The World Bank Income Support Program for the Poorest (P146520) REPORT NO.: RES37383 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF INCOME SUPPORT PROGRAM FOR THE POOREST APPROVED ON DECEMBER 16, 2014 TO PEOPLE'S REPUBLIC OF BANGLADESH SOCIAL PROTECTION & JOBS SOUTH ASIA Regional Vice President: Hartwig Schafer Country Director: Mercy Miyang Tembon Regional Director: Lynne D. Sherburne-Benz Practice Manager/Manager: Stefano Paternostro Task Team Leader: Aneeka Rahman, Kenichi Victor Nishikawa Chavez The World Bank Income Support Program for the Poorest (P146520) ABBREVIATIONS AND ACRONYMS ANC Ante Natal Care BPO Bangladesh Post Office CNCD Child Nutrition and Cognitive Development DPP Development Project Proforma GMP Growth Monitoring and Promotion IDA International Development Association MIS Management Information System NHD National Household Database PMU Project Management Unit SDR Special Drawing Rights SEC Small Ethnic Communities SNC Safety Net Cell WASH Water, Sanitation and Hygiene The World Bank Income Support Program for the Poorest (P146520) BASIC DATA Product Information Project ID Financing Instrument P146520 Investment Project Financing Original EA Category Current EA Category Not Required (C) Not Required (C) Approval Date Current Closing Date 16-Dec-2014 30-Jun-2020 Organizations Borrower Responsible Agency PEOPLE'S REPUBLIC OF BANGLADESH Local Government Division Project Development Objective (PDO) Original PDO The Project Development Objective is to provide income support to the poorest mothers in selected Upazilas, while (i) increasing the mothers’ use of child nutrition and cognitive development services, and (ii) enhancing local level government capacity to deliver safety nets. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-55530 16-Dec-2014 09-Feb-2015 16-Apr-2015 30-Jun-2020 300.00 33.06 247.30 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Income Support Program for the Poorest (P146520) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project Status 1. The Income Support Program for the Poorest, a US$300 million IDA Credit, was approved on December 16, 2014 and became effective on April 16, 2015. The Project is in its fourth year of implementation and progress towards achievement of development objective and overall implementation progress have recently been upgraded to moderately satisfactory. However, due to initial delays in program start up, only 11 percent of financing has been disbursed to date. 2. In the first two years of implementation, the Project set up the necessary systems and structures to implement the cash transfer program. These include: a. Fully-staffed Project Management Unit (PMU) and field-level staffing in over 300 unions, including procurement of consultants and service firms to support program implementation; b. Memorandum of Understanding and Service Agreements with service partners to ensure interagency coordination, which form part of the Project’s legal covenant; c. Adoption of an approved Operations Manual laying out modalities to run the cash transfer program, thereby meeting the Project’s disbursement condition, and d. Development and deployment of management information system (MIS), which forms the foundational structure of the program by providing an automated system across all program processes, from beneficiary identification; enrollment and registration; compliance monitoring; payments and reconciliation, and case management and grievances. The MIS is linked to the National Household Database (NHD), from which it would draw all potential households and associated poverty and demographic information, and the Bangladesh Post Office (BPO) information system, from which it draws co-responsibility compliance data as well as financial transaction and reconciliation data. 3. The Project was initially designed to select beneficiaries from households within the bottom two expenditure quintiles, as identified by the National Household Database. The cash transfer program (Jawtno) was launched in 2017 in four pilot unions where NHD data was available, enrolling over 4,000 beneficiaries from households that included pregnant women and/or mothers of children below the age of sixty months. Regular provision and uptake of antenatal care (ANC), growth monitoring and promotion (GMP) and child nutrition and cognitive development (CNCD) services enabled the first few tranches of the conditional cash transfer. 4. However, delays in the availability of nationwide NHD data prevented the Project from identifying eligible beneficiaries in other locations and delayed the rollout of the cash transfer program significantly, impacting disbursement and ultimately the Project’s ability to meet its development objective and associated results targets. in June 2018, following a request from Government dated March 2018, the Project was restructured, with an associated revision of the Development Project Proforma (DPP) in September 2018. In the absence of data availability from the National Household Database (NHD), the restructuring introduced a revised targeting mechanism which allowed the Project to make significant progress in rolling out to new locations and enrolling beneficiaries. 