Document of The World Bank Report No: 25034-ZA PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT IN THE AMOUNT OF SDR 33.7 MILLION US$ 42 MILLION (EQUIVALENT) TO THE REPUBLIC OF ZAMBIA FOR THE ZAMBIA NATIONAL RESPONSE TO HIV/AIDS (ZANARA) IN SUPPORT OF THE SECOND PHASE OF THE MULTI-COUNTRY AIDS PROGRAM FOR AFRICA (MAP 2) (APL) December 11, 2002 Human Development 1 Country Department 3 Africa Region CURRENCY EQUIVALENTS (Exchange Rate Effective March 11, 2002) Currency Unit = Zambian Kwacha ZMK 3988 = US$1.00 US$0.000251696 = ZMK 1 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS ACTafrica Aids campaign Team for Africa ADB African Development Bank AG Auditor General ART Anti-Retroviral Therapy CAS Country Assistance Strategy CBI Community based Investments CBO Church based Organization CQ Consultants' Qualifications CRAIDS Community Response to HIV/AIDS DATF Distnct AIDS Task Force DffD Department for Intemational Development (United Kingdom) DGA Development Grant Agreement DIF District Investment Fund EC European Commission FMAPM Financial Management & Accounting Procedures Manual FMR Financial Monitoring Report FMS Financial Management System GDP Gross Domestic Product GPN General Procurement Notice GRZ Government of Zambia GTZ Deutsch Gesellschaft fuer Technische Zusammenarbeit (German Technical Cooperation) HAART Highly Active Anti-Retroviral Treatment HCC Home based Care & Counseling HIPC Highly Indebted Poor Countries HIV/AIDS Human Immunodeficiency Virus / Acquired Immune Deficiency Syndrome IAPSO Inter-Agency Procurement Services Office (United Nations IC Individual Consulting ICB Intemational Competitive Bidding IDA Intemational Development Association IEC Information, Education & Communication JFC Joint Financing AIDS Committee LCMS Living Conditions Monitorng Survey M&E Monitoring & Evaluation MAP Multi-country H1V/AIDS Program MOE Ministry of Education MoFNP Ministry of Finance & National Planning MoH Ministry of Health MTCT Mother to Child Transmission NAC National HIV/AIDS/STD/TB Council NAPCP National AIDS Prevention & Control Program NASF National HIV/AIDS/STD/TB Strategic Framework (2001-2003) NGO Non-governmental Organization OAG Office of the Auditor General 01 Opportunistic Infections OM Operational Manual OPLA Organizations of People Living with HIV/AIDS OVC Orphans & Vulnerable Children PAD Project Appraisal Document PAU Programme Administration Unit PEP Post Exposure Prophylaxis PIM Project Implementation Manual PIP Project Implementation Plan PLHA Persons Living with HIV/AIDS PMTCT Prevention of Mother to Child Transmnission PPF Project Preparation Facility PRGF Poverty Reduction & Growth Facility PRSP Poverty Reduction Strategy Paper QCBS Quality & Cost based Selection RM Resource Mobilization SDR Standard Drawing Rights SOE Statements of Expenditure STD Sexually Transmitted Diseases TB Tuberculosis TWG Technical Working Groups UNAIDS United Nations Joint Programme on HIV/AIDS UNDP United Nations Development Business UNDP United Nations Development Programme UNFPA United Nations Population Fund UNIHCR United Nations High Commission for Refugees UNICEF United Nations Childrens' Fund USAID United States Agency for Intemational Development USD U.S. Dollars VCT Voluntary Counseling & Testing WHO World Health Organization ZAMSIF Zambia Social Investment Fund ZANARA Zambia National Response to HIV/AIDS ZDHS Zambia Demographic Health Survey (1998) ZMK Zambian Kwacha Vice President: Pamela Cox (acting) Country Director: Yaw Ansu Sector Manager: Dzingai Mutumbuka Task Team Leader: Albertus Voetberg ZAMBIA ZAMBIA NATIONAL RESPONSE TO HIV/AIDS (ZANARA) CONTENTS A. Program Purpose and Project Development Objective Page 1. Program purpose and program phasing 3 2. Project development objective 3 3. Key performance indicators 4 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 5 2. Main sector issues and Government strategy 5 3. Sector issues to be addressed by the project and strategic choices 9 4. Program description and performance triggers for subsequent loans 12 C. Program and Project Description Summary 1. Project components 12 2. Key policy and institutional reforms supported by the project 15 3. Benefits and target population 15 4. Institutional and implementation arrangements 16 D. Project Rationale 1. Project alternatives considered and reasons for rejection 25 2. Major related projects financed by the Bank and other development agencies 26 3. Lessons learned and reflected in the project design 27 4. Indications of borrower commitment and ownership 30 5. Value added of Bank support in this project 30 E. Summnary Project Analysis 1. Economic 31 2. Financial 32 3. Technical 32 4. Institutional 33 5. Environmental 34 6. Social 35 7. Safeguard Policies 37 F. Sustainability and Risks 1. Sustainability 38 2. Critical risks 38 3. Possible controversial aspects 40 G. Main Grant Conditions 1. Effectiveness Condition 40 2. Other 41 H. Readiness for Implementation 41 I. Compliance with Bank Policies 41 Annexes Annex 1: Project Design Summary 43 Annex 2: Detailed Project Description 47 Annex 3: Estimated Project Costs 55 Annex 4: Monitoring and Evaluation 56 Annex 5: Financial Summary 59 Annex 6: Procurement and Disbursement Arrangements 60 Annex 7: Project Processing Schedule 73 Annex 8: Documents in the Project File 74 Annex 9: Statement of Loans and Credits 75 Annex 10: Country at a Glance 76 Annex 11: Supervision Strategy 78 Annex 12: CRAIDS Project Implementation Manual (Overview) 82 MAP(S) IBRD 26792R ZAMBIA Zambia National Response to HIV/AIDS (ZANARA) Project Appraisal Document Africa Regional Office AFTH1 Date: December 11, 2002 Team Leader: Albertus Voetberg Sector Manager/Director: Dzingai B. Mutumbuka Sector(s): Health (77%), Central government Country Manager/Director: Yaw Ansu administration (11%), Other social services (9%), Project ID: P003248 Sub-national government administration (3%) Lending Instrument: Adaptable Program Loan (APL) Theme(s): Fighting communicable diseases (P), Civic engagement, participation and community driven development (P), Social risk mitigation (S), Gender (S) Ji !1t '* [1t; A , ' , ~~Estimated'j <"rc~,1l,v1 ,APL indicative Flhaindh9I,Plai, ' ' ldolementa'tion, Period Borrowoer?,:-, ._____ . ^,,,,,(Binkf'Vm). . IBRD Others Total Commitment Closing US$ m % US$ m US$ m Date Date APL I Loan/ Credit = _ Total 0.00 0.00 0.00 l [ Loan [] Credit [X] Grant [ ] Guarantee [ Other: For Loans/Credits/Others: Amount (US$m): 42 Flia0qln Pl1an,.5,US$m): Source, Local Foreign,,, . Tptal,, BORROWER/RECIPIENT 4.00 0.00 4.00 IDA GRANT FOR HIV/AIDS 32.80 9.20 42.00 Total: 36.80 9.20 46.00 Borrower/Recipient: GOVERNMENT OF THE REPUBLIC OF ZAMBIA Responsible agency: MINISTRY OF FINANCE AND NATIONAL PLANNING Address: P.O. Box 50062 Ridgeway, 15101 Chimanga Rd., Lusaka, Zambia Contact Person: Mr Francis Mbewe Tel: 260 1 250544 Fax: 260 1 251078 Email: finm@zamnet.zm Other Agency(ies): Zambia Social Investment Fund (ZAMSIF) Address: P 0 Box 31559, Kambendekela House, Dedan Kimathi Road, Lusaka, Zambia Contact Person: Mr. Cosmas Mambo, Programme Director Tel: 260 1 226201/226207 Fax: 260 1 226195 Email: cosmas@zamsif.org.zm National HIV/AIDS/STIITB Council (NAC) Address: 315 Independence Ave., P.O. Box 38718, Lusaka, Zambia Contact Person: Dr. Bolla, Director-General Tel: 260 1 255044 / 255092 Fax: 260 1 253881 Email: Aidsec@zamnet.zm Estimated Disbursements ( Bank FYIUS$m): FY ; -2003 2004 2005 -2006 2008 Annual 6.00 9.00 10.00 10.00 7.00 Cumulative 6.00 15.00 25.00 35.00 42.00 Project implementation period: 5 years Expected effectiveness date: 02/28/2003 Expected closing date: 02/28/2008 OCS IPL PAD F< r. h 202 -2 - A. Program Purpose and Project Development Objective 1. Program purpose and program phasing: 2. Project development objective: (see Annex 1) This project is a country program within the context of The Second Multi-Country HIVIAIDS Program for the Africa Region [(MAP2) (APL) (report no. P7497 AFR)], which was approved on February 7, 2002. Reference is made to Section HII, Part A. Program Objectives and Part B. Program Description of the report. Only key features are highlighted below which are relevant to the Zambia National Response to HIV/AIDS (ZANARA) Project and to the HIV/AIDS situation in Zambia. Zambia meets all the eligibility criteria to qualify for participation in the MAP, as summarized below: MAP eligibility for country participation How eligibility criteria were met by Zambia Satisfactory evidence of a strategic approach to The National Strategic Framework on HIV/AIDS HIV/AIDS. This would typically be demonstrated by a elaborated in consultative manner with broad coherent national, multi-sectoral strategy and action plan involvement and support from all major for HIV/AIDS prevention, care and treatment which has stakeholders. The final version of the Strategic been developed through a participatory approach using Framework was officially presented at the social assessment techniques. It could also be November 21, 2000 Roundtable Discussion on demonstrated by having a participatory strategic planning HIV/AIDS. process underway with a road map and timetable. A high level coordinating body such as a national The Government has established the National HIV/AIDS council or equivalent has been established to HIV/AIDS/STD/TB Council; the Secretariat is being oversee the implementation of the strategy and action established and recruitment is wel advanced. Broad plan. This body should encompass broad representation representation of the public and private sector, of key stakeholders, including persons living with including religious organizations, non-governmental HIV/AIDS. organizations (NGOs), the Network of People Living with HIV/AIDS, the business society, and other civil society organizations is assured. Government has agreed to use exceptional The Government has agreed to place project implementation arrangements to accelerate project administration function in the Ministry of Finance & implementation, such as channeling grant funds for National Planning (MOFNP), and program HIV/AIDS activities directly to communities, and administration for community organizations to an out-sourcing financial management and procurement existing social fund in order to enhance efficiency where necessary. and effectiveness, and to accelerate program implementation. Government has agreed to use and fund multiple The Project supports the implementation of the implementation agencies, especially community-based National Strategic Framework on and NGOs organizations. HIV/AIDS/STD/TB which hinges on the involvement and support of multiple implementing agencies from all sectors and layers of society. (a) Project purpose The project contributes to the partnership against HIV/AIDS in Zambia by supporting the Government's program as articulated in the Zambia National Strategic Framework on HIVIAIDS 2001-2003 (NASF). - 3 - The purpose of this program is to reduce the spread of HIV/AIDS, to mitigate the socio-econornic impact of the disease, and to increase access to care and support for people infected or affected by the HIV/AIDS epidemic in Zambia. The project is selective in the support it provides and focuses on the financing of high priority interventions for which significant funding gaps exist. The overall project is based on a new approach for addressing HIV/AIDS by supporting and strengthening community-based responses to the epidemic. The NASF of October 2000, is the reference document for both the program and the project. Further development of and amendments to this document are not unlikely as the multi-sectoral nature of Zambia's response to the epidemic evolves. (b) Project development objective The project development objective of the ZANARA project is to significantly increase access to, and use of HIV/AIDS prevention, care and impact mitigation programs with particular emphasis on vulnerable populations (e.g. youth, women of childbearing age, orphans, widows and widowers, child or women-headed households, people living with HIV/AIDS and other groups at increased risk of infection or being affected). The details of each sub-objective are given in Annex 1. 3. Key performance indicators: (see Annex 1) Ideally, incidence data on HIV/AIDS should be used to monitor its progression in the short term. However, the availability of useful incidence data for HIV is very limited in Zambia. Prevalence data are a partial substitute for monitoring the disease's impact, but are fraught with difficulties in showing significant changes over a short period. On balance, the best available indicator is the prevalence rate of LlfV among the age group 15-19 years since it is an impact indicator closer to the real incidence rate and also more likely to be responsive to any behavioral changes resulting from the interventions. While a more extensive list of indicators appears in the logical framework (Annex 1), the project will contribute to the goal of reducing the transmission of HIV in Zambia as described in the NASF and reflected in the Poverty Reduction Strategy Paper (PRSP), the Poverty Reduction and Growth Facility (PRGF) and Highly Indebted Poor Countries (HIPC) documents, and will be evaluated by the use of indicators outlined below. Baseline data for these indicators are mostly already available and all will be available by project effectiveness. Meanwhile, interim indicators will be agreed with the Government at project launch or shortly thereafter. (a) Input indicators 1. The number of HIV/AIDS prevention, care and impact mitigation community initiatives funded by 2008 2. The number and availability, in each district, of LILV counseling and testing services by 2008 3. The number of trainers of trainers trained by 2008 4. The number of community initiatives funded that specifically address gender issues 5. The percentage of public sector institutions (primary schools, secondary schools, universities and technical training institutions) with HIV/AIDS prevention education integrated into their curricula 6. The number of districts with functioning HIV Support groups 7. The number of technical guidelines produced and disseminated to care providers 8. The number of operational research studies on HIV prevention conducted and reported (b) Output indicators 1. Number of awareness activities conducted by line ministries 2. Number of peer educators and counselors in HIV/AIDS prevention and care trained 3. The percentage of ministries with budget line items for HIV/AIDS-related programs 4. The percentage of ministries budget for HIV/AIDS activities that are actually funded - 4- 5. The percentage of submitted proposals for community based activities funded by the project (c) Outcome indicators 1. Median age at first sex increased by one year among both males and females by 2008 2. Reported condom use at last sex encounter with non-regular partner increased from 30 to 45 % for males and from 17 to 30% for females by 2008 3. Percentage of teenagers aged 15-19 years who are mothers or pregnant with their first child reduced from 59% to 45% by 2008 4. Number of research activities focusing on gender 5. Primary school enrollment and completion rate among orphans and vulnerable children will have increased by 10% in beneficiary communities supported under Part(a) of the project by 2008 (d) Impact indicators 1. Reduced HIV prevalence rates among young people aged 15 to 19 years by 2008 2. Reduced HLV prevalence among antenatal women aged less than 20 years by 2008 3. The national adult HIV seroprevalence begins to decline by 2008 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: 19889 Date of latest CAS discussion: 11/17/99 The overall objective of the Bank's work in Zambia is to increase the income and living standards for the vast majority of Zambians who are poor. The short term objective of the last CAS is to sustain positive growth rates and show that economic reforms are beginning to bring tangible, measurable benefits to the Zambian people. Sadly, the current HIV epidemic will seriously undermine the achievement of both the short term as well as the longer term objectives. The last CAS explicitly stated that recent gains from years of policy reforms and the promise of sustainable growth and development may not be realized unless the HIV/AIDS epidemic is controlled. Due to the implication of this great threat to the country's long-term development, one of the main objectives of the Zambia Poverty Reduction Strategy Paper and Joint IMF/IDA Staff Assessment (Zambia PRSP, approved April 2002) is to incorporate the use of crosscutting policies for HIV/AIDS, gender and environment. This was further endorsed by the Board of Governors through their approval of the 13th replenishment for IDA in support of more aggressive poverty reduction strategies (approved September 2002). One of the key features of this resport is the expanded use of grants to finance HIV/AIDS programs and other emergency disasters in IDA countries. Under the IDA 13 guidelines, it is expected that such grants may finance up to 100 percent of national HIV/ADS projects/programs in IDA-only countries. Since Zambia is an IDA-only country, the ZANARA project qualifies for grant financing under this criterion. Subsequently, the main strategy of the forthcoming CAS (anticipated September 2003), will be to work in tandem with GRZ and its partners to support a multi-sectoral, multi-donor HIV/AIDS prevention and treatment program, as well as to strengthen related activities within the ongoing portfolio. 2. Main sector issues and Government strategy: (a) The HIV/AIDS situation in Zambia Zambia is one of the countries that has been strongly affected by the HIV/AIDS epidemic. With the first case reported in 1984, infection rates have increased rapidly to a level whereby 19-20 per cent of the -5 - adult population (15-49 years) was estimated to be HIV positive. The epidemic has since stabilized around that high prevalence rate (see Figure 1). Of the approximately 870,000 Zambians who are living with I-UV (by the end of 1999), 40,000 are children aged 0-14 years. Of particular concem is HIV prevalence among young women, with 17 percent of women aged 15-24 being infected versus 8 percent of men in the same age group, reflecting their specific vulnerability in sexual relationships. - 6 - Figure 1 Zambia: Estimated HIV Prevalence, Ages 15 to 49, 1992-1998 20 ~16 i 2 A. 4 0 1992 '993 1994 1995 1996 1997 1998 Promising trends in the HIV prevalence among pregnant women aged 15 to 19 are beginning to emerge. Studies have indicated and confirmed that the HIV infection rates among this particular group in four Lusaka sites have declined from 28 percent in 1993 to 15 percent in 1998. The reason for this welcome decline has been attributed to behavior change among the urban youth. More studies are however required to fully understand this phenomenon. The downward trend suggests that momentum is building for behavior changes that will impede HIV transmission among this age group. Such a momentum, however, should not give room for complacency because the prevalence rate is still high and may worsen. (b) The impact of the HIV/AIDS epidemic on Zambian society A relatively large number of impact studies have been carried out in Zambia, and elsewhere, documenting the details and extent of the impact the H1V/AIDS epidemic has on individuals infected or affected, their households, firms and businesses, whole sectors, and the economy. The overall conclusion that all productive efforts, whether applied to econornic activity, subsistence, or service delivery, are severely affected, is driven by the fact that HIV/AIDS affects mainly people in their most productive years. With the negative impact of HIV/AIDS on all aspects of development, it compromises all other measures intended to reduce poverty. Still worse, several studies have shown how effectively HIV/AIDS can drive households into poverty when their assets (e.g., livestock) are sold to cover the costs of medical care, or when the available labor force becomes insufficient to tend to the necessary agricultural activities. Measures to reduce poverty among already vulnerable groups are likely to fail in the current environment where HIV prevalence is high. Therefore, prevention and mitigation of HIV/AIDS is central to an effective poverty-reduction strategy, while poverty reduction in itself is needed to mitigate the socio-economic impact that the epidemic imposes on society. -7- Poverty provides the conditions for the spread of IV/AIDS. The impact of poverty on women drives them to adopt coping mechanisms that may include increased risk exposure (e.g., commercial sex). Poverty also limits the scope for long-term development prospects, thereby reducing the barriers for taking otherwise unacceptable risks. The limited access to formal education of this increasingly substantial cohort of children, particularly girls, may well provide fertile ground for poverty and increased risk of exposure to HIV. Of particular concern is the situation of vulnerable children in Zambia. The effects of poverty are especially felt among the children, and their suffering has been called Zambia's silent crisis, as much of it is contained in the confines of households and communities (Orphans and Vulnerable Children, A Situation Analysis, Zambia 1999). There is little doubt that the HIV/AIDS epidemic has significantly worsened their situation. Already in 1999 there were an estimated 520,000 children orphaned as a result of AIDS in Zambia. That number is estimated to continue to rise to 895,000 by 2009 and 974,000 by 2014. Since the advent of the HIV/AIDS epidemic in Zambia, tuberculosis (TB) infection rates have increased nearly five-fold, from a fairly constant rate of 100 new cases per 100,000 population in 1984 to over 500 new cases per 100,000 population in 1996. The number of new cases will continue to increase rapidly and could reach 50,000 by the year 2005. In addition to the human suffering involved, this poses a huge additional burden on the already overstretched and under-resourced health sector, both in terms of financial and human resource requirements. Life expectancy in Zambia has significantly decreased as a result of increased infant mortality rates and adult mortality rates, especially where it concerns young adults. Between 2000 and 2010, another million Zambians may die, for a cumulative total of 1.8 mnillion deaths since the beginning of the epidemic. This is an enormous mortality for a country with a total population of about 9 million and illustrates that the full brunt of H[V/AIDS will be felt in the future. Figure 2 illustrates this point well. Figure 2, Zambia: Cumulative AIDS Deaths 1980 - 2010 2,000,000 1,785,000 1,500,000 -_ 1,000,000- - 500,000 II 0 1980 1985 1990 1995 2000 2005 2010 -8 - (c) Government's response to the HIV/AIDS epidemic History. The first case'of HIV/AIDS in Zambia was diagnosed in 1984. The National AIDS Prevention and Control Program (NAPCP) was formally established in 1986 with assistance from the WHO Global Program on AIDS. Several national plans were developed to face the challenge of curbing the epidemic, and in 1993, with the launch of the Second Medium Term Plan (MTP II, 1994-1998) it was acknowledged that a much more intensive and multi-sectoral response needed to be mounted. By that time, the proportion of the adult population infected with the virus had risen to approximately 18 per cent. The current government interventions and activities have been guided by the MTP II, and consistent with the sectoral impact of HIV/AIDS, Zambia has embarked upon a multi-sectoral response for the prevention of new infections and the mitigation of the impact of the epidemic. This has been pursued by stimulating and catalyzing government, private sector, NGOs, and church organizations participation in the response. Recent developments. A new institutional framework was adopted in 2000 and the National HIV/AIDS/STD/TB Council (NAC) was established, guided by a Committee of Cabinet Ministers. In addition to the Committee of Ministers, which provides oversight function, and the Council, a Secretariat to the Council is also being appointed. The Council consists of eight Permanent Secretaries from the line ministries, NGO and church-based organization (CBO) representatives, network of PLWHA, Business Coalition, a Youth Organization and five other appointed members. Nine HIV/AIDS Technical Working Groups (TWGs) have been established, which are the advisors to the Council and Secretariat in their respective areas of expertise. The TWGs cover Mother to Child Transmission (MTCT), Information, Education and Communication (IEC), Tuberculosis, Home Based Care and Counseling, Monitoring & Evaluation, Vaccines, Sexually Transmitted Diseases and Resource Mobilization. At the same time, a new Strategic Framework was launched with the guiding principles which require the national response to HIV/AIDS to: 1. be people centered and respect basic human rights of all persons, 2. be culturally sensitive, 3. be priority centered on vulnerable group and geographic priorities, and 4. promote catalytic projects and develop integrated strategic management approaches. In addition, a government Task Force on Orphans was formed, comprised of the Permanent Secretaries of the Ministry of Sport, Youth, and Child Development, the Ministry of Community Development and Social Welfare, the Ministry of Education, the Ministry of Health and the Ministry of Legal Affairs. The Task Force is assisted by a technical committee comprised of various professionals from each of the ministries. Additionally, the Disaster Management and Mitigation Unit in the Office of the Vice President is examining its role in the care of vulnerable children. Within the context of current government response and the National Strategic Framework on HIV/AIDS the following objectives are recognized. 