The World Bank Health Sector Development Support Project (P125229) REPORT NO.: RES38981 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF HEALTH SECTOR DEVELOPMENT SUPPORT PROJECT APPROVED ON SEPTEMBER 29, 2011 TO REPUBLIC OF ZIMBABWE HEALTH, NUTRITION & POPULATION AFRICA Regional Vice President: Hafez M. H. Ghanem Country Director: Bella Bird Regional Director: Dena Ringold Practice Manager/Manager: Ernest E. Massiah Task Team Leader(s): Christine Lao Pena The World Bank Health Sector Development Support Project (P125229) I. BASIC DATA Product Information Project ID Financing Instrument P125229 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 29-Sep-2011 31-Dec-2019 Organizations Borrower Responsible Agency Republic of Zimbabwe Stichting Cordaid Project Development Objective (PDO) Original PDO The Project Development Objective (PDO) is to increase coverage of key maternal and child health interventions in targeted ruraldistricts consistent with the Recipient's ongoing health initiatives. Current PDO The Project Development Objective is to increase coverage and quality of key health interventions with an emphasis on MCH services in targeted rural and urban districts and strengthen capacity for results-based financing contract management, consistent with the Recipients’ ongoing health initiatives. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-A9037 03-Nov-2018 20-Feb-2019 29-Mar-2019 31-Dec-2019 3.00 1.38 1.62 TF-A5311 21-Jul-2017 26-Jul-2017 24-Oct-2017 31-Dec-2019 5.00 5.00 0 TF-A1598 23-Dec-2015 12-Jan-2016 14-Mar-2016 30-Jan-2018 10.00 10.00 0 TF-15111 30-Jul-2013 30-Jul-2013 25-Sep-2013 28-Feb-2017 20.00 20.00 0 The World Bank Health Sector Development Support Project (P125229) TF-10748 27-Sep-2011 27-Sep-2011 08-Dec-2011 31-Jul-2014 15.00 15.00 0 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES 1. The Health Sector Development Support Project [P125229] of US$53 million includes an original US$15 million grant [TA-10748] approved in September 2011, a US$20 million additional financing (AF) grant [TF-15111] approved in July 2013, a second AF grant [TF-A1598] of US$10 million approved in December 2015; a third AF grant [TF-A5311] of US$5 million approved in July 2017; and a fourth AF Grant (TF-A9037) of US$ 3 million approved in January 2019. The Health Results Innovation Trust Fund financed the project from inception until the second AF. The project is currently being financed by the Health Results Innovation Trust Fund-Global Financing Facility (GFF) in Support of Every Woman Every Child. 2. The Zimbabwe Health Sector Development Support Project assists the Government of Zimbabwe to increase coverage and quality of key health interventions with an emphasis on maternal and child health (MCH) services in targeted rural and urban districts and strengthen capacity for results-based financing contract management, consistent with the Recipients’ ongoing health initiatives. The fourth AF that became effective on March 29, 2019 has been providing support to the Government in delivering high-impact MCH services in targeted rural and urban districts of Zimbabwe covering a population of 4.1 million (of the national population of 15 million). It aims to remove financial barriers to health care access on the demand side and strengthen service delivery using results-based financing. It is also piloting a Continuous Quality Improvement Program in five districts (Binga, Centenary, Chipinge, Mangwe, and Mnewezi). 3. Since its inception, the Health Sector Development Support Project has made significant progress with the results-based financing (RBF) pilot launched in two rural districts and subsequently scaled to an additional 16 rural districts resulting in a total of 18 rural districts. The 2014 impact evaluation results and subsequent assessments have shown that the project has contributed to revitalizing primary health services with significant effect on the coverage and quality of care of an integrated package of priority Maternal and Child Health services. In addition, qualitative research has confirmed RBF’s contribution to improvements in: (i) teamwork at health facilities; (ii) supervision and accountability for health care delivery; and (iii) community engagement and participation in governance issues in health facilities in participating districts. Following the success of the Health Sector Development Support Project in piloting the RBF mechanism, the Ministry of Finance and Economic Development (MOFED) introduced co-financing that uses the same funds flow mechanism as the World Bank grant. Over time, the Government has continued to demonstrate its commitment to the results-based financing program by increasing its share of counterpart funding, to the extent that