INFRASTRUCTURE & INSTITUTIONS EMERGENCY RECOVERY APPROVED ON MARCH 18, 2010 MINISTRY OF ECONOMY AND FINANCE, MEF,MINISTRY OF FINANCE AND ECONOMY

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1 DOCUMENT OF THE WORLD BANK REPORT NO.: RES29941 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF INFRASTRUCTURE & INSTITUTIONS EMERGENCY RECOVERY APPROVED ON MARCH 18, 2010 TO TRANSPORT & ICT MINISTRY OF ECONOMY AND FINANCE, MEF,MINISTRY OF FINANCE AND ECONOMY LATIN AMERICA AND CARIBBEAN Regional Vice President: Country Director: Senior Global Practice Director: Practice Manager/Manager: Task Team Leader: Jorge Familiar Calderon Anabela Abreu Jose Luis Irigoyen Shomik Raj Mehndiratta Pierre Xavier Bonneau, Mamadou Lamarane Deme

2 I. BASIC DATA Product Information Project ID P Original EA Category Full Assessment (A) Approval Date 18-Mar-2010 Financing Instrument Investment Project Financing Current EA Category Full Assessment (A) Current Closing Date 31-Dec-2017 Organizations Borrower Ministry of Economy and Finance, MEF,Ministry of Finance and Economy Responsible Agency Ministry of Public Works, Transport and Communications,Ministry of Public Works, Transport and Communications, Unité Centrale d'exécution Project Development Objective (PDO) Original PDO The Project Development Objective is to support the Recipient in its early sustainable recovery efforts from the effects oftheemergency, through selected interventions aiming at contributing to rebuilding key institutions and infrastructure Current PDO The Revised PDO is to support the Recipient in its sustainable recovery efforts from the effects of the Emergency, throughselectedinterventions aiming to rebuilding key institutions and infrastructure. Summary Status of Financing Ln/Cr/Tf Approval Signing Effectiveness Closing Net Commitment Disbursed Undisbursed IDA-D Nov Dec Mar Dec IDA-H Sep Nov Feb Dec IDA-H Mar Mar Apr Dec

3 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES This proposed Level Two Restructuring was requested by the Ministry of Economy and Finance (MEF) of the Government of Haiti (GoH) on September 28, 2017 and on December 13, 2017 would allow the completion of activities critical to the implementation of the MEF s Public Financial Management Reform Action Plan. The proposed restructuring would involve: (i) a 6-month extension of the closing date of Original Grant, the first Additional Grant and the second Additional Grant from December 31, 2017 to June 30, 2018; and (ii) a reallocation of SDR 855,000 (US$1.2 million equivalent) from Component 1 to Component 3 of the first Additional Grant (H812-0-HT) to cover operational costs, as well as a financing gap under Component 3, caused by a significant deprecation of the SDR allocation. This would be the fourth extension of the closing date, bringing the cumulative extension of this project to 60 months. The extension would allow for the completion of key activities to strengthen Public Financial Management under Component 1 and ensure a seamless uptake of these activities under the STATCAP AF/Haiti Strengthening Transparency Accountability and Reporting Project (STAR P164093) scheduled for consideration by the Board of Executive Directors in February It would also permit the completion of the annual audit and of a technical impact study relating to the closure of the project. All activities under Component 2, which finances infrastructure repairs and rehabilitation, are scheduled to be completed by the current closing date. There would be no change in the Project Development Objective (PDO), nor any impact on the safeguard category or policies triggered under the Project. The implementation arrangements would remain unchanged. Background: Parent Grant (H551-0-HT): The original IIERP in the amount of SDR 41.9 million (US$64.5 million equivalent) was approved on March 18, 2010, and became effective on April 23, The original closing date was June 30, 2013, but was extended three times. The current closing date is December 31, First Additional Grant (H812-0-HT): The first Additional Grant (AG) to the IIERP in the amount of SDR 23.3 million (US$35 million equivalent) was approved by the Executive Board of Directors on September 27, The first AG became effective on February 5, 2013, and the closing date was also extended to December 31, Second Additional Grant (D136-0-HT): The second Additional Grant to the IIERP in the amount of SDR 2.0 million (US$2.8 million equivalent) was approved by the Executive Board of Directors on November 10, The second AG became effective on March 17, 2017, and the closing date is December 31, The current Project Development Objective (PDO) is to support the Recipient in its sustainable recovery efforts from the effects of the Emergency, through selected interventions aiming at contributing to rebuilding key institutions and infrastructure. The PDO of the parent Project was slightly revised under the first AG, to remove the word early in front of sustainable recovery efforts, and project activities were expanded under the first and second AG. The

