The World Bank Health Sector Support (P074091) REPORT NO.: RES33410 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF HEALTH SECTOR SUPPORT APPROVED ON JUNE 29, 2010 TO MINISTRY OF HEALTH HEALTH, NUTRITION & POPULATION AFRICA Regional Vice President: Makhtar Diop Country Director: Diarietou Gaye Senior Global Practice Director: Timothy Grant Evans Practice Manager/Manager: Magnus Lindelow Task Team Leader: Gandham N.V. Ramana, Jane Chuma The World Bank Health Sector Support (P074091) ABBREVIATIONS AND ACRONYMS AF Additional Financing EMMS Essential Medicines and Medical Supplies GoK Government of Kenya HSSF Health Sector Services Fund HISP Heath Insurance Subsidies for the Poor NHIF National Hospital Insurance Fund RBF Results Based Financing The World Bank Health Sector Support (P074091) BASIC DATA Product Information Project ID Financing Instrument P074091 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 29-Jun-2010 30-Jun-2018 Organizations Borrower Responsible Agency Ministry of Health Ministry Of Health Project Development Objective (PDO) Original PDO The objectives of the Project are to support the Program and improve: (i) the delivery of essential health services in theRecipient's territory, especially for the poor; and (ii) the effectiveness of planning, financing and procurement ofpharmaceuticals and medical supplies. Current PDO The objectives of the Project are to improve (i) the delivery of quality essential health and nutrition services and utilization bywomen and children especially among the poor and drought affected populations; and (ii) the effectiveness of planning, financing, and procurement of pharmaceutical and medical supplies. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-53670 30-Dec-2013 21-Jan-2014 24-Mar-2014 30-Jun-2018 41.00 33.17 4.40 IDA-50340 20-Dec-2011 10-Feb-2012 28-May-2012 30-Jun-2018 56.80 52.73 .23 IDA-47710 29-Jun-2010 05-Jul-2010 30-Sep-2010 30-Jun-2018 100.00 101.71 .01 TF-16027 21-Jan-2014 21-Jan-2014 24-Mar-2014 30-Jun-2018 20.00 20.00 0 The World Bank Health Sector Support (P074091) TF-90490 28-Jan-2009 12-Feb-2009 07-May-2009 30-Jun-2013 .95 .95 0 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING Note: Formatting instructions for this document. A. Header 1. [All sub-sections must have a continuous paragraph numbering for the entire main text or for each annex per institutional standard.] (a) This is the sub-para numbering for this level. This is the sub-para numbering for this level. This is the sub-para numbering for this level. (i) This is the sub-para numbering for this level. This is the sub-para numbering for this level. (ii) This is the sub-para numbering for this level. This is the sub-para numbering for this level. (iii) This is the sub-para numbering for this level. This is the sub-para numbering for this level. A. Rationale for restructuring 1. The Project is scheduled to close on June 30, 2018. Despite good progress in achievement of development objectives, the Project still has SDR 3,234,094.52 undisbursed. Slow progress in enrollment of beneficiaries under the Health Insurance Subsidies for the Poor (HISP) by the National Hospital Insurance Fund (NHIF) and challenges related to the devolution and the protracted health worker strike delayed implementation. Therefore, expected implementation was not fully achieved. The Bank has agreed to the Government of Kenya’s (GoK) request to cancel the undisbursed amount. B. Project status 2. The original project (SDR 66.2 million, US$100 equivalent) supporting the Health Sector-Wide Program in Kenya has been under implementation for seven years, since its effectiveness in September 2010. In December 2011, the Bank approved Additional Financing (AF) of SDR 35.9 million (US$56.8 million equivalent) under the IDA Crisis Response Window to support urgent nutrition and health needs of the drought affected population in Northern Kenya. On December 30, 2013, the Bank approved a second AF of SDR 26.7 million The World Bank Health Sector Support (P074091) (US$41 million equivalent) and US$20 million grant from the Health Results Innovation Trust Fund. The second AF supports scaling-up of Results Based Financing (RBF) to 21 arid and semi-arid counties, the implementation of the Health Insurance Subsidies to the Poor (HISP) and capacity building of county health systems. At the request of the GoK, the Bank approved an 18-months extension of the closing date to June 30, 2018. 