Document of
                                The World Bank

                           FOR OFFICIAL USE ONLY

                                                                 Report No: 76378-AR




                           RESTRUCTURING PAPER

                                          ON A

               PROPOSED PROJECT RESTRUCTURING
                                OF
     ADDITIONAL FINANCING FOR BUENOS AIRES INFRASTRUCTURE
         SUSTAINABLE INVESTMENT DEVELOPMENT PROJECT
                         LOAN 7947-AR
                         APPROVED ON
                           July 27, 2010


                                     TO THE

                     PROVINCE OF BUENOS AIRES
           WITH THE GUARANTEE OF THE ARGENTINE REPUBLIC

                                   May 2, 2013




Sustainable Development Department
Argentina, Paraguay and Uruguay Country Management Unit
Latin America and Caribbean Region


               Regional Vice President:      Hasan Tuluy
                     Country Director:       Penelope Brook
                      Sector Manager:        Wambui G. Gichuri
                    Task Team Leader:        Lilian Pena Pereira Weiss
ARGENTINA – ADDITIONAL FINANCING FOR BUENOS AIRES INFRASTRUCTURE
          SUSTAINABLE INVESTMENT DEVELOPMENT PROJECT

                                       P088032
                                     LOAN 7947-AR

                                  Restructuring Paper


1.      The closing date for the Argentina Additional Financing for Buenos Aires
Infrastructure Sustainable Investment Development Project – Phase 1 (APL1), Loan
7947-AR, P088032 will be extended from December 31, 2013 until May 30, 2015. The
Project’s grace period will end 4 months after the new closing date, on September 30,
2015.

2.      The Additional Financing in the amount of US$50 million, approved by the Board
on July 27, 2010, aims at filling the financing gap in the parent Project caused by
unforeseen cost increases and scaling up the parent Project to include additional works.
Because of reasons outside of the Borrower’s control, the Additional Financing loan only
became effective on February 17, 2012, 18 months after its approval by the Bank’s
Board. Thanks to the Borrower’s proactive engagement, the Additional Financing loan
has disbursed US$15.07 million (30%) in just one year since effectiveness. The Project
implementation progress and the performance of the implementing agency have been
rated satisfactory in the parent Project for several years (and continue to be satisfactory
currently), the Project is not under suspension of disbursements, and the Project has no
outstanding audit reports or audit reports not satisfactory to the Bank.

3.      Currently, work contracts for a total amount of US$56.41 million are ongoing in
the overall Project (parent Project and Additional Financing), of which US$41.21 will be
financed by the Additional Financing loan. Two works contracts for an amount of
US$10.26 million are in the final contracting phase (pending contract signature).
Consequently, no additional procurements or activities will be commenced under this
Project. However, the expected completion dates of two major civil works (Catonas II
and III) to be financed by the Additional Financing will require until early 2015 to be
finalized, and a 17-month extension of the current closing date (almost equivalent to the
Additional Financing’s effectiveness delay) is required to complete these activities.

4.      The proposed extension is necessary to allow the Borrower to complete the civil
works and substantially achieve the indicator targets and the PDO. Please note that the
Borrower has prepared an action plan to complete the Project by the new closing date and
that the Project objectives continue to be achievable.

5.      This will be the first extension of the Additional Financing (Loan 7947-AR). The
original loan (7268-AR), which has been extended twice, will not be extended.


                                            2