5. As of June 26, 2019, the total number of enrolled beneficiaries stands at 163,100 in over 100 unions across ten upazilas. On a monthly basis, Program services are being provided through Community Clinics and CNCD services 4 The World Bank Income Support Program for the Poorest (P146520) partner NGO. Beneficiary attendance has been strong, with over 90 percent complying with regular co- responsibilities and triggering over US$ 1.6 million in cash transfers up to March 2019. 6. Enrollment is progressing on a daily basis and would be completed by September 2019, with approximately 450,000 beneficiaries enrolled across 33 upazilas, less than target. Enrollment would be discontinued at this time to allow all beneficiaries to receive at least one quarter of program services, which would terminate by March 2020. 7. Fiduciary: The Project has completed all major procurement activities, which include four service contracts that are critical for program implementation. Three out of the four contracts were recently modified to revise the scope of work based on limited timeline remaining for program activities. The Project’s financial management performance is moderately satisfactory: while it initially relied on a manual system of book-keeping and financial reporting, the Project has recently operationalized a customized accounting software that will generate financial reports directly from the digitized system. This has also allowed the Project to move to an Interim Unaudited Financial Report (IUFR)-based reporting modality, effective from April 1, 2019. There are no outstanding audits. An internal audit firm is on board to review and assess the Project’s effectiveness of risk management, control and governance processes. 8. Safeguards management: The Project is in compliance with the Small Ethnic Communities (SEC) Plan: in locations where there is presence of SEC, the Project has made efforts to minimize scope of exclusion through recruiting ethnic community personnel in training, outreach and enrollment activities and ensuring a dedicated queue for SEC at the enrollment camp. Irrespective of ethnicity, pregnant women and women with young children are also prioritized during enrolment and payment to minimize their time standing in the queue. B. Rationale for Restructuring 9. While the Project is on track to meet its development objective, it would not meet coverage targets, either in beneficiary numbers (core indicator) or in location (43 upazilas which were initially identified during preparation) within the current closing date of June 30, 2020. Moreover, the Project would have a large undisbursed balance of approximately US$ 150 million. 10. The Government, in a letter dated June 26, 2019, has requested: a. Partial cancellation of loan proceeds: With the initial delay in the start of the program, there is a high level of undisbursed funds. Based on enrollment projections and estimated disbursement, the Project is unlikely to fully utilize remaining funds and has requested a partial cancellation of US$ 50 million. b. Extension of closing date: In order to reach targets on beneficiary numbers across all 43 sub-districts, the Government seeks a closing date extension up to June 15, 2022. An extension of the closing date would allow: (i) Full coverage: With a longer implementation period, the Project would be able to continue enrollment services across all 43 sub-districts, enabling full coverage of locations as well as reaching over 600,000 beneficiaries. This would also allow for dynamism in the program, with scope to enroll new beneficiaries who become eligible while previous beneficiaries graduate as their children cross 60 months of age. Depending on resource availability, additional locations could be included based on justifiable selection criteria, i.e. high poverty rate and high malnutrition rate. (ii) Longer tenure of services: The longer implementation period would allow for continued and sustained services to beneficiaries. Depending on their date of enrollment, a beneficiary would receive at least one 5 The World Bank Income Support Program for the Poorest (P146520) year and up to four years of program services. Studies show that the frequency and duration of intervention have a significant bearing on behaviour change and outcomes. (iii) Role as cross-cutting service platform: As part of its objective to strengthen safety net administration at the local level, through the Safety Net Cells (SNC), the Project provides a platform to link households other services and facilities, including water, sanitation and hygiene (WASH); pre-primary education, and financial