The World Bank Honduras Pilot Program for Climate Resilience Phase 1 Grant (P157795) REPORT NO.: RES32206 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF THE HONDURAS PILOT PROGRAM FOR CLIMATE RESILIENCE PHASE 1 GRANT APPROVED ON APRIL 17, 2017 TO THE SECRETARIA DE FINANZAS DE HONDURAS (SEFIN) SECRETARIA DE ENERGIA, RECURSOS NATURALES, AMBIENTE Y MINAS (MI AMBIENTE) WATER GLOBAL PRACTICE LATIN AMERICA AND THE CARIBBEAN Regional Vice President: Jorge Familiar Calderon Country Director: Seynabou Sakho Senior Global Practice Director: Jennifer Sarah Practice Manager/Manager: Rita E. Cestti Task Team Leader: Marco Antonio Aguero The World Bank Honduras Pilot Program for Climate Resilience Phase 1 Grant (P157795) ABBREVIATIONS AND ACRONYMS CIF Climate Investment Funds EA Environmental Assessment ID Project Identification Code IDA International Development Agency INVEST-H Implementer Mi Ambiente Ministry of Environment PDO Project Development Objective PIU Project Implementation Unit PPCR Pilot Program for Climate Resilience SEFIN Ministry of Finance SPCR Strategic Program for Climate Resilience The World Bank Honduras Pilot Program for Climate Resilience Phase 1 Grant (P157795) BASIC DATA Product Information Project ID Financing Instrument P157795 Investment Project Financing Original EA Category Current EA Category Not Required (C) Not Required (C) Approval Date Current Closing Date 17-Apr-2017 31-Dec-2018 Organizations Borrower Responsible Agency Secretaria de Finanzas de Honduras (SEFIN),Secretaria de Honduran Strategic Investment Office (INVEST-H) Energia, Recursos Naturales, Ambiente y Minas Financing (in USD Million) FIN_SUMM_PUB_TBL SUMMARY Total Project Cost 1.40 Total Financing 0.00 Financing Gap 0.00 DETAILS -NewFin3 Project Development Objective (PDO) Original PDO The proposed PDO is to strengthen institutional capacity of the Government for integrating climate resilience in development planning. OPS_TABLE_PDO_CURRENTPDO The World Bank Honduras Pilot Program for Climate Resilience Phase 1 Grant (P157795) Summary Status of Financing Net TF Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-A4893 11-Apr-2017 13-Sep-2017 13-Sep-2017 31-Dec-2018 1.40 .50 .90 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No Note to Task Teams: End of system generated content, document is editable from here. I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Introduction 1. This Restructuring Paper seeks the Country Director’s approval of a Second Order Restructuring of the Grant TF0A4893 for the Honduras Pilot Program for Climate Resilience Phase I (P157795). The proposed restructuring entails the extension of the closing date by 12 months, as well as changes in the result framework to reflect the change in the closing date. B. Project Status 2. The US$1.4 million recipient executed grant was approved on April 17, 2017 and declared effective on September 13, 2017. The current closing date is December 31, 2018. 3. Progress towards achievement of the Project Development Objective (PDO) and overall implementation progress are currently rated Moderately Satisfactory (MS), based on the understanding that the closing date will be extended by 12 months. At present, all components are rated MS. 4. Thus far, the Project has disbursed US$500,000 (35.7 percent of total funding). The first disbursement was requested by the Recipient on January 3, 2018, and the funds have been used to set up the Project Implementation Unit (PIU). The advance payment will also be used to make payments for the first consultancies already tendered. 5. Despite delays in project effectiveness, the PDO is still achievable, as the country has a clear and comprehensive legislative body; a framework of public policies that promote climate change adaptation, which the Strategic Program for Climate Resilience (SPCR) may strengthen; and water security policies and strategies for targeted vulnerable areas in the country; among others. The Government has recently requested support through this The World Bank Honduras Pilot Program for Climate Resilience Phase 1 Grant (P157795) Project to prepare a Water Security Strategy for the Dry Corridor of Honduras, which was impacted severely by droughts and floods in 2018. C. Rationale for Restructuring 6. During the initial phase, the Project faced a series of delays due to factors beyond the Project’s control, including a 5- month delay in the signing of the grant agreement given the shift in institutional arrangements on climate-related issues, and the general slowdown in Government processes due to the 2017 Presidential election. Disbursement requests were left at a standstill for many months. 