1. Reducing the HIV/AIDS transmission mainly focusing on children, youth, women and situations providing risk for HIV transmission and increased vulnerability. 2. Reducing the socio-economic impact of HIV/AIDS on individuals and families at the workplace, in the homes and on the whole Zambian society. 3. Mobilizing local and external resources to fight the epidemic through a concerted effort at all levels including the highest level of government. The project will, complementary to the efforts by all partners and other Bank-financed projects, finance part of the total government effort to address these objectives. -9- 3. Sector issues to be addressed by the project and strategic choices: Sectoral background. With the recognition of the impact of the HIV/AIDS epidemic on every sector and all development programs, it has become evident that the existing sectoral responses need to be harmonized. The need for an institution that has a multi-sectoral agenda to channel resources for the response to H1V/AIDS to the various implementing partners has led to the choice of the Ministry of Finance as the responsible institution for financial management of resources made available under the project. The NAC, currently established under the Ministry of Health (MOH) as its parent institution, is a new and emerging institution, mandated to coordinate and monitor the national response to HIV/AIDS. With the understanding that the NAC will not be involved in the implementation aspects of the national program, the project will support the NAC to carry out their mandate while assigning responsibilities for implementation and financial accounting directly to the implementing institutions. Some sectors have proceeded with significant decentralization efforts but direct interaction with communities often remains limited in scope and limited to sectoral issues. To provide for a more active interface between the government and community level Zambia Social Investment Fund (ZAMSIF) was created and has established itself as multi-sectoral and demand driven institution. The project recognizes the comparative advantage of ZAMSIF in channeling resources to communities, religious organizations and NGOs. Finally, in order for the IDA resources not to compete with grant funding, there is need for a flexible approach and good coordination. For this purpose the establishment of a Joint HIV/AIDS Financing Committee (JFC) is under preparation, as a platform for joint financing and other implementation arrangements. The project will be based on annual workplans to allow for timely changes in the light of grants forthcoming with donor coordination by the NAC facilitated under their component. Ensuring an effective and coordinated response combined with rapid institutional and organizational development. The Zambia National Strategic Framework on HIV/AIDS is the key national document that defines the national priorities and strategic goals for accelerating and expanding the HIV/AIDS Response in Zambia. It embraces a large number of NGOs and fourteen key sectoral Ministries in developing the new response. These Ministries include Health; Education; Agriculture and Cooperatives; Sport, Youth and Child Development; Community Development and Social Welfare; Information and Broadcasting Services; Defense; Home Affairs; Labour and Social Security; Commerce, Trade and Industry; Science, Technology and Vocational Training; Finance and National Planning; Local Government and Housing; Energy and Water Development which have developed sector-specific strategic plans for scaling-up. Within this Strategic Framework, sector priorities are identified and include a number of "catalytic projects" that seek to scale up HIV/AIDS interventions both in terms of geographic and sub-population coverage. It is anticipated that the strategic directions will evolve as the lessons learned from the new approach of a multi-sectoral response are absorbed. The coordination and monitoring and evaluation of this intensified response poses challenges that the project will assist by supporting the NAC and its Secretariat to carry out their mandate. At decentralized levels, the project will support the establishment, capacity building for, and functioning of local coordinating mechanisms through local government structures. The prevention of new HIV infections. Reducing the incidence of HIV is the single most important strategic priority to address the epidemic. Strategies and activities to achieve this vary according to the target population and encompass health education, sex education, anticipatory guidance for children and parents, peer support programs, behavior-change interventions, the promotion of condom use, voluntary counseling and testing (VCT), the promotion of abstinence, the prevention of parent-to-child transmission, the reduction of susceptibility through treatment of STI, the screening of blood before transfusion, post-exposure treatment for rape-victims, etc. The implementing agencies will be required to - 10 - put special emphasis on three target groups for prevention activities to be funded under the project: a) the poor and vulnerable (e.g., women and children); b) those in whom significant investments will be made or have been made (e.g., new recruits, school and university entrants, employees); and c) high risk groups, both in terms of getting infected as well as transmitting HIV (e.g., commercial sex workers, migrant workers, truck drivers, construction workers). The extent to which the various implementing agencies will be involved with any given target group will depend on their respective mandates and access to these groups. Major roles are anticipated for the education sector (children, school and university entrants, employees), the private sector (employees, new recruits, migrant workers), public sector institutions (ernployees, new recruits), especially those with important extension services like agriculture, police, defense, health, and livestock (rural poor and vulnerable), and NGOs/CBOs (commercial sex workers, women, the poor, street children). The NAC and its equivalents at the provincial and district levels District AIDS Task Forces (DATFs) will coordinate these activities, promote consistency in the various approaches, and disseminate experiences and best practices. Mitigating the socio-economic impact of the HIV/AIDS epidemic. The HBV/AIDS epidemic in Zambia has significant impact on individuals, households, businesses, public institutions, and whole sectors. The growing number of orphans poses an enormous challenge for the social sectors. Reaching them in order to provide just the very basic nutrition, health and education services already constitutes a significant problem. Coping mechanisms for households are stretched to the limit and businesses find themselves confronted with increased costs for social benefits, a high turnover of staff, and a less- productive workforce. Whole sectors such as health, agriculture, and education now realize that their usual service delivery mechanisms and the content of those services will have to be revisited, adjusting their programs to the new circumstances caused by HIV/AIDS. Implementation of the National Strategic Framework on HIV/AIDS includes measures to be supported by the project to mitigate these effects of the epidemic, including the design and promotion of social safety nets for those affected by HIV/AIDS. Orphans and vulnerable children. Children are a particularly vulnerable group among those affected by the AIDS crisis and the increasing poverty in Zambia. According to the Living Conditions Monitoring Survey (LCMS) of 1996, 13% of the population aged below 18 years were orphans from AIDS and other causes. By 1999, an estimated 520,000 children have been orphaned as a result of HIV/AIDS. As a result of the lag period between the parents' infection and death, the number of orphans due to AIDS is expected to continue to rise, and to reach 974,000 by 2014. The orphans crisis exerts considerable strain on the existing extended family structure and the whole social system in the communities through increasing household dependency ratios, school enrollments and multi-generational poverty traps. A detailed "Situation Analysis on Orphans and Vulnerable Children in Zambia" was completed in 1999 (see Annex 8). The children orphaned as result of AIDS are likely to suffer from loss of schooling and educational opportunities, failure to be immunized or to receive health care, increased malnutrition, increased demand for labor, loss of family and identity, depression, and overall reduction in well-being. In recognition of these special problems, the ZANARA project recognizes that support for community based responses targeting orphans is a desirable and economically feasible intervention. Through the Community Response to HIV/AIDS (CRAIDS) component of the project, community based initiatives that help to address the educational, health and social needs of the orphans will be given due attention. Through the involvement of the Ministry of Legal Affairs the project will also support advocacy for policy and judicial reforms that will increase the protection of the individual as well as property rights of the orphans in Zambia. Increasing access to care and support for those infected or affected by HIV/AIDS. An estimated 870,000 HIV infected people are currently living in Zambia. To provide at least a basic, sustainable, but meaningful package of care and support to those infected or affected by HIV/AIDS poses enormnous economic, social, ethical, and organizational challenges to Zambian society. While there are great efforts undertaken by families, communities, the Government, and its development partners to address the issues involved, there remains a huge and growing demand. The project will support activities that increase access to social support services, such as patient support groups coordinated by the Network of People Living with HIAIDS, and initiatives to provide care and support for orphans. Activities will be formulated that will protect the human rights of those infected or affected, including the articulation of policies that guard against discrimination in employment practices and access to benefits. Promoting an enabling socio-cultural environment for a multi-sectoral response. One of the key reasons for a broader approach to the HIV/AIDS issue is the influence of socio-cultural norns and values on the spread of the disease. Attitudes toward gender, religious teachings on sexuality, and social and cultural practices can facilitate the spread of HIV. Efforts will be made to promote socio-cultural norms, values, and beliefs that are consistent with the reduction of HIV transmission, and that protect the human rights of those infected or affected by HIV while at the same time being culturally sensitive. NAC-coordinated activities are expected to pursue this objective through education, advocacy, counseling, consultation, and modification of customary law, and intensified enforcement of written laws, particularly with respect to gender-specific issues. The reduction of stigma will receive special attention as it constitutes an important obstacle for affected individuals and households to access support and care services. The project will support such efforts through both the financing of work-programs of the implementing partners of NAC and of activities directly coordinated by NAC on this issue. Use of indigenous knowledge and practices to positively change behaviors, for example initiation and marriage rites and ceremonies, will be explored to provide fora for HfIV prevention activities. Research. Developments in the area of HIV/AIDS are occurring rapidly, both with regards to prevention as well as to treatment and care. Studies are needed to establish the effectiveness, feasibility, affordability, and appropriateness of these in the Zambian context. In addition, in order to develop an appropriate response, impact assessments that quantify specific changes due to HIV/AIDS are needed in various sectors. NAC has the mandate to set the priority research agenda and the project will consider supporting studies that may lead to a more effective and efficient response to the epidemic. It is anticipated that studies related to parent-to-child transmission, women-controlled methods for HIV and STI prevention such as microbicides, and impact studies will be supported. Piloting the use of prophylaxis against Opportunistic Infections (01), and the development of a syndromic OI management protocol for adults and children with HIV/AIDS would also be considered for support as research activities. Specific gender strategy. The HIV/AIDS epidemic in Zambia has an important bearing on gender relationships in the society. Young girls tend to engage in sexual activities earlier than their male counterparts. They also enter into relations with older more experienced men who are more likely to have been infected. The females in two partner unions are also less likely to perceive being at risk and less likely to report sexual activity with non-regular partners when compared with their male counterparts. When asked whether a condom was used during the last sexual intercourse, females are less likely to report having done so [Zambia Demographic Health Survey (ZDHS) 1998]. After the death of their male partners, females are more likely to lose control over the properties of the deceased thereby becoming even poorer. When parents are ill or have died, girls are the more likely to drop out of school to care for the sick parents or the younger siblings. When placed in foster homes, girls are much more - 12 - likely to be sexually abused. Physical violence, the threat of violence, and/or fear of abandonment can act as substantial barriers to women in negotiating condom use, discussing fidelity with partners, or in leaving relationships perceived to place them at increased risk of HIV infection. Women are especially vulnerable to HIV infection due to a variety of social and biological factors. The Government will work with community agencies to provide support for activities that reduce the risk of HIV infection among women, such as basic education on sexual and reproductive health, HIV, and STIs; activities for youth designed to delay sexual experience; harmonizing the age of consent, marriage, and maturity; encouraging voluntary testing; and empowering women on matters pertaining to access to information, employment, and economic/social recognition. A large percentage of new HIV infections occur among youth, particularly young women (15-19 years). The NAC, in close cooperation with the education sector, will provide guidance in the development of culturally, morally, and scientifically acceptable AIDS education programs for youth in and out of school and advocate for the protection of youth against behaviors that place them at increased risk of HIV infection. These activities will be supported both through the financing of work-programs and activities coordinated by NAC. The plight of men with regards to HIV/AIDS can easily be ignored in the face of the enormous problems faced by women. But boys and young men are still brought up in an environment in which social values, education and peer pressures endorse and in fact encourage multiple and casual sexual relationships. To address the HIV/AIDS epidemic successfully, it will be essential to consider the role of gender in increasing the vulnerability and impact of HIV/AIDS. This project will mainstream gender considerations into all its components. Community activities that focus on the prevention of HIV specifically targeting the female or male population will be encouraged. Reducing the H1V prevalence among teenage girls population will receive high priority and a concerted effort will be made to involve activities targeting older men in bringing about this change. Community driven activities that focus on the care of women, girls and widows affected by HIV/AIDS will be supported. All the line ministries with HIV/AIDS activities in their work plans will need to have gender specific activities as well. The Ministry of Education can take proactive measures to ensure that girls affected by the HIV/AIDS epidemic themselves or their families have adequate support mechanisms to continue with their education. Research activities which address the questions of the role of gender in HIN transmission will also be promoted. 4. Program description and performance triggers for subsequent loans: N/A C. Program and Project Description Summary 1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): General. The project will support Zambia's response to the HIV/AIDS epidemic in the context of the principles and objectives reflected in the Zambia National HIV/AIDS/STD/TB Strategic Framework 2001-2003, and in close collaboration with a wide variety of implementing, coordinating and supporting partners. The support to implementing agencies will involve public as well as private sector and religious organizations, with a main focus on commnunity driven initiatives. The coordination of the national response will be supported through the (NAC), its Secretariat and the decentralized entities - 13 - charged with coordination at the district level. The project administration will be housed initially in the MOFNP as the ministry mandated to mobilize resources and coordinate their use. Flexibility in both project design and project implementation is essential in view of the evolving character of Zambia's multi-sectoral approach to the HIV epidemic, and the evolving financial support from other collaborating partners. In the same context the establishment of a Joint HIV/AIDS Financing Committee will be crucial as it will provide the platform for agreed adjustments during the project cycle and for joint financing arrangements, assuring that IDA funds do not replace grant funding from other partners. Part (a) Support for Community Response to HIV/AIDS (CRAIDS) (US$ 14.7 million) Financial support under this component will serve to support communities in responding to the epidemic, either directly through financing activities by community based organizations or through the facilitation of interventions by NGOs, Religious Organizations or Organizations of People Living with HIV/AIDS. At central level, the administration of this component will be under the MOFNP with ZAMSEF as the lead executing agency. Support for approved organizations will be provided through ZAMSIF as grants, upon approval of proposals. Eligibility criteria for organizations and activities to be supported as well as the operational aspects of this component are elaborated in the CRAIDS Operational Manual. At the district level, ZAMSIF will collaborate closely with NAC and the coordinating entities to review and, when appropriate, approve proposals. Care will be taken to maintain an appropriate balance between interventions targeted at the prevention of HIV transmission and interventions targeted to the provision of care and support to infected or affected individuals or households. Equally, the geographic spread of activities will be monitored and additional efforts to mobilize communities are anticipated in case of relative inertia in an identified geographic area. Particular attention will be given to coordination with relevant TWGs and NAC to provide appropriate support for the various target groups. Part (b) Support to the National AIDS Council and Secretariat (US$ 2.5 million) This component will provide support to the NAC to coordinate the national response to AIDS. Its Secretariat will provide technical guidance and implement Council decisions emanating from the mandate and deliberations of the Council. The Council and Secretariat do not constitute an implementing agency but will play a facilitating and catalytic role. At district level, appropriate entities for the coordination and harmonization of fHV/AIDS related interventions will be eligible for financial support as well. Financial support for the NAC as well as for the district entities will be provided on the basis of costed annual workplans. Eligible activities to be supported will be consistent with the mission of the Council and target the coordination, monitoring and harmonization of interventions by the various implementing actors in order to achieve synergism and complementarity. In this context, project funds will be available to facilitate the review and approval process of sub-project proposals submitted under Part (a) of the project. Particular attention will be reserved for support to the Co-ordination and M&E role of the Secretariat. As a major challenge within the context of a multi-sectoral program with multiple, and very diverse implementing partners, the monitoring of all HIV/AlDS related activities by the Council and Secretariat is a crucial issue and the project will finance activities related to capacity building in this area. The establishment of M&E systems and mechanisms, as well as the conduct of specific studies for data gathering, analysis and dissemination would be supported under this component of the project. Part (c) Support to the Line Ministries (US$ 21.3 million) One prong of this component (US$9.6 million) has the specific purpose of mainstreaming HIV/AIDS-related activities into the workprograms of all line ministries, this sub-component will support - 14 - sector-specific responses to the HIV/AIDS epidemic. The HIV/AIDS Focal Person in each ministry is expected to facilitate the elaboration of annual workplans that address: (cl) the internal impact. The manner in which HIV/AIDS has affected the quality, quantity and substance of available services, the ability to supply the required services, the organization of the sector, the role of service providers, human resources policy and management practices, the planning and management of sector resources, and the availability of resources to the sector; (c2) the external impact. The manner in which the sector can contribute to the prevention of further spread of HIV in order to protect both staff and target populations, and the increase ir access to and use of care and support for the affected or infected. Within the context of the National Strategic Framework several "catalytic projects" have been identified that constitute recognized best practices. The ministries responsible for taking the lead in increasing the coverage of these programs have been identified and the project will make resources available for this purpose. Where the implementing agency is a NGO, CBO, or Religious Organization, support will be channeled through the CRAIDS component to the extent possible. The line ministries are considered as key public sector partners in Zambia for the fight against HIV/AIDS, and project funds will be used for eligible expenditures as proposed in annual workplans of those ministries. These ministries include the Ministry of Health (MOH); Education; Sport, Youth and Child Development; Community Development and Social Services; Science, Technology and Vocational Training; Agriculture, Food and Fisheries; Labor and Social Security; Commerce, Trade and Industry; Finance and Economic Development; Home Affairs; Defense; Information and Broadcasting Services; Local Government and Housing; Works; Energy and Water Development. Five ministries will receive priority, given their central role in the fight against HIV/AIDS and/or their large staffs -- Defense, Education, Health, Home Affairs (includes police and prisons), and Local Government. Budgeted workplans have been prepared which detail the activities to be conducted by each Ministry in the first year. These first year work plans concentrate on measures to immediately protect staff, including new recruits, in the respective ministries, on the scaling up of the catalytic projects and on capacity building for the elaboration of more comprehensive and sector-specific responses. The detailed first year workplan for each ministry is available in the Project files. The MOH as a key public sector agency in the fight against HIV/AIDS will receive financing ($11.7 million) to support implementation activities to provide care and support, and to mnitigate the impact of HIV/AIDS for those affected and infected, as outlined in the MOH's HIV/AIDS Workplan. The focus of the workplan is on strengthening youth friendly services, expansion of voluntary counselling and testing (VCT) services, provision of safe blood, strengthening laboratory services, information education and communication (EEC), partnerships with traditional healers, research, and monitoring and evaluation. In addition, this sub-component will fund activities as described under the first part of this component as they relate to the MOH. Part (d) Program Administration (US$ 3.5 million) A Program Administration Unit (PAU), established within the MOFNP and reporting to the Permanent Secretary- Secretary to the Treasury will be responsible for the administration, management, and reporting of all project activities. Reports for all stakeholders on resources and their use, implementation progress and procurement plans and progress will be consolidated by this unit. In addition, the PAU will oversee the financial management, procurement and disbursement functions of the project and be responsible for the day to day interactions with the World Bank on project administration. The PAU will - 15 - initially be established in the MOFNP, but, during the course of project implementation, the Govermnent and IDA will assess whether MOFNP as the parent institution of the PAU remains the most appropriate. The unit will be established with the specific understanding that it may accommodate the administrative and project management requirements of cooperating partners. Indicative Bank- % of Component Costs % of' financing Bank- (US$M)' Total (US$M) financing Part (a) CRAIDS 14.70 32.0 14.70 35.0 Part (b) NAC 3.80 8.3 2.50 6.0 Part (cl) Line Ministries 10.30 22.4 9.60 22.9 Part (c2) MOH National Program 12.70 27.6 11.70 27.9 Part (d) Program Administration 4.50 9.8 3.50 8.3 Total Project Costs 46.00 100.0 42.00 100.0 Total Financing Required 46.00 100.0 42.00 100.0 2. Key policy and institutional reforms supported by the project: This project is a multi-sector operation that will support the following key policy and institutional changes. It will neither address long-term sector and institutional reforms within any one sector nor will it include conditions linked to macroeconomics or individual sector policies. It will assist the Government in: (a) Making the National HIV/AIDS Program truly multi-sectoral by mainstreaming HIV/AIDS control into the action plan of every Govermnent Ministry and by strengthening capacity of the NAC for overall national coordination; and (b) Ensuring the National H1V/AIDS program is truly participatory by encouraging the private sector participation in HIV/AIDS control and empowering communities to be key players in the HIV/AIDS control program. 3. Benefits and target population: (a) Benefits The project will provide the following benefits to Zambia: 1. Reduced number of new HIV/AIDS cases, by reducing the rate of transmission of HIV through: (a) changing HIV-related behaviors, (b) improving the accessibility to condoms, (c) reducing the rate of sexually transmitted diseases, and (d) reducing the number of infections transmitted from parent to child 2. Extended productive life of people living with AIDS by: (a) improving the prevention and treatment of 01, and (b) providing support for nutritional programs for people living with HlV/AlDS; 3. Improved diagnosis, treatment and care for people living with HIV/AIDS by: (a) expanding access to voluntary counseling and testing, (b) diffusing standard protocols, and training both professional and traditional health care providers on the clinical management of STI and OI, and of HIV; and (c) improving the planning, procurement and distribution of essential diagnostic kits and pharmaceuticals; 4. Improved ability of communities, households and individuals to prevent or cope with impact of - 16 - HIV/AIDS, through support for community-led HIV/AIDS Initiatives, and 5. Improved economic prospects of orphans and poor HIV stricken families with school aged children by providing support for initiatives targeting the respective households and increasing the enrollment of orphans and vulnerable children in schools. (b) Targeting The project is designed to not only target specific groups which are known to be particularly vulnerable to HIV infection, but also address the specific needs of different sectors such as education, gender, labor, social development, transport, industry, and etc. Efforts will be put into improving the country's overall capacity to cope with the epidemic: within the government, at the central and district levels, and outside government. Some health promotion activities will be targeted to address risks as well as vulnerability: 1. groups which are known to be particularly vulnerable to HIV infection such as young people (in particular young girls), pregnant women, long distance truck drivers, road and power construction workers, traders, fishermen, the military, the prison population; 2. groups which engage in high risk HIV-related behaviors, such as commercial sex workers, or intravenous drug users, or other high risk groups such as the young people, particularly girls; and 3. key sectors such as agriculture, mines and other industries, road construction, power and energy, and others with significant mobile or active work force. 4. Institutional and implementation arrangements: (a) Institutional arrangements The MOFNP will be the custodian of the proposed project. The Permanent Secretary Budget and Economic Affairs of the MOFNP will be the overall controlling officer for resources made available for the project and accountable. MOFNP will provide for a PAU consisting of a Program Administrator, a Finance Manager, a Program Administration Officer, a Procurement Officer and supporting staff. While this unit will initially service the administrative requirements of this IDA financed project it is envisaged that projects financed by other cooperating partners may be accommodated by the same unit. At mid-term, GRZ, IDA and the development partners will assess the appropriateness of these institutional arrangements. Under MOFNP, ZAMSEF will implement the CRAIDS component and will submit its progress reports and accounts directly to the Permanent Secretary MOFNP, with copies to the PAU and the NAC and Secretariat. The controlling officer of each implementing line ministry will ensure that program and project activities are aimed at mitigating the impact of HIV/AIDS on their sector and that prevention activities are integrated into its workprograms. They will ensure that the project resources are applied to the intended purposes and used for eligible expenditures. The HIV/AIDS Focal Person in the line ministries will coordinate the implementation of project activities at the level of the individual ministry. Similarly, the controlling officer of the NAC will ensure that the use of project resources are used for the intended purposes and for eligible expenditures. The head of the Secretariat will be responsible for the submission of annual workplans and regular financial and implementation progress reports. In addition, it is foreseen that the NAC will consolidate the reports of the various projects and programs, and organize annual reviews for all partners and stakeholders. The underlying principles behind the institutional arrangements proposed for the project are simple and - 17 - aim to: 1. As much as possible, avoid creating new institutional structures and use existing means for coordination and project implementation. 2. Support the NAC to carry out its institutional mandate of program coordination and monitoring & evaluation. 3. Support agreed channels to provide efficient flow of funds to the implementing agencies. (b) National level coordination The institutional arrangements for program coordination at the national level are represented by the diagram in Figure 3. Figure 3 National Level Coordination - Institutional Arrangements Committee of Ministry of Finance & Cabinet Ministers National Planning (MoFNP) UNADSTG rProgramme Administration National AIDS Council | Unit (PAU) (NAC) & Secretariat Technical Working Groups [ int Finnd Co I / \ Jo~~~~Inluing FinaniDS expanmitedeG ,~ j Civil Society Response Line Ministries Activities NAC Activities The project will work largely through existing and established structures for the national level coordination. The multi-sectoral NAC has been established and will be the central coordinating body for project activities at the national level. The Chairman of the Council and a Director of the Secretariat have been appointed. The Council will provide broad policy guidance for the National HIV/A1DS program, supported by an adequately-staffed Secretariat headed by a Director. The NAC will be expected to coordinate with the Committee of Cabinet Ministers on the policy issues related to the overall national response to HIV/AIDS. The NAC Secretariat will be responsible for the program coordination and monitoring & evaluation for the national program, supported by the TWG which will provide technical guidance on each of their identified areas (some of these are already functioning). - 18 - Management responsibility for technical aspects of the project will lie with the NAC, the non-technical, administrative aspects of project implementation will be assigned to the PAU in the MOFNP. The PAU will coordinate the central procurement activities and administer the project disbursement and withdrawal procedures. The NAC will have approval authority for all project activities. At the program level a Joint HIV/AIDS Financing Committee will be established. This Committee, under the Chairmanship of the NAC will bring together the technical and financial partners, supporting the program. It will serve as an advisory body to the Council and monitor the physical progress of the program, the use of resources, and the commitments for support by the various partners and elaborate joint financing plans and mechanisms. The committee will receive and review the interim and annual technical and financial audits of the project, among other reports. (c) Decentralized level coordination The CRAIDS component. The bulk of the community responses will be coordinated through the existing ZAMSIF structure. The mechanism for such coordination is depicted in Figure 4. This component will be community driven, and the exact nature of which projects will be funded can only be determined based on received responses from the communities selected from a menu of broadly-defined activities. The process starts when a community prepares a proposal for funding of an HTV/AIDS prevention and care activity under the project. A facilitating NGO may assist the community in the proposal preparation if requested. The proposal is channeled through the existing District Planning Sub-Committee which oversees all development activities in the district. The Planning Sub-Committee then submits the proposal to the DATF for appraisal, and then to the District Council for approval. The costing and budgeting of the communities' proposals will be done by ZAMSIF and submitted to NAC on a no-objection basis and then to ZAMSIF for disbursement. Figure 4 Appraisal, Approval & Disbursement Mechanisms - 19 - Sub-project Proposal Assisted by "facilitating" NGO if so Elaborated by Community requested by Community Submitted to District Planning Sub-committee & to District AIDS Task Force (where existing) for Appraisal t Nubrnitted to District Council b for Recommendation for Approval b Subrmitted to ZAMSIF for fuNdn a b t costing and budgeting Authorization to Fund Advise to ZAMSIF _for disbursement The Strengthening of the NAC component. For the NAC work program, a proposal will be made by the NAC Secretariat and subrniitted to the NAC TGWs for appraisal. The NAC will be the approving body for the work programn, which is then submitted to the PAU for funding and disbursement to the NAC Secretariat. - 20 - Figure 5 NAC Component Appraisal, Approval and Disbursement Mechanisms Annual Workprogram Proposal Elaborated by National AIDS Council & Secretariat and Technical Working Groups Submitted to National AIDS Council for Joint Consultations and Authorization to (JFC) Fund Recommendation to PAU for disbursement Support for the line ministries component. For the line ministries' work program proposals elaborated by the AIDS focal points, the NAC secretariat will appraise the proposal. The appraised work program is submitted to the PAU for funding. The PAU seeks the authorization to fund the proposal from the TSC, and disburses the funds. - 21 - Figure 6 Line Ministries Component Appraisal, Approval and Disbursement Mechanisms Annual Workprogram Proposal Elaborated by Line Ministry Submitted to Permanent Secretary for Approval Submitted to TSC of Joint Consultations NAC for Appraisal Joint (JFC) Recommendation to PAU for disbursement By these arrangements, the NAC will be able to focus on its mandate for coordination of all HIV/AIDS activities, and will be in better place to monitor and evaluate progress with the program without being overwhelmed by the multiple and diverse day to day administrative functions of procurement, disbursement and withdrawal procedures, which fall outside the intended role of the NAC. (d) Project implementation The project will finance a series of HIV/AIDS plans presented by CBOs, NGOs, the NAC and line -22 - ministries. Planned activities for the first year of project implementation will be integrated into an annual Project Implementation Plan (PIP). The project will assist in building capacity in weaker CBOs/NGOs and ministries for planning and implementing the AIDS control activities. The project geographic coverage will gradually expand to include more communities as the implementing capacity gets stronger. The NAC Secretariat and line ministries will annually present HIV/AIDS plans for the following fiscal year. The NAC will review such plans and, when needed, will provide guidance to improve such programs. Communities will organize themselves, and with collaboration with CBOs or NGOs if necessary, prepare and present proposals for sub-projects to be funded by the CRAIDS component under ZAMSIF. DATFs will appraise the merit of each of them and make a recommendation on whether it should be financed. Sub-projects over US$ 10,000 will need the appraisal review by the NAC Secretariat. The regular reports on these sub-project audits and evaluations will feed back into project annual reviews. The PIP and ZAMSIF's Operational Manual describe in detail the specifics of the project's institutional and implementation arrangements with regards to the CRAIDS component. (e) Project monitoring The overall aim of the HIV/AIDS project is to reduce the spread of HIV and mitigate its impact. The short term objective of the project is to increase the use of HIV prevention, care and impact mitigation services by targeted vulnerable groups through activities under the four project components. During the pre-appraisal mission, a logical framework was finalized for the project, and joint performance indicators were agreed upon for the project inputs/output and also for the outcomes/impact according to established guidelines. A detailed performance monitoring plan was developed on the basis of the logical framework and the selected indicators. The project will support the establishment of an M&E system within the NAC Secretariat to perform the critical task of project M&E during project implementation. The system will provide valuable information for project management, and for other stakeholders. The aim of the M&E system will be to provide: 1. Easily accessible, timely information on the Project Inputs, Outputs and Outcomes so that Project Management can be responsive, if not proactive. 2. Identify intra-country variations in HIV/AIDS epidemiology to support the design of effective HIV/AIDS Prevention, Care and Impact mitigation operations 3. Engage stakeholders by sharing information on progress done, lessons learnt and improvements to be done through a participatory evaluation of project activities at all levels. This would provide a basis for information to be shared and compared with others nationally as well as in the sub-region. The institutional capacity for M&E within NAC will be strengthened early on during project implementation by provision of specific technical and financial assistance to the NAC by the African Development Bank. There will be a need for sufficient capacity to collect, analyze and report the input/output data related to the project activities from the district level to the national level on an ongoing fashion. At the national level there are various ongoing activities, external to the Government, which would provide useful data in terms of the outcomes and impact indicators. A computerized M&E Unit with a modest expertise in statistics and epidemiology will facilitate efficient project M&E. The establishment of a link with a local research institution like the Institute for Economic and Social Research / University of Zambia will help tap into locally available expertise and skills, and also facilitate capacity building that can be retained. - 23 - (f) Project evaluation There have been sufficient data generated in Zambia to provide baselines for the project impact and outcome indicators. The project evaluation process will evolve around the annual reviews, when the existing data collected through the M&E system by the M&E Unit would be collated and analyzed specifically relative to the achievements or lack thereof of the goals set by the project and program. During the project preparation process, an attempt was made to set realistic and achievable targets. While project progress will be monitored regularly, through the annual reviews, a flexible approach will be taken if the monitoring data indicated need for project re-design during implementation. The annual reviews will provide timely opportunities to address areas of significant weaknesses. It is expected that these annual reviews, as well as the final evaluation of the project, will be participatory, and that the final evaluation will include a beneficiary impact assessment. (g) Supervision DATFs, representing all sectors and the Ministry of Local Government and incorporating CBO and NGO representation, will supervise project activities at district and sub-district levels. Staff from the PAU, NAC, cooperating partners and the Bank's Task Team will make sample visits to the field to monitor the performance of implementing agencies at peripheral level. The NAC will monitor overall project implementation and meet regularly with HIfV/AIDS focal persons of the various ministries to discuss progress under each line ministry. The PAU, in close collaboration with NAC, will organize annual project reviews to assess the performance of the project, its components and its contribution to the national effort to reduce the spread and impact of HIV/AIDS. Specific areas of the review will include technical and operational aspects of project implementation. Project reviews will be carried out jointly by the NAC and an independent team of experts from various partners and from various technical backgrounds under previously defined terms of reference. The reviews will draw on the information generated from routine monitoring, the studies conducted and any other relevant information. Project reviews will culminate in stakeholder meetings that will