The World Bank Sri Lanka: Primary Health Care System Strengthening Project (P163721) REPORT NO.: RES58639 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SRI LANKA: PRIMARY HEALTH CARE SYSTEM STRENGTHENING PROJECT APPROVED ON JUNE 27, 2018 TO DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA HEALTH, NUTRITION & POPULATION SOUTH ASIA Regional Vice President: Martin Raiser Country Director: Faris H. Hadad-Zervos Regional Director: Nicole Klingen Practice Manager/Manager: Aparnaa Somanathan Task Team Leader(s): Deepika Eranjanie Attygalle, Bushra Binte Alam The World Bank Sri Lanka: Primary Health Care System Strengthening Project (P163721) I. BASIC DATA Product Information Project ID Financing Instrument P163721 Investment Project Financing Original EA Category Current EA Category Not Required (C) Not Required (C) Approval Date Current Closing Date 27-Jun-2018 31-Dec-2023 Organizations Borrower Responsible Agency Democratic Socialist Republic of Sri Lanka Ministry of Health, Nutrition and Indigenous Medicine Project Development Objective (PDO) Original PDO The project development objective is to increase the utilization and quality of primary health care services, with an emphasis on detection and management of non-communicable diseases in high-risk population groups, in selected areas of the country. Current PDO The project development objective is to increase the utilization and quality of primary health care services, with an emphasis on detection and management of non-communicable diseases in high-risk population groups, in selected areas of the country and to provide immediate and effective response to an Eligible Crisis or Health Emergency. Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-88780 27-Jun-2018 23-Jan-2019 23-Jan-2019 31-Dec-2023 200.00 137.07 62.93 The World Bank Sri Lanka: Primary Health Care System Strengthening Project (P163721) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES 1. This Project Paper seeks the Country Director’s approval for extension of closing date by six months for the Primary Health Care Systems Strengthening Project (PSSP) (Loan No. 8878-LK) from December 31, 2023 to June 30, 2024, as per the Department of External Resources (ERD), Government of Sri Lanka (GoSL) request via letter number ERD/WB/PSSP Vol III dated November 21, 2023. 2. Background: The US$200 million PSSP was approved by the World Bank Board of Executive Directors on June 27, 2018 with an IBRD financing of US$200 million. It became effective on January 23, 2019 with a closing date of December 31, 2023. 3. PSSP has made significant progress within five years of implementation despite the challenges caused by the COVID-19 pandemic and the ongoing economic crisis in the country. The economic crisis has led to shortages of essential food and medicines. This hampered the provision of health services in many parts of the country which continues even today. 4. Based on the request from the Government of Sri Lanka (GoSL), the project was restructured on June 17, 2020 to trigger the activation of the Contingent Emergency Response Component (CERC) and re-allocate funds from Component 2 to a common CERC pool created to support the multi-sectoral response to the COVID-19 pandemic. All planned activities under the CERC have been completed and the CERC was closed on March 31, 2023. The project underwent a second restructuring in June 2022 wherein the results framework of the project was adjusted to refine the operational definition of DLI 3 (Number of PMCIs that have the required capabilities for providing comprehensive and quality care) stated in the verification protocols and to adjust the target of a non-DLI indicator (Percentage of schools implementing health-promoting programs), implementation of which was impacted due to the pandemic. Further, the restructuring added a new intermediate result indicator to reflect the investments made under the project to strengthen the emergency COVID response capacity at PMCIs. On November 21, 2023, the World Bank received a third restructuring request from the Department of External Resources (ERD), GoSL, for a 6-month extension of the closing date until June 30, 2024. The request proposes to continue the ongoing interventions to meet the pending project development objective (PDO) and the intermediate result (IR) indicators that were delayed due to COVID-19 pandemic and subsequent economic setback experienced by the country. 