The World Bank Transforming Health Systems for Universal Care (P152394) REPORT NO.: RES48707 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF TRANSFORMING HEALTH SYSTEMS FOR UNIVERSAL CARE APPROVED ON JUNE 15, 2016 TO REPUBLIC OF KENYA HEALTH, NUTRITION & POPULATION EASTERN AND SOUTHERN AFRICA Regional Vice President: Victoria Kwakwa Country Director: Keith E. Hansen Regional Director: Amit Dar Practice Manager/Manager: Francisca Ayodeji Akala Task Team Leader(s): Toni Lee Kuguru, Jane Chuma The World Bank Transforming Health Systems for Universal Care (P152394) I. BASIC DATA Product Information Project ID Financing Instrument P152394 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 15-Jun-2016 30-Sep-2023 Organizations Borrower Responsible Agency Republic of Kenya Ministry of Health Project Development Objective (PDO) Original PDO The project development objective is to improve utilization and quality of primary health care services with a focus on reproductive, maternal, newborn, child, and adolescent health services. Current PDO The project development objective is to improve utilization and quality of primary health care services with a focus on reproductive, maternal, newborn, child and adolescent health services and to provide immediate and effective response to an eligible crisis or emergency . Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-58360 15-Jun-2016 04-Jul-2016 29-Sep-2016 30-Sep-2023 150.00 140.91 6.94 TF-A2561 15-Jun-2016 04-Jul-2016 29-Sep-2016 30-Jun-2023 40.00 31.88 8.12 TF-A2792 15-Jun-2016 04-Jul-2016 04-Jul-2016 31-May-2022 .95 .95 0 The World Bank Transforming Health Systems for Universal Care (P152394) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES Summary of Project Status 1. The Transforming Health Systems for Universal Care Project (THS-UCP) (P152394) financing is comprised of: (a) an International Development Association (IDA) credit for an equivalent of US$150.0 million (Credit IDA-5836-KE) approved on June 15, 2016; (b) a US$40.0 million grant from the Global Financing Facility (GFF) Trust Fund (TF0A2561) approved on April 27, 2016; and (c) a US$1.1 million grant from the Japan Policy and Human Resources Development (PHRD) Trust Fund (TF0A2792) approved on June 7, 2016. The project became effective on September 29, 2016 and was restructured on March 29, 2021 to extend the closing date to September 30, 2023. 2. The Project Development Objective (PDO) is to improve utilization and quality of primary health care services with a focus on reproductive, maternal, newborn, child, and adolescent health services and to provide immediate and effective response to an eligible crisis or emergency. The project has 4 components listed below: (a) Component 1. Improving Primary Health Care Results (US$141.0M) (b) Component 2. Strengthening Institutional Capacity (US$28.7M) (c) Component 3. Cross-County and Intergovernmental Collaboration and Project Management (US$ 11.4M) (d) Component 4. Contingency Emergency Response Component (CERC) (US$ 10.0M) 3. Restructurings: There have been five Level II restructurings for the Project. These are summarized below: (a) June 24, 2019 (Report No: RES32133): The project scope was revised to address implementation bottlenecks and align activities to the Government of Kenya’s (GoK) Universal Health Coverage (UHC) agenda. (b) January 31, 2020 (Report No. RES38960): A CERC was added with an allocation of US$1.0 million. (c) October 21, 2020 (Report No: RES40851): The GoK activated the CERC in the amount of US$10.0 million on March 18, 2020, to support the implementation of the National COVID-19 Contingency Plan. (d) March 26, 2021 (Report No: RES45267): The closing date for the IDA credit was extended from September 30, 2021, to September 30, 2023. (e) September 15, 2021 (Report No: RES47655): The closing dates of the PHRD grant and GFF grant were extended to May 31, 2022, and June 30, 2023 respectively, and resources were reallocated across disbursement categories to facilitate accelerated implementation of civil registration activities. 4. The project is on track to achieve the PDO. Out of seven PDO level indicators, four have met/surpassed the targets. The remaining three indicators are partially achieved/on track to achieve the target (Aide Memoire - June The World Bank Transforming Health Systems for Universal Care (P152394) 2022 implementation support mission). The progress towards implementation is Moderately Satisfactory (ISR Seq No 15 dated April 14, 2023). 5. As of April 20, 2023, the project has disbursed US$173.7 million, 92.0 percent of the total financing: US$140.9 million out of US$150.0 million from the IDA credit, US$31.9 million out of US$40.0 million from the GFF grant and US$0.95 million out of US$1.10 million from the PHRD grant. A total of US$15.1 million is undisbursed (US$6.9 million IDA and US$8.1 million TF) and will not be utilized by the project closure. 