The World Bank SUSTAINABLE AGRICULTURE AND CLIMATE CHANGE MITIGATION PROJECT (GEF) (P127486) REPORT NO.: RES29359 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SUSTAINABLE AGRICULTURE AND CLIMATE CHANGE MITIGATION PROJECT (GEF) APPROVED ON JANUARY 29, 2013 TO REPUBLIC OF UZBEKISTAN AGRICULTURE EUROPE AND CENTRAL ASIA Regional Vice President: Cyril E Muller Country Director: Lilia Burunciuc Senior Global Practice Director: Juergen Voegele Practice Manager/Manager: Julian A. Lampietti Task Team Leader: Dilshod Khidirov The World Bank SUSTAINABLE AGRICULTURE AND CLIMATE CHANGE MITIGATION PROJECT (GEF) (P127486) ABBREVIATIONS AND ACRONYMS GEF Global Environment Facility GEO Global Environmental Objectives PFI Participating Financial Institution MOF Ministry of Finance FMR Financial Management Report The World Bank SUSTAINABLE AGRICULTURE AND CLIMATE CHANGE MITIGATION PROJECT (GEF) (P127486) Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. BASIC DATA Product Information Project ID Financing Instrument P127486 Specific Investment Loan Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 29-Jan-2013 31-Mar-2018 Organizations Borrower Responsible Agency Rural Restructuring Agency under Ministry of Agriculture Republic of Uzbekistan and Water Resources,Ministry of Agriculture and Water Resources Project Development Objective (PDO) Original PDO The Global Environmental Objectives of the proposed Project are to (i) promote the introduction of renewable energy and energyefficiency technologies of relevance to agri-businesses and farms; and (ii) strengthen capacity for improving degraded irrigatedland and water conservation in the project area. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-14400 07-Feb-2014 07-Feb-2014 07-May-2014 31-Mar-2018 12.70 10.25 2.45 The World Bank SUSTAINABLE AGRICULTURE AND CLIMATE CHANGE MITIGATION PROJECT (GEF) (P127486) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank SUSTAINABLE AGRICULTURE AND CLIMATE CHANGE MITIGATION PROJECT (GEF) (P127486) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. The Project was approved by the Board on January 29, 2013, and the Grant Agreement was signed on February 7, 2014. The project has experienced a 15-month delay between Board approval and effectiveness due to the protracted internal approval process within Government. The pending Matching Grant Financing Guideline was approved by the Central Bank, Ministry of Finance and Ministry of Agriculture & Water Resources in January 2017 and Subsidiary Grant Agreements between MOF and PFIs were signed in February 2017. After the approval of the Guidelines and signing of Grant Agreements the project implementation accelerated especially implementation of matching grant Component 1 Promoting Renewable Energy Technologies. The project disbursement rate has increased from 25% to 70% during seven months following signing of Subsidiary Grant Agreements. The last mission assessed the progress and upgraded all project ratings including the DO, IP and components to moderately satisfactory. 2. All project components/activities are progressing well especially on demonstration sites on renewable energy and energy efficiency technologies. To date 23,518 farmers and rural entrepreneurs attended the training workshops on the renewable energy technology options. The following renewable energy and energy efficiency technologies were demonstrated: 7 energy efficient irrigation water pumps, 5 water heating solar systems (solar collectors), 4 water lifting systems with use of photovoltaic power plants (PVPP), 20 small biogas plants with a bioreactor capacity of 6m3 and 1 big biogas plant with a bioreactor capacity of 600m3.. 3. This restructuring includes funds reallocation and adjusting targets of results indicators: The reallocation of $1.1m from Unallocated (Category 4) to Goods, works, consultants; services (Category 1) will allow additional demonstration of renewable energy and energy efficient technologies (Component 1) in line with the project objectives. These unallocated funds are currently unutilized under Component 2 Technologies and Practices to mitigate Irrigated Land Degradation ($0.3m) and Component 3 Advisory Services and Project Management $0.8m). The Ministry of Finance is also asking the Bank to make a revision following two results indicators (i) Number of hectares of irrigated land where the degradation has been reversed – from 900 to 26351.4 and (ii) Investment in renewable energy in the agri-business sector measured as a number of sub-projects from 2370 to 37 based on the actual sub-grant application approved by the Participating Financial Institutions. 4. The average value of individual sub-projects amounts increased due to the increase of the required biogas and energy-efficient pumps capacity and higher prices of the equipment packages. Therefore, the value of actual average sub-project applications received by the PFIs increased. As a result, the target number of investment sub-projects and the number of matching grant beneficiaries have reduced. 5. The Ministry of Agriculture and Water Resources and Project Implementation Agency have confirmed that the additional demonstration of renewable energy sites will be completed by the project closing date. The RRA is updating the implementation, procurement and disbursement plans in line with the proposed relocation. The World Bank SUSTAINABLE AGRICULTURE AND CLIMATE CHANGE MITIGATION PROJECT (GEF) (P127486) II. DESCRIPTION OF PROPOSED CHANGES The Recipient, Ministry of Finance of the Republic of Uzbekistan, in its letter dated July 24, 2017, has requested the Bank to (i) change of the end target of selected results indicators:  Number of hectares of irrigated land where the degradation has been reversed – from 900 to 26,351. The main activities on demonstration plots include laser leveling and deep reaping of selected plots, demonstration of modern technics such as drip irrigation, hose reel sprinkler, and introducing gravity irrigation. These activities were jointly financed by the GEF SACCMP project and SDC parallel financed in line with the project design.  