inclusion among others. Preliminary discussions have already been initiated with other sectors. As the efforts have largely been focused on putting in place systems and processes and rolling out implementation in the first few years, collaborative synergies can now be explored and pursued with greater attention. (iv) Informed policy dialogue: As part of its strategy to move towards lifecycle-based to social security, the Government is in the process of designing a nationwide Child Benefit Scheme. The Project provides critical understanding and demonstrative value on how such could be designed and implemented. Regular monitoring and operational reviews have enabled an understanding on how well processes are working and areas where improvements are required. Since the launch of the program in October 2017, the Project has carried out fine-tuning and adjustment in a number of areas to reflect field realities. As the program scales up and with repeated cycles of intervention, it is expected that more lessons would emerge to inform design and implementation changes. Moreover, the World Bank has secured resources to conduct an evaluation of the program’s impact on household overall and food consumption spending and dietary diversity; women's decision-making ability and financial inclusion, and (c) early childhood development and nutrition status. The baseline survey was completed between January to June 2019. With an extended closing date, the endline survey would be scheduled to allow maximum duration of intervention to support more conclusive and robust findings and facilitate evidence-based policy making and design decisions. II. DESCRIPTION OF PROPOSED CHANGES C. Partial Cancellation of Loan Proceeds 11. An amount of US$ 50 million equivalent (SDR 35,965,790) will be cancelled from the original Credit. Due to exchange rate losses since approval, the original Credit of SDR 202,400,000 amounts to US$ 280,394,571.35. Following cancellation, the revised financing will be US$ 231,158,625 (SDR 166,434,210) 1. Based on the Project’s estimates, the revised amount will be allocated across three components and two disbursement Categories in the same proportion as originally designed, i.e. 89 percent of financing will be allocated to cash transfers to beneficiaries (component 1 and Category 1) and the remaining 11 percent to administrative and monitoring & evaluation costs (component 2 & 3 and Category 2). D. Extension of Closing Date 12. The closing date will be extended from the original closing date of June 30, 2020 to June 15, 2022. E. Results Framework Targets 13. The results framework will be updated to include two additional fiscal years of implementation (FY21 and FY22). While most targets remain unchanged, the following indicators will be adjusted for the additional years: 1 1 United States Dollars equals 0.72 Special Drawing Rights (as of June 29, 2019) 6 The World Bank Income Support Program for the Poorest (P146520) Indicator Target Justification PDO indicators 1. Beneficiaries of Safety Original end target (FY20): While the original beneficiary target of Nets programs 600,000 600,000 is expected to be reached by Revised end target (FY22): FY2020, this number will go down over 400,000 time as the replacement rate of new beneficiaries is expected to be lower than the number of beneficiaries graduating out of the program when their child becomes five. Beneficiaries are expected to be identified through the NHD and in the absence of updated poverty profiles, eligible households are expected to be limited. 2. Proportion of ISPP Original end target (FY20): 60% This indicator measures compliance beneficiaries receiving Revised end target (FY22): 70% with co-responsibilities to trigger benefit at least 50% of the payments. It is expected that with maximum benefit repeated cycles of compliance, payments amount and behaviour change, beneficiaries will recognize the value of regular uptake of services. 3. Number of Unions Original end target (FY20): 275 The additional implementation maintaining a single Revised end target (FY22): 325 timeframe would allow more Unions to beneficiary registry of maintain the beneficiary registry. at least five safety net programs Intermediate indicators 4. Proportion of Original end target (FY20): 30% The additional implementation implementing Upazilas Revised end target (FY22): 40% timeframe would allow more Upazilas to processing grievance process grievance cases. cases F. Disbursement Estimates 14. Disbursement estimates will be revised to reflect actual disbursement and projections (FY2020-22) based on the implementation workplan going forward following restructuring. G. Legal Covenant 15. As major procurement under the Project has been completed, the legal covenant related to fiduciary staffing will be revised to allow either one procurement specialist or associate and, as per the original covenant, two financial management specialists with qualifications and experience and under terms of reference acceptable to the Association. 