Page 1 PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB724 Project Name HIV/AIDS Capacity Building and Technical Region AFRICA Sector Health (55%);Other social services (45%) Project ID P087843 Borrower(s) KINGDOM OF LESOTHO Implementing Agency Debt Management Office, Ministry of Finance and Development Planning Environment Category [ ] A [ ] B [X] C [ ] FI [ ] TBD (to be determined) Safeguard Classification [ ] S 1 [ ] S 2 [X] S 3 [ ] S F [ ] TBD (to be determined) Date PID Prepared May 10, 2004 Date of Appraisal Authorization May 3, 2004 Date of Board Approval June 17, 2004 1. Country and Sector Background Lesotho is among the countries worst affected by the HIV/AIDS epidemic. With a national population of 2.2 million and 330,000 of its adults estimated to be infected with HIV, the country is a facing an unprecedented national disaster. Compared to neighboring countries like South Africa, Botswana, Namibia and Swaziland who all have similar high HIV/AIDS prevalence, Lesotho has limited national financial and human resources to effectively tackle the epidemic, which threatens to further undermine its development. The Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM), approved a US $34 million grant ($29 million for HIV/AIDS and $5 million for tuberculosis) in 2002 for the Government of Lesotho to scale up its fight against the HIV/AIDS and TB epidemics over the next five years. The Principal Recipient of the Global Fund resources is the Ministry of Finance and the two sub-recipients are LAPCA and the Ministry of Health and Social Welfare. In July 2003, Lesotho hosted an extraordinary meeting of SADC on HIV/AIDS, and recent approval by the Cabinet of a document titled “ Scaling up the fight against the HIV/AIDS epidemic in Lesotho” reflects increased high-level attention needs to be followed up by concrete action. The Cabinet’s approval of the document was accompanied by a decision to create a National AIDS Commission that will oversee the national response to HIV/AIDS in Lesotho. The Commission is envisioned to comprise appointed Commissioner and four other Commissioners elected by their constituents (Youth, Women, Church Groups and People Living with HIV/AIDS) and with an improved LAPCA functioning as Secretariat to the Commission. 2. Objectives Page 2 This technical assistance project aims to increase the capacity of government and non- governmental institutions responsible for the national response to HIV/AIDS to utilize and assess the impact of funds received for HIV/AIDS. 3. Rationale for Bank Involvement The Global Fund operates as a financing instrument, not an implementing entity. The challenge facing Lesotho is that of implementation of robust national program with financial resources approved by the Global Fund. The Bank has substantial experience with implementation of multi-sector operations and has specifically gained more experience than any other agency in implementation of national multi-sector HIV/AIDS programs in Africa. Thus, the rationale for this project is to provide implementation support for HIV/AIDS, complementary to other partners that are supporting the Lesotho national response. 4. Description The proposed project will have four inter-related components : Component I: Support to the Ministry of Finance and Development Planning (MOFDP). This component will support the MOFDP to discharge its fiduciary and program management responsibilities as principal recipient of the HIV/AIDS and Tuberculosis grants from the Global Fund. Component II: Support to the Ministry of Health and Social Welfare (MOHSW) : The project will support MOHSW to fulfill its role as a sub-recipient of the Global Fund resources for implementation of HIV/AIDS and Tuberculosis interventions in the health sector. Component III: Support to Secretariat of the National AIDS Program (LAPCA): The project will finance technical assistance to enable the national program secretariat perform its mandated coordination and monitoring and evaluation functions as well as support implementation of activities by public sector line ministries, civil society and the private sector in the GF approved work plan. Component IV: Support for civil society and private sector capacity development : This component will support capacity building for facilitating and umbrella civil society and faith based organizations, traditional institutions and communities to develop proposals, implement such proposals and fulfill the reporting requirements for disbursements under the GF agreement. 5. Financing Source: ($m.) BORROWER/RECIPIENT .05 IDA GRANT FOR HIV/AIDS 5 Total 5.05 6. Implementation Page 3 As the project is intended to support the implementation of the Global Fund for HIV, AIDS, Malaria and Tuberculosis (GFATM), the project preparation and project implementation will be closely coordinated with the Portfolio Manager of the GFATM, members of the CCM (Country Coordinating Mechanism) and the LFA (Local Fund Agent, PricewaterhouseCoopers). The Bank’s supervision of the TAL will effectively act as supervision of the GFATM program in Lesotho. As the GFATM has no capacity to supervise or provide implementation support, the Fund and the Bank have been exploring ways to collaborate. The project is viewed as a potential model for this partnership. 