5. Implementation Status: The Project is currently rated as “Moderately Satisfactory” for both the PDO achievement and Implementation Progress ratings. As of November 29, 2023, the project has disbursed 68.54 percent (US$137.07 million). A total of US$125.11 million has been disbursed under Component 1 (Implementation of the Primary Health Care (PHC) System Reorganization and Strengthening Strategies), US$3.65 million under Component 2 (Project Implementation Support and Innovation Grants), and US$8.94 million under the CERC. The Project has disbursed an additional US$34.02 million (of the balance US$ 62.93 million) post the verification process in November 2023. 6. Targets for three out of four PDO indicators have been achieved. DLI 8.1 on cervical cancer screening and DLI 8.2 on the study on the quality of cancer screening have been completed. DLR 9.1 on noncommunicable disease (NCD) screening and registration has been achieved and the target has been exceeded. DLR 9.2 on the study on the quality of NCD screening has been completed; DLR 3.1 and DLR 3.3 on the situation analysis and gap analysis of PMCI capabilities have been completed. DLI 3.2 on the availability of minimum capabilities at PMCI has been partially completed. In addition, the project has met 23 out of 30 IR indicators. The pending 7 IR indicators are expected to be met by the end The World Bank Sri Lanka: Primary Health Care System Strengthening Project (P163721) of the project (availability of emergency treatment unit, training of medical officers on NCD, PMCIs with community engagement committees, schools implementing health promotion programs, release of funds from treasury and PMCIs connected with MSMIS). 7. For the pending PDO and IR indicators, PMU has proposed mitigation measures to meet the targets during the proposed extension period. For example, to address the human resource shortages at PMCIs, as new cadre positions for PMCIs will not be approved, the MoH and provincial authorities have confirmed that Medical Officers (MO) and Nursing Officers (NO) within existing cadre positions will be released and reassigned to fill the gaps at PMCIs. Regarding the shortages of essential drugs, the MoH has confirmed that the drugs required for PMCIs have already been ordered and delivery is expected by March 2024. Similarly, an action plan has been developed to connect the remaining PMCIs to the Swastha system and mechanisms have been proposed to resolve the connectivity issues faced by some PMCIs. 8. Under Component 1, the Ministry of Health (MoH) has endorsed the Primary Healthcare policies and standards; the MoH and the provinces have adopted the community engagement guidelines; and the clinical protocols for selected health conditions have been completed. Further, the procurement guidelines and benchmarks and Grievance Redressal Mechanism (GRM) has been completed. 57 percent (target 55) of PMCIs have transport facilities to dispatch laboratory samples to apex laboratories, 58 percent (target 55) of PMCIs have capabilities for the primary detection and management of Dengue, 60 percent (target 55) of PMCIs provide a standard primary oral health care package, 69 percent (target 50) have basic emergency care facilities, and 53 percent (target 45) have capabilities for Tuberculosis screening and referral. 75 percent (target 35) of MOs of health areas offer mental health services in at least one PMCI and 33 percent (target 30) of schools implement health promotion programs. Under Component 2, 34 out of 35 capacity-building programs have been completed. Eight innovation grants out of 9 have been completed and findings have been disseminated. 9. The last implementation support mission (in November 2023) has maintained the PDO rating at “Moderately Satisfactory”, and Implementation Progress (IP) rating as “Satisfactory”. Further, it notes that there are no overdue IUFRs or audit reports. 10. Rationale for restructuring: PSSP has made significant progress over five years of implementation and has been ontrack to achieve its objectives despite the volatile and challenging socio-economic environment. This affected the implementation of the project activities, thus impacting the achievement of DLIs and the disbursements under the project. The PMU is confident that the achievement gaps in the DLIs can be met during the proposed extension period. For this, PMU is working closely with the health authorities to prepare a detailed action plan with mitigation measures identified for each of the lagging DLIs. 11. Thus, the restructuring proposes to revise the closing date of the project from December 31, 2023 to June 30, 2024. There will be no change to the results framework and the PDO. The verification protocols will also remain the same, and the remainder of the FY 22 verification is expected to commence in March/April 2024. III. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications The World Bank Sri Lanka: Primary Health Care System Strengthening Project (P163721) IBRD-88780 Effective 31-Dec-2023 28-Jun-2024 28-Oct-2024