The World Bank Debt Management Strengthening Programme at Ministry of Finance, Government of Pakistan (P161451) REPORT NO.: RES37704 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF DEBT MANAGEMENT STRENGTHENING PROGRAMME AT MINISTRY OF FINANCE, GOVERNMENT OF PAKISTAN APPROVED ON MARCH 24, 2017 TO ISLAMIC REPUBLIC OF PAKISTAN MACROECONOMICS, TRADE AND INVESTMENT SOUTH ASIA Regional Vice President: Hartwig Schafer Country Director: Patchamuthu Illangovan Senior Global Practice Director: Marcello De Moura Estevao Filho Practice Manager/Manager: Maria Manuela Do Rosario Francisco Task Team Leader: Adnan Ashraf Ghumman The World Bank Debt Management Strengthening Programme at Ministry of Finance, Government of Pakistan (P161451) ABBREVIATIONS AND ACRONYMS CD Country Director DFID Department for International Development (United Kingdom) EA Environmental Assessment EAD Economic Affairs Division DPCO Debt Policy and Coordination Office FY Fiscal Year ID Identity (Project ID) NO. Number MU Moderately Unsatisfactory MS Moderately Satisfactory PDO Project Development Objective PSDP Public Sector Development Program TAGR Trust Fund for Accelerating Growth and Reform TF Trust Fund USD United States Dollar US$ United States Dollar The World Bank Debt Management Strengthening Programme at Ministry of Finance, Government of Pakistan (P161451) 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 P161451 Investment Project Financing Original EA Category Current EA Category Approval Date Current Closing Date 24-Mar-2017 28-Jun-2019 Organizations Borrower Responsible Agency Islamic Republic of Pakistan Debt Policy Co-ordination Office, Ministry of Finance Financing (in USD Million) FIN_SUMM_PUB_TBL SUMMARY Total Project Cost 0 Total Financing 0 Financing Gap 0 DETAILS -NewFin3 Project Development Objective (PDO) Original PDO Strengthening institutional capacity of DPCO to undertake its enhanced role of managing market and credit risks. OPS_TABLE_PDO_CURRENTPDO The World Bank Debt Management Strengthening Programme at Ministry of Finance, Government of Pakistan (P161451) Summary Status of Financing Net TF Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-A4468 24-Mar-2017 06-Jun-2017 06-Jun-2017 28-Jun-2019 1.53 .54 .99 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No Note to Task Teams: End of system generated content, document is editable from here. I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. The Debt Management Strengthening Program at Ministry of Finance was approved by the World Bank on 24th March, 2017 and the Grant Agreement (GA) was signed on 6th June, 2017 which was also the effectiveness date of the project. The project aims at improving debt management practice in the Government of Pakistan (GoP) by assisting the authorities in strengthening two key functions: (i) implementation of the debt management strategy, risk management and coordination functions of Debt Policy Coordination Office (DPCO); and (ii) obtaining financing in the external markets in the External Finance (EF) Wing, Ministry of Finance (MoF). 2. The project has had satisfactory progress against its Project Development Objectives (PDOs). The project has achieved the target for PDO 1 (applicable within the timeline under review) to have an approved Debt Management Strategy 2015/16 - 2018/19. The project also achieved the target for PDO 2 as the DPCO undertook statutory responsibility and ensured compliance with the Fiscal Responsibility and Debt Limitation Act (FRDLA) by publishing annual Debt Policy Statements for 2017-18 in February 2018 and for 2018-19 in March 2018. 3. However, the progress on other elements of the project have been gradual and uneven. Changes in the Ministry of Finance, especially after the elections in July 2018 have slowed progress and generated uncertainty, which the authorities are in the process of addressing. Capacity building activities were undertaken but due to changes in the top financial management, approvals were slow. The project is therefore slow on disbursements – as only 35 percent of the total amount has been disbursed until May 2019. While it is certain that the original project amount of US$1.53 million will not be fully disbursed by the project, an extension of the project by two months (as requested by the Ministry of Finance) would allow for better achievement of the PDOs, especially those associated with capacity building of the DPCO. The World Bank Debt Management Strengthening Programme at Ministry of Finance, Government of Pakistan (P161451) II. DESCRIPTION OF PROPOSED CHANGES A. Change in Loan Closing Date(s): 4. The proposed restructuring responds to a request by the Economic Affairs Division (EAD) of the Government of Pakistan to restructure the Project through an extension of the project closing date by two months from June 30, 2019 to August 31, 2019 (Letter No. 5(14)WB-IV/17 of 31st May, 2019). Consistent with this request, the restructuring proposes an extension of the project closing date until August 31, 2019. B. Change in Disbursement Estimates: 5. The disbursement estimates will be changed to spread out the disbursement projections over the project period (revised till August 31st, 2019). Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. I. SUMMARY OF CHANGES Changed Not Changed Loan Closing Date(s) ✔ Implementing Agency ✔ Project's Development Objectives ✔ Results Framework ✔ Components and Cost ✔ Cancellations Proposed ✔ Additional Financing Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Change in Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ The World Bank Debt Management Strengthening Programme at Ministry of Finance, Government of Pakistan (P161451) Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ 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-A4468 Effective 30-Apr-2018 28-Jun-2019 31-Aug-2019 30-Oct-2019 Note to Task Teams: End of system generated content, document is editable from here.