The World Bank Second Community Agriculture Resource Management and Competitiveness Project (P133705) REPORT NO.: RES37152 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SECOND COMMUNITY AGRICULTURE RESOURCE MANAGEMENT AND COMPETITIVENESS PROJECT APPROVED ON JUNE 20, 2014 TO MINISTRY OF FINANCE,PROJECT IMPLEMENTATION DEPARTMENT AGRICULTURE EUROPE AND CENTRAL ASIA Regional Vice President: Cyril E Muller Country Director: Mercy Miyang Tembon Senior Global Practice Director: Juergen Voegele Practice Manager/Manager: Julian A. Lampietti Task Team Leader: Bekzod Shamsiev, Arusyak Alaverdyan The World Bank Second Community Agriculture Resource Management and Competitiveness Project (P133705) I. BASIC DATA Product Information Project ID Financing Instrument P133705 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 20-Jun-2014 31-May-2020 Organizations Borrower Responsible Agency Ministry of Finance,Project Implementation Department Ministry of Agriculture Project Development Objective (PDO) Original PDO The Project Development Objective (PDO) is to (i) improve productivity and sustainability of pasture and livestock systems in targeted communities and (ii) increase the marketed production from selected livestock and high value agri- food value chains. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-83740 20-Jun-2014 06-Aug-2014 23-Jan-2015 31-May-2020 23.00 10.31 12.69 IDA-55040 20-Jun-2014 06-Aug-2014 23-Jan-2015 31-May-2020 5.87 4.32 .97 IDA-55050 20-Jun-2014 06-Aug-2014 23-Jan-2015 31-May-2020 3.80 2.40 1.01 The World Bank Second Community Agriculture Resource Management and Competitiveness Project (P133705) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES After about four years since effectiveness the Project implementation remains sluggish. The about 12 months of the original Project implementation period remaining the Project disbursement stands at 52 percent. The last Implementation Support Mission identified lack of proactive procurement and contract management on the part of the Foreign Financed Project Management Center (FFPMC) under the Ministry of Finance (MOF) as the key impediment and recommended that both the Project procurement and financial management functions are re- assigned back to the Agriculture Development Fund (ADF) , a specialized Project implementation agency under the Ministry of Agriculture (MOA). The mission also recommended extending the Project’s closing date by 20 months for satisfactory achievement of its development objective. The Ministry of Finance concurred with the World Bank recommendation and decided to absolve FFPMC of the fiduciary functions in relation to agriculture Projects. Concurrently, the new Government of Armenia made the political decision to abolish all PIU like structures country-wide by assigning the responsibility for Project implementation directly to the line Ministries. To minimize further disruption to the Project implementation the World Bank team, MOF, MOA, FFPMC and ADF have jointly developed the action plan for the immediate transition of the Project management to the newly created Project Implementation Department (PID) within MOA. There is a formal request for amendment of the legal agreements between the World Bank and Republic of Armenia and the next step will be revisions of the Project manuals. Furthermore, it was agreed to postpone the discussion about the changes to the Project’s Closing Date and possible modification of the Project scope until after the PID becomes fully operational. Proposed Restructuring: The proposed change covers only the designation of the Ministry of Agriculture or its legal successor as the Project implementing agency of the Recipient/Borrower, in line with the applicable legal acts of the Government of Armenia with no change to the Project scope or implementation schedule at this time. To ensure efficient and well-regulated decision-making process in relation to Project implementation, and in line with the successful practice in Armenia and elsewhere, the proposed restructuring also introduces a Project Steering Committee (PSC) to empower the Project Team within PID of the Ministry of Agriculture in carrying out their day-to- day activities in conformance with the agreed Project targets. II. DETAILED CHANGES