The World Bank OBA SANITATION MICROFINANCE PROGRAM (P157958) REPORT NO.: RES31998 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF OBA SANITATION MICROFINANCE PROGRAM APPROVED ON JUNE 30, 2016 TO PEOPLE’S REPUBLIC OF BANGLADESH WATER GLOBAL PRACTICE SOUTH ASIA REGION Regional Vice President: Ethel Sennhauser (Acting) Country Director: Qimiao Fan Senior Global Practice Director: Guang Zhe Chen Practice Manager/Manager: Takuya Kamata Task Team Leader: Rokeya Ahmed The World Bank OBA SANITATION MICROFINANCE PROGRAM (P157958) ABBREVIATIONS AND ACRONYMS BDT Bangladeshi Taka GPOBA Global Partnership on Output-Based Aid MFI Microfinance institution OBA Output-based aid PDO Project development objective PKSF Palli Karma-Sahayak Foundation PO Partner organization The World Bank OBA SANITATION MICROFINANCE PROGRAM (P157958) 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 P157958 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 30-Jun-2016 30-Jun-2018 Organizations Borrower Responsible Agency Economic Relations Division - Ministry of Finance Palli Karma-Sahayak Foundation (PKSF) Project Development Objective (PDO) Original PDO The project development objective (PDO) is to increase access to hygienic sanitation facilities for low-income households in rural areas of Bangladesh through commercial sanitation loans. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net TF Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-A3117 30-Jun-2016 21-Dec-2016 23-Feb-2017 30-Jun-2018 3.00 2.12 .88 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank OBA SANITATION MICROFINANCE PROGRAM (P157958) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project status 1. The OBA Sanitation Microfinance Program aims to increase access to hygienic sanitation facilities for low- income households in rural areas of Bangladesh through commercial sanitation loans. The project is financed with a US$3 million grant from the Global Partnership on Output-Based Aid (GPOBA), with a contribution of approximately US$22 million in household loan financing from the implementing partner, Palli-Karma Sahayak Foundation (PKSF), and 21 local microfinance institutions (MFIs), also called Partner Organizations (POs). It is linked with a World Bank executed technical assistance activity (P156017), designed to build the capacity of small scale local private sector actors for sanitation market development. The project was approved on June 30, 2016 and declared effective on February 23, 2017. 2. The project experienced initial delays in implementation due to limited experience by many POs in loan programs for household sanitation, in addition to heavy rains and flooding in project areas. However, the task team worked closely with PKSF to accelerate project implementation, and as of end of March 2018, over 148,000 households have received sanitation loans and installed hygienic household latrines benefitting 740,000 people (87 percent of the project target). The OBA grant has mobilized US$18 million in household loan financing to date from POs, in addition to US$1.2 million in loans to over 900 local entrepreneurs, responsible for latrine construction and installation. A payment request from PKSF of US$1.31 million was recently approved by the task-team leader based on outputs achieved between January – March 2018, and is pending disbursement, which would bring total project disbursements to US$2.2 million (73 percent of total loan). The project is on track to achieve the target of 170,000 installations through household sanitation loans, benefitting 850,000 people by the original project closing date of June 30, 2018. B. Rationale for extension 3. While it is expected that outputs will be achieved by the original closing date, the project implementing partner, PKSF, has requested a three month, no-cost extension in order to complete independent verification and reporting activities under the project. This would extend the closing date to September 30, 2018. As this is an output-based aid project, grant funds can only be disbursed after independent verification of a sample of project outputs. The extension would allow the independent verification consultants hired under Component 2 of the project to fully verify and report on the remaining 13 percent of hygienic latrines installed between April and June 2018. In addition, the extension would allow consultants to support the project impact evaluation and documentation of lessons. The World Bank OBA SANITATION MICROFINANCE PROGRAM (P157958) II. DESCRIPTION OF PROPOSED CHANGES A. Proposed changes 4. The project proposes to extend the closing date by three months from June 30, 2018 to September 30, 2018. The deadline for withdrawal applications would be extended accordingly to January 30, 2019, four months after the project closing date as noted in the Disbursement Letter. This is a no-cost extension, and would be the first and only extension of the project closing date. Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. III. SUMMARY OF CHANGES Changed Not Changed Change in Loan Closing Date(s) ✔ Change in Implementing Agency ✔ Change in Project's Development Objectives ✔ Change in Results Framework ✔ Change in Components and Cost ✔ Cancellations Proposed ✔ Additional Financing Proposed ✔ Reallocation between Disbursement Categories ✔ Change in Disbursements Arrangements ✔ Change in Disbursement Estimates ✔ 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 Procurement ✔ The World Bank OBA SANITATION MICROFINANCE PROGRAM (P157958) Change in Implementation Schedule ✔ Other Change(s) ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline TF Status Closing Closing(s) Closing for Withdrawal Applications TF-A3117 Effective 30-Jun-2018 30-Sep-2018 30-Jan-2019 Note to Task Teams: End of system generated content, document is editable from here.