The World BankNepal Agriculture and Food Security Project (P128905)

REPORT NO.: RES31907

RESTRUCTURING PAPER

ON A

PROPOSED PROJECT RESTRUCTURING

OF

NEPAL AGRICULTURE AND FOOD SECURITY PROJECT

APPROVED ON FEBRUARY 11, 2013

TO

GOVERNMENT OF NEPAL

AGRICULTURE

SOUTH ASIA

Regional Vice President: Annette Dixon Country Director: Qimiao Fan

Senior Global Practice Director: Juergen VoegelePractice Manager/Manager: Kathryn Hollifield

Task Team Leader: Omar Lyasse, Purna Bahadur Chhetri

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The World BankNepal Agriculture and Food Security Project (P128905)

BASIC DATA

Product Information

Project ID Financing Instrument

P128905 Investment Project Financing

Original EA Category Current EA Category

Partial Assessment (B) Partial Assessment (B)

Approval Date Current Closing Date

11-Feb-2013 31-Mar-2018

Organizations

Borrower Responsible Agency

Government of Nepal Minstry of Agriculture and Cooperation

Project Development Objective (PDO)

Original PDOThe Project Development Objective is to enhance food and nutritional security of targeted communities in selected locations of Nepal. Food security will be realized through increased food availability, made possible by increasing productivity of agriculture, both crop and livestock. Nutrition security will be realized through improved dietary intake, made possible by promotion of diversifieddiets, and improved feeding and caring practices for pregnant and nursing women and children up to 2 years of age.OPS_TABLE_PDO_CURRENTPDOSummary Status of Financing

Ln/Cr/Tf Approval Signing Effectiveness ClosingNet

Commitment Disbursed Undisbursed

TF-13719 30-Apr-2013 30-Apr-2013 30-Apr-2013 31-Mar-2018 46.50 36.66 9.84

Policy Waiver(s)

Does this restructuring trigger the need for any policy waiver(s)?No

The World BankNepal Agriculture and Food Security Project (P128905)

I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING

1. The Global Agriculture and Food Security Program (GAFSP) Multi-Donor Trust Fund, through its Public Sector Window, supports the Nepal Agriculture Food Security Project (AFSP). The project aimed to improve food security and nutrition through increased food availability (by increasing the productivity of crops and livestock) and through improved dietary intake (by promoting diversified diets and improved feeding and caring practices for pregnant and nursing women, and children up to 2 years old). Nineteen of Nepal’s 75 districts are targeted by the project, with a focus on the Mid-Western and Far-Western regions. The project directly reached over 162,500 beneficiary households of 190 Village Development Committees (VDC) over a period of five years, including the regions’ poorest farmers, and young mothers, children and adolescent girls. In the final year of implementation, the Project has made good progress to meet most targets for intermediate outcome indicators, exceeded three out of four PDO level indicator targets. However, a few productivity sub-indicator targets for paddy, goat meat, and milk fell somewhat short due to an overestimation of the targets at the project’s inception, which warranted to revisit the rating for “Achievement of PDO” from “satisfactory” to “moderately satisfactory”.

2. Under Component 1, 17 new crop varieties and 30 improved technologies (22 for crop and 8 for livestock) have been released. In addition to this, 583 metric tons of source seeds have been produced which included 32.4 tons of breeder seeds; 533 tons of foundation seeds and 16.9 tons of potato basic seed. Seed replacement rate for rice, wheat, maize and potato were reported at 27%; 28%; 30% and 34%, respectively. Good progress has also been noted in livestock component. From 175 pure Boer goats and artificial insemination program, 6,680 crossbred kids have been produced for distribution to the targeted beneficiaries. Under Component 2, the project has established 1932 Farmer Field Schools (FFS) for crop/seed, and livestock production cumulatively, and conducted 5348 stand-alone demonstrations. In addition, the project has supported thus far the rehabilitation of 1351 small scale irrigation schemes covering 3941 ha. Under component 3, the project supported increased household level food availability, promotion of diversified diets and improved feeding and caring practices for pregnant and nursing women and children between 6-24 months of age. Community health workers were trained through 464 Ward and Illaka level training events to strengthen their capacity to improve the nutritional status for about 49873 households with Pregnant and Nursing Mothers using Behavior Change & Communication materials and targeted support for the establishment of Homestead nutrition gardens (1114), Village Model Farms (794), recipe demonstrations and the establishment of 1297 Food Preparation and Processing (FPP) demo centers.

