The World Bank AFCC2/RI-Enhancing Institutional Capacities on REDD issues for Sustainable Forest Management in the Congo Basin (P113167) REPORT NO.: RES31350 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF AFCC2/RI-ENHANCING INSTITUTIONAL CAPACITIES ON REDD ISSUES FOR SUSTAINABLE FOREST MANAGEMENT IN THE CONGO BASIN APPROVED ON JULY 14, 2011 TO CENTRAL AFRICAN FOREST COMMISSION (COMIFAC) ENVIRONMENT & NATURAL RESOURCES AFRICA Regional Vice President: Makhtar Diop Country Director: Elisabeth Huybens Senior Global Practice Director: Karin Erika Kemper Practice Manager/Manager: Benoit Bosquet Task Team Leader: Loic Jean Charles Braune The World Bank AFCC2/RI-Enhancing Institutional Capacities on REDD issues for Sustainable Forest Management in the Congo Basin (P113167) ABBREVIATIONS AND ACRONYMS CEEAC Economic Community of Central African States CEFDHAC Conference on Dense Humid Forest Ecosystems of Central Africa COMIFAC Central Africa Forests Commission FCPF Forest Carbon Partnership Facility GCF Green Climate Fund GEF Global Environment Facility GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit PMU Project Management Unit REDD+ Reducing Emissions from Deforestation and Forest Degradation SBSTA Subsidiary Body for Scientific and Technological Advice UNFCCC United Nations Framework Convention for Climate Change BASIC DATA Product Information Project ID Financing Instrument P113167 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 14-Jul-2011 31-Mar-2018 Organizations Borrower Responsible Agency Central African Forest Commission (COMIFAC) PREREDD Project Development Objective (PDO) Original PDO The Project Development Objective is to strengthen the capacities of the Congo Basin countries on REDD+ issues and on forest carbonstocks measurements, in particular. OPS_TABLE_PDO_CURRENTPDO The World Bank AFCC2/RI-Enhancing Institutional Capacities on REDD issues for Sustainable Forest Management in the Congo Basin (P113167) Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-10038 02-Aug-2011 02-Aug-2011 30-Nov-2011 31-Mar-2018 13.00 12.53 .47 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Background 1. The Regional REDD+ project aims at reinforcing capacities on Reducing Emissions from Deforestation and Forest Degradation (REDD+) in the different Congo Basin countries. It has been designed to specifically respond to common needs on REDD+ that are better addressed at the regional level (building on the subsidiarity and economy of scale principles) and complement the REDD+-related activities conducted at the national level in the different Congo Basin countries. The regional approach adopted for this operation produces economies of scale, facilitate knowledge exchange, and support the regional harmonization agenda on REDD+ and sustainable forest management. 2. The Project acted as a catalyst for REDD+ in the Congo Basin region and has made significant progress to (i) provide support to the REDD+ coordination institutions at the national level, (ii) strengthen regional coordination on REDD+ (joint submission to the Subsidiary Body for Scientific and Technological Advice (SBSTA)) in international fora, (iii) improve scientific knowledge on Central African forests’ contribution to carbon sequestration, (iv) to communicate findings and share results with other partners involved in REDD+ to create synergies and partnerships.Following some early delays in procurement, the project has been extended up to March 2018. The World Bank AFCC2/RI-Enhancing Institutional Capacities on REDD issues for Sustainable Forest Management in the Congo Basin (P113167) B. Project Status 3. The project is making good progress toward its objective and execution is satisfactory. Implementation is satisfactory, with a disbursement over 96% 3 months before closing, with most of the remaining envelop being already committed. 4. COMIFAC has requested a 4-month extension to ensure they can fully execute a few last activities, which have started but may not be completed before the closing date. In addition, this extension would allow the project team to be able to solve any administrative/financial issues while the project is still active. 5. This extension would be at no cost (Project Management Unit (PMU) staff will not be extended except the accountant) and the proposed closing date is less than 2 years before the initial closing date. 6. This restructuring will not revise the allocation per component nor the result framework as the current allocation per component – as revised in the first project restructuring – is still relevant. Each component is financed adequately to achieve its goal. The Project Development Objective as well as the main outcomes objectives will be reached with the current budget. 7. The status of components as of January 2018: a. Component1: the project is actively contributing to COMIFAC and beneficiary countries' participation in the international dialog on Climate Change where the countries promoted sustainable forest management and obtained an agreement on REDD+. This component has reached its objective (sub-component 1a) and has been revised in 2017 to support new developments in international discussions, with a greater focus on supporting the countries to be better prepared for accessing REDD+ related resources under the Green Climate Fund (GCF). b. The support to civil society (sub-component 1b), which is the most challenging sub-component of the project, has been restructured and is supporting actively the renewal of CEFDHAC governance structure (CEFDHAC is the umbrella structure for forest governance in Central Africa). This sub-component is implemented in partnership with GIZ. Renewal of the elective mandate for civil society leaders was successfully completed in 4 countries according to the schedule. However, due to the difficulties to find a consensus on the election process in Cameroun and for GIZ to get resources in the countries included in CEFDHAC but not covered by this project (Burundi, Rwanda, Chad), the final stage of the renewal (renewal of the sub-regional level elective mandates) would not be completed before end of March – which is the current closing date. This extension will allow the renewal process to be completed first in Cameroun and later at sub-regional level, for a renewal of CEFDHAC Sub- Regional Steering Committee. c. The project has also been supporting countries’ REDD+ agenda at national level, through sub-component 1c. A specific disbursement category was created in the Grant Agreement to set aside US$350,000 per country (total for 6 countries is US$2,1 million). However, for political reasons, Gabon decided to opt out from this arrangement, and the envelop of US$350,000 was reallocated to