Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: 77952-BF

RESTRUCTURING PAPER

ON A

PROPOSED PROJECT RESTRUCTURING

OF

URBAN WATER SECTOR PROJECT

GRANT NUMBER H-482-BF

BOARD APPROVAL DATE: MAY 28, 2009

TO

BURKINA FASO

August 30, 2013

WATER AND URBAN II

COUNTRY DEPARTMENT AFCF2

AFRICA REGION

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.

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ABBREVIATIONS AND ACRONYMS

ESMF Environmental and Social Management Framework

EOPT end-of-project-target

GoBF Government of Burkina Faso

IDA International Development Association

ISR Implementation Status and Results

MDGs Millennium Development Goal

M&E Monitoring and Evaluation

MTR Mid-term Review

ONEA National Water and Sanitation Agency (Office National de l’Eau et de

l’Assainissement)

PAD Project Appraisal Document

PDO Project Development Objective

RPF Resettlement Policy Framework

SDR Special Drawing Right

Regional Vice President: Makhtar Diop

Country Director: Madani M. Tall

Sector Manager: Alexander Bakalian

Task Team Leader: Matar Fall

3

BURKINA FASO

URBAN WATER SECTOR PROJECT

CONTENTS

Page

A. SUMMARY ........................................................................................................................... 4

B. PROJECT STATUS .............................................................................................................. 4

C. PROPOSED CHANGES ...................................................................................................... 5

ANNEX 1: RESULTS FRAMEWORK AND MONITORING ................................................. 7

ANNEX 2: REALLOCATION OF PROCEEDS ......................................................................... 9

4

URBAN WATER SECTOR PROJECT

RESTRUCTING PAPER

A. SUMMARY

1. This Restructuring Paper seeks the approval of the Country Director to amend the

Financing Agreement of the Burkina Faso Urban Water Sector Project (IDA-H4820) in

order (i) to make changes in the formulation and organization of the project performance

indicators of the project and, (ii) to reallocate Grant proceeds. These changes have been

requested by the Government in a letter dated May 2, 2013, following the Mid-Term-

Review (MTR) of the project carried out on February 14, 2013.

B. PROJECT STATUS

2. The Financing Agreement of the Burkina Faso Urban Water Sector Project was signed

on June 9, 2009 for an amount of SDR53.50 million (US$80 million equivalent), and the

project became effective on October 5, 2009. The development objective of the project

(PDO) is to increase access to sustainable water and sanitation services in selected urban

areas. This will contribute to achievement of the water and sanitation Millennium

Development Goals (MDGs). The project will achieve the objective through: (a)

facilitating access to services through programs for constructing social water service

connections, public standpipes, and on-site sanitation facilities; and (b) consolidating the

achievements of the urban water supply sub-sector reforms and strengthening capacities

to deliver and manage services.

3. The overall project implementation status is satisfactory. As of February 14, 2013,

304,500 additional people representing 58% of the end-of-project-target (EOPT) have

gained access to piped water and 203,900 additional people (83% of the EOPT) have

gained access to improved sanitation services thanks to the project. With regards to the

sector reform supported by the project, the financial equilibrium of the urban water sector

is maintained with a net positive cash balance of US$6M in December 2012. The staff

productivity of the water utility (ONEA) has improved from 4.3 to 3.5 staff per 1000

connections (EOPT achieved) and the bill collection ratio of private water consumers has

reached the EOPT of 97%.

4. The project good performance rating is also based on: (i) the satisfactory credit

disbursement level of 53% as of July 1, 2013, which is consistent with initial projections

in the Project Appraisal Document (PAD); (ii) effective procurement which resulted in

awarding by MTR, more than 75% of the civil works contracts initially planned; (iii)

adequate compliance with fiduciary and safeguards requirements; (iv) full compliance

with agreed covenants under the Financing Agreement with the Government of Burkina

Faso (GoBF) and the Project Agreement with ONEA and; (v) appropriate risks mitigation

- the overall project risk rating remains low.

5

5. Based on those findings, the project is fully on track to achieve its PDO which

remains valid and unchanged at MTR.

C. PROPOSED CHANGES

6. The following changes are proposed to be considered in a level 2 restructuring of the

project.

Results/indicators (refer to Annex 1)

7. The project indicators need to be reorganized, as recommended by a monitoring and

evaluation (M&E) review of projects with MTR in FY13. At the PDO level, the two

indicators expressed in terms of "percentage of people served", will be replaced with

their equivalent Core Indicators expressed in terms of "number of additional people

provided with improved water and sanitation services” which are mandatory for all Bank

funded water and sanitation projects. Actually, these core indicators had been initially

included in the Result Framework, but they were mistakenly classified as intermediate

result indicators and this need to be corrected. The "percentage of people served" which

cannot be solely attributed to the IDA project impact (other projects funded by various

sources are being implemented in the same intervention area) will continue to be

monitored for MDGs at the national level. As recommended by the M&E review, the

“urban water financial equilibrium” indicator will be upgraded from intermediate to

PDO level, to better value for sustainability and the “direct project beneficiaries of which

women” will be introduced in the Result Framework as a mandatory PDO level indicator

for all projects. Finally, costs savings under the onsite sanitation will allow building and

rehabilitating more latrines than initially planned. Therefore, the EOPT for the “number

of additional people in urban areas provided with access to improved sanitation under

the project” indicator will increase from 246,000 to 351,600 people. Both the Result

Framework (RF) and the Financing Agreement (FA) will be revised to reflect the above

mentioned changes.