7. Sustainability The project focuses on building the capacity of government institutions, as well as the capacity of civil society. Key project inputs focus on defining the terms of reference for, and establishing both the National AIDS Commission Secretariat, the Directorate for HIV/AIDS within the MOHSW and the GFATM Unit within the MPFDP. These new structures within the public sector for responding to HIV/AIDS, will be enabled to better absorb and manage significant external resources, as well as to demonstrate results. This is expected to enable to country to better attract additional external resources following the Closing Date. 8. Lessons Learned from Past Operations in the Country/Sector The project builds upon Bank experience supporting HIV/AIDS in Lesotho . Under the existing Health Sector Reform Project (HSRP), approved in June, 2000, the Bank has worked with the MOHSW and LAPCA to make grants available to NGOs to undertake HIV/AIDS projects. The Bank, more than any other partner, is aware of the additional capacities required to enable LAPCA to better perform this function (as is envisioned under the GFATM program), and to coordinate information at the national level. The project has identified needs within civil society for additional skills in HIV/AIDS project design, proposal writing, performance monitoring and accounting. The HSRP has also supported an assessment of pharmaceutical management, the results of which have informed the proposed project. Implementation experience from national AIDS programs in Africa has shown that in those countries which have not made progress in reversing the spread of the HIV/AIDS epidemic the main reasons included : (i) the national programs were inadequately financed; (ii) there was inadequate government commitment and leadership; (iii) support from governments and the international community was too slow, especially for scaling up effective programs, often developed by NGOs; (iv) insufficient resources reached communities; and (v) programs were too narrowly focused on the health sector. With these lessons at hand, the project adopted the following approach : • The project is stepping in to strengthen implementation of the national program and thereby improve outcomes by ensuring that the GFATM resources are effectively used and appropriately accounted for. • The project has nurtured a broad based partnership across several donor agencies and with civil society organizations and has contributed to the development of consensus on the way forward for Lesotho, which is to focus on implementation. Page 4 • The adoption of a flexible approach to financing NGOs and communities by the GFATM is complemented by this project’s effort to strengthen the implementation capacities of the NGOs. • While the health sector has a normative responsibility and a leadership role to play in scaling up access to care and treatment, the national program in Lesotho was built on the foundations of multi-sectorality and the project is providing support to the health sector as well to all other sectors. Focus on comparative strengths of various partners within the national program : The Bank is acknowledged to have comparative strength in institutional development and improving capacities for fiduciary functions, such as dealing with procurement and financial management. In addition, the Bank has been involved in HIV/AIDS in Lesotho for almost two decades and, as such, it has institutional memory that may not be available among other partners. Projects involving multiple implementing agencies need implementation arrangements that ensure effective coordination of these agencies. In this regard, the project management and coordination arrangements have already been discussed and agreed to ensure better understanding of issues to be addressed by the project and of the Bank’s policies and procedures. The early agreement on project components and coordination mechanisms will ensure that once the project is approved, start-up activities can be implemented without delay. 9. Safeguard Policies (including public consultation) Safeguard Policies Triggered by the Project Yes No Environmental Assessment ( OP / BP / GP 4.01) [ ] [X ] Natural Habitats ( OP / BP 4.04) [ ] [X ] Pest Management ( OP 4.09 ) [ ] [X ] Cultural Property ( OPN 11.03 , being revised as OP 4.11) [ ] [X ] Involuntary Resettlement ( OP / BP 4.12) [ ] [X ] Indigenous Peoples ( OD 4.20 , being revised as OP 4.10) [ ] [X ] Forests ( OP / BP 4.36) [ ] [X ] Safety of Dams ( OP / BP 4.37) [ ] [ X] Projects in Disputed Areas ( OP / BP / GP 7.60) * [ ] [X ] Projects on International Waterways ( OP / BP / GP 7.50) [ ] [X ] 10. List of Factual Technical Documents 11. Contact point at World Bank Contact: Muhammad Pate Title: Health Spec. Tel: (202) 473-4463 * By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas Page 5 Fax: (202) 473-8299 Email: mpate@worldbank.org 12. For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-5454 Fax: (202) 522-1500 Web: http://www.worldbank.org/infoshop