form a basis for re-planning for the next year. These meetings will be used to share information on trends, best practices and to provide general technical information. The World Bank's Task Team charged with the supervision will cooperate closely with all cooperating partners involved and will provide multi-sectoral expertise. In view of the new institutional structures being put in place, the multiplicity of implementing agencies and the consequent need for broad consultations, participation and coordination an intensive supervision strategy is proposed (see Annex 11) as essential to the success of the project. (h) Procurement arrangements The NAC, line ministries and districts will procure works, goods and services in relation to the respective activities, in accordance with the Bank's Guidelines: Procurement under IBRD Loans and IDA Credits (January 1995 and revised in January and August 1996, September 1997, and January 1999), in particular Section 3.15, Community Participation in Procurement. Consulting services by firms, organizations, or individuals financed by IDA will be contracted in accordance with the Bank's Guidelines: Selection and Employment of Consultants by World Bank Borrowers (January 1997, revised in September 1997 and January 1999). Communities will use the Bank's simplified Procurement and Disbursement Procedures for Community-Based Investments to procure goods or services needed to implement their respective community-led HIV/AIDS initiatives under the CRAIDS component. When these activities cost less - 24 - than US$ 30,000 equivalent per community per approved proposal, communities will use "local shopping" as the standard procurement method. To facilitate speedy import of items valued at less than US$ 100,000 equivalent required urgently for diagnosis/treatment and institutional strengthening, contracts may be made based on international shopping and national shopping procedures, respectively, per IDA Procurement Guidelines (Clauses 3.5 and 3.6) or through procurement from the United Nations (i.e., IAPSO, UNFPA, UNICEF, WHO), provided contract awards are made within 12 months of the Project effectiveness date. Given the urgency of the project, a wide-ranging General Procurement Notice (GPN) for the first year of operations will be placed on the United Nations Development Business web site without a need for hard-copy publication. The Borrower will prepare, no later than August 31, 2002, a procurement plan for the first year of project operations to be included in the PIM, and subsequently annual procurement plans. The plan will include relevant inforrnation on goods, works, and consulting services under the project as well as the timing of each milestone in the procurement process. The procurement schedule will be updated every quarter and reviewed by IDA. Procurement performance (including sub-project procurement activities) will be assessed on an annual basis (in the form of procurement/physical audits by an external agency). In addition to the formal annual audits, ad-hoc procurement reviews will be conducted periodically. (i) Financial management The Bank standard procedures for accounting and auditing will apply to the funds disbursed to either public or private institutions, as set out in Financial Reporting and Auditing of Projects Financed by The World Bank. Under the supervision of the Permanent Secretary (MOFNP) as the controlling officer, the Finance Manager will be responsible for ensuring that financial management and reporting under the project will be acceptable to the Govermment, the World Bank and if applicable other cooperating partners. The Financial Management System (FMS) objective will be to help management in spending the resources aimed at ensuring economy, efficiency and effectiveness by reaching the intended beneficiaries and achieving the set objectives. Specifically, the FMS must be capable of producing timely, understandable, relevant and reliable financial information that will allow management and financiers to plan, implement, monitor and appraise the Project's overall progress or lack of it. The FMS that will be developed will be computerized. It will follow the proposals as presented in Annex 6. The Action Plan to bring about the FMS includes: the recruitment of a Financial Management Consultant to advise on the selection and installation of the Project's FMS (using an integrated accounts package), to prepare the Program's Financial Management and Accounting Procedures Manual (FMAPM) and to train all staff in the operation of the system and basic record keeping for the communities; the recruitment of an internationally qualified Finance Manager; the availability of relevantly qualified and experienced staff at ZAMSIF, line ministries and support staff; capacity building; the establishment of a Fixed Assets Register and a Contracts Register; separate Special dollar and Kwacha Accounts will be operated and these will be reconciled monthly; quarterly reporting of financial information; cash flow management including variance analysis; Program activities will be reviewed by the Internal Audit Department of MOFNP and ZAMSIF in conjunction with the Monitoring & Evaluation group; an annual external audit will be undertaken by qualified and independent auditors on terms of reference acceptable to the Bank. Given the characteristics and risk profile of the project, for a more timely feedback, the audit work will be carried out in two semi-annual phases and an interim -25 - report will be submitted to the stakeholders not later than three months after the end of the first half of each fiscal year. The annual audit report will however cover the full period. By project effectiveness, ZANARA will have in place a FMS that can provide, with reasonable assurance, accurate and timely information as required by the Bank i.e. the Financial Monitoring Reports (FMR). The borrower has opted to use the traditional transaction-based method of disbursement. Thus, existing disbursement procedures, as outlined in the Bank's Disbursement Handbook, will be followed i.e. Direct Payment, Reimbursement and Special Commitments. A review of the progress on the establishment of the financial management system and capacity of the Project will be made by a World Bank Financial Management Specialist before project effectiveness. (j) Disbursement procedures All disbursements against expenditure contracts with civil society organizations and the private sector will be made against statements of expenditure (SOEs) and is subject to sample ex-post financial, physical, and technical audit to be carried out by financial and technical consultants appointed by the Auditor-General and acceptable to the Bank, and employed by the PAU. All procurement contracts not subject to IDA prior review will be disbursed against SOEs and documentation will be retained by the PAU and made available for review by IDA financial management and procurement specialists and project financial and procurement auditors. In the case of the community-driven HIV/AIDS initiatives under the CRAIDS component, the financing of expenditures is on the basis of grants to the communities and NGOs, as the beneficiaries are unlikely to spend without the assurance of funds. All disbursements against expenditures under this component will be subject to ex post financial and physical audits, on a sample basis, to be carried out by financial and technical consultants employed by the PAU. D. Project Rationale 1. Project alternatives considered and reasons for rejection: This project is an IDA 13 Grant under the Second Multi-Country H1V/AIDS Program (MAP 2) for the Africa Region and is in accordance with the Bank's regional HIV/AlDS strategy "Intensifying Action Against HIV/AIDS in Africa: Responding to a Development Crisis". The overall MAP design is using the lending instrnment of an APL. A "vertical" APL for individual countries, in combination with the "horizontal" APL for Africa was an alternative proposed and rejected (see MAP PAD for further details). Given the MAP context, no alternative project designs would be appropriate. The IDA assistance is aimed at filling the existing funding gap for the Zambia National HIV/AIDS/STI Strategic Framework, and complement other available funds. - 26- 2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing and planned). A large number of agencies are involved in HIV/AIDS related activities, frequently through multiple projects. The IDA projects in Zambia have made significant progress in addressing HIV/AIDS throughout the portfolio and other development partners are doing the same. In order to facilitate an overview of the multiplicity of activities, projects and partners involved, IDA has assisted in assembling a database of the extemal contributions to Zambia's HIV/AIDS response (April 2000). From the major funding agencies alone, over 130 projects have been identified (as summarized below) and the extemal resources, including those from IBRD/IDA, to support the current program are estimated at US$50 to 60 million annually. Notwithstanding this large number of projects and significant resource flow, a sizeable funding gap remained until recently when Zambia's application to the Global Fund against HIV/AIDS, TB and Malaria was approved, thus promising to significantly reduce this gap. This large number of projects and partners presents both an opportunity for receipt of a wide-range of support and expertise, but also a challenge for effective coordination. The govemment has facilitated coordination between the partners during preparation and established procedures are in place to ensure that this continues. Implementation experience in Zambia is generally good, but the HSSP (see below) has been an exception. Steps have, however, been taken to ensure that the relevant lessons for this project, such as experiences with a sector-wide approach and central procurement issues, are included in the design. The experience from sector-wide approach in Zambia has led to a project design that accommodates sufficient options for partner coordination and common financing and implementation arrangements, use of an existing social fund structure for implementation of community initiatives and locating project administration in the MOF. Latest Supervision Sector Issue Project (PSR) Ratings (Bank-financed projects only) Implementation Development Bank-financed Progress (IP) Objective (DO) General Health HSSP U U HlIV/AIDS prevention among farners ASIP S S & farm workers Community support for HIV/AIDS SIF S S prevention & impact mitigation Scholarship program for OVC Basic Education Subsector S S Investmnent (BESSIP) HIV/AIDS training for traditional Environmental Support U S healers Program Other development agencies Behavior change interventions Japan, Norway, EC, GTZ, Canada, Sweden, Netherlands, DFID, Denmark, USAID, Ireland, WHO, UNFPA, UNESCO, UNDP, UNICEF, UNHCR Procurement of drugs & HIV test kits EC, Netherlands, Japan, DFID Home-based care Norway, EC, Denmark, Netherlands, DFID, Canada, WHO, UNDP, UNICEF -27 - High risk groups Norway, EC, Japan, Canada, Sweden, UNFPA, UNESCO, UNDP, UNICEF, USAID) Hospital care Denmark, Netherlands, DFID, WFP Prevention of PTCT Norway, GTZ, USAID, WHO, UNICEF Multi-sectoral programs USAID, Norway, Denmark, Netherlands, Canada, Sweden, WHO, UNDP, UNFPA, ILO, UNICEF OVC EC, Japan, Canada, Denmark, DFID, Netherlands, Ireland, Italy, Norway, USAID, UNICEF, WFP STD control Norway, Sweden, GTZ, DFID, Japan, Canada, WHO, UNFPA, USAID, UNFPA, UNHCR Stigma reduction EC, Norway, Canada, UNFPA, UNESCO, UNDP, UNICEF, USAID HIV/AIDS, TB and Malaria Global Fund/HIV/AIDS/TB and Malaria ($193 million) IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory) 3. Lessons learned and reflected in the project design: Political leadership and commitment is a key issue in mobilizing national and donor resources for the fight against the HIV/AIDS epidemic. The GRZ has indicated its firm commitment to the fight against HIV/AIDS. The people of Zambia are among the hardest hit by the epidemic, and the political as well as the economic imperatives for faster growth will not be realized if the HIV/AD)S situation is not controlled. Effective action requires national leadership and political commitment at the highest levels. The successful short- term control of the HIV epidemic in Thailand arose because of the political leadership driven by good epidemiological data, effective programs and vibrant activist civil society participation. In Zambia, there is consensus among the leadership on the need to tackle the epidemic effectively. But the thrust of the government's response will need to be sharpened based on evidence and broad participation. Vulnerability factors are key drivers of the epidemic. The HIV/AIDS epidemic is driven by underlying vulnerability factors among populations. The combination of poverty, gender disparities and information asymmetry provide very fertile soil for HIV to grow and blossom. Therefore, any attempt at controlling the epidemic without meaningfully addressing the vulnerability factors will be unlikely to succeed in the long term. This project will specifically focus on the vulnerable groups, including the youth, orphans, women, widows and widowers in prevention and impact mitigation efforts. Community participation as a process of empowerment is cruciaL The communities affected by the H1V/AIDS epidemic find themselves facing multifaceted challenges, and with very thin resources and capacity to respond. In addition, short term focused strategies may not meet the need for long term rehabilitation and healing in the communities. Community participation engages the people in a partnership to fight the epidemic. With extemal resources and the building of local capacity, the - 28 - communities will be more empowered in their response to H1V/AIDS. Such a response is also more likely to be sustainable in the long term. The Zambia HIV/AIDS project will commit about 35% of the grant resources towards supporting community driven initiatives. Centralized coordination of community-driven initiatives is an effective way to channel resources directly to the communities. A lot has been learned in Zambia with regards to the financing of community based initiatives over the last few decades. The Government itself has provided public funds through the Social Recovery Project (SRP I and II) as matching grants to conmmunities for community-managed development activities since 1990. At the same time several other programs, financed locally and through external support, also provided funds for community activities. In most cases these programs operated in parallel fashion and without adequate coordination. In order to minimize the potential inefficiencies and confusion emerging from the uncoordinated approach to community-driven initiatives, the Government has taken the measure of gradually channelling the community components of its sector programs through a unified delivery mechanism, ZAMSIF. ZAMSIF draws on the 10 years of community development experience of SRP I and II and is a centralized coordination mechanism initiated to channel funds for community-based activities. The community components of the RoadSIP, BESSIP, Environmental Fund, and Community Investment Fund are already being implemented through ZAMSIF. ZAMSIF is also responsible for strengthening the capacity of districts to respond to community needs through the DIF. The ZANARA project will use such experience and the already existing ZAMSIF structure to implement the CRAIDS component for the community-based HIV/AIDS prevention, care and impact mitigation activities. Multi-sectoral orientation. It has been widely recognized that the HIV/AIDS epidemic extends far and beyond the narrowly defined health sector. The multi-dimensional nature of the epidemic and its impacts warrant a change in paradigm from a biomedical to a development one. In this context, the multi-sectoral approach in HIV prevention, care and mitigation offer best chances of success. This project will involve the active participation from fourteen line ministries, who will mainstream HIV/AIDS prevention into their activities with the support of the IDA grant resources. It is expected that such broad mainstreaming of HIV activities will have a wide impact on the control of the epidemic. Focus on knowledge building and evidence based interventions. When compared to the HIV/AIDS situation in the developed countries, there is a huge deficit of knowledge, best practices and resources on which to build strong evidence based prevention and care interventions. There is still lack of consensus on areas such as preventing PTCT, ART, Use of Vaginal microbicides, STI treatment and prophylaxis and treatment of opportunistic infections. As such, this project will adopt a cautious approach by initially supporting well designed research activities on these unclear issues rather than committing to a particular intervention. The findings of such research activities could provide firner basis for specific interventions and can be shared counrtywide, regionally and internationally. The indigenous knowledge and practices could also be complementary in the efforts to fight HIV/AIDS. In Mozambique, the involvement of traditional knowledge workers (healers) in awareness creating in a psychologically and socially sensitive area like sexuality had higher impact at lower cost. In Tanzania, the integration of local healers in AIDS prevention and mitigation strategies increased the effectiveness of the approach and access for poorer families. Along similar lines, the Bank is currently piloting the use of traditional channels of communication ("griot" network) to deliver culturally congruent messages in prevention of HIV/AIDS in West Africa. This project will encourage access to and use of appropriate indigenous knowledge and practices in the fight against HIV/AIDS. (For example, where initiation rites are practiced, the leaders and the young men and women could also receive HIV prevention information). - 29 - Role clarity between the NAC and implementing agencies. There are experiences from other countries which show that channeling significant resources to institutions that were set up to coordinate and monitor project activities, introduces a temptation for those institutions to venture into implementation. In the Zambia situation, the NAC has been set up explicitly to coordinate and monitor the national response to the epidemic and not to implement. The NAC will be supported under the project to coordinate and monitor the activities, whereas a wide spectrum of agencies and institutions will be supported to implement the project activities. Procurement and disbursement. The emergency nature of the response to HIV/AIDS requires simple, rapid and focused implementation arrangements for project activities. Lack of familiarity with IDA procurement and disbursement procedures could hinder smooth project implementation. In this project, such lack of familiarity is not a major problem because most activities will be channeled through the ZAMSIF. The procurement that will be done outside ZAMSIF will be handled through a centralized procurement office, located in MOFNP. This cental procurement office has proven capacity on IDA procurement. In terms of disbursement, the current Zambia health project has suffered from a long back log of payment applications. Such experience is very unlikely when the processing of payment applications are handled by MOFNP which has greater capacity both in terms of human resources and in experience with IDA. Recognized "Best Practices" in Zambia, designated as catalytic projects, tend to have common characteristics that include local ownership, public-private cooperation, cultural sensitivity and limited geographical coverage. The project will encourage sub-projects along similar lines and assist NAC develop an appropriate approach to scaling up the various interventions and increasing geographical coverage. It has been suggested that NGO and CBO led initiatives have provided for a substantial part of successes recorded. Staff turnover threatens implementation capacity. One lesson that has emerged from the HSSP project is that turnover of staff, on either the Borrower or the Bank side, can seriously diminish capacity to implement the project. The limited number of staff, in Zambia, with experience working on IDA projects, in particular with respect to procurement and financial management, negatively affected HSSP's implementation. Efforts will be made to insulate ZANARA from this risk. Commitment to monitoring and evaluation, scheduled assessments. Another lesson from HSSP that is particularly relevant with regards to this project is the importance of the Government's firm commitment to M&E and the agreed schedule of assessments/appraisals. The health project, much like ZANARA, was designed to be very flexible in order to respond to the most urgent needs in a dynamic sector. In order for both the Government and IDA to be able to guide the project in this relatively more fluid scenario, it is essential that the planned M&E take place and that the findings be jointly reviewed in a formal, periodic meeting. When this commitment weakened in the context of the health project, key data stopped being released to partners and the annual reviews were discontinued, the overall program became directionless and stalled. Good donor coordination, as experienced in the health sector within the context of a sector-wide approach, can significantly reduce the transaction costs to the government related to the management of externally funded programs. Common arrangements for program reviews, M&E, planning of financial and technical assistance, support missions, funding of programs or program components are all areas that will be pursued in close cooperation with the NAC, UNAIDS and other cooperating partners. - 30 - Good governance is crucial for the achievement of impact and for sustained support to the program. Especially in countries like Zambia with a high degree of donor dependency, such sustained support is of critical importance for the HIW/AIDS program to have significant impact. Design issues concerning transparency, accountability, monitoring and evaluation, and participation by all stakeholders will continue to be monitored frequently. 4. Indications of recipient commitment and ownership Realizing the devastation of the HIV/AIDS epidemnic, the political leadership of Zambia speaks out increasingly forcefully on the need to urgently intensify the response to the epidemic. As an integral part of the country's overall development programs and strategies, it has therefore developed the National Strategic Framework on HIV/AIDS in a collaborative effort between the Govermment and its partners. Based on the agreed principles and strategic directions contained in this document, the Government endorsed the initial project concept. Subsequently, consultations were held with all the Government ministries, all of which have appointed an HIV/AIDS focal person who will serve as their liaison to the project, and the project was broadly endorsed. Finally, while the NAC continues to take shape, the Council, its Chairman and Director-General have strongly endorsed the project and its design. On November 21, 2000, the GRZ organized a roundtable discussion on HIV/AIDS. The meeting was addressed by President Chiluba and co-chaired by the Minister of Health and the MOFNP. In his opening address, the President underlined the importance of effective education and community activism as the main pillars for the fight against HIV/AIDS. The main thrusts of the project therefore have support from the highest level. 