The World Bank Swaziland Health, HIV/AIDS and TB Project (P110156) REPORT NO.: RES29750 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SWAZILAND HEALTH, HIV/AIDS AND TB PROJECT APPROVED ON MARCH 10, 2011 TO MINISTRY OF FINANCE HEALTH, NUTRITION & POPULATION AFRICA Regional Vice President: Makhtar Diop Country Director: Paul Noumba Um Senior Global Practice Director: Timothy Grant Evans Practice Manager/Manager: Magnus Lindelow Task Team Leader: Edit V. Velenyi, Christine Lao Pena The World Bank Swaziland Health, HIV/AIDS and TB Project (P110156) I. BASIC DATA Product Information Project ID Financing Instrument P110156 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 10-Mar-2011 31-Mar-2018 Organizations Borrower Responsible Agency Ministry of Finance Ministry of Health,Deputy Prime Minister's Office Project Development Objective (PDO) Original PDO The project development objectives (PDOs) are: (i) to improve access to and quality of health services in Swaziland with a particular focus on primary health care, maternal health and TB, and (ii) to increase social safety net access for OVC. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-80190 10-Mar-2011 14-Dec-2011 09-May-2012 30-Sep-2018 20.00 16.41 3.59 TF-11740 04-Apr-2012 04-Apr-2012 09-May-2012 30-Jun-2018 16.34 14.69 1.65 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES The World Bank Swaziland Health, HIV/AIDS and TB Project (P110156) The Swaziland Health, HIV/AIDS and TB project (P110156) was approved by the World Bank Executive Board on March 10, 2011 in the amount of a US$20 million (IBRD 80190) loan, and a €14.5 million European Union (EU) grant (TF011740), and became effective on May 9, 2012. In May 2016, a level II restructuring extended the May 31, 2016 closing date by 22 months until March 31, 2018. Two subsequent level II restructurings were processed in September 2016, and June 2017, to reflect the receipt of the second and third tranches of EU financing respectively. To date, this co-financed World Bank loan and EU grant has disbursed a combined US$31.1 million or 85.4% of the total project funds, up from US$24.45 million (67%) in June 2017. Currently, there are no outstanding audit reports for this project. The audit report for the fiscal year ending 31st March, 2017 was submitted to the Bank within six-months following the end of the fiscal year, with the auditor expressing an unqualified opinion on the project financial statements. The next audit report related to the fiscal year ending 31st March, 2018 is due by 30th September, 2018. The December 2017 Implementation and Status Report (ISR) maintained the Implementation Progress rating as Satisfactory, and the progress towards the achievement of the PDO as Moderately Satisfactory. Under component 1, accelerated progress has been made on the Health Financing (HF) Technical Assistance (TA), including completion of Phase I which identified reform areas that would improve the effectiveness, efficiency, and equity of the health care system and initialization of Phase II which operationalizes the agreed priorities for reform. Under the reform phase of the HF TA, the Government of Swaziland has been receiving TA in five agreed reform areas, including on donor coordination, institutional change to support HF function, efficiency, strategic purchasing, and technical assessment and policy dialogue on the National Health Insurance Scheme. Meanwhile, under the hospital governance and management (HGM) TA, a situation analysis report has been submitted to inform HGM model development, as well as the improvement of HGM tools and processes. Furthermore, a Joint TA Workshop was convened across the HF, HGM, and the legal and regulatory framework TAs – to consolidate recommendations on HF and HGM to support strategic policy development, and supported the development of the draft Health Bill. Under component 2, renovations have been completed at the Mbabane Government Hospital maternity and neonatal ward, Good Shepherd School of Nursing, Mkhuzweni, Nhlangano, and Matsanjeni Health Center maternity wards, Maternity Waiting Homes at Good Shepherd and RFM Hospitals, TB Center at Manzini, four health clinics (Mangweni, Ikhwezi, Dwalile, and Lavumisa), and the Biomed workshop at Piggs Peak, and continued progress of renovations at Dvokolwako health center (85% complete) and the Ambulance Base station (22% complete following move to new site). Under component 3, seven of the eight payments of the Orphans and Vulnerable Children (OVC) Cash Transfer Pilot were completed by October 2017, and an additional 7,000 beneficiaries were enrolled in the seventh payment, reaching 13,706 beneficiaries, compared to 6,786 beneficiaries as of the sixth payment. This figure is expected to increase to approximately 16,000 on the 8th and final payment, which will include an estimated 3000 OVCs from the Control Group. In