3. The original project supported two main reforms started by GoK: (a) provision of direct cash transfers to primary health facilities through the Health Sector Services Fund (HSSF) to enhance participatory decentralized planning and delivery of the Kenya Essential Package of Health Services; and (b) expansion of the ‘pull system’ of Essential Medicines and Medical Supplies (EMMS) by the Kenya Medical Supplies Agency (KEMSA) to improve the quality of care and reduce wastage. Six out of the seven PDO indicators have exceeded their end of project targets and 1 is nearly achieved. There has also been good progress in intermediate indicators with three out of four exceeding the end of project targets and fourth nearly achieved. 4. Despite good progress made in the achievement of PDOs and key reforms of direct cash transfers to health facilities and supply of essential medicines, there were challenges in scaling up the implementation of the next level of reforms that include RBF to primary health care facilities and HISP introduced under the AF approved in December 2013. 5. Implementation of RBF was affected by funds flow challenges consequent to devolution and protracted health worker strikes. Slow registration of beneficiaries delayed implementation of the HISP. Despite this, the NHIF scaled up HISP to 177,415 households. Capacity building of targeted county government officials at the Kenya School of Government is complete with trained 2,994 county executives and administrative and technical officers in financial management and training of 400 nurses from arid and semi-arid counties, at the Kenya Medical Training College is in its final phase. The Project also supported implementation of the service delivery indicators survey targeting 3,281 health facilities and household expenditure and utilization survey targeting 37,500 households. II. DESCRIPTION OF PROPOSED CHANGES The World Bank Health Sector Support (P074091) Note: Formatting instructions for this document. B. Header 1. [All sub-sections must have a continuous paragraph numbering for the entire main text or for each annex per institutional standard.] (b) This is the sub-para numbering for this level. This is the sub-para numbering for this level. This is the sub-para numbering for this level. (iv) This is the sub-para numbering for this level. This is the sub-para numbering for this level. (v) This is the sub-para numbering for this level. This is the sub-para numbering for this level. (vi) This is the sub-para numbering for this level. This is the sub-para numbering for this level. 6. The proposed changes consist of the cancellation of funds in 3 disbursement categories for a total amount of SDR 3,234,094.52 responding to the Borrower’s request. The Borrower requested cancellation of funds from 3 IDA credits (47710, 50340, 53670). However, IDA Credit 47710 is 99.99% disbursed. Therefore, only funds from IDA Credits 50340 and 53670 will be cancelled. 7. IDA-50340: The cancellation of SDR 164,024.54 under Category (2)(a) is mostly due to exchange rate fluctuations. 8. IDA-53670: The cancellation of SDR 3,070,069.98 under Categories (1)(a) and (6) is due to implementation delays of RBF and HISP. III. SUMMARY OF CHANGES Changed Not Changed Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Change in Implementing Agency ✔ Change in DDO Status ✔ Change in Project's Development Objectives ✔ Change in Results Framework ✔ Change in Components and Cost ✔ Change in Loan Closing Date(s) ✔ Change in Disbursements Arrangements ✔ The World Bank Health Sector Support (P074091) Change in Disbursement Estimates ✔ Change in Systematic Operations Risk-Rating Tool ✔ (SORT) Change in Safeguard Policies Triggered ✔ Change of EA category ✔ Change in Legal Covenants ✔ Change in Institutional Arrangements ✔ Change in Financial Management ✔ Change in Procurement ✔ Change in Implementation Schedule ✔ Other Change(s) ✔ Change in Economic and Financial Analysis ✔ Change in Technical Analysis ✔ Change in Social Analysis ✔ Change in Environmental Analysis ✔ IV. DETAILED CHANGE(S) CANCELLATIONS Value Reason Current Cancellation New Ln/Cr/Tf Status Currency Date of for Amount Amount Amount Cancellation Cancellation IDA-47710- Disburs XDR 66,200,000.00 0.00 66,200,000.00 001 ing BORROWER' S REQUEST