5. Value added of Bank support in this project: The Bank has taken the decision to be a leader in the reorientation of the response to the HIV/AIDS epidemic, refocusing it from a sectoral, or medical, issue to a multi-sectoral development one. The September 1999 launch in Lusaka of the Bank's regional AIDS strategy, "Intensifying Action Against HIV/AIDS in Africa," was well received by both the Govemment and the private sector, as well as by bilateral and multilateral donors. Through the Bank's regional AIDS Campaign Team for ACTafrica and UNAIDS, the Bank is well positioned to make regional issues and experiences available to the project. The existing HIV/AIDS Program has to be scaled up by mainstreaming program activities to all the line ministries and other non-health government agencies at national, regional and district levels, and by making better use of the capacity of community organizations and civil society organizations such as churches, trade unions and private businesses. From the Roundtable Discussion on HIV/AIDS on November 21, 2000 it became evident that the Government resources and the combined pledges by other cooperating partners could not possibly provide for such effort and that a substantial injection of resources and technical assistance from IDA is required to sustain the current progress and to further reduce HIV/AIDS prevalence and its impact on socioeconomic development. An estimate of the commitments from external funding sources indicate that the current program is supported with financial resources at a total of USD 50 to 60 million annually. GRZ budgetary resources to contribute to the program are expected to increase significantly through additional funds that are being made available under the HIPC Initiative. The total resources required to seriously address the HIV/AIDS epidemic in Zambia are estimated at around US$560 million over three years (best estimate scenario, NAC 1999) which includes the costs for HAART. After donor pledges there would still be a financing gap of approximately US$300 million, or US$150 million if HAART is excluded from the estimated costs. More recently, the approval of Zambia's application to the Global Fund against - 31 - HIV/AIDS, TB and malaria, for an amount of $193 million, has significantly reduced the previously estimated funding gap. The IDA grant funds will contribute to filling the remaining gap and be applied in a flexible manner to respond to evolving priorities. In order for the many sources of funds in addition to the IDA resources there is need for a flexible approach and good coordination. For this purpose the Country Coordination Mechanism will play a major role and the establishment of a Joint HV/AIDS Financing Committee is under preparation, as a platform for joint financing and other implementation arrangements. The project will be based on annual workplans to allow for timely changes in the light of grants forthcoming with donor coordination by the NAC facilitated under their component. E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8) 1. Economic (see Annex 4): O Cost benefit NPV=US$ million; ERR = % (see Annex 4) O Cost effectiveness * Other (specify) [ref. Annex 5, Project Appraisal Document in Support of the First Phase of the Multi-Country HIVIAIDS Program for the Africa Region (MAP 1) Report no. 20727 AFR). The detailed economic analysis on HIV/AIDS has been carried out under MAP 1, which includes an overall assessment on the impact of HIV/AIDS on economic development and poverty and a cost-benefit analysis of HIV/AIDS interventions. The data used in the analysis included the Zambia HrV/AIDS information. This section only highlights some key points for the ZANARA Project. The HIV/AIDS epidemic has gone beyond health and has become a serious socioeconomic development issue. HIV/AIDS affects an economy through (i) reducing productivity, domestic savings and economic growth, and (ii) increasing costs of treatment and care for both affected households and the society as a whole. Zambia is one of the severely-affected countries. About 20 percent of Zambia's adult population is LIV positive. About 650,000 cumulative AIDS deaths have occurred by 1999 and left over 520,000 children as orphans. It is estimated that Zambia's GDP would be 4% less with the HIV/AIDS epidemic than without it. AIDS strikes people in their most productive age, reducing both the size and growth of the nation's labor force, increasing absenteeism due to illness and time taken to attend funerals, increasing labor turnover and generally reducing productivity. The care and treatment for AIDS impose enormous costs on households and the society at large. Households with AIDS patients are likely to lose the income of their members (often the main breadwinner) in addition to facing an increase in medical expenses, and the expenses related to burials . Some households are forced to withdraw their children from schools in order to save money as one of their coping strategies. - 32 - The economic benefits of the proposed AIDS control project are multi-fold. First, since this project aims to scale up interventions in HIV/AIDS control and mitigation, the majority of Zambians will directly and indirectly benefit from increased access to HIV/AIDS prevention, treatment, care and mitigation I activities. Secondly, new HIV infections will be reduced, due to an expansion in coverage of the package of HIV/AIDS prevention activities supported by the project. Thirdly, PLHA can lead a longer and more productive life by benefiting from better management of opportunistic infections and access to nutritional supplements; and therefore, less loss in productivity and income and reduced costs for treatment and care. Fourthly, the support to the community responses will improve the care for orphans and increase their school attendance. As the analysis in Annex 5 of the MAP showed, a reduction in AIDS-related death rate and improved care for PLHA would likely increase the country's economic growth rate by reversing the losses in productivity. In addition, there will be the direct benefit to vulnerable groups such as teenage girls, orphans, PLHA and pregnant women. 2. Financial (see Annex 4 and Annex 5): NPV=US$ million; FRR = % (see Annex 4) Fiscal Impact: 3. Technical: The project will assist the government to implement the strategic HIV/AIDS control interventions which are accepted as priorities for the national program, and which have been shown to be both cost-effective and affordable under the Zambian economic and fiscal situation. The project will finance health manpower training and supplies for the use of standard clinical management protocols, as recommended by UNAIDS or WHO. Such standards will be used in VCT, in prevention of PTCT, in prevention of OI, and in the clinical management of STD and the prevention and treatment of OI. Financing of anti-retroviral drugs. The financing of anti-retroviral drugs to prevent mother to child transmission (PMTCT), for the treatment of parents enrolled in PMTCT programs or for PEP under WHO/UNAIDS guidelines will be considered under the project. Support to further increase the access to HAART may be considered in the course of the project. If the government decides to use IDA Grant proceeds for these purpose, the project would finance training of health care personnel in the use of ART, as well as the costs incurred with the respect to the necessary laboratory support, according to clear clinical management protocols to be agreed with the UNAIDS and other technical agencies. This issue also requires the formulation of a coherent national policy on the prevention of PTCT, on PEP for rape victims and health workers and on equity issues related to access to ART. The considerations to be taken into account for the prevention of PTCT will include promotion of breast feeding versus alternate feeding for infants, the social stigmatization that may arise, the side effects and resistance development from inappropriate use of the drugs. The adequacy of the legislation and law enforcement concerning rape and sex with rninors will be addressed in the context of the PEP. Cost-effectiveness studies of suggested interventions will be supported under the project. Chemo-prophylaxis and treatment of 01. Research on the cost-effectiveness of alternative interventions for the clinical management of HIV/AIDS, STDs and 01, including the piloting of chemo-prophylaxis for OI, would be areas that can be supported under the project. The rising incidence of TB in the country is a direct consequence from the raging HIV/AIDS epidemic. The TB TWG of the project TSC under the NAC would coordinate and guide the national response specific to TB. Project resources can be flexibly applied to supplement the national program in the control of the OI, including - 33 - TB. 4. Institutional: The distinction between the coordination role of the national program by the NAC, and the administration of project activities by the PAU in the MOFNP and ZAMSIF have been agreed to in order to avoid overlap in responsibilities. Similarly, the lines of responsibility between coordinating and the various implementing agencies will be defined and reflected in the PIM. With the exception of ZAMSIF, most of the institutions within the project are new or, to varying degrees, new to the tasks assigned to them. Some line ministries, such as the MOE and the MOH have been involved in the response to HIV/AIDS and made significant progress in elaborating their role. Others have not yet been involved and the project will support the NAC in mobilizing and supporting the various ministries. The NAC is a new institution and expectations related to its effectiveness during the early stages of project implementation will need to be modest. 4.1 Executing agencies: Varying degrees of capacity with the various implementing agencies and actors are anticipated and the project will make substantial provisions for capacity building, in particular, through the CRAIDS component. The executing agencies for the project will include the community organizations, the NGOs, DATFs and the respective line ministries at both national and district levels where available. The existing ZAMSIF structure will provide important support for the capacity building at the district and comrmunity levels. 4.2 Project management: The role of PAU vis-a-vis the NAC will be agreed upon and spelled out in the PIM. Care will be taken that project administration by the PAU will not include tasks and responsibilities related to implementation. There are experiences from other countries which show that channeling significant resources to institutions that were set up to coordinate and monitor project activities, introduces a temptation for those institutions to venture into implementation. In the Zambia situation, the NAC is being set up explicitly to coordinate and monitor the national response to the epidemic and not to implement. The NAC will be supported under the project to coordinate and monitor the activities, whereas a wider spectrum of agencies and existing institutions will be supported to implement the project activities. 4.3 Procurement issues: All major procurement activities for Part b and Part c will be handled centrally by the PAU, except minor procurements for contracts valued at less than USD 5,000 equivalent per contract subject to an aggregate of USD 50,000 equivalent per line ministry per year, which will be handled by the respective line ministries in accordance with the agreed work-programs. In order to kick-start the procurement activities under the program, the PAU will be hiring a procurement adviser to provide support in the initial procurement activities of the project. The procurement advisor will be hired for the first six months of project operations for coordination and support of the project-related procurement activities including contract management. The procurement advisor will provide on-going procurement and contract management training to designated PAU staff, who will take over the procurement activities at the end of the first six months of operations. Furthermore, in order to build capacity at the local level, where necessary, the procurement advisor will provide procurement training workshops at the local level. It should be noted that since approximately 35% of the project funds (USD 14.7 million) will be in support of activities related to community-level initiatives, it is not expected that the PAU would be involved in extensive procurement activities with - 34 - large-value contracts, and the bulk of the major procurements should be completed during the first two years of the project activities. 4.4 Financial management issues: The FMS will be the responsibilities of the Finance Manager in the PAU for Parts (b), (c) and (d), and the Financial Controller of ZAMSIF for Part (a) of the project. Reporting to the Permanent Secretary (MOFNP) through their Program Managers, the Finance Manager and Financial Controller will ensure that financial management and reporting procedures to be put in place will be acceptable to the Government, the World Bank and other cooperating partners if applicable. The borrower intends to use the traditional transaction-based method of disbursement, and will put in place a FMS that would be able to produce FMS as required by the Bank. The ZANARA FMS will be developed in accordance with the Financial Management Action Plan presented in Annex 6. The action plan will include: the recruitment of a Financial Management Consultant to advise on the selection and installation of the project's EMS capable of producing consolidated financial statements (using an integrated accounts package), to prepare the project's FMPM and to train staff in the operation of the system; the establishment of a representative Financial Management and Procurement Committee; the recruitment of an internationally qualified Finance Manager and other relevantly qualified and experienced support staff; capacity building; the establishment of a Fixed Assets Register and a Contracts Register; separate Special and Kwacha Accounts will be operated and these will be reconciled monthly; quarterly reporting of financial information; cash flow management including variance analysis; Project activities will be periodically reviewed by the Internal Audit Department (MOFNP) and an annual external audit will be undertaken by the Auditor General on terms of reference acceptable to IDA. 5. Environmental: Environmental Category: B (Partial Assessment) 5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including consultation and disclosure) and the significant issues and their treatment emerging from this analysis. The project was appraised in April 2001, at which time the environmental classification was "C" (no assessment) and the initial Environmental and Social Data Sheet (ESDS) was approved on January 19, 2001. The current requirements of preparation and disclosure of the Medical Waste Management Plan (MWMP) prior to appraisal were not applicable at the time. When the categorization of MAP projects was changed to environmental classification "B" in August 2001, the preparation of the project had slowed down, mainly because of frequent changes within the Zambia government in the running up to the elections in December 2001. Consultations on the medical waste management issues to be addressed, and the preparation of an MWMP started only in the calendar year 2002. Through a dated covenant provided in the Development Grant Agreement (DGA, GRZ is assuring that the project will be compliant -- with the environmental safeguard policy for category B projects - not later then August 31, 2003. A draft MWMP has been prepared by MOH, supported by resources under the PPF. Resources under the ZANARA Project will support the implementation of this plan. The plan addresses major adverse environmental effects such as inappropriate handling and disposal of hazardous medical waste, including sharp needles. Under the plan it is proposed to train health care professionals, traditional birth attendants and traditional healers, and other community workers delivering care to HIV/AIDS patients. This training will include instruction on appropriate separation, transport and disposal of hazardous medical waste. In addition, a campaign to educate the general public and especially those living near disposal sites on the potential hazards of medical waste will be conducted. The project will finance the revision of existing health sector curriculum on appropriate management of hazardous medical waste at medical facilities and at disposal sites to include the relevant dispositions regarding HIV/AIDS, and on occupational safety guidelines for health care workers. The draft MWMP is available in the project files - 35 - for additional information. The project itself is not expected to culminate in any major adverse environmental effects and assurances have been obtained that the final MWMP will be disclosed in-country and through the World Bank infoshop upon finalization. Resources under the project will support the implementation of the plan. The project is not primarily designed to supply drugs and antibiotics for STI, TB or HIV. In the event that such drugs are deemed necessary and the government requests to allocate funds for such a purpose, appropriate mechanisms will be put in place to ensure that drugs are appropriately used, and that resistance development is monitored through surveillance. Microbial and viral resistance to antibiotics and antiviral drugs could pose a challenge to the micro-environment, if such drugs are not used properly. The potential contribution of the ZANARA project to this risk is considered minimal at this time. 5.2 What are the main features of the EMP and are they adequate? The MWMP is focused on strengthening the skills and knowledge of health workers, community volunteers, patients and those who scavenge at disposal sites. It proposes a training strategy built on focused messages, and messages tailored to the different audiences. The plan is currently in its early draft and would be discussed with all stakeholders before its finalization. 5.3 For Category A and B projects, timeline and status of EA: Date of receipt of final draft: August 31, 2003 The first draft MWMP was received on October 31, 2002. In-country disclosure of the plan and its display at the World Bank Infoshop is due by August 31, 2003 5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b) draft EA report on the environmental impacts and proposed environment management plan? Describe mechanisms of consultation that were used and which groups were consulted? Key stakeholders include all sectors of Government, development partners, NGOs/CBOs/FBOs, people living with HIV/AIDS and their families, medical personnel, including professional medical organizations, and the general population. With regard to issues related to medical waste management special emphasis will be given to involve medical personnel at all levels. During project preparation, consensus-building exercises to involve major stakeholders to gain consensus around the project concept document, project design and implementation arrangements have been conducted. During project implementation, communities will be able to express their needs through Community HIV/AIDS projects and to participate as active partners in project implementation, adding ownership, transparency and accountability to the project. Consultations with civil society organizations on the concept of the project have been extensive and further consultations during project implementation, monitoring and evaluation will continue. NGOs and other civil society organizations will implement a significant part of the project, supporting government agencies and communities in the implementation of project activities. Civil society organizations will also be consulted in the annual project reviews, in the mid-term reviews and during the summative evaluation of the project. As mentioned above, consultations on the draft MWMP are still on-going and will be expected to complete at the latest by August 31, 2003. 5.5 What mechanisms have been established to monitor and evaluate the impact of the project on the environment? Do the indicators reflect the objectives and results of the EMP? Revisions of the existing MWMP will be reviewed together with Government. 6. Social: 6.1 Summarize key social issues relevant to the project objectives, and specify the project's social - 36 - development outcomes. The project is expected to have a positive social impact by assisting and empowering people and institutions to deal more effectively with the HIV epidemic. The project development objective is cast with a particular focus on the vulnerable groups. The existing poverty situation, lack of knowledge and social arrangements all play a role in making individuals vulnerable to HIV infection. The project will promote access to prevention, care and mitigation services by the vulnerable groups in the population through supporting the communities as well as the public sector. Issues such as distribution of condoms to youths may raise cultural and religious sensitivities. The project will involve key stakeholders who are experienced in dealing with these issues (i.e. civil society organizations and PLHA) to help overcome such barriers in locally appropriate ways and ensure that no groups are excluded in program implementation. The CRAIDS component will offer considerable support to communities to develop culturally sensitive and acceptable ways to respond to the HIV/AIDS epidemic. In addition the project will carry out a series of advocacy, information, education and communication (IEC) activities to create awareness and acceptance of the human rights issues associated with HIV/AIDS. For instance, PLHA and their families face continued violations of their economic and human rights. Consequently, the project will finance advocacy, information, IEC activities to raise awareness and acceptance of the human and economic rights of PLHA. Information activities will include advocacy against issues of social stigmatization and discriminatory work place practices. In addition, the project will pay special attention to women, who do not receive adequate information on their vulnerability to HIV/AIDS. In particular, sexual workers will be targeted and also receive information on alternative sources of income so that they are able to protect themselves against HIV/AIDS. Finally, the issues relating to OVC will be addressed within the project. 