Investment in renewable energy in the agri-business sector from 2370 to 37 based on the actual number of sub-grant application approved by the Participating Financial Institutions. The value of individual sub-projects increased significantly. This happened due to two inter-related factors: demand-based increase of the required biogas and energy-efficient pumps capacity and higher prices of the equipment packages. Therefore, the value of actual average sub-project applications received by the PFIs increased. As a result, the target number of investment sub-projects and the number of matching grant beneficiaries have reduced. (ii) reallocate Grant proceeds in the amount of US$ 1.105 million from the Unallocated Category (Category 4) to Goods, works, consultants’ services and Training (Category 1), to Component 1. Most of demonstration of renewable energy and energy efficiency sites have been successfully completed (46 sites) and trainings carried out (23,518 farmers and rural entrepreneurs trained). The Government is proposing to finance additional demonstration sites in research institutes and universities to expand the achievements of demonstrated technologies and training and improve their research and development capacity. I. SUMMARY OF CHANGES Changed Not Changed Change in Results Framework ✔ Change in Components and Cost ✔ Reallocation between Disbursement Categories ✔ Change in Disbursement Estimates ✔ The World Bank SUSTAINABLE AGRICULTURE AND CLIMATE CHANGE MITIGATION PROJECT (GEF) (P127486) Change in Procurement ✔ Change in Implementing Agency ✔ Change in DDO Status ✔ Change in Project's Development Objectives ✔ Change in Loan Closing Date(s) ✔ Cancellations Proposed ✔ Change in Disbursements Arrangements ✔ Change in Overall Risk Rating ✔ Change in Safeguard Policies Triggered ✔ Change of EA category ✔ Change in Legal Covenants ✔ Change in Institutional Arrangements ✔ Change in Financial Management ✔ 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_RESULTS_TABLE RESULTS FRAMEWORK Project Development Objective Indicators Intermediate Indicators IO_IND_TABLE Investment in renewable energy in the agri-business sector Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 60.00 37.00 Revised The World Bank SUSTAINABLE AGRICULTURE AND CLIMATE CHANGE MITIGATION PROJECT (GEF) (P127486) Date 08-Aug-2012 05-Jun-2017 24-Aug-2017 Number of workshops held to inform/disseminate selected RE technologies and publicize the RESP-2 credit line Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 354.00 256.00 No Change Date 08-Aug-2012 05-Jun-2017 31-Mar-2017 Client days of training provided on relevant practices for irrigation/land conservation/EE (female & male) Unit of Measure: Text Indicator Type: Custom Baseline Actual (Current) End Target Action Value 00000 128 150 No Change Date 08-Aug-2012 05-Jun-2017 31-Mar-2017 Number of workshops for equipment and service providers on legal issues, regulations, contract law, guarantees, health and safety, etc. Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 30.00 90.00 No Change Date 08-Aug-2012 05-Jun-2017 31-Mar-2017 Global Environment Objective Indicators GEO_IND_TABLE Number of hectares of irrigated land where degradation has been reversed Unit of Measure: Hectare(Ha) Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 26351.40 26351.40 Revised Date 04-Mar-2013 05-Jun-2017 31-Mar-2017 Renewable Energy technology demonstrated in the project areas Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action The World Bank SUSTAINABLE AGRICULTURE AND CLIMATE CHANGE MITIGATION PROJECT (GEF) (P127486) Value 0.00 39.00 55.00 No Change Date 03-Mar-2014 05-Jun-2017 31-Mar-2017 Generation Capacity of Renewable Energy constructed - Biogas Unit of Measure: Megawatt Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 1070.00 No Change Date 04-Mar-2013 05-Jun-2017 31-Mar-2017 Support formulation of the regulatory framework to assist integration of renewable energy into the rural energy system Unit of Measure: Text Indicator Type: Custom Baseline Actual (Current) End Target Action The international Existing draft RE policy consultant is working Draft regulatory Value and regulation with the line ministries framework revised and No Change documents and agencies on drafting consulted regulatory framework Date 04-Mar-2013 05-Jun-2017 31-Mar-2017 GHG emissions avoided by the project Unit of Measure: Metric ton Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 3.50 No Change Date 04-Mar-2013 05-Jun-2017 31-Mar-2017 OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Promoting Renewable Energy Promoting Renewable Energy 9.00 Revised 10105000.00 Technologies Technologies Promoting Technologies and Promoting Technologies and Practices to mitigate Irrigated 1.09 Revised Practices to mitigate Irrigated 790000.00 Land Degradation Land Degradation Advisory Services and Project Advisory Services and Project 2.60 Revised 1804000.00 Management Management The World Bank SUSTAINABLE AGRICULTURE AND CLIMATE CHANGE MITIGATION PROJECT (GEF) (P127486) TOTAL 12.69 12,699,000.00 OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed TF-14400-001 | Currency: USD iLap Category Sequence No: 1 Current Expenditure Category: GO, W, CS, TR 3,001,500.00 2,403,243.19 4,106,562.00 100.00 100.00 iLap Category Sequence No: 2 Current Expenditure Category: Matching Grants 8,000,000.00 5,124,083.70 8,000,000.00 100.00 100.00 iLap Category Sequence No: 3 Current Expenditure Category: INC. OPERATING COSTS 592,438.00 273,051.02 592,438.00 100.00 100.00 iLap Category Sequence No: 4 Current Expenditure Category: UNALLOCATED 1,105,062.00 0.00 0.00 Total 12,699,000.00 7,800,377.91 12,699,000.00 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2013 0.00 0.00 2014 4,233,333.33 54,725.25 2015 6,232,333.33 471,174.12 The World Bank SUSTAINABLE AGRICULTURE AND CLIMATE CHANGE MITIGATION PROJECT (GEF) (P127486) 2016 2,233,333.34 2,773,586.70 2017 0.00 8,099,513.93 2018 0.00 1,300,000.00 Note to Task Teams: End of system generated content, document is editable from here.