Document of The World Bank FOR OFFICIAL USE ONLY Report No: 76224-AR RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF ARGENTINA RURAL EDUCATION IMPROVEMENT PROJECT - PROMER PROJECT LOAN 7353-AR APPROVED BY THE BOARD ON DECEMBER 15, 2005 TO THE ARGENTINE REPUBLIC APRIL 3, 2013 ARGENTINA RURAL EDUCATION IMPROVEMENT PROJECT - PROMER P070963 LOAN 7353-AR Restructuring Status: Draft Restructuring Type: Level II Last modified on date : 04/03/2013 1. Basic Information Project ID & Name P070963: AR Rural Education Improvement Project Country Argentina Task Team Leader Peter Anthony Holland Sector Manager/Director Reema Nayar/ Keith E. Hansen Country Director Penelope J. Brook Original Board Approval Date 12/15/2005 Original Closing Date: 10/31/2011 Current Closing Date 12/31/2013 Proposed Closing Date [if applicable] EA Category B-Partial Assessment Revised EA Category EA Completion Date 02/08/2005 Revised EA Completion Date 2. Revised Financing Plan (US$m) Source Original Revised BORR 65.00 90.58 IBRD 150.00 150.00 Total 215.00 240.58 3. Borrower Organization Department Location Argentine Republic Argentina 4. Implementing Agency Organization Department Location Ministry of Education Argentina i 5. Disbursement Estimates (US$m) Actual amount disbursed as of 04/03/2013 139.73 Fiscal Year Annual Cumulative 2013 4.00 143.73 2014 6.27 150.00 Total 150.00 6. Policy Exceptions and Safeguard Policies Does the restructured project require any exceptions to Bank policies? N Does the restructured project trigger any new safeguard policies? If yes, N please select from the checklist below and update ISDS accordingly before submitting the package. 7a. Project Development Objectives/Outcomes Original/Current Project Development Objectives/Outcomes The Project's Development Objective is to support national Government policy to: (i) improve the coverage, efficiency, and quality of the Argentine education system; and (ii) to improve the governance of the Argentine education system through strengthening of the normative, planning, information, monitoring, and evaluation capacity at the national and provincial levels. 7b. Revised Project Development Objectives/Outcomes [if applicable] ii ARGENTINA RURAL EDUCATION IMPROVEMENT PROJECT - PROMER P070963 LOAN 7353-AR RESTRUCTURING PAPER 1. Proceeds for the Argentina Rural Education Improvement Project (Loan 7353- AR, P070963) will be reallocated as follows: Allocation Category of Expenditure % of Loan Allocation US$ Current Current Revised Current Revised 1) Component A of the Project: a) Goods, works, 79,270,000 99,625,000 52.8% 66.4% consultants´ and other services, training and operating costs procured by Provinces for subprojects and school managed activities costs b) Goods, works, 57,902,000 41,010,000 38.6% 27.3% consultants’ and other services, training and operating costs procured by the Borrower pursuant Components A.1, A.2, and A.3 of the Project 2) Component B of the Project a) Consultants’ 2,982,208 4,940,000 1.9% 3.3% services and operating costs b) Goods and training 4,848,382 3,098,839 3.2% 2.07% 3) Front-end fee 375,000 375,000 0.3% 0.3% 4) Refunding of Project 951,161 951,161 0.6% 0.6% Preparation Advance 5) Premia for Interest Rate 0 0 0.0% 0.0% Caps and Interest Rate Collars 6) Unallocated 3,671,249 0 2.4 % 0.0% Total 150,000,000 150,000,000 1 2. The Project is progressing well towards achieving its Project Development Objectives. The Project is now in its final phase of implementation. Some of the highlights of results are as follows: with regards to coverage, the trend of 6 year olds in 1st grade living in rural areas and who did not attend preschool continues to decline, reaching a low of 5,292 children in 2011. This compares very favorably to figures for 2009 (8,154) and to the baseline of 2004 (15,861), and even surpasses the end of Project goal of 7,921 children. Second, the transition rate from 6th grade to 7th grade continues to increase to 89.60 percent in 2011 (from 88.5 percent in 2009), as does the transition rate from 7th grade to 8th grade, from 77.8 percent (2004) to 85 percent (2011). In terms of efficiency, promotion rates have also improved to 90.3 percent in 2011 (from a baseline in 2004 of 85.3 percent). 3. The proposed reallocation is necessary to finance: i) increased unit costs in infrastructure activities; ii) unanticipated consultant services related to the production of pedagogical materials; and iii) increased operating costs linked to the teacher training program (now reaching 8,000 teachers in 20 provinces), and the financial transfers to schools (“Planes de Mejora�) implemented in 2,033 schools. This reallocation is based on final estimates for expenditures for the Project. 2