6.2 Participatory Approach: How are key stakeholders participating in the project? The ZANARA project was developed on the basis of the Zambia National Strategic Framework. The Strategic Framework was formulated through a process of consultations with key government, non-government and external stakeholders, and groups of PLHA. The coordination of all national activities concerning HIV/AIDS is the mandate of the NAC in which all key stakeholders are represented. The project will support the NAC in order to enhance its effective leadership. At the beginning of the design of ZANARA, key stakeholders such as NAC, NGOs and donors were consulted on the project intentions. As part of preparation, the GRZ established a project preparation team with broad representation of the civil society (including the Network PLHA and the Zambia Business Coalition on HIV/AIDS), government, the academia, and NAC. This team has been charged to consult with a wide variety of other key stakeholders on the design of the project. It is expected that there will be significant involvement of all key stakeholders at various stages during project implementation. In particular, the multi-sector nature of the project design and implementation makes, by necessity, for broad stakeholder participation in M&E of project activities. A participatory project evaluation approach is expected to be used during the annual reviews and at project completion. 6.3 How does the project involve consultations or collaboration with NGOs or other civil society organizations? Civil society organizations will continue to be consulted during project implementation and will execute a significant part of the project through the CRAIDS component supporting community-led initiatives. They will also be consulted as part of the evaluation process such as the annual project reviews, and at completion of the project. -37 - 6.4 What institutional arrangements have been provided to ensure the project achieves its social development outcomes? The project will seek to build on the multi-sectoral nature of NAC and will support the Council to organize annual program reviews with involvement of all key stakeholders. The reviews will concentrate on the achievements of the program, based on an agreed set of indicators, and the formulation of specific recommendations to improve performance. Both the NAC and ZAMSIF will be supported in creation of a M&E that will include the relevant outcomes. 6.5 How will the project monitor performance in terms of social development outcomes? The project M&E system will collect data on progress made towards achieving the targeted outcomes, and particular focus will be on increased use of HIV/AIDS prevention, care and impact mitigation programs by the targeted vulnerable groups. As already stated, the vulnerable groups include women, PLHA, OVC, youth in and out of school and commercial sexual workers. Therefore, specific indicators on gender and other vulnerable groups have been included among the project performance indicators (see Annex 1). 7. Safeguard Policies: 7.1 Are any of the following safeguard policies triggered by the pr ect? Policy Triggered Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) * Yes 9 No Natural Habitats (OP 4.04, BP 4.04, GP 4.04) U9 Yes * No Forestry (OP 4.36, GP 4.36) U Yes S No Pest Management (OP 4.09) (9 Yes * No Cultural Property (OPN 11.03) (U Yes * No Indigenous Peoples (OD 4.20) () Yes * No Involuntary Resettlement (OP/BP 4.12) ( Yes * No Safety of Dams (OP 4.37, BP 4.37) ( Yes * No Projects in International Waters (OP 7.50, BP 7.50, GP 7.50) ( Yes * No Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60)* () Yes * No 7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies. The MWMP has been elaborated by GRZ, and reviewed and approved by the the Bank's Africa Social and Enviromnent Sector unit (AFTES). Resources from the IDA grant will be applied to implement this plan. - 38 - F. Sustainability and Risks 1. Sustainabiiity: The GRZ has demonstrated its firm commitment in the fight against the HIV/AIDS epidemic. This high level commitment has provided an encouraging environment for the fight against the epidemic. The new institutional framework establishing the NAC provides the focal point for coordination of efforts at the national level. The National Strategic Framework consolidates HIV prevention and mitigation efforts within the context of a national strategy. This project will build on the existing frameworks, along with other partners, to support the prevention of HIV and the mitigation of its impact. The main thrust behind the Strategic Framework is the requirement for integrated, people-centered, culturally sensitive and prioritized approaches. The combination of the community oriented multi-sector approach, a strong commitment from high levels of Government, substantial capacity building, modest financial requirements, and the willingness of the donor community to enter into the partnership against AIDS in Zambia make for the reasonable expectation of the project's sustainabilitv being considered likely in the short to medium term. The proposed program will be used as a leverage to mobilize additional resources. Expanding the ownership for the responsibility to respond to the challenges that the HIV/AIDS epidemic poses is at the core of the project and will create additional capacity and spread the budgetary burden over a larger number of sources of financing. The capacity of the program to demonstrate result in both aspects will be crucial for the sustainability over an extended period of time. 2. Critical Risks (reflecting the failure of critical assumptions found in the fourth column of Annex 1): Risk Risk Rating Risk Mitigation Measure From Outputs to Objective The socio-cultural & political M There is already, a high level political environment is not conducive to promote cornmitment to the fight against HIV/AIDS. In the behavioral changes necessary in order to sustain the current level of support, the fighting the spread of the epidemic and project will work in a participatory manner mitigating its impact with other donors to keep HIV/AIDS in the forefront of public discourse & encourage more openness. Civil society, community leaders will be involved very early in project implementation so as to facilitate a more conducive environment for the fight against The Government's stated political & M By keeping HIV/AIDS at the forefront of financial commitments do not materialize public policy agenda & encouraging dialogue, the government will be more likely to follow through on its commitments & the attention to the community driven initiatives. The mainstreaming of HIV prevention & mitigation activities in all sectors will also engender more attention from the government & political leaders. From Components to Outputs - 39 - The demand for preventive and impact S The project will provide room for supporting mitigating services are not met with provision of drugs to prevent MTCT, STI adequate supplies treatment, condoms, TB and O treatments. In addition, other co-financiers will be encouraged in a participatory manner. Already the HIV/AIDS epidemic in Zambia has matured, and sero-prevalence among the youth is beginning to show a downward trend. The project will be flexible, within agreed limits, and will adjust its resources to contend with significant but unexpected demands that may arise. The flow of funds to the implementing M The MOFNP will be the custodian of the agencies becomes very low and slow. project, and the project accounting will be decentralized. A framework within which NGO/CBO and community activities can be funded will be developed. Agreements will be obtained for counterpart funding by GRZ. Community organizations and civil M Project will use the existing ZAMSIF structure society are not mobilized, and lack the to sensitize communities and channel funds capacity to plan, implement and evaluate towards community driven activities. The activities tailored for HIV prevention and training of the community members and care among vulnerable groups. volunteers in the skills relevant to their participation in HIV/AIDS prevention and mitigation activities will be integral part of the project's activities. The NAC and PAU have limited capacity H The project will focus intensely on to provide appropriate coordination at the strengthening the capacity of the NAC and national level and administer IDA PAU through training of staff and the supply of financed projects. appropriate equipment, technical assistance to coordinate project activities at national and local levels. Decentralized project implementation in S The project will institute a system of ensuring the face of uncertain financial accountability at all levels of implementation, management and institutional capacity and the use of computerized project resulting in fiduciary difficulties. management information system inclusive of financial and accounting data. An adequate audit mechanism will also be put in place. Major procurement will be done only through ZAMSIF or through the centralized procurement office located in MOFNP. Overall Risk Rating S Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk) There is sufficient experience, both within and outside the Bank, to warrant a cautious assessment of the overall project risk, which is considered substantial. The major risks faced by the project include the -40 - following: (i) The relative lateness of an aggressive response to the HIV epidemic in Zambia means that very valuable time may have been lost, and that the epidemic has progressed even deeper, with a much broader impact. The implementation of the project at decentralized levels will provide the most responsive way to reach the frontline of fighting the epidemic. There will be the need for significant financial commitment from both the public and private sectors in the fight against HIV, and such commitments will need to be sustained. A potential risk is the project resources being overwhelmed by the demands arising from the continued epidemic. In order to mitigate this risk, the project will work on expanding co-financing arrangements with other donors. Government's comments to counterpart funding will need to be kept. (ii) The continuation of donor support is crucial to the achievement of the goal of reducing the spread of HIV and the mitigation of its impact. This project focuses on institutional and community responses, whereas fighting the HIV epidemic demands substantial efforts in other areas especially for resources targeted to the provision of drugs, condoms and other supplies. The involvement of IDA will likely encourage other donors to provide more resources that will be needed for stemming the epidemic through cost-effective, well coordinated partnerships. (iii) The project is expected to ride on significant involvement by NGO/CBOs and the communities. The organizations of PLHA will have to assume prominence in advocacy as well as direct involvement in the implementation of the community initiatives. As such, the socio-cultural environment will need to be conducive for them to do so without being stigmatized. Because the project is targeted initially to vulnerable populations, it will be important that the institutional mechanisms exist to ensure that the benefits reach the intended beneficiaries, and that social stigma as well as discriminatory practices are minimized. The project will bring together the various stakeholders in addressing and creating the appropriate environment for its efforts. 3. Possible Controversial Aspects: Condom promotion versus abstinence. There is a likelihood that the debate on the promotion of condoms as a means to prevent HIV transmission and the alternative of promoting abstinence among the youth will continue in Zambia for a period extending into the project's implementation. It is, however, unlikely that any major controversy will be spurred on the issue by reason of the project. The majority of Zambians support the use of condoms as the means of preventing HIV/AIDS, and the available research evidence strongly supports their use as a practical step in preventing HIV infection. Provision of anti-retroviral therapy. The use of ART against HIV/AIDS is still evolving, and there are research efforts going on in the region as well as internationally. There are ethical and moral issues of depriving their use where they are available. The project will not be prescriptive as to whether the drugs are used. There are no major controversies expected in this regard, as the project would be guided by the technical guidelines produced by specialized agencies, such as WHO and UNAIDS. More generally, beyond just the provision of ARVs, resources under the project could be used to increase access to care and to increase the capacity of the health care system to provide and administer these services. G. Main Loan Conditions 1. Effectiveness Condition The Borrower will have: -41 - (a) adopted the project implementation plan in form and substance satisfactory to IDA (b) opened project accounts, made therein the initial deposits, and informed IDA of completicn of this task. (c) established in a form and with functions, resources and staffing satisfactory to the Association (i) the PAU and (ii) appointed the following staff of the PAU, (ii.a) a program administrator, (ii.b) a procurement officer and (ii.c) a financial controller (d) established with functions, staffing and resources satisfactory to the Association; (i) an accounting and financial management system; (ii) a financial management and procurement manual; (iii) a procurement plan for the first year of the project; and (iv) a financial management and procurement committee (e) appointed, for the Project, independent auditors, acceptable to IDA under terms of reference satisfactory to IDA 2. Other [classify according to covenant types used in the Legal Agreements.] The Borrower shall, not later than August 31, 2003, and in form, substance, resources and with functions that are satisfactory to IDA: (a) maintain NAC and its Secretariat which will be responsible for the overall coordination, monitoring and evaluation of both the Programme and the Project (b) cause NAC to appoint (in accordance with Section II of Schedule 3 of the DGA) the following staff, namely: (i) a programme manager, (ii) an MIS manager, (iii) a finance manager, (iv) an administrative manager; and (v) an internal auditor. (c) prepare, submit and carry out the Medical and Waste Management Plan. H. Readiness for Implementation C 1. a) The engineering design documents for the first year's activities are complete and ready for the start of project implementation. 2 1. b) Not applicable. 2 2. The procurement documents for the first year's activities are complete and ready for the start of project implementation. S 3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactory quality. D 4. The following items are lacking and are discussed under loan conditions (Section G): 1. Compliance with Bank Policies 3 1. This project complies with all applicable Bank policies. D 2. The following exceptions to Bank policies are recommended for approval. The project complies with all other applicable Bank policies. -42 - Wbertus Voetberg Dzingai B. Mutumbuka Team Leader Sector Manager/Dire Manager/Director December 11, 2002 4 - 43 - Annex 1: Project Design Summary ZAMBIA: Zambia National Response to HIV/AIDS (ZANARA) Key Performance Data Collection Strategy Hidr.'rchyofOb.jectives_ Indicators Critical Assumptions Sector-related CAS Goal: Sector Indicators: Sector/ country reports: (from Goal to Bank Mission) Achieve sustainable growth Reduced HIV incidence & HIV sentinel surveillance Strong political & financial through the strategic priority prevalence among males & reports commitment by both public & of (i) reducing the spread of females aged 15-19 years private sectors to the fight the HIV/AIDS epidemic & (ii) against HIV/AIDS from a mitigating its impact multi-sector perspective in a sustained fashion Reduced HIV prevalence HIV sentinel surveillance Socioeconomic & political among antenatal women, less reports climate remains stable than 20 yrs from 17% to 15%. Reduced national adult HIV HIV surveillance reports Socioeconomic & political prevalence UTNAIDS climate remains stable Program Purpose: End-of-Program Indicators: Program reports: (from Purpose to Goal) ref. MAP 2 ref. MAP 2 ref. MAP 2 ref. MAP 2 Project Development Outcome / Impact Project reports: (from Objective to Purpose) Objective: Indicators: Increased use of Median age at first sex Sexual & Behavioral Survey Safer sexual behavior change HIV/AIDS prevention, care & increased by I year for both report (SBS) sustained impact mitigation programs by females & males by 2008 (ZDHS) the targeted vulnerable groups Percentage of teenagers aged HIV Sentinel surveillance Both male & female partners 15-19 years who are mothers ZDHS change sexual behaviors or pregnant with their first Women empowered child reduced from 59.4% to 45% by 2008 Reported Condom use at last SBS Condom supplies are sex with non-regular partner ZDHS available, affordable & users increased from 30% to 45% know how to use them for males, & from 17% to 30% for females by 2008 Decrease the primary school School Survey/MOE Educational system is effective non-enrollment rate among LCMS orphans & vulnerable children BESSIP/MOE (OVC) from x % to x% by 2008 (will check with BESSIP) Output from each Output Indicators: Project reports: (from Outputs to Objective) -44 - Component: Part (a) Community 350 Community Initiatives ZAMSIF Project Reports Balance between prevention & response to the HIV/AIDS funded by 2008 care maintained epidemic improved Availability of counseling & ZAMSIF Project Reports Test kits are available, social testing services increased by stigma reduced 2008 Number of peer educators, ZAMSIF Project Reports Quality maintained trainer of trainers increased Increase number of districts ZAMSIF Project Reports Communities willing to with functioning HIV support participate groups to 25 by 2008 10% increase in orphans & ZAMSIF Project Reports Social safety net is intact vulnerable children attending school before & after projects in beneficiary communities by 2008 30 functioning district ZAMSIF Project Reports Social safety net is intact. HIV/AIDS task forces (DATF) established for sensitizing, appraising & coordinating HIV/AIDS prevention & care activities by 2008 Part (b) NAC & Secretariat Technical & operational NAC annual reports Information & technical strengthened guidelines produced & Copies of guidelines expertise available disseminated by all Technical Working Groups every three years until 2008 Two research studies on NAC reports Research expertise is available HIV/AIDS prevention & care Research reports supported annually until 2008 Membership of the Business NAC reports Private & public sector able to Coalition against HIV/AIDS Business Coalition reports work together increased from 18 to 36 by 2008 An HIV/AIDS situational NAC reports Information available, assessment & report on accessible progress against the strategic framework produced annually until 2008 An HIV/AIDS newsletter NAC reports Local circumstances produced to share & considered disseminate best practices & bibliography on HIV/AIDS in -45 - Zambia produced annually Management Information NAC reports Staff are trained, have skills & System established by are retained Mid-Term Agreed operational framework NAC reports for the DATFs produced by the end of first year of project Part (c) HIV/AIDS All line ministries have line ministry reports to NAC Behavior change occurs prevention & mitigation systematically sensitized their NAC annual reports activities mainstreamed in staff about HIV/AIDS through all line ministries specifically planned workshops & activities by 2008 All line ministries have a line ministry reports Funds are not used for funded budget line for NAC reports unplanned purposes HIV/AIDS prevention & care activities by 2008 All public sector training NAC compiles & reports from Skills available institutions have integrated all institutions qualitative HIV/AIDS aspects into their curriculum by 2008 All line ministries have line ministry reports Non-discriminatory policy is produced & disseminated IEC NAC reports maintained materials on HIV/AIDS prevention in the workplace by 2008 All line ministries have trained ILine ministry reports Peer educators are retained peer educators & counselors NAC reports on HIV/AIDS prevention & care by 2008 Part (d) Project All central procurements are PAU internal reporting Bureaucracy minimized Administration done according to time plan Negative power not exercised Strengthened Disbursement & withdrawal PAU intemal reporting procedures are done according to established standards Financial Management Action PAU intemal reporting plan implemented according to schedule -46 - Key'P'40(,;orinnce Mt ,0Dta-1lection -Strategyll Hierarchy of Qbjectives IKe ncA c C Critical Assumptions Project Components / Inputs: (budget for each Project reports: (from Components to Sub-components: component) Outputs) Support for CRAIDS USD 14 7 million ZAMSIF Reports Capacity is built & retained at communities Communities are willing to participate Demand does not overwhelm resources Strengthening NAC & its USD 2 5 million NAC Reports Capacity built & retained Secretariat NAC is able to work with implementing partners Support to Line Ministries USD 21.3 million (i) Line NAC Reports Budgets are funded ministries (excluding MOH) & Line Ministries Report Implementation capacity is (ii) MOH built & retained Non-discriminatory policy implemented in work place Program Administration USD 3.5 mullion PAU Reports Capacity built & retained Unit Bank Supervision Reports - 47 - Annex 2: Detailed Project Description ZAMBIA: Zambia National Response to HIV/AIDS (ZANARA) This project contributes to the partnership against HIV/AIDS in Zambia by supporting the Government's program as articulated in the NASF. The ZANARA project will finance US$ 46 million to GRZ's national program for HIV/AIDS as articulated in the National Strategic Implementation Plan and its activities. The purpose of the Government's program is to: (i) to reduce the spread of HIV/AIDS (ii) to mitigate the socioeconomic impact of the disease, and (iii) to increase access to care and support for people infected or affected by HIV/AIDS The project's objectives support the national program by aiming to increase the use of HIV/AIDS prevention, care and impact mitigation programs by specifically targeted vulnerable groups. The particular focus on vulnerable groups is important because the same vulnerability factors directly underlie the reasons for the ravaging spread of the HIV/AIDS and its adverse impact. The ZANARA project is designed within a multi-sectoral framework, which addresses the HIV/AIDS epidemic within a very broad context. It is a program to support the GRZ to implement an expanded response to HIV/AIDS through supporting community-based initiatives, and also by mainstreaming HIV/AIDS activities into all line ministries and the private sector. The support for community-based initiatives would involve H1V/AIDS prevention programs through peer education, IEC activities and the provision of support for