The World Bank RUSSIA FOREST FIRE RESPONSE PROJECT (P123923) REPORT NO.: RES36167 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF RUSSIA FOREST FIRE RESPONSE PROJECT APPROVED ON SEPTEMBER 20, 2012 TO MINISTRY OF FINANCE ENVIRONMENT & NATURAL RESOURCES EUROPE AND CENTRAL ASIA Regional Vice President: Cyril E Muller Country Director: Andras Horvai Senior Global Practice Director: Karin Erika Kemper Practice Manager/Manager: Kseniya Lvovsky Task Team Leader: Gayane Minasyan The World Bank RUSSIA FOREST FIRE RESPONSE PROJECT (P123923) I. BASIC DATA Product Information Project ID Financing Instrument P123923 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 20-Sep-2012 31-Dec-2019 Organizations Borrower Responsible Agency Federal Forestry Agency,Ministry of Natural Resources Ministry of Finance and Environment Project Development Objective (PDO) Original PDO The objectives of the Project are to improve forest fire prevention and suppression in select forest ecosystems, including targetedprotected areas, and to enhance forest management in pilot regions. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-81970 20-Sep-2012 08-Jul-2013 05-Dec-2013 31-Dec-2019 40.00 16.20 23.76 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES The World Bank RUSSIA FOREST FIRE RESPONSE PROJECT (P123923) The Project’s Loan Agreement was signed on July 8, 2013 and the Project became effective on December 5, 2013. The Project has two components: Part A (Enhancing Forest Fire Prevention, Management and Control) implemented by the Federal Forest Agency (FFA) and Part B (Building Foresting and Protected Areas Management Capacity) implemented and the Ministry of Natural Resources and Environment (MNRE). As of March 21, 2019, disbursement is US$ 16.2M, which is 41 percent. The project is rated Moderately Unsatisfactory on both the PDO and IP. After a reasonable start in 2014 (US$4.23M of the Loan had been disbursed, 41 percent of the original disbursement target for that stage), between February 2015 and March 2016, the implementation of Part A activities (implemented by the FFA) ceased. Under Part A approvals for TORs, specifications, tender documents, and some contract outputs stalled. By December 2015, there were outstanding contracts for approximately US$22 M, of which US$11 M were awarded but not signed. Designed to be implemented at a slower initial pace, the implementation of Part B activities (implemented by MNRE), started to accelerate in 2016. To speed up implementation and meet the project development objectives, the Project was restructured on December 15, 2016. The scope of Part A (implemented by the FFA) was changed to include only the activities for which contracts were already signed and/or awarded. The scope and coverage of Part B (implemented by MNRE) were expanded to included activities in 25 Protected Areas (PA) from the initial 12 PAs. The Project Closing Date was extended to December 31, 2019 from January 31, 2018. The Loan amount of US$40 M and the PDO remained unchanged. Despite close monitoring of Project implementation during 2017 – 2018 since restructuring, the pace of implementation has not picked up. Disbursement of the Loan funds remained unchanged at 41 percent (US$ 16.2 M out of US$ 40 M) over a period of 24 months. None of the agreed actions, including 13 items specified in the June 2018 Aide Memoire has been completed. The Project has reached an almost complete standstill. Based on the analysis of the current procurement plan, and updated dates for the TORs and Technical Specifications, none of the consultancy and goods contracts can be completed by the Project Closing date. Upon consideration, the Government of Russian Federation decided to close the Project, ahead of its closing date of December 31, 2019, due to the need to optimize federal budget expenditures and in light of persistent delays in implementation, and cancel any undisbursed funds. Through consultations with all relevant parties, agreement was reached to close the Project on March 31, 2019. The agreement was confirmed officially with a February 22, 2019 letter from the MOF. The restructuring will entail two changes: 1. The Project closing date will be moved forward to March 31, 2019 from December 31, 2019. 2. A total of US$23,756,379.30 will be cancelled. II. DETAILED CHANGES LOAN CLOSING DATE(S) The World Bank RUSSIA FOREST FIRE RESPONSE PROJECT (P123923) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IBRD-81970 Effective 31-Jan-2018 31-Dec-2019 31-Mar-2019 31-Jul-2019