the main activities. Thus, the dedicated disbursement category The World Bank AFCC2/RI-Enhancing Institutional Capacities on REDD issues for Sustainable Forest Management in the Congo Basin (P113167) can be reduced to US$1,7 million. The budget allocation initially dedicated to Gabon was reallocated within the component 1 (mostly to Sub-component 1a), and was used to strengthen the capacities at regional level. d. Component 2: this component is supporting the flagship activity of the project, which is a study to collect data and establish allometric equations for the Congo Basin forest (6 types of forests). The field work is already completed in all 6 countries and the firm in charge of the scientific study is currently working on the last phase of the contract, which is to create the allometric equations and publish scientific reports based on the data that had been collected. The scientific articles related to the project are currently being written and are expected late April or early May – which is another reason why this extension is sought. e. The contract for this firm is the largest contract for the project (over 2 million euros) and was established in Euro – while the grant agreement was in dollars. The rapid change in the EUR/USD exchange rate has created difficulties to assess precisely the project commitment as well as the unallocated envelop. Thus, multiple activities (validation workshop, training, gratuities for students) have been put on hold until the Client is able to determine the exact envelop left (in dollars). As the last invoices will be sent by the firm after the current closing date, those activities have been postponed to April or May, after the projet closing – under the condition that the project would still have funds left after the payment of the last EUR invoices. f. Regarding the component 3, the support to the private sector has met its objective (sub-component 3a), with more trainings than initially planned. An envelope with leftover funds from the project was expected to finance gratuities for MSc and PhD students to help them with their field work - however, the quickly dropping USD/EUR rate has reduced the envelop and the client is currently unable to estimate precisely the budget that could be dedicated to this activity without risking to over-commit. The extension will allow the Client to assess more precisely the actual amount that is left after the payment of the main commitments in Euro (on component 2) and then execute those activities between April and June. g. Finally, regarding Component 4, and the request to change the institutional arrangements for the last 4 months of the project (period covered by the closing date extension): the grant agreement currently states that, after an initial interim period during which COMIFAC was directly in charge of the daily supervision of the project, a light PMU should be established, with at least: a project coordinator, a procurement specialist, a financial management specialist and an accountant. This obligation has been fulfilled during the project duration. As the project is now almost 100% committed and the extension is provided at no cost, the budget left for the 4-months extension and the low number of activities to be implemented would not justify financing such a unit. Thus, the Client proposed to modify the legal obligation to finance a PMU, and proposed to take over the responsibility of the execution for the last 4 months of the project. The PMU would then only include an accountant satisfactory to the Bank, and COMIFAC Executive Secretary would endorse the role of Coordinator, as it did for the first 4 months of the project. h. As the PMU staff was supposed to be released on March 31 anyway (current closing date), the PMU staff contacts will be terminated as planned even if the project closing date is extended to July – except for the accountant. COMIFAC Executive Secretariat will then have the overall responsibility for the day-to-day implementation of the Project. The World Bank AFCC2/RI-Enhancing Institutional Capacities on REDD issues for Sustainable Forest Management in the Congo Basin (P113167) II. DESCRIPTION OF PROPOSED CHANGES (a) Reallocation between disbursement categories: Reallocate financing between the disbursement activities as Gabon’s national envelop for REDD+ has been reallocated for other activities. The disbursement table will be modified to reduce the provision to national envelop to US$1.7 million. (b) Extend the closing date to July 31st, 2018. The objective is to allow the project to complete the last activities, in particular the election within sub-component 1b, and some activities which have been postponed due to uncertainty related to the exact envelop left in the project in dollars after the major commitments in Euros have been paid. (c) Modify the Institutional arrangement. The legal agreement amendment will modify Section A.1 of Schedule 2 to the Agreement in order to allow the Client (COMIFAC) to take back the responsibility for project daily operations for the 4 months of the extension as the Project management Unit will be dismantled. III. SUMMARY OF CHANGES Changed Not Changed Change in Loan Closing Date(s) ✔ Reallocation between Disbursement Categories ✔ Change in Institutional Arrangements ✔ Change in Implementing Agency ✔ Change in DDO Status ✔ Change in Project's Development Objectives ✔ Change in Results Framework ✔ Change in Components and Cost ✔ Cancellations Proposed ✔ Change in Disbursements Arrangements ✔ Change in Disbursement Estimates ✔ Change in Overall Risk Rating ✔ Change in Safeguard Policies Triggered ✔ Change of EA category ✔ Change in Legal Covenants ✔ Change in Financial Management ✔ The World Bank AFCC2/RI-Enhancing Institutional Capacities on REDD issues for Sustainable Forest Management in the Congo Basin (P113167) Change in Procurement ✔ Change in Implementation Schedule ✔ Other Change(s) ✔ Change in Economic and Financial Analysis ✔ Change in Technical Analysis ✔ Change in Social Analysis ✔ Change in Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications TF-10038 Effective 31-Aug-2016 31-Mar-2018 31-Jul-2018 30-Nov-2018 OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed TF-10038-001 | Currency: USD iLap Category Sequence No: 1 Current Expenditure Category: CON,TRN,OP,GDS Prt 1(a),1(b),2,3,4 11,075,000.00 10,964,152.84 11,300,000.00 100.00 100.00 iLap Category Sequence No: 2 Current Expenditure Category: CON,TRN,OP,GDS pRT 1(c)-CG BASIN 1,925,000.00 1,421,871.01 1,700,000.00 100.00 100.00 Total 13,000,000.00 12,386,023.85 13,000,000.00 The World Bank AFCC2/RI-Enhancing Institutional Capacities on REDD issues for Sustainable Forest Management in the Congo Basin (P113167)