appropriate VCT services. The care of orphans, widows, widowers, and home based care for PLHA are also expected to be conducted as part of the community-based initiatives. By Component: Project Component I - US$14.70 million Part (a) Support for the Community Response to HIV/AIDS (CRAIDS). Under this component, the project will support community-based responses to the challenge posed by the HIV/AIDS epidemic. The support will take the form of direct funding of community initiatives or through the facilitation of activities by community CBOs and NGOs. There will be clearly defined eligibility criteria for organizations and NGOs which will be funded under this component. In order to hasten the implementation of this highly decentralized component, the already existing ZAMSIF structure within the GRZ establishment will be utilized to channel and administer the project funds to the communities. Although it will be difficult to specify which activities will be funded under this component, the broad range of activities to be supported include: (i) Support for community-based sub-projects which have been prepared and submitted through the agreed upon institutional structure. It is anticipated that at least 350 new community-based initiatives will be funded during the course of the project implementation. A careful balance will be maintained among the sub-projects between prevention, care and impact mitigation activities. (ii) Training of community volunteers, peer educators and trainers of trainers in HIV related counseling. This would generate a critical mass of capable community members who will provide counseling for HIV prevention, post-test counseling for those infected, condom promotion and distribution, and also to optimize the care and support available to PLHA, orphans, widows, widowers, and other vulnerable groups as outlined in the NASF. (iii) HIV support groups. As at the time of project preparation, there are an estimated 12 districts with I{V support groups. These support groups are formed by organizations of people living with HIV/AIDS and are an important forum for providing psychological and material support to the -48 - PLHA. Under this component, it is planned to establish about 25 additional and functioning HIV support groups spread among the districts. (iv) Support for orphans and vulnerable children. One of the tragedies resulting from the HlV/AIDS epidemic in Zambia is the increasing number of orphans and other vulnerable children in the population. These children are less likely to be enrolled in primary schools and even when enrolled, are more likely to drop out. The project will support community-based initiatives that focus on making it possible for OVCs to remain in school. In particular, attention will be given to school attendance among females. Support will be given to initiatives that make special provisions for the OVCs for social services such as education and health. (v) Capacity building for the District Response to HIV/AIDS. The District HIV/AIDS Response system will coordinate the HIV/AIDS prevention, care and impact mitigation activities by the communities in the districts. Under this component, the project will support the building of the necessary capacity to manage the response. Where significant inertia is detected from the communities in coming out with proposals, the project will undertake appropriate measures to stimulate and facilitate the community response through workshops and consultation with the community leaders. Project Component 2 - US$2.50 million Part (b) Support to NAC and its Secretariat The NAC and it's Secretariat form the national body for coordination and M&E of the overall national program and the project. In order to support the NAC to perform this vital task, the project will support activities such as: (i) Building capacity within NAC. This would involve enhancing the capacity to provide national leadership on HIV/AIDS, especially its role to guide a coordinated national strategy, to overcome social and cultural barriers to HIV/AIDS, and to mobilize the line ministries, religious and cultural organizations, organizations of PLHA, women's groups, youth groups, the private sector and other stakeholders in facing the challenge of HIV/AIDS. The project support would include the financing for NAC to conduct its mandated activities and support for the establishment of a viable M&E system. Similarly, the decentralized entities for the coordination of HIV/AIDS related activities at district level will be supported where it relates to capacity building, appraisal of proposals and M&E. (ii) Coordinate project support towards HIV-related research and knowledge management The project would provide support for NAC to fund at least two research studies on HIV/AIDS prevention and care annually. The NAC Secretariat would also be expected to produce and disseminate technical and operational guidelines related to all the nine TGW. Such guidelines will be evidence-based and accessible to care providers. Similarly, local best practices will be identified and shared with the stakeholders through HIV/AIDS periodicals, newsletters and mass media where appropriate. (iii) Coordinate private-public sector partnerships in facing the challenge of the HIV/AIDS epidemic. The NAC would be supported to work with civil society, such as the Zambia Business Coalition against HIV/AIDS and the Zambia Federation of Employers, to expand its membership within the private sector and to engage in HIV/AIDS activities that will benefit both the private as well as the public sectors. (iv) Conduct monitoring and evaluation of the project implementation activities. The project will support the NAC Secretariat in performing its vital M&E role for the project, as well as to contribute to the overall national program. As a major challenge within the context of a -49- multi-sector program with multiple, and very diverse implementing partners, the monitoring of all HIV/AIDS related activities by the Council and Secretariat is a crucial issue, and the project will finance activities that will enable capacity to be built in this area. The collection, analysis, reporting and dissemination of the data on inputs, outputs, outcomes and impact, as well as the conduct of specific studies for data gathering if necessary, will form the core of the activities to be supported. The NAC Secretariat would be encouraged to consider contracting out of some functions where its ability is limited or building that particular capacity within itself is not very cost-effective. Project Component 3 - US$ 21.30 million Part (c): Support to the Line Ministries With the specific purpose of mainstreaming HIV/AIDS-related activities to all line ministries, this project component will support the various sector-specific responses to the HIV/AIDS epidemic. All activities relating to line ministries, excluding the MOH, will be supported under Part (cl) of this component. In recognition of the unique role that the MOH plays with respect to IHIV/AIDS, those activities to be undertaken by the MOH, as defined in their workplan, as well as MOH's mainstreaming of HIV/AIDS-related activities in its own ministry will be funded as Part (c2) of this component. Part (cl) Support to all line ministries (except MOH). The HIV/AIDS Focal Persons in each ministry, with support from the NAC Secretariat and their respective Permanent Secretary, would facilitate the elaboration of annual FIV/AIDS work plans that address the following two broad areas: (i) The internal impact of the HIV/AIDS epidemic on the specific line ministry. The extent to which HIV/AIDS has affected the quality, quantity and substance of available services, the ability to supply the required services, the organization of the sector, the role of service providers, human resources policy and management practices, the planning and management of sector resources, and the availability of resources to the sector would provide the framework for assessing the internal impact of the epidemic on the specific line ministry. (ii) The external impact of the HIV/AIDS epidemic relative to the work of the specific line ministry. The extent to which the specific sector can contribute to the prevention of further spread of HIV in order to protect both its staff and target populations, and the increase in access to and use of care and support for the affected or infected among staff members and their families. Within the context of the NASF, several "catalytic projects" have been identified that constitute recognized best practices. The ministries responsible for taking the lead in increasing the coverage of these programs have been identified and the project will make resources available for this purpose. Where the implementing agency is an NGO, CBO, or religious organization, support will be resourced from the CRAIDS component [Part (a)] of the project to the extent possible. The line ministries are considered as key public sector partners in Zambia for the fight against HIV/AIDS, and project funds will be used for eligible expenditures as proposed in the annual work plans elaborated by ministries. The line ministries include the MOH; Education; Sport, Youth and Child Development; Community Development and Social Welfare; Science, Technology and Vocational Training; Agriculture and Cooperatives; Labor and Social Security; Commerce, Trade and Industry; Finance and National Planning; Home Affairs; Defense; Information and Broadcasting Services; Local Government and Housing; Works and Supply; Energy and Water Development. Budgeted work plans have been prepared which detail the activities to be implemented by each Ministry in the first year. These first year work plans concentrate on measures to immediately protect staff, including new recruits, in the respective ministries, on the scaling up of the catalytic projects and on - 50 - capacity building for the elaboration of more comprehensive and sector-specific responses. The detailed first year work plan for each ministry is available in the project files. In general, the activities to be considered within each of the line ministry work plans will include the following basic range of activities: (i) Capacity building for the mainstreaming of HIV/AIDS related activities in the ministries' work plans. (ii) EEC campaigns for its staff and clients awareness, promote condom use and provide for a sustainable behavior change among its staff and the clients by extension. (iii) Train peer educators and counselors to promote utilization of VCT services among their staff, and provide psychological support for those affected in the Ministry. (iv) Promote access to condoms for staff. (v) Promoting the prevention of MTCT among staff, piloting of routine prophylaxis against 01 for staff that have been infected with HIV. (vi) Impact studies to investigate the qualitative and quantitative consequences of the epidemic on specified (sub)/sectors and analyze possible and appropriate responses. In addition to the above areas, each line ministry will conduct activities specifically relevant to its areas of comparative advantage. The possible activities to be supported under each of the various line ministries include: (a) Ministry of Education (i) Mainstreaming of HIV/AIDS prevention into the teachers' training curriculum and for the orientation of new teachers employed. (ii) Expand HIV/AIDS and STI related counseling and testing to schools, colleges and institutions of higher education, using peers and parents as key resources. (iii) Establishment of support groups for teachers and other staff affected by HIV/AIDS. (iv) Review education sector policies regarding access to school of children and teachers with HIV/AIDS, sanctions against sexual harassment and sexual abuse by teachers and others. (v) Review primary, secondary and tertiary school curricula to include appropriate reproductive health and HIV related education, produce and distribute the relevant educational materials, and train teachers in their use; promote school- and student association- led initiatives, in primary, secondary and tertiary education institutions. (vi) Monitor and evaluate the impact of HIV/AIDS in the education sector, in collaboration with other ministries and relevant agencies. (b) Ministry of Sport, Youth and Child Development (i) Utilize the comparative advantage of the ministry in access to external audience through sporting and other youth activities for the dissemination of HIV/AIDS prevention and care information. (ii) Stimulate the development of youth-led HIV/AIDS initiatives, including recreation, sports club and adolescent reproductive life and health-related initiatives. (c) Ministry of Community Development and Social Welfare (i) Utilize the comparative advantage of the ministry in access to external audience through community development activities and outlets for the dissemination of HIV/AEDS prevention - 51 - and care information. (ii) Support and promote policies protecting the property as well as human rights of orphans, widows and PLHA, to avoid disinheritance and other discriminatory practices. This activity will be carried out in collaboration with civil society, organizations of PLHA, women associations, and other relevant governmental and non-governmental agencies. (iii) Stimulate the development of women-led initiatives focusing on the empowerment of women, counseling on the use of condoms, awareness on the risks posed by early and forced marriages, defilement, and the rights of PLHA. This activity will be carried out in collaboration with women's organizations. (d) Ministry of Science, Technology and Vocational Training Utilize the comparative advantage of the ministry in access to external audience through the curriculum at the vocational training centers and other outlets for the dissemination of HIV/A1DS prevention and care information. (e) Ministry of Agriculture and Cooperatives (i) Utilize the comparative advantage of the ministry in access to external audience through the farmers associations and other outlets for the dissemination of HIV/AIDS prevention and care information. (ii) Train district trainers of agriculture and fishery extension workers on IV/AIDS counseling and testing, and on improved nutrition, with an emphasis on locally grown foods for improving the nutrition of PLHA, orphans and as breast-feeding alternatives. (iii) Promote community-led and farmers' association-led H1V/AIDS initiatives in the area of improved nutrition, with an emphasis on the nutrition of PLHA, orphans and children of H1V-infected mothers. (f) Ministry of Labor and Social Security (i) Utilize the comparative advantage of the ministry in access to external audience through the pensioners and their families and other outlets for the dissemination of HIV/AIDS prevention and care information. (ii) Incorporate and promote the implementation of new public service management rules and practices that address legal, ethical and social rights of PLHA, including policies on recruitment, leave, deployment, training, pay, exit, and welfare of public officers. (iii) Monitor trends and the impact of HIV/AIDS in the civil service and assist the respective ministries plan for future resource shortages (iv) Stimulate company-led, workers associations-led and union-led HIV/AIDS initiatives at workplaces. These activities will be targeted at particularly vulnerable professional groups such as long distance truck drivers, migrant laborers, traders, fishermen, hotel and tourism industry workers. (g) Ministry of Commerce, Trade and Industry (i) Utilize the comparative advantage of the ministry in access to external audience through the chamber of commerce, members of the private sector and other outlets for the dissemination of HIV/AIDS prevention and care information. (ii) Promotion of public-private partnerships in the fight against HIV/AIDS in Zambia. (h) Ministry of Finance and National Planning (i) Utilize the comparative advantage of the ministry in access to external audience and other - 52 - relevant outlets for the dissemination of HIV/AIDS prevention and care information. (ii) Mainstreaming of HIV/AIDS prevention messages on salary pay checks and other avenues. (i) Ministry of Home Affairs (i) Utilize the comparative advantage of the ministry in access to external audience and other relevant outlets for the dissemination of HIV/AIDS prevention and care information. (ii) Provide targeted HIV prevention, care and mitigation services for all police and prison workers and populations. (iii) Train police and prison health care providers, care givers and social workers and counselors on HIV/AlDS prevention, diagnosis, clinical management and social support. (iv) Train police and prison managers in H1V/AIDS control activity management. (j) Ministry of Defense (i) Utilize the comparative advantage of the ministry in access to external audience and other relevant outlets for the dissemination of HIV/AIDS prevention and care information. (ii) Provide targeted HIV prevention, care and mitigation services for all members of the armed forces and their families. (iii) Train armed forces health care providers, care givers and social workers and counselors on HIV/AIDS prevention, diagnosis, clinical management and social support. (iv) Train armed forces managers in HIV/AIDS control activity management. (k) Ministry of Information and Broadcasting Services Utilize the comparative advantage of the ministry in access to external audience through various externally directed EEC activities and other relevant outlets for the dissemination of HIV/AIDS prevention and care information to the general public. (1) Ministry of Local Government and Housing (i) Utilize the comparative advantage of the ministry in access to external audience and other relevant outlets for the dissemination of H{IV/AIDS prevention and care information to the general public. (ii) Review, harmonize and supervise the application of district-based policies and regulations concerning HIV/AIDS. (m) Ministry of Energy and Water Development (i) Utilize the comparative advantage of the ministry in access to external audience and other relevant outlets for the dissemination of HIV/AIDS prevention and care information to the general public. (ii) Devise strategies for high capture audience through use utility bills and focus on water collection points for HIV/AIDS prevention messages. (n) Ministry of Works and Supply (i) Utilize the comparative advantage of the ministry in access to external audience and other relevant outlets for the dissemination of HIV/AIDS prevention and care information to the general public. (ii) Ensure all construction contracts include HIV/AIDS prevention and mitigation activities for the work force. - 53 - (iii) Promote company- and union-led HIV/AIDS initiatives, targeted to mobile workers. (iv) Scale up existing initiatives within the Ministry of Works, for example, the Drama Club activities. Part (c2) Support to the Ministry of Health. As the impact of the epidemic is increasingly placing demands on MOH, it has a unique role to play in the implementation and support, and mitigation of the impact of HIV/AIDS for those affected and infected. An HIV/AIDS Work plan, indicating how ZANARA will support the Ministry in its efforts, has been prepared. The focus of this support is on: (i) scaling up of youth friendly health services, since prevalence among the 15 to 19 year old has registered a decline. (ii) increasing the number of VCT centers at health facilities, as well as support positive living 'post test clubs'. (iii) strengthening the capacity to treat Ols, thereby improving the quality of live and preventing premature death. (iv) providing anti-retroviral drugs to improve the PMTCT program (including treatment of mothers and fathers recruited into the PMTCT program); and post-exposure propylaxis in rape and sexual abuse victims, as well as accidental contamination in health workers. (v) improving laboratory support services in HIV/AIDS. (vi) increasing awareness through IEC interventions. (vii) support for M&E activities, including establishing an effective surveillance system and strengthening the existing information system. In addition to the above activities, which are, by and large, focussed on its clients, the Ministry of Health will also: (i) Mainstream HIV/AIDS prevention into the curriculum of all institutions of training for health care workers. (ii) Improve blood safety and quality control with the national blood transfusion system by providing HIV testing kits and maintaining high standards. (iii) Promote occupational safety for workers in the Ministry through improved and safe handling of laboratory and other medical waste, training of medical and support staff on occupational safety relevant to HIV transmission and provision of clear guidelines in cases of accidental occupational exposure to HIV. (iv) Promote job security for members of staff affected by HIV/AIDS while minimizing exposure risks of un-infected external clients in the health sector. (v) Provide support to other ministries in their HIV/AIDS related activities. Project Component 4 - US$3.50 million Part (d) Program Administration. Under this component, the project will support the PAU located within MOFNPfor the day-to-day administration of project activities. Support will be provided to PAU to monitor resource use, process all central procurement activities, administer withdrawal and disbursement procedures, consolidate the financial management aspects of project implementation, and consolidate project reporting. During the course of project implementation, Government, IDA and other partners will assess whether this institutional arrangement is still the most appropriate. - 54 - - 55 - Annex 3: Estimated Project Costs ZAMBIA: Zambia National Response to HIV/AIDS (ZANARA) Local Foreign - Total Project Cost By Component US $million US $million US $million Part A: CRAIDS 13.82 0.88 14.70 Part B: National AIDS Council 2.32 0.48 2.80 Part C: Line Ministries 10.50 11.50 22.00 Part D: Project Administration 2.23 0.27 2.50 Total Baseline Cost 28.87 13.13 42.00 Physical Contingencies 0.90 0.10 1.00 Price Contingencles 0.90 0.10 1.00 Total Project Costs' 30.67 13.33 44.00 Total Financing Required 30.67 13.33 44.00 Local Foreign Total Project Cost By Category US $million US $million US $million Goods 8.60 12.00 20.60 Works 0.20 0.00 0.20 Technical Assistance, Services, Training, Workshops 9.50 0.60 10.10 Grants: CRAIDS 8.60 0.00 8.60 Incremental Operating Costs 4.50 0.00 4.50 Total Project Costs 31.40 12.60 44.00 Total Financing Required 31.40 12.60 44.00 Identifiable taxes and duties are 0 (US$m) and the total project cost, net of taxes, is 46 (US$m) Therefore, the project cost shanng ratio is 0% of total project cost net of taxes. - 56 - Annex 4 Monitoring and Evaluation ZAMBIA: Zambia National Response to HIV/AIDS (ZANARA) Monitoring and evaluation (M&E) The overall aim of the HIV/AIDS project is to reduce the spread of HrV and mitigate its impact. The short term objective of the project is to increase the use of HIV prevention, care and impact mitigation services by targeted vulnerable groups through activities under the four project components. During