June 2017, a level II restructuring was approved to reflect the third of four tranches of the EU co-financing transferred to TF11740 in the amount of €2.9 million. With tranches 1 through 3 of the co-financing, totaling US$14.7 million, fully disbursed. Following the processing of the third tranche, substantial commitments and accelerated disbursements, the project has reached the threshold to call the fourth and final tranche from the EU grant in the amount of €1.45 million with this restructuring. This restructuring proposes to make the following changes: 1. Extension of Project Closing Date: Following a request from the MOF, the Regional Vice President approved in principle an extension of the project closing date extension for six months, through September 30, 2018. The The World Bank Swaziland Health, HIV/AIDS and TB Project (P110156) extension will allow for the completion of ongoing activities, namely: (i) TA on legislation and regulation to complete the drafting of the Health Bill, and TA to support policy making in HF and HGM, including reform work plans; (ii) remaining rehabilitation of the Dvokolwako Health Center and the Ambulance Base Station at Ntfonjeni and final installation of medical equipment for seven of the fifteen sites; and (iii) complete the final payment of the OVC cash transfer program, fully operationalize the related management information system (MIS), and generate evidence for decision-making through an impact evaluation (IE). The extension of the closing date will allow for implementation of originally planned project activities and ensure that the Project Development Objective (PDO) will be fully met. 2. Although the proposed extended closing date of the IBRD Loan is September 30, 2018, the closing date of the EU TF is June 30, 2018, due to the administrative timelines of the European Union. 3. Receipt of final tranche of EU grant: This Level II restructuring is required to reflect the fourth and final tranche of the EU grant transferred to TF11740 in the amount of €1.45 million. As a result of the October 2017 transfer from the EU of the final tranche, cumulatively, the TF would now reach approximately US$16.3 million. 4. Adjustment of the IBRD-EU Grant funding ratio from 51:49 to 55:45: Due to exchange rate fluctuations, the original disbursement ration cannot be maintained. 5. Reallocation across select disbursement categories. Reallocation for the IBRD loan and EU grant will be made in line with the stated objectives of the closing date extension, and consistent with the revised funding ratio, as detailed in the reallocations table below. Specifically, to enable the completion of the remaining two sites, the amounts under Civil Works and Goods expenditure categories are to increase. This reallocation is necessary due to projected shortfalls under these categories due to the change in the US Dollars to Swazi Emalengeni exchange rate. Furthermore, there is also a slight increase in operating costs, as a result of the extended project implementation period. To afford the increase in the aforementioned categories, the Annual Work Program and Budget Planning review proposed that TA/consulting and training activities are to be streamlined, and the schedule of the OVC cash transfer is to be optimized. III. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications 31-Mar-2018, 30-Sep- IBRD-80190 Effective 31-May-2016 30-Sep-2018 30-Jan-2019 2018 31-Mar-2018, 30-Jun- TF-11740 Effective 31-May-2016 30-Jun-2018 31-Jul-2018 2018 The World Bank Swaziland Health, HIV/AIDS and TB Project (P110156) REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Current Current Actuals + Proposed Disbursement % Ln/Cr/TF Expenditure Allocation Committed Allocation (Type Total) Category Current Proposed IBRD- DISB - CIVIL 8,782,000.00 6,702,913.93 8,782,000.00 55.00 57.2 80190-001 WORKS Currency: USD DISB - GOODS 3,768,000.00 2,683,515.89 3,768,000.00 55.00 51.8 DISB - 4,008,000.00 2,969,417.10 4,008,000.00 55.00 55.7 CONSULTING DISB - TRAINING 981,000.00 760,467.43 981,000.00 55.00 51.3 GRANTS- PART 1,514,000.00 986,909.37 1,514,000.00 55.00 52.4 C(ii) DISB - OPERATING 897,000.00 626,398.08 897,000.00 55.00 53.7 COSTS UNALLOCATED 0.00 0.00 0.00 GD,CS,WK for Pt D (expt Pt A,B & 0.00 0.00 0.00 0.01 100 C) Total 19,950,000.00 14,729,621.80 19,950,000.00 TF-11740- DISB - CIVIL 6,559,271.00 5,892,205.09 6,559,271.00 45.00 42.8 001 WORKS Currency: USD DISB - GOODS 3,501,426.00 2,578,280.04 3,501,426.00 45.00 48.2 DISB - 3,194,073.00 2,728,686.24 3,194,073.00 45.00 44.3 CONSULTING DISB - TRAINING 932,156.00 698,698.21 932,156.00 45.00 48.7 GRANTS- PART 1,377,401.00 893,854.36 1,377,401.00 45.00 47.6 C(ii) The World Bank Swaziland Health, HIV/AIDS and TB Project (P110156) DISB - OPERATING 772,539.00 581,333.04 772,539.00 45.00 46.3 COSTS UNALLOCATED 0.00 0.00 0.00 Total 16,336,866.00 13,373,056.98 16,336,866.00