Document of The World Bank FOR OFFICIAL USE ONLY RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF THE GEF GRANT (TF-96758) Approved by the Board on June 17, 2010 TO THE ITAIPÚ BINACIONAL February 8, 2013 Sustainable Development Department Argentina, Paraguay, and Uruguay Country Management Unit Latin America and the Caribbean Region Report No: 75404 v1 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
ABBREVIATIONS AND ACRONYMS MAG (Ministerio de Agricultura y Ganadería) Ministry of Agriculture and Livestock PRODERS World Bank Sustainable Agriculture and Rural Development Project SEAM (Secretaría del Ambiente) Secretary of the Environment TT Task Team DEAG (Dirección de Extensión Agrícola) Directorate of Agricultural Extension Regional Vice President: Country Director: Sector Manager: Task Team Leader: Hasan A. Tuluy Penelope J. Brook Karin Kemper Marcelo Hector Acerbi 2
PARAGUAY CONTENTS Page A. SUMMARY... 4 B. PROJECT STATUS... 4 C. PROPOSED CHANGES... 5 3
PARAGUAY GEF GRANT (TF096758) A. SUMMARY RESTRUCTING PAPER 1. This restructuring paper is in response to a change in implementation arrangements requested by Itaipu Binacional (the Recipient) that refers to the roles of the co-executants within the Project s Management Council, as established by the Tripartite Agreement signed by SEAM, Itaipú and MAG, dated June 30 th, 2011. The Recipient requested the change in a letter to the Bank dated September 28 th, 2012) following the agreement by the co-executants as recorded in the signed aide memoire of the supervision mission undertaken in September, 2012. This is a level 2 restructuring, in accordance with Bank s policy. B. PROJECT STATUS 2. The Grant from the Global Environment Facility (GEF) in the amount of US$ 4.5 million was approved by the Board on June 17 th, 2010. The Project Development Objective of this operation as stated in the Grant Agreement is to assist the Republic of Paraguay s continued efforts to achieve sustainable natural resource-based economic development in the Project Area, by: (a) establishing the Mbaracayú-San Rafael conservation corridor within public and private lands through sustainable native forest management practices for biological connectivity; (b) encouraging sustainable agricultural practices that maintain biodiversity within productive landscapes, while increasing productivity and mainstreaming biodiversity conservation; (c) strengthening the institutional capacity of MAG in order to implement conservation techniques in the rural landscape; (d) strengthening the institutional capacity of SEAM to improve knowledge of forest and biodiversity conservation activities, including the monitoring and enforcement of the aforesaid activities; and (e) strengthening the National Protected Areas System. 3. Project implementation has experienced significant delays. The Grant Agreement was signed on February 24 th, 2011, and due to lengthy government internal approval process, it was declared effective on July 21 st, 2011. After effectiveness, substantial coordination issues between co-executants (mainly between Itaipu and SEAM) affected implementation and no project activities were started for more than a year. 4. More recently, however, the SEAM and the PRODERS/MAG have been more actively participating in the Project's implementation arrangements. The Recipient, in agreement with SEAM and PRODERS/MAG, assigned a team of experts that, would lead the implementation of a realistic work plan. As part of this renewed effort, a revised Procurement Plan that includes all contracts and activities to be financed by the Project 4
during the first year of project implementation has been included in the project s operational plan. 5. During the last supervision mission, carried out in September 2012, the Recipient submitted an action plan to speed up the project implementation, which as of January 2013 has been implemented according to schedule. C. PROPOSED CHANGES Institutional arrangements 6. The implementation arrangement change requested by the Recipient envisages the Management Council composed of three members: the Secretary of the Environment (SEAM), Itaipu Binacional and the Ministry of Agriculture and Livestock (MAG), to be chaired by Itaipu instead of SEAM. 7. No changes are envisaged nor are impacts expected in terms of the governance of the project. The Project s overall implementation arrangements, including the original Project s management structure and the expected functions for each management level (Management Council, Executive Working Group and PIU) will remain as planned in the originally approved Project. 8. In addition, each executing partner will have the same specific functions as previously planned. The implementing agency for the Project is the Paraguayan authority within Itaipu. The main co-executors will be SEAM and MAG, which have signed a tripartite cooperation agreement with Itaipu to formalize their participation in the Project. It is envisaged that SEAM would play primarily a policy setting role in the Project, while providing field support for enforcement in the sustainable forest management through the agency s fiscalizadores. MAG would be involved in Project implementation activities through PRODERS, including extension services provided by DEAG. Departmental and Municipal Governments will also sign specific agreements with Itaipu and the coexecutors, SEAM and MAG, in accordance with their roles within the Project. NGOs and consultants would provide services for specific Project activities. MAG and SEAM capacities were evaluated during Project preparation and a set of actions were included in Component 3 (Enhanced Policy Framework and Institutional Strengthening) in order to address the institutional weaknesses that were identified. 9. The expectation is that this change will have a positive impact on project performance, as Itaipu has already an administrative structure in place and good logistical capacities that can support its role as the Chair of the Management Council, thereby reducing overall operating costs. 5