Document of
            The World Bank


                                      Report No: 74072-KG




         RESTRUCTURING PAPER

                 ON A

    PROPOSED PROJECT RESTRUCTURING

                   OF

THE SECOND VILLAGE INVESTMENT PROJECT

           CREDIT (46570-KG)
           GRANT (H2500- KG)
           GRANT (H5190-KG)

   BOARD APPROVAL: NOVEMBER 3, 2009


                TO THE

           KYRGYZ REPUBLIC


           NOVEMBER 30, 2012
 Regional Vice President:        Philippe H. Le Houerou
        Country Director:        Saroj Kumar Jha
Sector Manager / Director:       Elisabeth Huybens
       Task Team Leader:         Aly Zulficar Rahim




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                     SECOND VILLAGE INVESTMENT PROJECT
                                  P098949
                              CREDIT (46570-KG)
                              GRANT (H2500- KG)
                              GRANT (H5190-KG)

                                 Restructuring Paper


1. The closing date for Second Village Investment Project, Credit 46570-KG (original
   financing) and Second Village Investment Project Additional Financing, Grant
   H2500- KG, and Grant H5190 - KG, will be extended from December 31, 2012 to
   June 29, 2013, following the formal letter from the Government of Kyrgyzstan dated
   November 8, 2012, requesting extension of the project’s closing date. No other
   changes are proposed.

2. The Project Development Objective (PDO) continues to be achievable and could be
   realized by the proposed extension of the closing date based on renewed commitment
   of the Ministry of Finance and of the implementing agency, ARIS.

3. Project implementation has been and continues to be satisfactory. The project has
   reached each of the 475 aiyl okrugs (local municipalities) in the country and has
   gained strong recognition amongst the rural population. More than 70,900 local
   government officials and community members have been trained in principles of
   budgeting and planning, and 1,698 villages have gained access to improved social and
   economic infrastructure. Approximately 2.3 million people have benefited directly
   from the completion of about 6000 micro-projects.

4. The proposed extension is necessary to enable the implementing agency to continue
   with structural remediation works required for technically complex infrastructure
   built before 2009 by this project and its predecessor (Village Investment Project).
   The extension requested will accommodate ongoing remediation works as well as
   technical designs for works which are due to continue under the proposed Second
   Additional Financing, which will close the unanticipated financing gap resulting from
   an underestimate of the cost of works to remedy the structural deficiencies. The
   Board date for the Second Additional Financing is December 20, 2012 and the Project
   Paper proposes a closing date of October 31, 2014.

5. The team is pleased to confirm that the Recipient has in place an action plan to
   complete the project. More specifically, a preliminary assessment of works needed
   has been produced by an engineering firm and a procurement plan has been prepared.
   The team also confirms that there are no outstanding audit reports and that previous
   audit reports were found satisfactory.

6. This will be the second extension of the (first) Additional Financing. The approval of
   a first Additional Financing set a closing date of December 31, 2011. The first
   extension to December 31, 2012 was approved through restructuring in June 2011.


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