7 The World Bank Income Support Program for the Poorest (P146520) III. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Components and Cost ✔ Loan Closing Date(s) ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursement Estimates ✔ Legal Covenants ✔ Implementation Schedule ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Disbursements Arrangements ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) 8 The World Bank Income Support Program for the Poorest (P146520) OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Cash transfers for beneficiary Cash transfers for beneficiary 267.00 Revised 203.45 mothers mothers Enhancing local government Enhancing local government 32.87 Revised 25.04 capacity capacity Monitoring and evaluation 3.50 Revised Monitoring and evaluation 2.67 TOTAL 303.37 231.16 OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IDA-55530 Effective 30-Jun-2020 15-Jun-2022 15-Oct-2022 OPS_DETAILEDCHANGES_CANCELLATIONS_TABLE CANCELLATIONS Value Reason Current Cancellation New Ln/Cr/Tf Status Currency Date of for Amount Amount Amount Cancellation Cancellation BORROWER' S REQUEST IDA-55530- Disburs 202,400,000.0 166,434,210.0 XDR 35,965,790.00 29-Jun-2019 FOR 001 ing 0 0 COUNTRY REASONS OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IDA-55530-001 | Currency: XDR iLap Category Sequence No: 1 Current Expenditure Category: Cash Transfers under Part 1 ix The World Bank Income Support Program for the Poorest (P146520) 180,100,000.00 1,155,358.04 148,096,840.00 100.00 100 iLap Category Sequence No: 2 Current Expenditure Category: Gds,NonCS,CS,Csh tf fees,trg,OC-2&3 22,300,000.00 4,375,913.53 18,337,370.00 100.00 100 Total 202,400,000.00 5,531,271.57 166,434,210.00 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2015 5,000,000.00 5,000,000.00 2016 325,261.50 352,261.50 2017 643,640.26 643,640.26 2018 5,850,000.00 3,579,569.35 2019 43,530,000.00 23,275,808.05 2020 247,501,098.24 72,072,313.00 2021 0.00 180,063,219.00 2022 0.00 230,569,412.00 2023 0.00 0.00 OPS_DETAILEDCHANGES_LEGCOV_TABLE LEGAL COVENANTS Loan/Credit/TF Description Status Action Finance Agreement :Program Operations Manual | Description :The Government of Bangladesh, through the LGD, shall adopt an Operations Manual, in form and After delay complied IDA-55530 No Change substance satisfactory to the Association, which shall with set forth, inter alia, (i) the modalities for Cash Transfers and (ii) detailed arrangements and procedures for x The World Bank Income Support Program for the Poorest (P146520) institutional coordination and day-to-day execution of the Program. | Due Date: 16-Jul-2015 Finance Agreement :Interagency Coordination with Bangladesh Bureau of Statistics | Description :The Government of Bangladesh, through LGD, shall enter into, and maintain throughout implementation of the Project, a Memorandum of Understanding, on terms After delay complied IDA-55530 No Change and conditions acceptable to the Association, with the with Bangladesh Bureau of Statistics, inter alia, setting out arrangements for the provision of access to lists of poor households based on the data from the Bangladesh Poverty Database. | Due Date: 16-Jul-2015 Finance Agreement :Interagency Coordination with Directorate General of Health Services | Description :The Government of Bangladesh, through LGD, shall enter into, and maintain throughout implementation of the Project, a Service Agreement, on terms and IDA-55530 Complied with No Change conditions acceptable to the Association, with the Directorate General of Health Services, inter alia, setting out arrangements for the sharing and management of Beneficiary data and the use of community clinics for the provision of services. | Due Date: 16-Jun-2015 Finance Agreement :Procurement and fiduciary staffing | Description :The Government of Bangladesh, through the LGD, shall recruit to the Project Management Unit IDA-55530 one procurement specialist and two financial Complied with Revised management specialists with qualifications and experience and under terms of reference acceptable to the Association. | Due Date: 16-Oct-2015 Finance Agreement :Procurement and fiduciary staffing | Description :The Government of Bangladesh, through the LGD, shall recruit to the Project Management Unit Partially complied Proposed one procurement specialist or associate and two with financial management specialists with qualifications and experience and under terms of reference acceptable to the Association xi The World Bank Income Support Program for the Poorest (P146520) Finance Agreement :Compliance with Governance and Accountability Action Plan | Description :The IDA-55530 Government of Bangladesh, through LGD, shall carry Complied with No Change out the Project in accordance with the Governance and Accountability Action Plan. | Frequency: CONTINUOUS