since July 1, 2018 it has fully assumed financing of results-based financing subsidies in the 18 rural districts being supported by the World Bank. At the same time, other development partners through the Health Development Fund [financed mainly by Governments of Ireland, Sweden, the United Kingdom; the European Union; and the Global Vaccine Alliance. The United Nations International Children’s Emergency Fund is the Health Development Fund Administrator] are funding an additional 42 rural districts not covered by the World Bank’s funding using the design initiated under the WB project. In addition, the project is supporting an innovative results-based The World Bank Health Sector Development Support Project (P125229) financing pilot and demand-side maternal health voucher that targets the poorest households to reduce financial barriers to access high impact maternal and child health services while improving the quality of health services in Zimbabwe’s two largest cities (Harare and Bulawayo). 4. In terms of progress made, as of June 2019 (latest available information), six out of 11 project development objective (PDO) indicators’ end of project targets including the average quality score have been achieved while three are close to being met; one is on track based on information until June 2019. Five out of 15 intermediate results indicators have been met, with five indicators close to meeting their targets. Indicator targets will be reviewed and adjusted as needed to align with proposed new Closing Date based on updated 2019 data that will be available in late January/early February 2020. 5. With regard to progress made in terms of key agreed actions, the Government continues to advance with RBF institutionalization, allocating US$8 million to RBF for this calendar year. The Ministry of Health and Child Care (MOHCC) is also proceeding to manage more performance-based contracts, reaching 23 percent or 13 rural districts in June 2019 with the goal of covering all 60 districts by the end of 2020. Approximately 150 MOHCC staff members at all four levels (central- Program Coordination Unite and Department of Financial Administration, Provincial Health Executive, District Health Executive; and primary level for verification) are now directly involved in RBF institutionalization. In addition, the Project Implementation Manual which includes the revised institutional arrangements and updated list of indicators and prices have been app roved by the MOHCC’s Top Management Team and Directors and stakeholder consultations, including the Bank review have been completed. The Project Implementation Manual is being edited for wider stakeholder dissemination. Moreover, the RBF information system upgrade has been successfully completed and training of districts is taking place in a phased manner. Critical next steps relate to integrating the MOHCC District Health Information System 2 and RBF system once the former is more stable, making the system more operationally useful during training, and sensitizing MOHCC Senior Management about the system upgrade and RBF. Almost all legal covenants have been complied with except for two: (a) the quality consultant will be in place in January 2019 (if the extension is approved); it took time to find well-qualified consultants that would be available for the time required for the assignment and the most qualified consultant is only available after December 2019 and (b) the Project Implementation Manual has been updated and approved through a thorough multi-stakeholder process. It is undergoing final edits prior to dissemination. The MOHCC will adopt the new RBF prices next calendar year after sufficiently sensitizing and orienting facilities and other key stakeholders. 6. The Government of Zimbabwe in its letter dated October 11, 2019 requested the World Bank to extend the project Closing Date from December 31, 2019 to June 30, 2020. The extension is requested because the AF IV became effective close to three months later than expected (i.e. March 27, 2019 instead of early January 2019) and funds were received in May 2019, which resulted in some implementation delays. There were also unintended implementation delays resulting from changes in payment systems and official currency for transactions due to two Statutory Instruments 33 and 142 issued by the MOFED. Delays resulted in the enrollment of urban voucher program beneficiaries in June 2019. Extending the project Closing Date would allow for 12 months of implementation of the urban voucher program and for at least a full pregnancy cycle (9 months) to be covered together with follow-up post- natal care. In addition, the extension would allow for a Finance Officer to be seconded by the Catholic Organization for Relief and Development-Project Implementing Entity (CORDAID-PIE) to the MOHCC to provide needed capacity building in handling RBF financial transactions to existing MOHCC financial officers while provincial RBF officers seconded to the MOHCC would continue to support the institutionalization process. 