3. The Government of Nepal has requested the cancellation of $ 5million in grant proceeds, as this amount would not be utilized prior to the project’s closing date. This is largely due to an overestimation of the cost of certain activities at project preparation, and the favorable exchange rate fluctuations during the project’s implementation period. This level 2 restructuring does not entail any change in: (i) the project development objective (PDO); (ii) the results framework; (iii) the description of the project, implementation arrangements, or components of the project as described in the Financing Agreement; or (iv) the safeguards category/classification.

II. DESCRIPTION OF PROPOSED CHANGES

1. This is a level 2 restructuring of the “Nepal: Agriculture and Food Security Project” (P128905) for the cancellation of $5 million in grant proceeds, pursuant to the Government’s request. This level 2 restructuring does not entail any change in: (i) the project development objective (PDO); (ii) the results framework; (iii) the description of the project or components of the project as described in the Financing Agreement; or (iv) the safeguards category/classification.

The World BankNepal Agriculture and Food Security Project (P128905)

III. SUMMARY OF CHANGES

Changed Not Changed

Cancellations Proposed ✔

Reallocation between Disbursement Categories ✔

Change in Implementing Agency ✔

Change in DDO Status ✔

Change in Project's Development Objectives ✔

Change in Results Framework ✔

Change in Components and Cost ✔

Change in Loan Closing Date(s) ✔

Change in Disbursements Arrangements ✔

Change in Disbursement Estimates ✔

Change in Overall Risk Rating ✔

Change in Safeguard Policies Triggered ✔

Change of EA category ✔

Change in Legal Covenants ✔

Change in Institutional Arrangements ✔

Change in Financial Management ✔

Change in Procurement ✔

Change in Implementation Schedule ✔

Other Change(s) ✔

Change in Economic and Financial Analysis ✔

Change in Technical Analysis ✔

Change in Social Analysis ✔

Change in Environmental Analysis ✔

IV. DETAILED CHANGE(S)

OPS_DETAILEDCHANGES_CANCELLATIONS_TABLE

The World BankNepal Agriculture and Food Security Project (P128905)

CANCELLATIONS

Ln/Cr/Tf Status Currency Current Amount

Cancellation Amount

Value Date of

Cancellation

New Amount

Reason for

Cancellation

TF-13719-001

Disbursing USD 46,500,000.00 5,000,000.00 08-Jan-2018 41,500,000.00

BORROWER'S REQUEST

FOR COUNTRY REASONS

OPS_DETAILEDCHANGES_REALLOCATION _TABLE

REALLOCATION BETWEEN DISBURSEMENT CATEGORIES

Current Allocation Actuals + Committed Proposed Allocation Financing %(Type Total)

Current Proposed

TF-13719-001 | Currency: USD

iLap Category Sequence No: 1 Current Expenditure Category: DISB - TRAINING AND WORKSHOPS

11,918,000.00 7,122,488.36 9,923,019.00 100.00 100.00

iLap Category Sequence No: 2 Current Expenditure Category: DISB - CONSULTANTS' SERVICES

10,683,000.00 9,221,328.65 9,636,101.00 100.00 100.00

iLap Category Sequence No: 3 Current Expenditure Category: DISB - WORKS

3,857,000.00 3,039,896.86 3,809,812.00 100.00 100.00

iLap Category Sequence No: 4 Current Expenditure Category: DISB - GOODS & NON CS

11,960,000.00 8,782,971.58 11,181,992.00 100.00 100.00

iLap Category Sequence No: 5 Current Expenditure Category: DISB - INC OPERATING COSTS

4,582,000.00 2,556,122.98 3,600,316.00 100.00 100.00

iLap Category Sequence No: 6 Current Expenditure Category: DISB - SMALL GRANTS

The World BankNepal Agriculture and Food Security Project (P128905)

3,500,000.00 1,937,123.09 3,348,760.00 30.00 30.00

Total 46,500,000.00 32,659,931.52 41,500,000.00