The World Bank Mekong Integrated Water Resources Management (P104806) REPORT NO.: RES29578 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF MEKONG INTEGRATED WATER RESOURCES MANAGEMENT APPROVED ON MARCH 8, 2012 TO MEKONG RIVER COMMISSION,LAO PEOPLEÂS DEMOCRATIC REPUBLIC WATER EAST ASIA AND PACIFIC Regional Vice President: Victoria Kwakwa Country Director: Ellen A. Goldstein Senior Global Practice Director: Guang Zhe Chen Practice Manager/Manager: Sudipto Sarkar Task Team Leader: Daryl Fields, Eileen Rose Burke The World Bank Mekong Integrated Water Resources Management (P104806) I. BASIC DATA Product Information Project ID Financing Instrument P104806 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 08-Mar-2012 31-Mar-2021 Organizations Borrower Responsible Agency Mekong River Commission,Lao Peopleâs Democratic Mekong River Commission,Ministry of Natural Resources Republic and Environment Project Development Objective (PDO) Original PDO to establish key examples of integrated water resources management practices in the lower Mekong Basin at the regional, national and subnational levels, thus contributing to more sustainable river basin management in the lower Mekong. Current PDO The Project Development Objective is to to improve water resource and fisheries management in selected areas of the Lower Mekong Basin. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-61180 06-Jul-2017 26-Jul-2017 11-Oct-2017 31-Mar-2021 25.00 2.50 23.38 IDA-H6750 08-Mar-2012 19-Apr-2012 17-Aug-2012 31-Mar-2021 18.00 16.89 0 IDA-H7620 08-Mar-2012 04-Apr-2012 17-Aug-2012 31-Mar-2018 8.00 5.57 1.96 TF-98965 17-Feb-2011 21-Apr-2011 21-Apr-2011 31-Mar-2012 .12 .12 0 The World Bank Mekong Integrated Water Resources Management (P104806) TF-94553 03-Aug-2009 02-Sep-2009 02-Sep-2009 31-Dec-2011 .09 .09 0 TF-93258 09-Feb-2009 05-Mar-2009 05-Mar-2009 11-Jun-2013 .87 .87 0 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES 1. The Mekong Integrated Water Resources Management (IWRM) Project (the Project) is the first project in the series of three Mekong IWRM projects benefitting the countries of the Lower Mekong sub-region. The project is currently rated Moderately Satisfactory for Progress towards the Development Objective and for Implementation Progress. There are no outstanding audit reports or complaints about the project. 2. The Project was first approved by the Board on March 8, 2012, and benefits two recipients: a) The Mekong River Commission (MRC) is implementing Component 1 of the project. The $8 million Component helps integrate the three national projects (namely Cambodia, Lao PDR and Vietnam) in the Mekong IWRM series of Projects, by facilitating transboundary dialogue on strategic water resources management issues. The current closing date for Component 1 is March 31, 2018. To-date, about $5.10 million (or 63% of the grant amount for IDA H7620) has been disbursed—almost all of it within the last two years. The Component is rated Moderately Satisfactory, and could be upgraded to Satisfactory if an extension of closing date is approved, to provide adequate time to complete the remaining project activities. (Please note that the disbursement table in "Section I - Summary Status of Financing" of this Restructuring Paper provides US Dollar equivalents of the Project loan amounts. In the table, some disbursed and undisbursed balances do not sum to the listed committed amount, due to exchange rate fluctuations since the time of loan approval). b) Lao PDR implements Components 2 and 3 of the Project in Laos. The $43 million project supports improved understanding and analysis of the national water resources through hydromet services and analysis, basin planning processes, irrigation and fisheries management. As of September, 2017, US$16.89 million had been disbursed. The current closing date for Components 2 and 3 is March 31, 2021. The rating for Components 2 and 3 is Satisfactory. 3. The Project has recently undergone a project restructuring and received approval for an additional financing of USD25 million for Components 2 and 3 of the Project (increasing the financing to Laos PDR only from US$18 million to US$43 million) from the World Bank Board on July 6th, 2017. 