7. Despite these destabilizing delays, the Ministry of the Environment pro-actively moved forward and fast-tracked the preparation of a preliminary version of the SPCR), allowing the Government to keep grant financing. The SPCR was endorsed by the Climate Investment Fund (CIF) in December 2017. In addition, during 2018, the Government was able to set up the PIU’s core team and to advance the procurements of key studies described in the SPCR. These studies will further develop and strengthen the evidence-base of the SPCR, which is fundamental to the achievement of the Project’s PDO. 8. The Task Team confirms that the proposed restructuring follows the Articles of the Grant Agreement signed between the Bank and the Government. II. DESCRIPTION OF PROPOSED CHANGES 9. This Restructuring seeks to extend the Project’s closing date from December 31, 2018 to December 31, 2019, as requested by the Government of Honduras. The Task Team confirms that there are no changes in the scope or nature of project activities, nor in implementation arrangements, and that the restructuring does not hold any restrictions from the Donor’s side (CIF). Furthermore, the restructuring fully follows OP/BP 10.00 as: (a) the Project is not subject to suspension of disbursements; (b) the Recipient does not have any outstanding audit reports nor there are audit reports, which are not satisfactory to the Bank; and (c) no other safeguards will be triggered. III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Loan Closing Date(s) ✔ Disbursement Estimates ✔ Implementing Agency ✔ The World Bank Honduras Pilot Program for Climate Resilience Phase 1 Grant (P157795) Project's Development Objectives ✔ Components and Cost ✔ Cancellations Proposed ✔ Additional Financing Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Change in Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_RESULTS_TABLE RESULTS FRAMEWORK Project Development Objective Indicators PDO_IND_TABLE Government s Climate Resilience policies and/or climate change strategies are informed by the SPCR Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 1.00 Revised Date 20-Apr-2017 31-Dec-2019 Intermediate Indicators IO_IND_TABLE Number of pre-feasibility studies framed within the SPCR, one for each of the prioritized areas (institutional strengthening on climate risk, water security and agriculture) prepared by ICCC Unit of Measure: Number The World Bank Honduras Pilot Program for Climate Resilience Phase 1 Grant (P157795) Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 4.00 Revised Date 20-Apr-2017 31-Dec-2019 Number of key sector institutions (MiAmbiente, MoF, SANAA & Ministry of Agriculture, INVEST-H, among others exchanging information & best practices to mainstream CCA capacity into development planning Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 4.00 Revised Date 20-Apr-2017 31-Dec-2019 Proposal for strengthening the regulatory framework and inter-institutional coordination mechanism in priority sectors related to climate change developed Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.50 1.00 Revised Date 20-Apr-2017 31-Dec-2019 Participants in consultation activities during project implementation (number) Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 320.00 Revised Date 31-May-2017 31-Dec-2019 Participants in consultation activities during project implementation - female Unit of Measure: Number Indicator Type: Custom Breakdown Baseline Actual (Current) End Target Action Value 0.00 128.00 Revised Date 31-May-2017 31-Dec-2019 The World Bank Honduras Pilot Program for Climate Resilience Phase 1 Grant (P157795) OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline TF Status Closing Closing(s) Closing for Withdrawal Applications TF-A4893 Effective 31-Dec-2018 31-Dec-2019 30-Apr-2020 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2017 0.00 0.00 2018 0.00 500,000.00 2019 0.00 200,000.00 2020 0.00 700,000.00 2021 0.00 0.00 2022 0.00 0.00 2023 0.00 0.00 2024 0.00 0.00 Note to Task Teams: End of system generated content, document is editable from here.