IDA-50340- Disburs XDR 35,900,000.00 164,024.54 28-Jun-2018 35,735,975.46 FOR 001 ing COUNTRY REASONS BORROWER' IDA-53670- Disburs XDR 26,700,000.00 3,070,069.98 28-Jun-2018 23,629,930.02 S REQUEST 001 ing FOR The World Bank Health Sector Support (P074091) COUNTRY REASONS TF-16027- Disburs USD 20,000,000.00 0.00 28-Jun-2018 20,000,000.00 001 ing Fully TF-90490- Disburs USD 950,827.83 0.00 28-Jun-2018 950,827.83 001 ed REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IDA-47710-001 | Currency: XDR iLap Category Sequence No: 1A Current Expenditure Category: HSSF Gra GDS,CS,TRG,OP A.1,A.2a(i) 17,124,090.00 16,649,735.53 17,124,090.00 35.00 35.00 iLap Category Sequence No: 1B Current Expenditure Category: Vehicles Part A.2(a)(ii) 2,200,000.00 2,104,898.87 2,200,000.00 100.00 100.00 iLap Category Sequence No: 2A Current Expenditure Category: EMMS GDS Part B1(a) 31,455,600.00 31,455,568.50 31,455,600.00 100.00 100.00 iLap Category Sequence No: 2B Current Expenditure Category: KEMSA OP Part B1(b) 567,400.00 567,327.90 567,400.00 100.00 100.00 iLap Category Sequence No: 3 Current Expenditure Category: GD,CS,TRG,OP Prt A.2/b/c/d/e & P B2 14,850,000.00 17,313,887.61 14,850,000.00 100.00 100.00 iLap Category Sequence No: 4 Current Expenditure Category: PPF REFINANCING 2,910.00 2,907.74 2,910.00 Total 66,200,000.00 68,094,326.15 66,200,000.00 IDA-50340-001 | Currency: XDR The World Bank Health Sector Support (P074091) iLap Category Sequence No: 1A Current Expenditure Category: HSSF Gra GDS,CS,TRG,OP A.1,A.2a(i) 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 1B Current Expenditure Category: Vehicles Part A.2(a)(ii) 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 2A Current Expenditure Category: EMMS GDS Part B1(a) 27,726,000.00 22,692,348.56 27,561,975.46 100.00 100.00 iLap Category Sequence No: 2B Current Expenditure Category: KEMSA OP Part B1(b) 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 3 Current Expenditure Category: GD,CS,TRG,OP Prt A.2/b/c/d/e & P B2 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 4 Current Expenditure Category: GDS,CS,OC - Prt A.3 and A.4 8,174,000.00 8,173,983.87 8,174,000.00 100.00 100.00 Total 35,900,000.00 30,866,332.43 35,735,975.46 IDA-53670-001 | Currency: XDR iLap Category Sequence No: 1A Current Expenditure Category: HSSF GDS,CS,TRG,OP A.1,A.2a(i) 7,200,000.00 0.00 7,029,930.02 100.00 100.00 iLap Category Sequence No: 1B Current Expenditure Category: Vehicles Part A.2(a)(ii) 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 2A Current Expenditure Category: EMMS GDS Part B1(a) 8,848,700.00 2,613,953.53 8,848,700.00 100.00 100.00 iLap Category Sequence No: 2B Current Expenditure Category: KEMSA OP Part B1(b) The World Bank Health Sector Support (P074091) 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 3 Current Expenditure Category: GD,CS,TRG,OP Prt A.2/b/c/d/e & P B2 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 4 Current Expenditure Category: GDS,CS,OC - Prt A.3 and A.4 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 6 Current Expenditure Category: HISP Under Pt A.2 (b)(i) 9,100,000.00 6,156,168.23 6,200,000.00 70.00 70.00 iLap Category Sequence No: 7 Current Expenditure Category: GDS,CS,TRG PTA.2c/e 1,551,300.00 1,551,282.67 1,551,300.00 100.00 100.00 Total 26,700,000.00 10,321,404.43 23,629,930.02 TF-16027-001 | Currency: USD iLap Category Sequence No: 1A Current Expenditure Category: HSSF GDS,CS,TRG,OP A.1,A.2a(i) 14,000,000.00 12,560,569.31 14,000,000.00 0.10 0.10 iLap Category Sequence No: 6 Current Expenditure Category: HISP Under Pt A.2 (b)(i) 6,000,000.00 3,441,988.28 6,000,000.00 30.00 30.00 Total 20,000,000.00 16,002,557.59 20,000,000.00 TF-90490-001 | Currency: USD iLap Category Sequence No: 1 Current Expenditure Category: DISB - CONSULTING 425,342.23 425,342.23 425,342.23 100.00 100.00 iLap Category Sequence No: 2 Current Expenditure Category: DISB - GOODS 30,280.21 30,280.21 30,280.21 100.00 100.00 The World Bank Health Sector Support (P074091) iLap Category Sequence No: 3 Current Expenditure Category: DISB - TRAINING 404,181.05 404,181.05 404,181.05 100.00 100.00 iLap Category Sequence No: 4 Current Expenditure Category: DISB - OPERATING COSTS 90,994.34 90,994.34 90,994.34 100.00 100.00 iLap Category Sequence No: 5 Current Expenditure Category: UNALLOCATED 0.00 0.00 0.00 Total 950,797.83 950,797.83 950,797.83