The World Bank DOCUMENT OF THE WORLD BANK REPORT NO.: RES25530 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF NATIONAL COMMUNITY EMPOWERMENT PROGRAM IN URBAN AREAS FOR 2012-2015 APPROVED ON NOVEMBER 20, 2012 TO REPUBLIC OF INDONESIA SOCIAL, URBAN, RURAL AND RESILIENCE GLOBAL PRACTICE EAST ASIA AND PACIFIC Regional Vice President: Country Director: Senior Global Practice Director: Practice Manager/Manager: Task Team Leader: Victoria Kwakwa Rodrigo A. Chaves Ede Jorge Ijjasz-Vasquez Abhas Kumar Jha George Soraya, Evi Hermirasari
I. BASIC DATA Product Information Project ID P125405 Original EA Category Partial Assessment (B) Approval Date 20-Nov-2012 Financing Instrument Specific Investment Loan EA Category Partial Assessment (B) Closing Date 30-Sep-2017 Organizations Borrower Republic of Indonesia Responsible Agency Directorate General of Human Settlements, Ministry of Public Works Project Development Objective (PDO) Original PDO The project development objective is to support the Republic of Indonesia to ensure the urban poor in participating kelurahan benefit from improved local governance and living conditions. Summary Status of Financing Ln/Cr/Tf Approval Signing Effectiveness Closing Net Commitment Disbursed Undisbursed IBRD-82130 20-Nov-2012 28-Dec-2012 01-Mar-2013 30-Sep-2017 266.00 250.39 15.61 TF-12192 28-Dec-2012 28-Dec-2012 28-Dec-2012 15-Dec-2016 20.96 20.96 0 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES
Project Status 1. PDO achievements and implementation progress are both satisfactory. As of August 31, 2017, the MIS (Management Information System) has recorded around 8.1 million beneficiaries; 52.6% of the beneficiaries were women, and 99.6% of complaints raised have been resolved. All outcomes have been achieved above their targets, as measured by an impact evaluation completed on December 2016: (1) 98.6% participating kelurahans (5040 kelurahans) have improved the access of urban poor to infrastructure, social, and/or economic services (target of 80%); (2) about 82% of beneficiaries are satisfied regarding improved services and local governance (target: min 80%); and (3) in 91% of participating kelurahans the infrastructure built is at least 20% less expensive than that built by noncommunity based mechanisms. About 83% of kelurahan grants were utilized for infrastructure, which is generally considered of good quality. The process indicators also show good results including significant participation of the target adult population in BKM (Board of Trustee) elections (35%), significant participation of the poorest/vulnerable groups and women in planning and decision-making meetings (47.1% and 44.4%, respectively), and good quality of infrastructure (99%). The revolving loan funds (RLFs) remain problematic, the percentage of kelurahans with a portfolio at risk (PAR) ratio 90 days of < 10% is only 29%, a result substantially lower than the target of > 50%. It should be noted, however, that RLFs constitute less than 2% of the total value of the loan. The project audit report for the year end date 2016 was received on time with clean opinion. Changes 2. The proposed changes are to extend the closing date of the abovementioned project from September 30, 2017 to December 31, 2018 and reallocate the remaining loan of USD 14.5 million from Category 2 Goods, consultant, and non-consultant service and training to Category 1 (b) Kelurahan grants. This extension will lead to a cumulative extension of 36 months and the total project period will become six years and one month to support reconstruction of areas affected by Bima flash-flooding, as well as providing additional grants to poor urban wards. The extension will provide additional grants to about 140 urban wards (kelurahans) which will result in additional activities in those kelurahans. The additional activites will then complement the achievement of: (1) PDO level result indicator on Number of project beneficiaries, and (2) Component 2 of Kelurahan Grant s result indicator on Number of infrastructure completed in those kelurahans, including small roads, water supply, sanitation, and solid waste facilities. The number of targeted project beneficiaries because of those additional activities is estimated 300,000 people. Rationale for extension 3. By 31 August 2017, the Bank had disbursed 94% (or approximately USD 246 million) of the loan allocated. During the previous extension, almost all of the remaining funds, especially under the kelurahan grants category, were used to further enhance the sustainability of community institutions as well as to support the smooth start-up of the National Slum Upgrading Project (NSUP). By the closing date, most of the funds were utilized except for USD14.5 million funds under Category 2, Goods, consulting services, non-consulting services, training and workshops and incremental operating costs, as some of these expenditures were financed under Local Governments own funds. 