic modules for emergency police dispatch are currently in progress after rebidding in
December 2018.

Proposed Changes:
This project restructuring is in response to the request from the Ministry of Finance of the Republic of Armenia (MoF)
dated April 1, 2019 (enclosed). The request is to replace the Foreign Financial Projects Management Center (“FFPMC”)
as the project implementing agency under MoF responsible for fiduciary functions with the newly created Project
Implementation Department (“PID”). The PID is the new name of the same implementing agency which has been
subject to organizational changes for absorbing the subordinate project implementing unit (PIU) within the structure
of MoF. The proposed amendment does not entail any other changes to the project. The project team re-assessed the
financial management and procurement arrangements, and concluded that the capacity remains satisfactory. The
financial management arrangements under the project are adequate and acceptable to the Bank, and there are no
overdue audits under the project.


II. DETAILED CHANGES