Revised in September 2006 to reflect new approval procedures for project restructuring which apply to Use of Project Cost Savings (see also  BP 13.05, Project Supervision). Note:  OP and BP 13.25 replace the Operational Memorandum Use of Savings in Existing Projects, 1/11/84, and draw on the Operational Memorandum Extensions of Closing Dates, Use of Savings, and Changes in Project Descriptions--Procedures, 1/10/85.  Questions may be addressed to opmanual@worldbank.org. |
 1. When project cost savings are available, the borrower may request a reallocation of the funds, provided that the guarantor, if any, raises no objection.  In these circumstances, the sector/ country operations division chief determines whether to seek the reallocation, which is an exception to the Bank1 policy of canceling loan savings.  2. Reallocations of five percent or less. Savings reallocations that represent five percent or less of the original loan amount are considered minor project changes and are approved by the country director (see BP 13.05, paragraph 21).  The country department informs the Executive Directors of changes made, including any postponement in the closing date,2 through the Report to the Executive Directors on Bank and IDA Operations.  3. Reallocations of more than five percent. Savings reallocations that represent more than five percent of the original loan amount are considered significant changes. If they involve changes to the project development objective or associated outcome targets, such changes are approved by the Executive Directors under the absence-of-objection procedures. If they do not involve any changes to project development objectives or associated outcome targets, such changes are approved by the Regional vice president (RVP).3 All significant changes are processed using a Project Paper. For Board approved cases, such Project Papers are accompanied by a one page Memorandum of the President (MOP).
4. The Project Paper4 is a concise document which (a) provides a brief history of the project's implementation, confirming that it has been satisfactory and substantially in compliance with the Agreements for the project;5
(b)Â identifies the origins of the savings; (c)Â describes the proposed additions to the project description;
(d)Â justifies the allocation of cost savings; and (e)Â is publicly available following approval of the project changes, in accordance with procedures that apply to disclosure of PADs.
The Project Paper includes any relevant technical, economic, fiduciary, safeguards, and other due diligence analysis, as well as changes to costs/benefits and the financing plan.  It also indicates whether a closing date extension will be necessary to complete the restructured project. If the change may be effected by waiver or notice, the TL also drafts the waiver or notice.
 ____________ "Bank" includes IBRD and IDA, and "loans" includes IDA credits and IDA grants. At the discretion of the RVP, such changes may also be submitted to the Board for approval. - For a template and guidelines on documentation used for restructuring, staff may refer to Template for Restructuring Project Paper (PP): Project Restructuring for Board and RVP Approval, available on the OPCS website.
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