The World Bank BZ Marine Conservation and Climate Adaptation (P131408) REPORT NO.: RES40325 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF BZ MARINE CONSERVATION AND CLIMATE ADAPTATION APPROVED ON MARCH 3, 2015 TO BELIZE ENVIRONMENT, NATURAL RESOURCES & THE BLUE ECONOMY LATIN AMERICA AND CARIBBEAN Regional Vice President: J. Humberto Lopez Country Director: Tahseen Sayed Khan Regional Director: Anna Wellenstein Practice Manager/Manager: Valerie Hickey Task Team Leader(s): Maja Murisic The World Bank BZ Marine Conservation and Climate Adaptation (P131408) I. BASIC DATA Product Information Project ID Financing Instrument P131408 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 03-Mar-2015 31-Mar-2020 Organizations Borrower Responsible Agency Protected Areas Conservation Trust (PACT),Ministry of Belize Agriculture, Fisheries, Forestry, the Environment and Sustainable Development Project Development Objective (PDO) Original PDO The objective of the proposed Project is to implement priority ecosystem-based marine conservation and climate adaptation measures to strengthen the climate resilience of the Belize Barrier Reef System. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-18449 03-Mar-2015 03-Jun-2015 15-Jul-2015 31-Mar-2020 5.53 4.31 1.22 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 BZ Marine Conservation and Climate Adaptation (P131408) I. Summary of Project Status The Belize Marine Conservation and Climate Adaptation Project (MCCAP) which became effective in July 2015 and is due to close in March 2020, is funded by the Adaptation Fund and implemented by the World Bank. Its objective is to implement priority ecosystem-based marine conservation and climate adaptation measures to strengthen the climate resilience of the Belize Barrier Reef System. In its last year of implementation, MCCAP continues to move in the right direction and show positive results. There is strong country ownership of the project and effective oversight in place for the project activities. The Project Implementing Agency Group (PIAG), the Technical Advisory Committee (TAC) and Project Steering Committee (PSC) have been instrumental in moving project implementation forward. The Project has disbursed 78% of its total funds ($5.53 million), which represents a significant increase from a year ago when the disbursement rate was 52%. II. Rationale for Restructuring The project has made significant progress toward achieving the PDO, with the level of achievement varying between different outcomes and components. While Outcome 1 (Marine areas brought under biodiversity projection), Outcome 2 (Coastline brought under biodiversity protection) and Outcome 4 (Change of attitude and/or behavior of targeted beneficiaries) are all well advanced, Outcome 3 (Direct project beneficiaries who adopted alternative livelihoods) experienced slight delays. The reasons for delays in activities supporting this outcome include long due diligence process of developing the sub- projects’ proposals, related business plans and required social and environmental safeguard documents, as well as lengthy national processes for obtaining necessary permits and approvals from various local organizations and agencies. The strategy and measures taken to address these challenges included dedicated capacity development efforts and skills training, as well as proactive steps and leadership of PIAG in meeting necessary social and environmental safeguards requirements and accelerating internal licensing processes. With these measures in place, the implementation of all planned sub-projects is accelerating, but given the delays, the Project will not be fully implemented before the original project closing date. That said, for sub-projects to be successfully implemented and completed, the extension of the Project closing date and related reallocation of grant proceeds is being sought, as also requested by the Government of Belize (GoB) on December 19, 2019. The Restructuring request of GoB also includes an annex (Summary of Changes to the Implementation Timeline) which further ensures the feasibility of activities’ implementation within requested extension period. III. Proposed Changes Proposed changes will allow the grant recipient to finalize ongoing project activities in a satisfactory manner, fully disburse remaining grant resources, and successfully implement the Project. Furthermore, the Project restructuring does not entail changes to the Project Development Objective (PDO) or total Project costs. Lastly, the Project restructuring fully complies with OP/BP 10.00, Investment Project Financing since: (a) the PDO remains achievable; (b) the performance of the Recipient remains satisfactory; (c) the Bank and the Recipient agree on actions that will be undertaken by the recipient to complete the Project; (d) the Project is not subject to suspension of disbursements; and (e) the Recipient does not have any outstanding audit reports nor are there are audit reports which are not satisfactory to the Bank In particular, the following two changes are being introduced as part of the proposed Project restructuring: The World Bank BZ Marine Conservation and Climate Adaptation (P131408) 1. Extension of the Project Closing Date: Considering the reasons for delays in the implementation of sub-projects, for their implementation to be successfully completed, 6 months extension of the Project closing date from March 31, 2020 to September 30, 2020 would be needed. Noting both the measures taken to address identified challenges and the fact that all sub-projects are underway, this extension would allow MCCAP to fully achieve its objectives and outcomes and ensure that efforts to support an innovative and integrated approach to developing climate adaptation options is also fully supporting livelihoods of the affected poor communities who largely depend on those natural resources. 2. Reallocation of Grant Proceeds: A reallocation of grant proceeds between components and related disbursement categories is requested in order to reflect the evolving needs during the extended period of Project implementation that is being proposed. In particular, the PIAG has projected the expenses until the end of the project and proposes to slightly reduce grant funds dedicated to sub-projects (disbursement category 2, component 2) from USD2,038,412 to USD2,006,283 while slightly increasing the funds linked to operating costs (disbursement category 3, component 4) from USD315,371 to USD347,500. The rationale behind proposed changes reflects the current costs of sub-projects' implementation, as well as a need to ensure effective project management during the requested extension period. As such, it has no impact on the Project Results Framework. II. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications TF-18449 Effective 31-Mar-2020 30-Sep-2020 30-Jan-2021 REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Current Current Actuals + Proposed Disbursement % Ln/Cr/TF Expenditure Allocation Committed Allocation (Type Total) Category Current Proposed TF-18449- GO,CW,N- 001 CS,CS,TRG, M&C 3,176,217.00 2,318,887.98 3,176,217.00 100.00 100.00 Currency: Act exc P2 USD The World Bank BZ Marine Conservation and Climate Adaptation (P131408) GO,CW,N- CS,CS,TRG for 2,038,412.00 1,235,956.64 2,006,283.00 100.00 100.00 Part 2 OPERATING 315,371.00 250,917.08 347,500.00 100.00 100.00 COSTS Total 5,530,000.00 3,805,761.70 5,530,000.00