PROJECT INFORMATION DOCUMENT (PID) ADDITIONAL FINANCING Report No.: PIDA1178 Project Name Kenya Health Sector Support Project - Additional Financing (P144197) Parent Project Name Health Sector Support (P074091) Region AFRICA Country Kenya Sector(s) Health (100%) Theme(s) Child health (20%), Health system performance (40%), Population and reproductive health (20%), Other human development (20%) Lending Instrument Investment Project Financing Project ID P144197 Parent Project ID P074091 Borrower(s) National Treasury Implementing Agency Ministry of Health Environmental Category B-Partial Assessment Date PID Prepared/Updated 05-Nov-2013 Date PID Approved/Disclosed 11-Nov-2013 Estimated Date of Appraisal 28-Oct-2013 Completion Estimated Date of Board 20-Dec-2013 Approval Decision I. Project Context Country Context Kenya's economy continues to stabilize gradually but still remains vulnerable to both internal and external shocks and it is still operating below its potential. However, given the domestic and global environment, the growth rate of 4.6 percent achieved in 2012 is considered satisfactory even though this remains below the average of the African and East African Community (EAC). After a peaceful election and transition in 2013, growth is expected to rise to 5.7 percent in 2013 and 6.0 percent in 2014, supported by lower interest rates and higher investment growth. The newly introduced VAT bill may contribute to short term inflation risks. Kenya’s poverty level is estimated to have declined from 47 percent in 2005, to between 34 to 42 percent today, which will be confirmed by the new household survey . Sectoral and institutional Context After a period of stagnant and even deteriorating health indicators in the 1990’s, the 2008 Kenya Page 1 of 4 Demographic Health Survey (KDHS 2008) began to show some remarkable improvements in infant and under-five mortality. Infant mortality declined from by 33 percent to 52 per thousand live births and under five mortality decreased by 36 percent to 74 per thousand live births during the period 2004-2008. This decrease can be attributed in part to successful implementation of vertical health programs especially immunization, malaria, tuberculosis and HIV/AIDS in addition to sustained economic growth and poverty reduction. However, several challenges still remain. The prevalence of stunting of over a third of Kenyan children has not changed significantly over the past few years , and the maternal mortality rates remain stubbornly high (around 530 per 100,000 live births) , and achievement of MDG 5 remains out of reach. Geographic and economic health inequities continue where nearly 90 percent of the women in Nairobi deliver their babies in a health facility in sharp contrast to only 17 percent in the North-East highlighting the geographic inequities within Kenya. Health services in Kenya are provided by a wide range of players consisting of public, faith based, private not for profit, and private for profit sectors. About 40 percent of services are estimated to be provided by the private sector, and public health services at primary care facilities are utilized by the poor and particularly women and children in many remote areas rely on services provided by faith based organizations. Kenya's new constitution (August 2010) provides an overarching framework for a more comprehensive rights-based approach towards health care. The constitution devolves power and accountability to the 47 counties and the proposed devolution is considered to be one of the most ambitious in the world. The devolved governance model promises Kenyans a more equitable development model by creating opportunities for new growth centers. The national government will be providing the broader policy direction. Providing universal health coverage received priority attention by the new government, which has already made important policy pronouncements related to the health sector. The President as a part of the first 100-day agenda of the government, announced abolition of user fee at primary health care facilities and free maternal health services at all public facilities. The national government has also provided resources for implementing these two reforms in FY 2013-14 budget. The devolved health systems and the new government’s high commitment to improve access to basic health care and achieve Millennium Development Goals (MDGs) that the country is lagging behind in, provide an excellent window for the development partners to join government’s efforts by adjusting their ongoing support and plan more targeted attention that is relevant and responsive to the current needs and aspirations of Kenyans. The new policies need a comprehensive health financing strategy to ensure sustainable financing to promote delivery and use of health services by the poor and vulnerable populations. II. Proposed Development Objectives A. Current Project Development Objectives – Parent The proposed project's development objectives are to: (i) improve the delivery of essential health services for Kenyans, especiallythe poor; and (ii) improve the efficiency of pharmaceutical planning, procurement and management. B. Proposed Project Development Objectives – Additional Financing (AF) To improve (i) the delivery and utilization of quality essential health and nutrition services by women and children especially among the poor and drought affected populations; and (ii) the effectiveness of planning, financing, procurement and distribution of pharmaceutical and medical supplies. Page 2 of 4 III. Project Description Component Name The PDO has been revised to specifically address the health and nutrition needs of women and children, especially the poor and among the drought affected populations. Comments (optional) IV. Financing (in USD Million) Total Project Cost: 30.00 Total Bank Financing: 30.00 Financing Gap: 0.00 For Loans/Credits/Others Amount BORROWER/RECIPIENT 0.00 International Development Association (IDA) 30.00 Total 30.00 V. Implementation The project remains similar to the original design of the Kenya Health Sector Support Project and the Results Based Financing (RBF) will be implemented by the Ministry of Health (MoH) anchored in the Sector Wide Approach. The Health Insurance Subsidies for the Poor (HISP) funds will channeled through the National Health Insurance Fund (NHIF) which will offer the agreed benefit package for the poor under the oversight of MoH using a combination of providers. The institutional, financial management, procurement or disbursement arrangements will remain in place for the Additional Financing with appropriate adjustments to ensure the effective role of counties in decision making and accounting for results and resources. The HISP will have a dedicated financial management arrangement and a well-defined Memorandum of Understanding between MoH and NIHF will clearly state roles and responsibilities. There will be additional key indicators for activities supported under the additional financing to measure new activities and some of existing indicators and targets will be adjusted to make them more specific and measurable. VI. Safeguard Policies (including public consultation) Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 ✖ Natural Habitats OP/BP 4.04 ✖ Forests OP/BP 4.36 ✖ Pest Management OP 4.09 ✖ Physical Cultural Resources OP/BP 4.11 ✖ Indigenous Peoples OP/BP 4.10 ✖ Involuntary Resettlement OP/BP 4.12 ✖ Safety of Dams OP/BP 4.37 ✖ Projects on International Waterways OP/BP 7.50 ✖ Projects in Disputed Areas OP/BP 7.60 ✖ Comments (optional) Page 3 of 4 VII. Contact point World Bank Contact: Gandham N.V. Ramana Title: Lead Health Specialist Tel: 5327+6376 Email: gramana@worldbank.org Borrower/Client/Recipient Name: National Treasury Contact: Dr. Kamau Thugge, EBS Title: Principal Secretary Tel: 2252299 Email: ps@treasury.go.ke Implementing Agencies Name: Ministry of Health Contact: Prof. Fred H. K. Segor Title: Principal Secretary Tel: 2248591 Email: VIII. For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-4500 Fax: (202) 522-1500 Web: http://www.worldbank.org/infoshop Page 4 of 4