4. The World Bank through Urban Poverty Project and PNPM Urban from the past has proven to be an effective mechanism for emergency response as well as rehabilitation and reconstruction on post disaster, seen in responses made following the 2004 Tsunami in Aceh, the 2006 Yogyakarta earthquake, as well as severe flash flooding at the end of 2016 in the city of Bima. The project supported Bima in 2017 by providing technical assistance and kelurahan grants to the impacted project sites, however, the funds were not sufficient to cover the infrastructure needs. Previously GOI
had allocated their own funds for rehabilitation to fill in the gap, but due to domestic budget constraints and recent budget cuts, the allocated funds are no longer available. Therefore, additional community grants are deemed necessary to continue support for Bima city reconstruction, which is expected to be completed within the Calendar Year 2018. 5. The GoI also intends to use the remaining funds to improve access of the urban poor to urban infrastructure and services, especially in poor kelurahans primarily through advanced forms of neighborhood upgrading in several cities with larger areas having poorest access to basic services, such as Banjarmasin, Semarang, Pekalongan, Yogyakarta, Malang, Surabaya, and Makassar. This remains consistent with PNPM Urban objective of improving the living conditions of the urban poor. Those areas are mostly identified as slum areas under KOTAKU, the national slum upgrading program launched by the Government in 2016 to achieve an ambitious target of zero slums. The kelurahan grants will be used specifically for community infrastructure based on multi-year planning prepared under KOTAKU. It is anticipated that about 120 urban wards will be supported by the additional activities, benefiting at least 250,000 people. 6. GOI has expressed interest in further extending the loan for about 15 months. The relatively long period of this extension is mainly due to the time required for more complex participatory planning in reconstruction of Bima as well as the need to re-budget FY 2018 as the GOI s budgeting cycle does not allow spending beyond the end of the fiscal year. The additional grants will cover at least 23 urban wards directly affected by the flood benefitting at least 50,000 people. The existing safeguard instruments are sufficient and applicable to the e xtended project activities. 7. This will be the third extension of the project loan (IBRD 8213). The original closing date was 31 December 2015, then extended to 31 December 2016, and subsequently extended to September 30, 2017. GoI has requested to extend the project closing date to December 31, 2018, which will lead to a cumulative extension of 36 months and a total project period of six years and one month. III. DETAILED CHANGES LOAN CLOSING DATE(S) Ln/Cr/Tf Status Original Closing IBRD-82130 Effective 31-Dec-2015 TF-12192 Closed 31-Dec-2014 Revised Closing(s) 31-Dec-2016, 30-Sep- 2017 31-Dec-2016, 15-Dec- 2016, 23-May-2017 Closing 31-Dec-2018 30-Sep-2017 Deadline for Withdrawal Applications 30-Apr-2019 31-Jan-2018
REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Ln/Cr/TF Expenditure Category Allocation Actuals + Committed Allocation Disbursement % (Type Total) IBRD- 82130-001 Currency: USD GRANT PT 2A GRANT PT 2B GOCSNONCSTR NGWSIOC PT1 PT3 KELUHARANGR NT GOCSNCSTRNG WSIOC PT4 100,000,000.00 99,998,580.49 100,000,000.00 100.00 100.00 49,000,000.00 46,588,192.52 63,400,000.00 100.00 100.00 117,000,000.00 94,372,820.77 102,600,000.00 100.00 100.00 0.00 0.00 0.00 100.00 100.00 Total 266,000,000.00 240,959,593.78 266,000,000.00 TF-12192-001 Currency: USD TF 12192 GRANT PT 2 TF 12192 GOCSNONCSTR NGWSIOC PT1 PT3 KELUHARANGR NT GOCSNCSTRNG WSIOC PT4 14,353,156.34 14,353,156.34 14,353,156.34 100.00 100.00 6,604,130.88 6,604,130.88 6,604,130.88 100.00 100.00 0.00 0.00 0.00 100.00 100.00 Total 20,957,287.22 20,957,287.22 20,957,287.22