7. The project has been extended seven times: (1) The first AF extended the original Closing Date of the parent project by 15 months (from July 31, 2014 to October 30, 2015). Its Closing Date was then extended twice: by 6 months The World Bank Health Sector Development Support Project (P125229) (from October 30, 2015 to March 31, 2016) and then by 11 months (from March 31, 2016 to February 28, 2017); (2) the second AF was extended by 11 months (from February 28, 2017 to January 30, 2018); (3) the third AF was extended by 6 months (from June 30, 2018 to December 31, 2018); (4) a fourth extension extended the project by three months (from December 31, 2018 to March 31, 2019); and the (5) fourth AF extended the Closing Date of the project by 9 months (from March 31, 2019 to December 31,2019). If approved, the proposed six-month extension until June 30, 2020 would result in a cumulative extension of 67 months from the original Closing Date, thus requiring Regional Vice President approval. With this extension, the project will be 8 years and 9 months up to June 30, 2020. 8. The World Bank Task Team confirms that the requirements of the World Bank Investment Project Financing Policy regarding closing dates are met, specifically: (i) project objectives continue to be achievable; (ii) progress in terms of Project Development Objectives remains Satisfactory while Implementation Progress is Moderately Satisfactory; (iii) the World Bank and the Recipient have agreed on key actions such as dissemination of updated Project Implementation Manual, application of new RBF prices, counter-verification of RBF results, implementation of consultancy to develop Continuous Quality Improvement framework and provide quality assurance support to the MOHCC, and development of standard operating procedures for District Steering Committees and Health Center Committees that will be undertaken by the Borrower to complete the remaining project activities based on a schedule that takes into account time that will be required for further consultations, reviews, and capacity building; and (iv) there are no outstanding audits or interim financial reports. 9. In its October 11, 2019 letter, the Government also requested for a reallocation of grant proceeds from Category 2 (Payments under Results- based Contracts, Vouchers and Operating Costs under Component 1.b or the Urban Results-Based Financing) to Categories 3 (Goods, Non-consulting Services, Consulting Services, Training and Workshops and Operating Costs under Component 2) and 4 (Monitoring, Documentation and Verification of Results under Performance Based Contracts under Component 3). Savings of 26 percent in Category 2 were due to lower procurement cost of program supplies and updated underlying assumptions for monetary support. These savings are proposed to be allocated to Category 3 (resulting in an increase of 7 percent from US$1,600,000 to US$1,718,998) to cover additional staff and office costs including the needed RBF Finance Officer to be seconded to the MOHCC Program Coordination Unit to support the management of performance based contracts and Category 4 resulting in an increase in 36 percent from US$300,000 to US$ 542,830 to cover mainly Provincial RBF officers seconded to the MOHCC Program Coordination Unit to continue to support the institutionalization process and implementation of remaining project activities such as monitoring and verification until June 30, 2020, while the Government of Zimbabwe is in the process of establishing civil staff positions for these officers. II. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications TF-10748 Closed 31-Jul-2014 17-Dec-2014 The World Bank Health Sector Development Support Project (P125229) 31-Mar-2016, 28-Feb- TF-15111 Closed 30-Oct-2015 2017 TF-A1598 Closed 28-Feb-2017 30-Jan-2018 31-Dec-2018, 31- TF-A5311 Effective 30-Jun-2018 Mar-2019, 31-Dec- 2019 TF-A9037 Effective 31-Dec-2019 30-Jun-2020 30-Oct-2020 REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Current Current Actuals + Proposed Disbursement % Ln/Cr/TF Expenditure Allocation Committed Allocation (Type Total) Category Current Proposed TF-A9037- Pmts undr 001 RBC,Vchr,OC Pt 1,000,000.00 58,243.53 738,172.00 100.00 100.00 Currency: A(II) USD Gds,wkshops,No nCS,CS,Tg,OC Pt 1,600,000.00 407,790.17 1,718,998.00 100.00 100.00 B Mntg,Docmt,Ver 400,000.00 160,534.09 542,830.00 100.00 100.00 if of RBC Pt C Total 3,000,000.00 626,567.79 3,000,000.00