Document of The World Bank FOR OFFICIAL USE ONLY Report No: 75048-MA RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF OUM ER RBIA SANITATION PROJECT (P098459) LOAN IBRD 7925-MA DATED AUGUST 19, 2010 IN THE AMOUNT OF EURO 25.9 MILLION AND US$ 8.6 MILLION TO THE OFFICE NATIONAL DE L’EAU POTABLE (ONEP) May 9, 2013 Sustainable Development Department Middle East and North Africa Region ABBREVIATIONS AND ACRONYMS ONEP Office National de l’Eau Potable ONE Office National de l’Electricité ONEE Office National de l’Electricité et de l’Eau Potable Regional Vice President: Inger Andersen Country Director: Neil Simon M. Gray Acting Sector Manager: Steven N. Schonberger Task Team Leader: Xavier Chauvot de Beauchêne KINGDOM OF MOROCCO OUM ER RBIA SANITATION PROJECT (P098459) CONTENTS Page A. SUMMARY ................................................................................................................ 1 B. PROPOSED CHANGES ............................................................................................ 1 KINGDOM OF MOROCCO OUM ER RBIA SANITATION PROJECT (P098459) RESTRUCTURING PAPER A. SUMMARY 1. The proposed restructuring follows a request from the Office National de l’Electricité et de l’Eau Potable (ONEE) on October 17, 2012 to reflect the merger (regroupement) of the Office National de l’Eau Potable (ONEP) with the Office National de l’Electricité (ONE) in the Loan and Guarantee Agreements. The Office National de l’Eau Potable (ONEP), the original Borrower, has been merged (regroupé) with the Office National de l’Electricité (ONE) as provided by Law 40-09, promulgated on September 29, 2011 and made effective on April 24, 2012. The new legal entity resulting from the merger of ONEP and ONE is named the Office National de l’Electricité et de l’Eau potable (ONEE). It is the proposed new Borrower. The purpose of the restructuring is to reflect this change of Borrower in the Project’s Loan Agreement and Guarante e Agreement (Loan No. 7925-MA) dated August 19, 2010 (the Loan Agreement and the Guarantee Agreement, respectively). B. PROPOSED CHANGES 2. The Bank will enter into: (i) a Loan Assumption Agreement with ONEE, under which ONEE, as new Borrower, will confirm that it accepts the rights and benefits, and assumes the obligation of ONEP, set forth or referred to in the Loan Agreement; and (ii) an Amended Guarantee Agreement with the Kingdom of Morocco (the Guarantor) to reflect the change of Borrower in the Guarantee Agreement. 3. After the merger of the ONEP with the ONE to form the ONEE, ONEE kept a Water Department (“ONEE-Branche Eau�) and an Electricity Department (“ONEE- Branche Electricité�). Changes induced by the merger were limited to creating in ONEE four overarching units dealing with transversal activities such as finance or operations. It did not entail any change in the organization or structure of Project implementation. 4. As a result, the change of Borrower will not have any impact on its capacity to handle the fiduciary functions (procurement and financial management), as the staff in charge will remain the same as it was at the time of Project appraisal. In addition, the Project’s objectives, activities, financing and implementation arrangements will remain the same. This change is therefore not expected to have any implication on Project implementation, which has been rated satisfactory or moderately satisfactory until August 2012 and Moderately Unsatisfactory since, essentially because of accumulated delays in procurement of some activities under the Project. Yet, procurement delays are expected to be reduced in the coming weeks and no further changes to the project are deemed necessary at this stage of implementation. 1