Structure of the Project Paper

DOCUMENT OF

THE WORLD BANK

FOR OFFICIAL USE ONLY

REPUBLICOF IRAQ

PROJECT PAPER

ON A PROPOSED REALLOCATIONOF GRANT PROCEEDS AND AMENDMENT OF THE TRUST FUND GRANT AGREEMENT

OF THE

EMERGENCY SOCIAL PROTECTION PROJECT

MAY18, 2009

HUMAN DEVELOPMENT SECTOR

MIDDLE EAST AND NORTH AFRICA

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

STRUCTURE OF THE PROJECT PAPER

Contents

1.DATA SHEET

2.Introductory Statement

3.Background and Reasons for Restructuring

4.Proposed Changes

5.Analysis

6.Expected Outcomes

7.Benefits and Risks

ANNEX 1: STATUS OF AGREED OUTCOMES INDICATORS

ANNEX 2: GOVERNMENT REQUEST FOR EXTENSION AND REALLOCATION

ANNEX 3: DISBURSEMENT FORECAST

ANNEX 4: PROCUREMENT PLAN

1.DATA SHEET

Date: 05/18/2009
Country: Iraq
Project Name: Emergency Social Protection Project
Project ID: / Task Team Leader: Ghassan Alkhoja
Sector Manager/Director: Roberta Gatti/Steen Lau Jorgensen
Country Director: Hedi Larbi
Environmental category: C
Borrower: Republicof Iraq
Responsible agency: Ministry of Labor and Social Affairs
Revised estimated disbursements (Bank FY/US$m)
FY / FY07 / FY08 / FY09 / FY10
Annual / 0.11 / 0.33 / 2.56 / 5.00
Cumulative / 0.11 / 0.44 / 3.00 / 8.00
Current closing date: 02/28/2010
Revised closing date [if applicable]:
Indicate if the restructuring is:
Board approved___
RVP approved_X_
Does the restructured project require any exceptions to Bank policies?
Have these been approved by Bank management?
Is approval for any policy exception sought from the Board? / __ Yes X No
__ Yes X No
__ Yes X No
Revised project development objective/outcomes [If applicable]
These objectives will remain unchanged.
Does the restructured project trigger any new safeguard policies? No
Revised Financing Plan (US$m.)
Source / Local / Foreign / Total
Borrower
IBRD/IDA
Others
Total / 0.0
1.2
1.2 / 0.0
6.8
6.8 / 0.0
8.0
8.0

2.Introductory Statement

This Project Paper seeks the approval of the Regional Vice President to introduce the following changes in the Iraq Emergency Social Protection Project (TF056808, P099295), namely to amend the implementation arrangements of the second component of the project (Schedule 2, Section I, Part B of the Trust Fund Grant Agreement), and to reallocate fundsfrom the unallocated and consultants’ servicescategories into goods, training, workshops and study tours, and operating costs (which represents more than 5% of the original grant amount). During the mid-term review mission in October 2008, the Bank discussed the need for such an amendment with the Government, and an official request was sent by the Ministry of Labor and Social Affairs (MOLSA) on February 23, 2009.

3.Background and Reasons for Restructuring

The US$8 million grant was negotiated on June 2, 2006, and was signed and became effective on June 3, 2006. It has a revised closing date of February 28, 2010. To date, the grant is 24% disbursed. The Project Development Objective is tostrengthen the policy, management and administrative capacity in MOLSA and the Ministry of Finance (MOF) to develop, manage and monitor pension and social safety net reforms. More specifically, the project aims to: (a) establish a basic information system within MOLSA, to record and process information on safety nets as a foundation for policy design; (b) consolidate and expand the information base for the social safety net (SSN) program managed by MOLSA to permit development of targeting strategies; (c) design and implement a monitoring and evaluation system for the expanded SSN program; (d) develop an updated digitized database on beneficiaries, contributors and employers in the pension system; (e) build technical capacity within MOLSA and MOF for policy analysis and design in the area of safety net and pensions; and (f) develop a draft pension reform strategy..

The project comprises three components: (1) Safety Nets, (2) Pensions, and (3) Project Management. At the time of appraisal, coordination of the project was the responsibility of the Project Management Office within MOLSA in Baghdad, while implementation was the responsibility of the respective departments of MOLSA for Component 1, and of the Pension Reform Steering Committee (PRSC) in MOF for Component 2.

The last ISR dated March 4, 2009, rated the “Progress toward achievement of PDO” and “Implementation Progress” Moderately Satisfactory. During the February 2009 supervision mission, it was agreed that an extension of the grant closing date would be necessary. It was however decided that MOLSA would wait until September 2009 to send a request for extension of closing date, as there would have then been sufficient progress in the pension survey and beneficiary assessment contracts to project a realistic closing date.

The audit report for fiscal year 2007 was received on time and was unqualified. The audit report and management letter for fiscal year 2008 are due by June 30, 2009.