6. The GFF grant and IDA credit co-finance two disbursement categories 1A and 2A. The current distribution of percentages of expenditures for disbursement categories 1A and 2A are as follows: • GFF grant: 21 percent (Disbursement Category 1A) and 48 percent (Disbursement Category 2A) • IDA credit: 79 percent (Disbursement Category 1A) and 52 percent (Disbursement Category 2A) 7. As of April 20, 2023, the GFF grant has disbursed a total of US$31.9 million: US$15.4 million under Category 1A and US$16.5 million under Category 2A. Suboptimal disbursement of the GFF grant vis a vis the grant closing date is due to: (a) varying the IDA credit ceiling while not varying the GFF grant ceiling resulting in withdrawing from the IDA credit and under withdrawing from the GFF grant (Disbursement Category 1A); and (b) lower disbursement against the overall project workplan related to low county absorption (Disbursement Category 1A) and savings and reprogramming (Disbursement Category 2A). 8. With the advancement in digital health, wide mobile network coverage, and increased use of smartphones, the Ministry of Health (MOH) developed the National Community Health Digitization Strategy and subsequently developed a mobile application in 2021, the electronic Community Health Information System (e-CHIS), for Community Health Volunteers (CHVs) to document and report household health data. Quality community health data is essential for the planning, resource allocation and monitoring progress towards UHC. The e-CHIS has been piloted in 2 counties (Kisumu and Migori) and has been shown to be user-friendly and improve the quality of community health data. Currently, over 3,000 CHVs in the 2 counties are using the e-CHIS in their routine community health work. The MOH plans to roll out the use of the e-CHIS application to 90,000 CHVs in all 47 counties starting in May 2023. The national scale-up of e-CHIS will require capacity building of the CHVs as well as the provision of complete CHVs kits (equipment and data collection devices) for household health data collection. To ensure availability of complete CHV kits, the Government has proposed that the THS-UCP support focuses on provision of data collection devices to complement the procurement of equipment already supported by other donors. Additionally, the THS-UCP will support sensitization, training, and monitoring activities. Summary of Proposed Changes 9. On October 28, 2022, the GoK submitted a restructuring request (Ref No: EA/FA240/116’D’ (53)) to revise the percentages of expenditures for disbursement categories 1A and 2A to ensure that the GFF grant will be fully utilized before the GFF grant closing date of June 30, 2023. Another restructuring request was submitted on May 5, 2023 (Ref No: EA/FA240/116’D’(64)) to re-allocate funds across disbursement categories to support the nationwide scale-up of the e-CHIS. Revision to disbursement categories 1A and 2A percentages The World Bank Transforming Health Systems for Universal Care (P152394) 10. The revision is being proposed to ensure that the GFF grant will be fully utilized before the GFF grant closing date of June 30, 2023. Specifically, the GoK proposes the following changes to the disbursement categories percentages which will be effective from July 1, 2021: (i) GFF grant (revise to “up to 100 percent as per the approved annual work plan”); (ii) IDA credit (revise to “100 percent after TF0A2561 is fully disbursed”). Re-allocation across disbursement categories 11. The revision is being proposed to provide support for the scale-up of the e-CHIS to all 47 counties. This support is aligned with the PDO, more specifically to Component 2, which aims to strengthen institutional capacity to improve utilization and quality of primary health care services. Specifically, the GoK proposes: (i) reallocating US$8.1 million from Component 1 (disbursement category 1(a)) to Component 2 (disbursement category 2(a)); and (ii) reallocating US$3.0 million from Component 3 (disbursement category 3) to Component 2 (disbursement category 2(a). III. DETAILED CHANGES REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Current Current Actuals + Proposed Disbursement % Ln/Cr/TF Expenditure Allocation Committed Allocation (Type Total) Category Current Proposed IDA-58360- Performance 67,474,400.00 34,005,328.18 61,398,018.00 79.00 79 001 Grants, part A1 Currency: Performance XDR 436,930.00 0.00 436,930.00 100.00 100.00 Grants, part B2 GDS,NCS,CS,TRG ,OC,A2,B1 excpt 12,258,270.00 11,179,891.39 20,585,164.00 52.00 52 B1bi GDS,NCS,CS,TRG 0.00 0.00 0.00 0.10 0 ,OC,B1bi Goods under Part B1(c) (iv) of 9,880,000.00 0.00 9,880,000.00 100.00 100.00 the Project GDS,WKS,NCS,C 8,470,000.00 4,438,111.30 6,219,488.00 100.00 100.00 S,TRG,OC part C Emergency 7,380,400.00 3,166,871.11 7,380,400.00 100.00 100.00 Expenditures The World Bank Transforming Health Systems for Universal Care (P152394) Total 105,900,000.00 52,790,201.98 105,900,000.00 TF-A2561- Performance 25,000,000.00 11,466,267.31 25,000,000.00 21.00 100 001 Grants, part A1 Currency: Performance USD 0.00 0.00 0.00 19.00 19.00 Grants, part B2 GDS,NCS,CS,TRG ,OC,A2,B1 excpt 15,000,000.00 13,023,162.68 15,000,000.00 48.00 100 B1bi GDS,NCS,CS,TRG 0.00 0.00 0.00 46.00 0 ,OC,B1bi GDS,WKS,NCS,C 0.00 0.00 0.00 0.10 0 S,TRG,OC part C Total 40,000,000.00 24,489,429.99 40,000,000.00