Reallocation of Grant proceeds (refer to Annex 2)

8. As most of the civil works contracts initially planned have been awarded, the

Recipient has requested that the balance of the grant be optimized to finance additional

water supply activities and increase the impact of the project. The proposed additional

activities fit into the scope of the activities currently listed in the PAD and the FA, and

include water production works and the extension of water distribution networks to

informal settlements in Ougadaougou and Bobo-Dioulasso.

9. As a result, the following changes are proposed in the grant proceeds: Category (1)

“Goods, works and consutants’services for Part 1 of the Project” will increase by 13%,

Categories (2) “Goods, works and consultants’services for Part 2 of the Project,

including Training” and Category (3) “Goods, works and consultants’services for Part 3

of the Project including Training and audits” will be decrease respectively by 26% and

13%. Category (4) “Goods, works and consultants’services for Part 4 (b) of the Project

including Training” will remain unchanged.

6

Safeguards

10. Additional proposed activities are of the same nature as the urban water works

included in the initial project. The target secondary cities have been identified, but the

exact location of the works will be defined in the technical studies to be carried out. The

environmental and social aspects which result from the implementation of additional

activities will be dealt with in the same manner as for the works originally planned in the

project through the existing ESMF and RPF.

ANNEX 1: Results Framework and Monitoring

Burkina Faso - Urban Water Sector Project

Project Development Objective Indicators

# PDO Level Results

Indicators Co

re

Dropped

Continue

New

Revised

Unit of

Measure

Baseline

(2010)

Cumulative Target Values*

Frequency Data Source/

Methodology

Responsibility for

Data Collection YR 1 YR 2 YR3 YR 4 YR5

1

Number of additional people provided with

access to “Improved

Water Sources” under the project

Continue Number - 100,000 200,000 300,000 450,000 527,000 Bi-annual

reports

Calculations based on the number of

water connections

and standpipes built (*)

ONEA

Supervision

Committee of the

PNAEPA

2

Number of additional

people provided with

access to “Improved Sanitation” under the

project

Revised Number - 50,000 90,000 130,000 246,000 351,600 Bi-annual

reports

Calculations based on the number of

sanitation facilities

built (*)

ONEA Supervision

Committee of the

PNAEPA

3

Number of additional students provided with

access to appropriate

sanitation facilities in their schools under the

project

Continue Number - 20,000 60,000 80,000 100,000 120,000 Bi-annual

reports

Calculations based

on the number of

sanitation facilities built (*)

ONEA

Supervision

Committee of the PNAEPA

4

Direct project

beneficiaries, of which female (%)

New Number - 150,000

(50 %)

290,000

(50 %)

430,000

(50 %)

696,000

(50 %)

878,600

(50 %)

Bi-annual

reports = sum (1) +(2)

ONEA

Supervision

Committee of the

PNAEPA

5

Financial equilibrium of the urban sector

maintained with the

agreed tariff policy based on cost recovery

Continue - Achieved Maintained Maintained Maintained Maintained Maintained Annual Report

Updated financial

model and

technical audits

ONEA/Consultants/

IDA supervision

missions

Intermediate Results Indicators

# Intermediate Results

Indicators Co

re

Dropped

Continue

New

Revised

Unit of

Measure

Baseline

(2010)

Cumulative Target Values*

Frequency Data Source/

Methodology

Responsibility for

Data Collection YR 1 YR 2 YR3 YR 4 YR5

1

ONEA’s water

employees per 1,000

water connections

Continue Number 4.3 4.2 4.0 3.8 3.7 3.5 Bi-annual

reports Technical audits

ONEA/Consultants/

IDA supervision

missions

2 Bill collection ratio of Continue % 95% 96% 97% 97% 97% 97% Bi-annual Technical audits ONEA/Consultants/

8

private water customers

(% of bills collected)

reports IDA supervision

missions

3

New piped household water connections that

are resulting from the

project intervention

New Number - 10,658 21,317 31,975 47,963 56,170 Bi-annual

reports

Calculations of the number of

sanitation facilities

built

ONEA Supervision

Committee of the

PNAEPA

4

Improved community

water points constructed

or rehabilitated under the project

New Number - 20 40 60 91 106 Bi-annual

reports

Calculations of the

number of water

connections and standpipes built

ONEA

Supervision

Committee of the PNAEPA

5

Improved latrines constructed under the

project New Number - 5,682 10,227 14,773 27,955 39,955

Bi-annual

reports

Calculations of the

number of

sanitation facilities built

ONEA

Supervision

Committee of the PNAEPA

(*) The following ratios agreed at project appraisal for calculations of the project impact remain unchanged

8.8 people served by a household water connection

300 people served by a standpipe

8.8 people served by a household latrine

ANNEX 2:

Reallocation of Proceeds

1. Proceeds for Burkina Faso, Urban Water Sector Project, Grant No. H-482-BF,

(P106909) will be reallocated as follow:

Category

Amount of the Financing

Allocated (expressed in

SDR)

Percentage of

Expenditures to be

Financed (exclusive of

Value Added Tax,

Registration tax and

custom duties)

Current Revised Current Revised

(1) Goods, works and

consultants’ services for

Part 1 of the Project

34,600,000 39,100,000 100% 100%

(2) Goods, works and

consultants’ services for

Part 2 of the Project,

including Training

16,300,000 12,100,000 100% 100%

(3) Goods, works and

consultants’ services for

Part 3 of the Project

including Training and

audits

2,400,000 2,100,000 100% 100%

(4) Goods, works and

consultants’ services for

Part 4 (b) of the Project

including Training

200,000 200,000 100% 100%

TOTAL AMOUNT 53,500,000 53,500,000

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