4 achievement of the PDO is supported by the following Project Components: (1) Restoration of Key Economic and Financial Functions of the Recipient, (2) Emergency Rehabilitation of Selected Public Infrastructure, and (3) Institutional Support, Reconstruction Planning and Project Management. Status of Implementation: Progress towards achievement of the PDO and Overall Implementation Progress (IP) are both rated Moderately Satisfactory (ISR archived on December 4, 2017), and all other Project ratings are either Satisfactory or Moderately Satisfactory. The Project has been rated Moderately Satisfactory consistently over the last twelve months. As of December 6, 2017, the overall disbursement rate is estimated at 92.7% (US$94.1 million). The parent grant has disbursed all its funds, a total of 41.9 million SDR (US$64.5 million equivalent), the first additional grant has disbursed 83.1% of its resources a total of US$28.6 million (equivalent to 19.4 million SDR) and the second additional grant has disbursed 35.1% of its resources for a total of 702,340 SDR (US$1.0 million equivalent). Both financial management and procurement have been carried out in accordance with the Bank Financial Management and Procurement Guidelines. There is no overdue project audit report by the borrower. Throughout its implementation, the Project has complied with all environmental, social and fiduciary safeguard requirements. However, for the first time, Social safeguards were rated Moderately Unsatisfactory under the ISR disclosed December 4, This rating reflects the fact that 19 Project Affected People (PAPs) on the Cap-Labadie road (being rehabilitated under Component 2) were not paid compensations for economic losses and land acquisition, before emergency works were carried out. These works were needed to protect beneficiaries/road users from landslides due to heavy rainfall and consisted of sustaining walls and water drainage outlets on small, uninhabited parcels of land on the sides of the road. As soon as this issue was identified by the task team, the project signed agreements with the 19 PAPs, authorizing the emergency works to be performed while waiting for payments to be processed. As of December 7, 2017, all PaPs eligible for economic compensation (eight in total) had received the required compensation (US$13,000 in total). The compensation for 11 PAPs impacted by land acquisition is pending. A signature from the Minister of Finance authorizing the payment of US$17,000 to 11 PAPs for land acquisition is expected by December 14, The land compensation is expected to be completed for all eligible people by December One PAP who signed a notarized land swap agreement with the government, has not yet received the land title for the new parcel from Government. The Minister of Finance has mandated the notary to formalize the land exchange and the process is expected to be completed by end December. Under a two-pronged approach, this Project has supported recovery and reconstruction of both institutions and infrastructure after the 2010 Earthquake. The Project assisted the government in fully rehousing and operationalizing the MEF (through works, provision of goods, equipment and technical assistance enabling the Government to resume key financial functions). The Project also supported the development and adoption of a new Public Financial Management Reform Action Plan (PFMRAP) and a Public Investment Management Action Plan (PIMAP). The Project supported critical emergency recovery activities in the immediate aftermath of the earthquake including the assessment of 430,000 buildings, the processing of 700,000 m3 of rubble, and prevented major flooding of earthquake affected areas by cleaning canals in Port-au-Prince. The Project undertook major repairs and rehabilitation of key corridors, bridges and roads ensuring continued and safe access after the earthquake and following major weather events throughout project implementation (see below). The Project carries an undisbursed balance of 5.2 million SDR (US$7.4 million equivalent) of a total of 67.2 SDR (US$102.8 million equivalent) for all financing sources combined. Risks assessed at appraisal and again at the time of approval of the Additional Financing instruments have been successfully mitigated and no significant new risks have emerged, though the risk of delays in implementation under

