The World Bank Integrated Habitat and Housing Project (P159929) REPORT NO.: RES34919 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF INTEGRATED HABITAT AND HOUSING PROJECT APPROVED ON FEBRUARY 27, 2017 TO REPUBLIC OF ARGENTINA SOCIAL, URBAN, RURAL AND RESILIENCE GLOBAL PRACTICE LATIN AMERICA AND CARIBBEAN Regional Vice President: Jorge Familiar Country Director: Jesko S. Hentschel Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez Practice Manager/Manager: Ming Zhang Task Team Leader: Catherine Lynch, Beatriz Eraso Puig The World Bank Integrated Habitat and Housing Project (P159929) ABBREVIATIONS AND ACRONYMS DiGePPSE Directorate General for Sectoral and Special Programs and Projects (Dirección General de Programas y Proyectos Sectoriales y Especiales) MIOPV Ministry of Interior, Public Works and Housing (Ministerio del Interior, Obras Públicas y Vivienda) PE Participating Entity SIU Secretary of Urban Infrastructure (Secretaria de Infraestructura Urbana) SV Secretary of Housing (Secretaria de Vivienda) UEC Central Executing Unit (Unidad Ejectutora Central) The World Bank Integrated Habitat and Housing Project (P159929) BASIC DATA Product Information Project ID Financing Instrument P159929 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 27-Feb-2017 31-Aug-2022 Organizations Borrower Responsible Agency Secretaria de Vivienda y Habitat,Ministry of Interior, Republic of Argentina Public Works and Housing Project Development Objective (PDO) Original PDO The proposed Project's development objectives are to: (i) increase access to formal housing for eligible households; and (ii) improve living conditions for households in selected precarious urban settlements. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-87120 27-Feb-2017 17-Aug-2017 14-Dec-2017 31-Aug-2022 200.00 12.50 187.50 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Integrated Habitat and Housing Project (P159929) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project Description 1. The Project has four components: (1) Increased access to formal housing (US$ 45 million, 100 percent IBRD financing); (2) Integrated habitat improvement (US$ 145 million, 100 percent IBRD financing); (3) Institutional Strengthening. (US$11 million, of which US$9 million IBRD financing and US$2 million Borrower contribution); and (4) Project Management (US$4.5 million, of which US$0.5 IBRD financing and US$4 Borrower contribution) B. Project Status 2. The Loan Agreement was signed on August 17, 2017 and Project effectiveness was declared on December 14, 2017. The last supervision mission was conducted on November 12-16, 2018. The loan is currently disbursed by 3.54% through implementation of Component 1 and Component 3. Component 2 is making progress in the preparation of the first group of 5 sub-projects and a pipeline of 46 sub-projects has been presented. However, implementation of this component is behind its schedule. C. Project Performance 3. Progress towards achieving the Project Development Objective is rated Satisfactory and overall Implementation Performance is rated Moderately Satisfactory. The Project has a satisfactory track record on safeguards implementation and is in compliance with the loan covenants. There are no overdue audit reports. D. Rationale for Restructuring 4. The Ministry of Treasury has requested changes to the Project implementation arrangements. As part of a ministerial restructuring, the Secretary of Housing and Habitat was divided into the Secretary of Housing (Secretaria de Vivienda, SV) and the Secretary of Urban Infrastructure (Secretaria de Infraestructura Urbana, SIU). In addition, the Central Executing Unit (Unidad Ejecutora Central, UEC), which was responsible for fiduciary activities and safeguards, was transformed into the Directorate General for Sectoral and Special Programs and Projects (Dirección General de Programas y Proyectos Sectoriales y Especiales, DiGePPSE). In addition, in response to fiscal constraints, the Ministry of Treasury has requested changes to the implementation of Component 2 to allow for sub-projects to be implemented through subsidiary loans with municipalities and provinces in addition to grants. II. DESCRIPTION OF PROPOSED CHANGES A. Changes to Implementing Agency 5. The Ministry of Interior, Public Works and Housing (Ministerio del Interior, Obras Públicas y Vivienda, MIOPV) will be responsible for overall Project implementation. The SV will implement Component 1, the SIU will implement Component 2, and they will jointly implement Component 3. The DiGePSSE will continue to be responsible for fiduciary activities. DiGePSSE will also continue to be responsible for overseeing the implementation of safeguard policies with the support from SIU for the implementation of Component 2. Proposed changes to the legal covenants in Part IV of this restructuring