4.Proposed Changes

The requested amendment to Schedule 2, Section I, Part B of the Trust Fund Grant Agreement is related to the implementation arrangements of the second component of the project (Pensions). The project was appraised in 2006, prior to the enactment of the Unified Pension Law (27/2006 and related amendments) in December 2007. At that time, a PRSC was coordinating pension reform, and a small Project Implementation Team (PIT) under the PSRC was in charge of coordinating ESPP Component 2 activities.With the enactment of the Unified Pension Law, the National Board of Pensions (NBP) was created and the PRSC ceased to exist. In addition, a Pension Reform Management Office (PRMO) was created within the NBP, to coordinate pension reform in general, and ESPP Component 2 in particular, taking over the tasks that were initially performed by the PIT. The Task Team finds this arrangement satisfactory, and has already seen improvement in the coordination of Component 2 activities.

In addition to the amendment of Schedule 2, Section I, Part Bof the Trust Fund Grant Agreement, MOLSA is requesting a reallocation of the Grant proceeds. This reallocation was discussed during the October 2008 Mid-Term Review mission, and will significantly increase the amounts financing training and related operating costs, which are key to the success of the project.

Category / Initial Allocation of the Grant Proceeds / Reallocation of the Grant Proceeds
1. Goods / 4,475,000 / 4,600,000
2. Consultants’ Services / 1,330,000 / 1,200,000
3. Training, Workshops and Study Tours / 1,075,000 / 1,600,000
4. Operating Costs / 320,000 / 600,000
5. Unallocated / 530,000 / -
TOTAL / 8,000,000 / 8,000,000

5.Analysis

The amendment of the Trust Fund Grant Agreementand the reallocation of grant proceeds will not have any major effect on the original economic, financial, technical, institutional or social aspects of the project as appraised. The environmental category will remain unchanged and no exceptions to Bank rules are sought.

6.Expected Outcomes

The proposed changes will not affect the project’s development objective. Annex 1 contains the detailed key performance indicators at their target values until present

7.Benefits and Risks

There are no risks that would jeopardize the achievement of the restructured project’s development or outcome targets.

ANNEX 1: STATUS OF AGREED OUTCOMES INDICATORS

Indicators / Measurement
Insert the measured value, or a qualitative indicator, or a brief explanation of why indicators are not available, together with the date of the information
Baseline Value / Progress To Date / End-of-Project Target Value
Number or text / Date / Number or text / Date / Number or text / Date
PDO Indicator
1. Safety Net: MIS in place, operational and providing useful data for MOLSA. Policy-makers in the areas of Baghdad, Erbil, Basrah and Najaf use newly generate system reports / No MIS in place / 06/06/2006 / Hardware progressing well (6 contracts completed, 9 under implementation, and 11 awarded). Connectivity equipment for Baghdad is complete. Software development by USAID/BE expected April 2009 / 01/05/2009 / Establishment of a basic information system in MOLSA to record and process information on safety nets as a foundation for policy design. / 12/31/2009
2. Safety Net: Targeting strategies introduced by MOLSA / No targeting strategies / 06/06/2006 / Targeting strategy already in place. Beneficiary Assessment expanding information base to allow enhanced policy analysis for improved targeting is currently underway. / 01/05/2009 / Consolidation and expansion of the information base for the social safety net program managed by MOLSA to permit development of more robust targeting strategies / 12/31/2009
3. Safety Net: Effective M&E system operational / No M&E system in place / 06/06/2006 / M&E already in place and being improved. Information will be fed by the information system. / 01/05/2009 / Design and implementation of an M&E system for the expanded MOLSA social safety net program / 12/31/2009
4. Pensions: Data Base completed. Policy-makers use newly generated system reports / No database available / 06/06/2006 / Contract implementation started. Questionnaires are completed and survey underway. Database development is underway. / 01/05/2009 / Development of an updated database on beneficiaries, contributors and employers in the pension system / 12/31/2009
5. Pensions: Related activities funded by project completed with evaluations where appropriate / No baseline value / 06/06/2006 / IT training provided to MOLSA, MOF and SPS staff. / 01/05/2009 / Building of technical capacity within MOLSA and MOF for safety net and pension policy design and analysis / 12/31/2009
6. Pensions: MOLSA/MOF complete draft pension reform strategy / No Pension Reform Strategy / 06/06/2006 / Comprehensive Unified Pension Law was enacted in December 2007. / 01/05/2009 / Development of a draft Pensions Reform Strategy / 12/31/2009
Intermediate outcome indicator(s)
1. Project Management: MOLSA is capable of managing and monitoring the project / New Project Management Office before project preparation / 06/06/2006 / Project management continues to be strong. Procurement and M&E rated satisfactory. / 01/05/2009 / Procurement activities carried out on schedule. PMO progress reports are prepared on schedule. / 02/28/2010