5 Component 1 did materialize, in great part due to political volatility and uncertainty prior to the conclusion of Presidential, Legislative, and Local elections in April Rationale for Restructuring: Tropical Storm Isaac (August 2012), Hurricane Sandy (October 2012) and Hurricanes Matthew (October 2016), Irma and Maria (September 2017) all affected Project activities, requiring redesign in some instances and the suspension of activities for safety reasons in others. This resulted in implementation delays. In addition, although the bulk of Project activities has been implemented, activities to support improvements in Public Financial Management under Component 1 have seen delays due to a persistently challenging political and governance environment over the project implementation period. The second AG currently supports the MEF in developing its IT capacity to better manage public finance, in particular the development of technical and functional specifications for the acquisition of a new Integrated Financial Management System (IFMIS), which is central to the objectives of an IDA-financed operation under preparation aimed at strengthening transparency and accountability (the Additional Financing to the Haiti Statistical Capacity Building Project, P or STATCAP AF). The proposed extension and restructuring would allow MEF to complete the bidding documents and prepare bidding procedures for the IFMIS. During the extension the Project would finance: (i) technical assistance to assist the GoH in IFMIS procurement; (ii) technical assistance and equipment to help MEF improve its deficient IT network; (iii) technical assistance, goods and service s to assist the GoH in preparing for payroll database cleaning, and required IFMIS change management activities; and (iv) the completion of the Public Financial Management strengthening activities, related to the preparation of the STATCAP AF. This support is critical in shoring up the Ministry of Finance s efforts to promote transparency and accountability in public finance in a highly volatile and quickly evolving environment Of the remaining US$7.4 million to be disbursed, US$4.0 million pertain to the financing of infrastructure works and studies under Components 2 and 3, which are scheduled to be completed by December 31, 2017 and another US$1.2 million will be used to cover shortfalls caused by exchange rate losses under component 3. The remaining resources (US$2.2 million) are expected to be absorbed during the extension period under component 1. There is a moderate risk that the project may have residual resources at closing, but these would not be significant in volume. Proposed Changes: Proposed changes include (i) a 6-month extension of the closing date of the Original Grant, the first Additional Grant and the second Additional Grant from December 31, 2017 to June 30, 2018; and (ii) a reallocation of SDR 855,000 (US$1.2 million equivalent) from Component 1 to Component 3 of the first Additional Grant (H812-0-HT) to cover operational costs and the financing gap under Component 3caused by the deprecation of the SDR allocation. III. DETAILED CHANGES LOAN CLOSING DATE(S)

6 Ln/Cr/Tf Status Original Closing Revised Closing(s) Proposed Closing Proposed Deadline for Withdrawal Applications IDA-D1360 Effective 31-Dec Jun Oct-2018 IDA-H5510 Effective 30-Jun-2013 IDA-H8120 Effective 30-Jun Jun-2016, 31-Dec- 2016, 31-Dec Dec-2016, 31-Dec Jun Jun Oct Oct-2018 REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Ln/Cr/TF Current Expenditure Category Current Allocation Actuals + Committed Proposed Allocation Disbursement % (Type Total) Current Proposed IDA-H Currency: XDR GO CW NCS CS OP Part 1 b,c,d,e,f GO CW NCS CS Part 2 c,d,e GO CW NCS CS OP Part 3 a,b,c,d,g,h 7,989, ,533, ,134, ,514, ,632, ,514, ,797, ,056, ,652, Total 23,300, ,222, ,300,000.00