paper reflect these changes to the implementation arrangements. The fiduciary aspects of the Project will be under the responsibility of the MIOPV, which will ensure that the Project is at all times assisted by professional staff (including, a Project coordinator, a financial management specialist and a procurement specialist) and administrative staff The World Bank Integrated Habitat and Housing Project (P159929) that will work under the same structure. To avoid future changes, it is proposed that the loan agreement refers to the MOIPV and all details regarding the responsibilities of each Secretariat and Directorate are specified in the Operations Manual. B. Other Changes 6. Sub-projects under Component 2 - Integrated habitat improvement will be implemented either through grants from the National Government to the Participating Entity, as originally designed, or through subsidiary loans between both parties. In both cases, the MIOPV and the Participating Entity will first sign the Framework Agreement approved by the Bank that establishes the obligations and rights of each party to ensure that implementation of the subproject follows the terms established in the Loan Agreement. In the case of subsidiary loans, the parties will separately sign a Subsidiary Loan Agreement that will make reference to the Framework Agreement. 7. The changes are proposed to have a retroactive effect from December 4, 2018 prior to the signature of the first subsidiary loan with the Province of Mendoza. III. SUMMARY OF CHANGES Changed Not Changed Implementing Agency ✔ Legal Covenants ✔ Other Change(s) ✔ DDO Status ✔ Project's Development Objectives ✔ Results Framework ✔ Components and Cost ✔ Loan Closing Date(s) ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ The World Bank Integrated Habitat and Housing Project (P159929) Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_IA_TABLE IMPLEMENTING AGENCY Implementing Agency Name Type Action Secretaria de Vivienda y Habitat Implementing Marked for Deletion Agency Ministry of Interior, Public Works and Implementing No Change Housing Agency OPS_DETAILEDCHANGES_LEGCOV_TABLE LEGAL COVENANTS Loan/Credit/TF Description Status Action Project Implementation Unit. Section I.A.1 of Schedule 2 to the Loan Agreement. The Borrower, through SVH, shall establish, and thereafter operate and maintain, at all times during Project implementation, a Project implementation unit (“PIU”), with structure, functions and responsibilities acceptable to the Bank, as set forth IBRD-87120 in the Operational Manual. Complied with Revised Safeguards. Section I.F.1 of Schedule 2 to the Loan Agreement. The Borrower, through SVH, shall, and shall cause each Participating Entity, to implement the parts of the Project under their responsibility in accordance with the Environmental and Social Management The World Bank Integrated Habitat and Housing Project (P159929) Framework (ESMF), the Resettlement Policy Framework (RPF) and the Indigenous Peoples Planning Framework (IPPF). Environmental/social management plan. Section I.F.2 of Schedule 2 to the Loan Agreement. Upon the definition of detailed technical designs in respect of each investment (involving works) under any given Subproject (including, if applicable, the definition of detailed technical designs for the construction of houses in the event that, as part of Resettlement compensation under any given Subproject, it is determined by the Borrower that construction of houses will be required, as provided for in Part 2 (e) (ii) of the Project), and prior to the carrying out of each said works, the Borrower, through SVH, shall or shall cause each Participating Entity to: (a) carry out and/or cause to be carried out an environmental/social assessment of the pertinent works, and based on the results of said assessment as determined by the Bank, approve and/or cause to be approved an environmental/social management plan, acceptable to the Bank, for each said works (which plan shall be based on the results of the environmental/social assessment mentioned herein, and the Bank’s comments on the results of said assessment, if any), all in accordance with the provisions of the Environmental and Social Management Framework; and (b) immediately after said approval, implement and/or cause to be implemented (as the case may be) the corresponding environmental/social management plan in accordance with its terms, and in a manner acceptable to the Bank. Resettlement plan. Section I.F.3 of Schedule 2 to the Loan Agreement. Upon the definition of detailed technical designs and precise siting alignments in respect of each investment (involving works) under any given Subproject (including, if applicable, the definition of detailed technical designs and precise siting alignments in respect of the construction of houses in the event that, as part of