The World Bank Health Sector Development Support Project (P125229) REPORT NO.: RES35444 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: Paul Noumba Um Senior Global Practice Director: Timothy Grant Evans Practice Manager/Manager: Magnus Lindelow Task Team Leader: 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-2018 Organizations Borrower Responsible Agency Republic of Zimbabwe Stichting Cordaid,Ministry of Health and Child Care 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 (PDO) is to increase coverage of key maternal and child health interventions in targeted rural and urban districts consistent with the Recipient's ongoing health initiatives. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-A5311 21-Jul-2017 26-Jul-2017 24-Oct-2017 31-Dec-2018 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 TF-10748 27-Sep-2011 27-Sep-2011 08-Dec-2011 31-Jul-2014 15.00 15.00 0 The World Bank Health Sector Development Support Project (P125229) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES 1. The Health Sector Development Support Project [P125229] of US$50 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; and a third AF grant [TF-A5311] of US$5 million approved in July 2017. 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 supports the Government of Zimbabwe to increase coverage and quality of maternal and child services in the country. The third AF that became effective on October 24, 2017 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 RBF pilot launched in two rural districts and subsequently scaled up to 16 additional 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 introduced co-financing that uses the same funds flow mechanism as the World Bank (WB) 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 Global Vaccine Alliance. The United Nations International Children’s Emergency Fund is the Health Development Fund Administrator] are funding an additional 43 rural districts not covered by the World Bank’s funding using the design initiated under the World Bank project. In addition, the project is supporting an innovative results-based 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 on key actions since the July 2018 Implementation Status Report, the Government has made some progress with implementing its results-based financing institutionalization plan. Aside from an increase in Government financing for performance-based payments (subsidies) in the 18 rural districts supported by The World Bank Health Sector Development Support Project (P125229) the Health Sector Development Support Project, the Ministry of Health and Child Care has begun to manage performance-based contracts with participating facilities in these districts. The Ministry of Health and Child Care aims to progressively manage more performance-based contracts in more districts, eventually covering all districts by 2020. In addition, the results-based financing database system upgrade has advanced with the new version linked with the Quantity and Quality data collection forms. Dashboards and risk-based categorization have been also developed. Remaining tasks to be completed are related to documenting steps taken and configurations made during the upgrade and source codes of all applications that feed data into the new system. Electronic invoicing would also need to be fine-tuned to be user-friendly and synchronized in real time with the National Health Information System (DHIS2). Provincial and district level trainings have been conducted and will be completed after the results-based financing data base system is finalized. Moreover, after some delays, capacity building of the new counter-verification agency (Health Professionals Association) is moving forward with the Ministry of Health and Child Care and the Project Implementing Entity using findings of the capacity assessment undertaken by the University of Zimbabwe to adjust the counter-verification training curriculum based on the Health Professional Association’s staffing. 5. The Ministry of Finance and Economic Development recently allocated US$7.2 million to the health sector to support the results-based financing approach. However, a financing gap of US$3.0 million remained. As a result, the Government requested the World Bank for additional financing to maximize development effectiveness and address the financing gap to support results-based financing implementation and institutionalization, and the urban voucher scheme. In response to the Government’s request, a fourth AF is being prepared. Since the processing of the fourth AF will only be completed after the closing date of the third AF, an extension would be needed from December 31, 2018 to March 31, 2019 to allow sufficient time to complete the approval and effectiveness of the fourth AF. 6. The proposed closing date extension will also allow for the upgrading of the results-based financing data base system and related training to be completed. The Government of Zimbabwe’s request to extend the closing date of the third AF was received on December 14, 2018. 7. The project has been extended five times: (1) The first AF I 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 (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); and (3) the third AF was extended by 6 months (from June 30, 2018 to December 31, 2018). If approved, the proposed three-month extension would result in a cumulative extension of 52 months from the original closing date, thus requiring Regional Vice President approval. With this extension, the project will be seven years and six months old at the time of the proposed March 31, 2019 closing date. 8. The World Bank Task Team will update the Results Framework targets and closing dates in the Interim Status Report if the proposed closing date extension is approved. 9. The World Bank Task Team confirms that the requirements of the World Bank Investment Project Financing Policy regarding closing dates specifically: (i) the Project objectives continue to be achievable; (ii) the Project Development Objectives and Implementation Progress remain Satisfactory; (iii) the World Bank and the Recipient have agreed on actions that will be undertaken by the Borrower to complete the remaining Project activities; and (iv) there are no outstanding audits or interim financial reports. 10. In its December 14, 2018 letter, the Government also requested for a reallocation of grant proceeds from Categories One (Payments under Result-based Contracts under Component 1.a or the Rural Results-Based Financing) The World Bank Health Sector Development Support Project (P125229) and Two (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 15 percent from Category 1 were due to the revised performance-based subsidy structure and pricing that became effective in 2017 and because the Government had financed a larger share of rural RBF subsidies than initially estimated relative to the World Bank grant. With regard to Category 2, savings of 15 percent were due to slightly lower than projected urban voucher sales and redemption. Savings from these two Categories is being proposed to be allocated to Category 3 (resulting in an increase of 21 percent from US$1,200,000 to US$1,452,655) to cover the completion of the results-based financing system upgrade and other related training costs and Category 4, resulting in an increase of 87 percent from US$300,000 to US$560,275 to cover monitoring and verification expenses and vehicle maintenance costs resulting from extending the closing date from June 30, 2018 to the current closing date of December 31, 2018 and estimated costs until March 31, 2019 if the extension is ap proved. The proposed reallocation will support the implementation of the agreed work program. III. 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 31-Mar-2016, 28-Feb- TF-15111 Closed 30-Oct-2015 2017 TF-A1598 Closed 28-Feb-2017 30-Jan-2018 TF-A5311 Effective 30-Jun-2018 31-Dec-2018 31-Mar-2019 31-Jul-2019 REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Current Current Actuals + Proposed Disbursement % Ln/Cr/TF Expenditure Allocation Committed Allocation (Type Total) Category Current Proposed TF-A5311- Results based 3,000,000.00 2,547,386.64 2,562,387.00 100.00 100.00 001 cntrcts -PT A1 Currency: The World Bank Health Sector Development Support Project (P125229) USD Pymts under RBC vchrs& Op 500,000.00 350,511.22 424,683.00 100.00 100.00 Cst-PT A2 Gds,Svcs,Trg&W kshps,Op Cst - 1,200,000.00 1,114,674.24 1,452,655.00 100.00 100.00 PTB&C Mntrng,Dcmtnt, Verifictin of 300,000.00 336,046.09 560,275.00 100.00 100.00 RBC-PTC Total 5,000,000.00 4,348,618.19 5,000,000.00