Finance Agreement :Compliance with Social Safeguards | Description :The Government of Bangladesh, through IDA-55530 the LGD, shall carry out the Project in accordance with Complied with No Change the Small Ethnic Communities Plan. | Frequency: CONTINUOUS The Government of Bangladesh, through LGD, shall enter into, and maintain throughout implementation of the Project, a Service Agreement, on terms and conditions acceptable to the Association, with the BPO IDA-55530 Complied with No Change or any other service provider acceptable to the Association, setting out the modalities for electronic Cash Transfer payments to be made to Beneficiaries, . and acceptable Cash Transfer Fees. xii The World Bank Income Support Program for the Poorest (P146520) . Results framework COUNTRY: Bangladesh Income Support Program for the Poorest Project Development Objectives(s) The Project Development Objective is to provide income support to the poorest mothers in selected Upazilas, while (i) increasing the mothers’ use of child nutrition and cognitive development services, and (ii) enhancing local level government capacity to deliver safety nets. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 Provide income support to the poorest mothers in selected Upazilas and enhancing local govt capacity Beneficiaries of Safety Nets programs 0.00 0.00 51.00 4,322.00 150,000.00 600,000.00 450,000.00 400,000.00 400,000.00 (number) (CRI, Number) Rationale: The beneficiary figure represents the active number of beneficiaries enrolled at the time of reporting. The highest target reached is 600,000. This number will go Action: This indicator down over time as the replacement rate of new pregnant beneficiaries is expected to be lower than the number of beneficiaries graduating when their child reaches has been Revised 5 years of age. Beneficiaries of Safety Nets programs - 0.00 0.00 51.00 4,322.00 150,000.00 600,000.00 450,000.00 400,000.00 400,000.00 Conditional cash transfers (number) (Number) xiii The World Bank Income Support Program for the Poorest (P146520) RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 Action: This indicator has been Revised Beneficiaries of Safety Nets 0.00 0.00 51.00 4,322.00 150,000.00 600,000.00 450,000.00 400,000.00 400,000.00 programs - Female (number) (Number) Action: This indicator has been Revised Proportion of eligible households in the bottom two expenditure quintiles 0.00 0.00 0.00 70.00 70.00 70.00 70.00 70.00 70.00 of the NHD that are enrolled as beneficiaries (Percentage) Action: This indicator has been Revised Proportion of ISPP beneficiaries receiving at least 50 percent of 0.00 0.00 0.00 50.00 55.00 60.00 65.00 70.00 70.00 the maximum benefit amount (Percentage) Action: This indicator has been Revised xiv The World Bank Income Support Program for the Poorest (P146520) RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 Unions maintaining a single beneficiary registry of at least five 0.00 0.00 0.00 4.00 50.00 275.00 300.00 325.00 325.00 safety net programs (Number) Action: This indicator has been Revised PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 Cash transfers for beneficiary mothers Proportion of ISPP beneficiary pregnant women and mothers 0.00 0.00 0.00 50.00 60.00 70.00 70.00 70.00 70.00 who fulfill CNCD co- responsibility (Percentage) Action: This indicator has been Revised Proportion of ISPP beneficiary pregnant women who fulfill ANC 0.00 0.00 0.00 50.00 60.00 70.00 70.00 70.00 70.00 co-responsibility (Percentage) xv The World Bank Income Support Program for the Poorest (P146520) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 Action: This indicator has been Revised Proportion of ISPP beneficiary mothers who fulfill monthly 0.00 0.00 0.00 50.00 60.00 70.00 70.00 70.00 70.00 GMP co-responsibility (Percentage) Action: This indicator has been Revised Proportion of ISPP beneficiary mothers who fulfill quarterly 0.00 0.00 0.00 50.00 60.00 70.00 70.00 70.00 70.00 GMP co-responsibility (Percentage) Action: This indicator has been Revised Enhancing local government capacity Proportion of implementing Upazilas 0.00 0.00 0.00 0.00 0.00 30.00 40.00 40.00 40.00 processing grievance cases (Percentage) Action: This indicator has been Revised Monitoring and evaluation Number of Unions/municipal 0.00 0.00 0.00 20.00 20.00 20.00 20.00 20.00 20.00 wards on which xvi The World Bank Income Support Program for the Poorest (P146520) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 periodic beneficiary spot checks surveys conducted (Number) Action: This indicator has been Revised Process evaluation of project cycle No No No Yes Yes Yes No No No conducted (Yes/No) Action: This indicator has been Revised Dissemination of monitoring and No No No Yes Yes Yes Yes Yes Yes evaluation reports on annual basis (Yes/No) Action: This indicator has been Revised IO Table SPACE xvii The World Bank Income Support Program for the Poorest (P146520)