Resettlement compensation under any given Subproject, it is determined by the Borrower that construction of houses will be required, as provided for in Part 2 (e) (ii) of the Project), if it is determined by the Bank that Resettlement will be involved, the Borrower shall, or shall cause the The World Bank Integrated Habitat and Housing Project (P159929) Participating Entity to, prior to the carrying out of each said works: (a) prepare and furnish to the Bank, a resettlement plan, acceptable to the Bank (which plan shall be consistent with the pertinent provisions of the Resettlement Policy Framework); and (b) immediately thereafter, implement said resettlement plan in accordance with its terms and in a manner acceptable to the Bank. Indigenous Peoples Plan. Section I.F.4 of Schedule 2 to the Loan Agreement With respect to the carrying out of any given activity under Part 2 of the Project (including, the construction of houses in the event that, as part of Resettlement compensation under any given Subproject, it is determined by the Borrower that construction of houses will be required, as provided for in Part 2 (e) (ii) of the Project), and when so determined by the Bank as set forth in the IPPF, the Borrower, through SVH, shall, or shall cause the Participating Entity to, prior to the carrying out of any said activities and/or works (as the case may be): (a) prepare and/or cause to be prepared and furnish to the Bank, an indigenous peoples’ plan, acceptable to the Bank (which plan shall be consistent with the pertinent provisions of the IPPF); and (b) thereafter, adopt and implement (and/or cause to be adopted and implemented) said indigenous peoples’ plan in accordance with its terms and in a manner acceptable to the Bank. Technical Assistance. Section I.F.5 of Schedule 2 to the Loan Agreement The Borrower, through SVH, shall ensure that the terms of reference for any consultancies related to the technical assistance provided under Part 3 of the Project, shall be acceptable to the Bank following its review thereof and, to that end, such terms of reference shall duly incorporate the requirement of the Bank’s Safeguard Policies then in force, as applied to the advice conveyed through such technical assistance. Proposed Section I.A.1 of Schedule 2.The Borrower, through C MIOPV, shall establish, and thereafter operate and maintain, at all times during Project implementation, an organizational structure for the Project with staff, functions and responsibilities acceptable to the Bank, as set forth in the OM, including, inter alia, the The World Bank Integrated Habitat and Housing Project (P159929) responsibility to implement, monitor and supervise the carrying out of the Project. Section I.E.2 of Schedule 2. Upon the definition of detailed technical designs under any given Subproject, and prior to the carrying out of each said works, the Borrower shall: (a) carry out an environ/social IBRD-87120 Complied with New assessment of the pertinent works and approve an environ/social management plan, all in accordance with the provisions of the Environ and Social Mgmt Framework and (b) implement the plan. Section I.E.4 of Schedule 2. With respect to the carrying out of any given activity under Part 2, and when so determined by the Bank as set forth in the IPPF, the Borrower shall prior to the carrying out of any said IBRD-87120 Not yet due New activities and/or works: (a) prepare and furnish to the Bank, an indigenous peoples’ plan (consistent with the pertinent provisions of the IPPF); and (b) adopt and implement said plan. Section I.E.1 of Schedule 2. The Borrower, through MIOPV, shall, and shall cause each Participating Entity, to implement the parts of the Project under their IBRD-87120 responsibility in accordance with the Environmental and Complied with New Social Management Framework (ESMF), the Resettlement Policy Framework (RPF) and the Indigenous Peoples Planning Framework (IPPF). Section I.E.3 of Schedule 2. Upon definition of detailed technical designs and precise siting of each investment, if it is determined by the Bank that Resettlement will be involved, the Borrower shall: (a) prepare and furnish to IBRD-87120 Not yet due New the Bank, a resettlement plan (consistent with the pertinent provisions of the Resettlement Policy Framework); and (b) immediately thereafter, implement the plan. IBRD-87120 Section I.E.5 of Schedule 2. Borrower shall ensure that Complied with New ToRs for any consultancies related to the technical The World Bank Integrated Habitat and Housing Project (P159929) assistance provided under Part 3, shall be acceptable to the Bank following its review thereof and, to that end, such terms of reference shall duly incorporate the requirement of the Bank’s Safeguard Policies then in force, as applied to the advice conveyed through such . technical assistance.