RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF RURAL HEALTH PROJECT LOAN 7551-CN. June 24, 2008 TO THE PEOPLE S REPUBLIC OF CHINA

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF RURAL HEALTH PROJECT LOAN 7551-CN June 24, 2008 TO THE PEOPLE S REPUBLIC OF CHINA July 27, 2012 Report No: CN

2 ABBREVIATIONS AND ACRONYMS Regional Vice President: Country Director: Sector Manager / Director: Task Team Leader: Pamela Cox Klaus Rohland Toomas Palu/Xiaoqing Yu Hope C. Phillips Volker

3 CHINA RURAL HEALTH PROJECT P CONTENTS Page A. SUMMARY... 1 B. PROJECT STATUS... 1 C. PROPOSED CHANGES... 1 ANNEX

4

5 CHINA RURAL HEALTH PROJECT P LOAN 7551-CN Restructuring Paper A. SUMMARY 1. This restructuring involves reallocation of proceeds of the Loan, including the addition of a category per Province/Municipality, comprising the original two sub-categories for each Province/Municipality, which contains the balance of funds available for each Province/Municipality. The original allocation to the Provinces/Municipality is not being reduced; additional funds are being moved from the Unallocated Category to selected Provinces/Municipality. This will allow for flexibility in expenditure of funds and remove the possibility of any future need for reallocation among the sub-categories for the Provinces/Municipality. B. PROJECT STATUS 2. The China Rural Health was approved on June 24, 2008, signed on October 8, 2008, and became effective on December 31, 2008; its original (and current) closing date is December 31, A reallocation from the unallocated category to well performing Provinces/Municipality was approved on March 31, The, from a US$50 million Loan, was co-financed by a DFID Grant (TF092893) of approximately US$5.9 million, which closed on March 31, Progress towards achievement of development objectives and overall implementation progress is rated Satisfactory. The Loan is currently 55 percent disbursed; this is primarily due to the utilization of the DFID Grant for activities with a view to completing that source of financing prior to its closing; this was accomplished. C. PROPOSED CHANGES 3. This restructure makes no changes to the s Development Objectives, Results/Indicators, Components, Institutional Arrangements, Financial Management, Procurement, Closing Date or Implementation Schedule. The proposed reallocation and addition of a single disbursement category does not affect the safeguard category. 4. Financing. A reallocation is being carried out in order to provide funds to designated Provinces/Municipality in recognition of their performance under the. These funds are being made available from the unallocated category. Given the difficulty in pre-determining under which category the selected Province/Municipality might use these funds, it is proposed that a new (single) category be created for each Province/Municipality which encompasses all activities currently described in two sub-categories; it is necessary to retain the original categories since disbursements have already been made. Please note that the proposed reallocation amounts vary from Government s request since the data used in Government s request is more than four months old; the possible need for such change is identified in the reallocation table attached to Government s request. 1

6 ANNEX 1: REALLOCATION OF LOAN PROCEEDS Category of Expenditure Allocation % of Financing Current Revised Current Revised Current Revised (1) For MOH, goods, training, and 2,150,191 2,150, (2) For Chongqing Municipality: (a) Block Grants 5,697,315 2,722, and (3) For Gansu Province: 100% after DFID End Date 696, , % until DFID, and Goods, 3,694, % (a) Block Grants 4,641,088 2,783, and 310,032 72, % until DFID, and Goods, 2,294, % 2

7 Category of Expenditure Allocation % of Financing Current Revised Current Revised Current Revised (4) For Heilongjiang Province: (a) Block Grants 3,742, , and (5) For Henan Province: 145, , % until DFID, and Goods, 3,184, % (a) Block Grants 8,756,243 3,783, and 807, , % until DFID, and Goods, 5,754, % 3

8 Category of Expenditure Allocation % of Financing (6) For Jiangsu Province: Current Revised Current Revised Current Revised (a) Block Grants 6,294,503 2,316, and (7) For Qinghai Province: 716, , % until DFID, and Goods, 4,629, % (a) Block Grants 3,649,876 1,010, and 263, , % until DFID, and Goods, 2,932, %

9 Category of Expenditure Allocation % of Financing Current Revised Current Revised Current Revised (8) For Shaanxi Province: (a) Block Grants 5,601,474 3,092, and (9) For Shanxi Province: 750, , % until DFID, and Goods, 3,453, % (a) Block Grants 3,614, , and 138, , % until DFID, and Goods, 3,238, % (10) UNALLOCATED 1,900,000 0 (11) FRONT END FEE 125, ,000 Total Amount 50,000,000 50,000,000 Amount payable pursuant to Section 2.04 of this Agreement in accordance with Section 2.07 of the General Conditions

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