4. The current proposed restructuring involves only a no-cost project extension for Component 1 only (IDA H7620), from March 31, 2018 to December 31, 2019, to allow time for completion of project activities. The extension of closing date of Component 1 was not included in recent Restructuring approved by the World Bank Board in July 2017, to allow the MRC to more time to demonstrate more progress on the project, which it has done. The extension of closing date was informally requested by the PMU for Component 1 during the April and June 2017 missions, followed by an official request from the MRC to the World Bank on November 20, 2017. The change in the Closing Date meets The World Bank Mekong Integrated Water Resources Management (P104806) the requirements set out in paragraph 50 of Section III of the IPF Directive and does not entail any: (i) change in scope or nature of project activities, (ii) change in implementation arrangements, or (iii) other amendment to the Legal Agreements. 5. Component 1 of the project enables core engagement in regional Mekong water issues. The central activity in the Component is transboundary dialogue to address water and environmental management at the transnational sub- basin level. These activities include identification of mechanisms for greater exchange of modelling and hydro-met data; agreement on new cross-border fisheries management activities; and lake-management exercises. Other activities include improvements to the MRC Guidelines for Transboundary Environmental Impact Assessment, consultation on the MRC National Indicative Plans, communications support on transboundary dialogue, and other implementation support for MRC procedures. 6. It is important to note that the start of the implementation of transboundary projects was delayed for a year and only started in mid-2014. The delay was also partly caused by the difficulty in getting budget clearance of the impress account and in establishing mechanisms to disburse project funds at the national level, but this has now been resolved. Other project delays were caused by the difficulty of coordinating the participation of a number of Ministries across countries in a timely manner. 7. While the project got off to a slow start, it is now proceeding at a satisfactory pace with a steady progress towards achievement of its development objectives by December of 2019. The MRC Secretariat, in collaboration with the Thai, Lao, Cambodian, and Vietnamese National Mekong Committees (NMCs) are moving forward with the bilateral transboundary projects. Currently, the MRC and the National Mekong Committees have completed the Joint Issues Paper for the three trans boundary projects: I) Cambodia-Lao Fisheries; ii) Vietnam-Cambodia 2S River Basin; and iii) Vietnam-Cambodia Mekong Delta, fulfilling the first of two intermediate results indicators for the MRC under the Project. The second of the intermediate results indicators for Component 1 has almost been met, and is expected to be over-achieved by the end of the project: 26 of the targeted 27 IWRM – related communication products have been produced and disseminated by the MRC. Three national projects (in Laos, Vietnam, and Cambodia) are also proceeding well, and by mid-2019, are expected to meet the one PDO-level indicator associated with Component 1 of the project: the delivery of three Joint Action Plans for addressing a priority transboundary integrated water resources management issues in the Mekong Basin. 8. The extension of closing date will allow the MRC to continue its regional coordination role and capacity building activities to complement Components 2 and 3 of this Project in Laos, and of the companion Mekong IWRM projects in Vietnam (P124942) and in Cambodia (P148647) until December 31, 2019. However, even with the closing date extension for Component 1 proposed in this Restructuring, the MRC component will still close 15 months before Components 2 and 3 in Laos, as well as before the Mekong IWRM project in Cambodia. Given the staggered closing dates, the MRC is already beginning to document project progress and successes, so that adequate records are available to the World Bank to enable it to conduct a thorough Implementation Completion Report for the Project when the remainder of the Project closes on March 31, 2021. III. DETAILED CHANGES LOAN CLOSING DATE(S) The World Bank Mekong Integrated Water Resources Management (P104806) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IDA-61180 Effective 31-Mar-2021 IDA-H6750 Effective 31-Mar-2018 31-Mar-2021 IDA-H7620 Effective 31-Mar-2018 31-Dec-2019 30-Apr-2020 11-Dec-2012, 11-Jun- TF-93258 Closed 11-Dec-2011 2013, 23-Dec-2013 TF-94553 Closed 31-Dec-2011 15-Jun-2012 TF-98965 Closed 31-Mar-2012 24-Aug-2012