the preparation, a logical framework was developed and finalized for the project in a participatory manner, and joint performance indicators were agreed upon for the project inputs/output and also for the outcomes/impact according to established guidelines. A detailed performance monitoring plan was developed on the basis of the logical framework and the selected indicators. The project will support the establishment of an M&E system within the NAC Secretariat to perform the critical task of project monitoring and evaluation during project implementation. The system will provide valuable information for project management, and for other stakeholders and external parties. The M&E system will collect data broadly categorized into two groups: (i) Operational data. These are derived from the day-to-day project activities, including all project inputs, supervisory information and the outputs resulting from project's activities. This category of information will focus on the process aspects of project implementation and align those processes with the overall project development objectives. The information will be collected by the M&E unit at the NAC from the various implementing agencies. The CRAIDS component will make input of the relevant data collected through the ZAMSIF M&E system. The line ministry information on project input and outputs will be collected by the HIV/AIDS focal points and forwarded to the central M&E unit in NAC. (ii) Epidemiological data. These data relate more to the project outcomes and the impact on the epidemic. These data sources will track the HIV/AIDS epidemic in Zambia and assess the impact of Zambia's national HIV/AIDS program. The serological, behavioral and social surveys being conducted by the various intemal and external partners in Zambia will provide valuable information to the M&E system. The M&E unit will be the central clearing house for all the information collected within the two categories outlined above. The unit will synthesize the information collected and provide: (i) Easily accessible, timely information on the project inputs, outputs and outcomes so that project management can be responsive, if not proactive. (ii) Identify intra-country variations in HIV/AIDS epidemiology to support the design of effective HIV/AIDS prevention, care and impact mitigation operations (iii) Engage stakeholders by sharing information on progress done, lessons learnt and improvements to be done through a participatory evaluation of project activities at all levels. This would provide a basis for information to be shared and compared with others nationally as well as in the sub-region. The multi-sectoral nature of the response supported by the project necessitates a significant investment into the monitoring and evaluation system. The system will have to capture inputs and outputs from implementation channels of variable degrees of efficiency and effectiveness. The decentralized level implementation will also need to provide incentive for participation in the project monitoring and evaluation. The commitment to beneficiary and stakeholder involvement in decision-making and in implementation will be enhanced if the M&E system can provide real-time information to NAC and to the other decentralized decision-makers in both the public sector and the private sector. - 57 - The institutional capacity for M&E within NAC will be strengthened early on during project implementation by providing specific technical assistance. There will be a need for sufficient capacity to collect, analyze and report the input/output data related to the project activities from the district level to the national level on an ongoing fashion. At the national level there are various agencies, external to the Government structure, which can provide useful data in terms of the outcomes and impact indicators. The establishment of a link with a local research institution like the Institute for Economic and Social Research/ University of Zambia will help draw upon locally available expertise and skills, and also facilitate capacity building that can be retained. At the district and decentralized levels of implementation, the key stakeholders include the DATF, the District Planning Sub-Committees, the NGO/CBOs involved with HIV/AIDS activities and the communities. The information generated through the decentralized level coordination can be captured through the existing ZAMSIF M&E system which can then feed into the overall national level M&E system. The ZAMSIF Poverty M&E component will provide very useful input to the project M&E Unit and also to the overall national HIV/AIDS program in terms of social and economic data and indices. A geographic mapping approach will also be incorporated into the M&E system. The real time data collated from the comnmunities and the decentralized implementation agencies can be presented through the geographic mapping system to capture the intra-country variations in project inputs/outputs, and any mismatch in resource applications. At the national level, the key users of the system will include each of the line ministries and their decentralized units, the Zambia Business Coalition, the NGO/CBOs and the organizations of PLHA. The M&E Unit will consolidate the inforination from all the sources and use it as a valuable monitoring tool on an on going basis for project management The linkages between the project reporting mechanisms and the national program level M&E have been clearly established. Project performance indicators Key performance indicators for the project have been selected to reflect the project's input/output (processes) and the outcomes/impact. The input indicators include the: (i) number of HIV/AIDS prevention, care and impact mitigation community initiatives funded through Part (a) of the project; (ii) number and availability of HIV VCT sernices in the districts; (iii) percentage of public sector training institutions with HIV/AIDS prevention education integrated into their curriculum; (iv) number of districts with functioning HIV support groups; and (v) number of operational research studies on HIV prevention conducted and reported. The output indicators include the number of: (i) ministries who have sensitized their staff, (ii) peer educators and counselors in HIV/AIDS prevention and care trained in each ministry, (iii) ministries with budget line items for HIV/AIDS-related programs, and (iv) DATFs that are functional. The outcome indicators selected for the project are behavior change indicators. These include the: (i) median age at first sex encounter increased by one year in both males and females by 2008; (ii) reported condom use at last sex encounter with a non-regular partner increased from 30 to 45 % for males and from 17 to 30% for females by 2008; (iii) percentage of teenagers aged 15-19 years who are mothers or pregnant with their first child reduced from 59% to 45% by 2008; and (iv) increase in primary school enrollment and completion rate among orphans and vulnerable children supported under Part (a) of the project by 2008. The impact indicators are the reduction in HIV prevalence among: (i) young people aged 15 to 19 years by 2008; and (ii) antenatal women aged less than 20 years by 2008. There has been sufficient data generated in Zambia on which to base the project's impact and outcome indicators. The baselines for these indicators have been identified, and their monitoring will not involve a - 58 - specially conducted survey because they are routinely obtained. The project evaluation process will begin at MTR, when the existing data collected through the M&E system by the M&E Unit would be collated and analyzed specifically relative to the achievements or lack thereof of the goals set by the project. During the project preparation process, attempt was made to set realistic and achievable targets. By the mid-term it should be possible to evaluate whether the project is moving in the right direction or not. In the event that significant weaknesses manifest during implementation, the annual reviews would provide timely opportunity to address such before the project implementation is concluded. It is expected that the final evaluation of the project will be participatory and will also include beneficiary assessment. - 59 - Annex 5: Financial Summary ZAMBIA: Zambia National Response to HIVIAIDS (ZANARA) Years Ending 2008 IMPLEMENTATION PERIOD - - i Year 1 Year 2 Year 3 Year4 Year5 Year6 Year 7 Total Financing Required Project Costs Investment Costs 4.5 8.0 9.0 9.0 5.5 0.0 0.0 Recurrent Costs 2.0 2.0 2.0 2.0 2.0 0.0 0.0 Total Project Costs 6.5 10.0 11.0 11.0 7.5 0.0 0.0 Total Financing 6.5 10.0 11.0 11.0 7.5 0.0 0.0 Financing IBRD/IDA 6.0 9.0 10.0 10.0 7.0 0.0 0.0 Government 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Central 0.5 1.0 1.0 1.0 0.5 0.0 0.0 Provincial 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Co-financiers 0.0 0.0 0.0 0.0 0.0 0.0 0.0 User Fees/Beneficiarles 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Project Financing 6.0 9.0 10.0 10.0 7.0 0.0 0.0 Main assumptions: - 60 - Annex 6: Procurement and Disbursement Arrangements ZAMBIA: Zambia National Response to HIV/AIDS (ZANARA) Procurement Procurement for project preparation. The project preparation facility (PPF) are funds to finance consulting services, urgent office equipment etc. Contracts are being awarded based on the PPF Letter Agreement and the Bank's Guidelines for Procurement under IBRD Loans and IDA Credits and the Guidelines for Selection and Employment of Consultants by World Bank Borrowers. (See para 3 below) Procurement under the project. Of the four components comprising the project, namely: (i) support for CRAIDS (US$14.7 million); (ii) support to NAC & its Secretariat (US$ 2.5 million); (iii), support to the line ministries (US$21.3 million); and (iv) program aministration (US$3.5 million), it is not possible to determine the exact mix of goods and services to be procured under the first component, where sub-projects will be identified as the project is implemented. For the other components, where feasible, the procurement requirements have been defined. Details of procurement and sources of funds for each procurement will be specified in the PIP and will conform with the Government's procurement requirements and with the IDA guidelines. Procurement methods will be defined each year, where possible, when the procurement plan is discussed and finalized. Consequently, aggregate amount of procurement by each method cannot be definitely assessed and defined at this stage (but estimates are used for the present) for a part of the project. During appraisal, discussions were held on the details of the procurement plan (including procurement methods) for the items that can be planned for under this project, as well as sources of funds for each activity. The summary of proposed procurement arrangements are presented in Table A below. IDA financed grants and credits will be utilized for goods, training, consultancy, and operating costs under the project. Procurement for all IDA financed activities will be carried out in accordance with the Bank's Guidelines for Procurement under IBRD Loans and IDA Credits (January 1995 and revised in January and August 1996, September 1997, and January 1999). Consulting services by firms or individuals will be awarded in accordance with the Bank's Guidelines for Selection and Employment of Consultants by World Bank Borrowers (January 1997; Revised September 1997; January 1, 1999 and May 2002). Consultant selection for assignments will usually be addressed through competition among qualified short-listed firms and individuals in which the selection will be based on QCBS by evaluation of the quality of the proposal before comparing the cost of services to be provided. In addition, selection shall also be done based on CQ and other methods as provided for in the guidelines. Short lists for contracts estimated to cost under US$ 200,000 may be comprised entirely of national consulting firms if a sufficient number of qualified firms (at least three) are available at competitive costs. However, if foreign firms have expressed interest, they will not be excluded. Contracts less than US$ 100,000 each for firms, may be contracted on the basis of CQ. Contracts less than US$ 50,000 for individuals may be awarded on the basis of their qualifications in accordance with Section V of the Bank's Consultants' Guidelines (hereinafter called IC procedure). Contracts may be awarded on a single source basis only in exceptional circumstances, after adequate justification and prior review by IDA for all those estimated to cost more than US$ 5,000. For contracts of a routine nature estimated to cost less than US$ 100,000 and where established practices and standards exist such as financial audits, least cost method of selection may be used. Goods procurement will be carried out in accordance with Guidelines for Procurement under IBRD - 61 - Loans and IDA Credits (January 1996, August 1996, September 1997, January 1999). Under the project goods expected to be procured include condoms, HIV/AIDS testing kits, drugs and medical supplies, equipment, vehicles, furniture, computers, etc. Contracts of individual value of US$ 100,000 equivalent, or more, will be awarded on the basis of ICB. To the extent possible, contracts for goods shall be grouped into packages estimated to cost US$ 100,000 equivalent or more and will be procured through International ICB. The ICB procurements shall be carried out by the Procurement Unit of the PAU. Small value goods procurement contracts (individual value of less than US$ 100,000 equivalent will be awarded on the basis of NCB subject to an aggregate ceiling of US$ 11.0 million equivalent. The standard bidding document for NCB will be submitted to IDA by the PAU for prior review and approval. For the CRAIDS component, contracts up to an aggregate amount not to exceed US$ 100,000 equivalent may be procured under community participation arrangements using the simplified formats set forth in the Guidelines for Simplified Procurement and Disbursement for CBI. Goods estimated to cost less than US$ 30,000 equivalent per contract may be procured through shopping procedures by soliciting at least three quotations from different suppliers, in accordance with paragraphs 3.5 and 3.6 of the Bank's Procurement Guidelines and the June 9, 2000 Memorandum "Guidance on Shopping" issued by the Bank, subject to an aggregate ceiling of US$ 900,000 equivalent. Contracts estimated to cost less than US$ 50,000 maybe procured through United Nations Agencies IAPSO in accordance with the provisions of paragraph 3.9 of Bank Guidelines, subject to an aggregate ceiling of US$ 500,000 equivalent; this includes urgent requirements set out below. Urgent requirements. Notwithstanding the general provisions of paragraph 5 above, given the urgency of the program, and to facilitate speedy procurement of urgently required drugs and items required immediately for institutional strengthening, specific contracts will be handled by the PAU in the following exceptional manner: (i) Drugs for 01, HIV test kits, syphilis test kits, reagents for infection control and TB laboratory reagents, estimated to cost less than US$ 200,000 per contract, up to an aggregate of US$ 1,000,000 may be procured through international shopping; (ii) Computers and accessories, office and power equipment for new PAU and NAC Secretariat staff estimated to cost up to an aggregate amount of US$ 100,000 may be procured through shopping or contracted from the UN Agency (IAPSO); and (iii) Vehicles (up to an aggregate amount not to exceed US$ 350,000 equivalent) for initial management of the project may be procured from IAPSO and/or National Shopping procedures (preferably from bonded warehouses' on a competitive basis). All contracts and deliveries (i.e. arrivals in the project site) under the above stated 'emergency requirements' must be completed within 12 months from the project effectiveness date. The list of these items and their estimated value - within the framework of the details mentioned in (i) to (iii) above - will be agreed upon with IDA and incorporated in the Procurement Plan. The procurement and timely distribution of the goods will be the responsibility of PAU. Works procurement will be carried out in accordance with Guidelinesfor Procurement under IBRD Loans and IDA Credits (January 1996, August 1996, September 1997, January 1999). The civil works to be included in this project would generally be small civil works projects i.e. minor works or refurbishment and rehabilitation and therefore there will be no ICB contracts. Contracts exceeding US$ 50,000 up to an aggregate amount of US$ 200,000 will be awarded on the basis of NCB. Individual contracts estimated to cost $50,000 or less may be procured under community participation arrangements using the simplified formats set forth in the Guidelinesfor Simplified Procurement and Disbursementfor Community-based Investments. Individual contracts (other than for CRAIDS component) estimated to cost less than US$ 50,000 may be awarded through National Shopping using approved procedures. For - 62 - the line ministries component, works contracts estimated to cost more than US$ 10,000 equivalent per contract will not be eligible for financing under the program. The National Shopping for works procedure to be adopted here is to award lump sum fixed price contracts on the basis of written solicitation issued to at least three qualified civil works contractors and after evaluation of the bids which would be received in writing. The invitation shall include a detailed description of the works, including basic specifications, the required completion date, a basic form of agreement acceptable to IDA and the relevant drawings, where applicable. The award of the contracts will be made to the contractor who offers the lowest price quotation for the required work, provided the contractor demonstrates the required experience and resources to complete the contract successfully. Training activities will comprise hiring consultants for developing training materials and conducting training and support for training programs. Training, workshops and study tours will be carried out on the basis approved annual work programs that will identify the general framework of training activities for the year, including the type of training/ study tours/ workshops, the number of trainees, cost estimates, etc. Procurement of these will also follow IDA procurement guidelines using the Quality Based selection method or Consultant Qualification for firms or the IC procedure for individuals. The General Procurement Notice will be published in the Development Business and local newspapers at least 60 days prior to the issue of bid documents. The GPN will be updated on an annual basis and will show all outstanding ICB for goods and consulting services. Specific Procurement Notices in accordance with the guidelines will be issued for ICB contracts and before preparation of short lists with respect to consulting contracts above US$ 200,000. Procurement planning. The Procurement Planning Schedules covering mainly goods and consultancy services are not yet finalized. Given that the individual projects to be financed will be defined later (during project implementation), the major part of the funds for CRAIDS cannot be defined at this stage. For some components (strengthening of procurement functions, financial management systems, etc), line ministries activities, the procurement plans are to be defined and included in the PIP. Given the importance of the procurement plans, these will be finalized on priority basis and their agreement with Bank is a "condition of effectiveness". Implementation arrangements. The Procurement work will be done in two main parts. For the CRAIDS component comprising community based sub-projects, where the existing structures and methodology of ZAMSIF project (see below) will be adopted. The ZAMSIF organization will render reports for the EIV/AIDS project to the Project Administration Unit (PAU). ZAMSIF-based community projects (CRAIDS). For the ZAMSIF based component, the communities or NGOs will be prepare sub-project proposals which will be approved through the District Planning sub-committee. After that ZAMSIF will be responsible for supervising and coordinating the procurement by the communities and also disbursing funds to the communities. ZAMSIF is already existing and is implementing community driven projects with this system. The work program to be implemented will be based on the applications received from the communities from a menu of approved activities. Procurement will be done using the simplified procurement procedures as those prevailing under the ZAMSIF. Procurement unit. The Procurement Unit will have the overall responsibility of carrying out procurement, managing and supervising the implementation of the procurement function as well as providing procurement support and capacity building in the implementing agencies. The Procurement Unit at the PAUwill comprise a Procurement Manager/ Specialist assisted by a Procurement Officer. - 63 - For the community driven component the existing ZAMSIF structure will be utilized with the addition of one Procurement & Costing Specialist to specifically responsible for the HIV/AIDS component. The rest of the procurement will be primarily done by the Procurement Unit in the PAU. The PAU is located in the Ministry of Finance and National Planning (MOFNP). Line ministries and NAC will also be gradually involved in their own procurement, starting in a small way and doing more as capacity is built up. This will entail procurement of goods, works and services within the agreed thresholds (see below). Procurement arrangements and reporting responsibilities (Chart is available at the end of this Annex 6 ) Procurement capacity assessments of the implementing agencies i.e. the PAU, 6 line ministries, ZAMSIF, one district council and one ZAMSIF regional office have revealed that procurement staffing levels for line ministries are adequate, and that the line ministries are operating under thresholds certified by Zambia National Tender Board (which are higher than the thresholds being proposed under ZANARA). However, most of the line ministries have limited or no experience in implementation of Bank financed projects therefore, training and capacity building in Bank procurement procedures and guidelines will need to be carried out. Some of the line ministries' and ZAMSIF Management Unit's procurement capacity assessments were satisfactory as they have gained experience from implementing other Bank financed projects and have a good track record. At the district council level the procurement capacity is very weak as the relevant structures are not in place and there are very limited procurement activities and generally most of the procurements are using the shopping method. ZAMSIF in conjunction with the District Councils has put in place institutional arrangements and training programs to strengthen the procurement capacity. PAU has not yet been established. Centralized procurement for items above the thresholds for the ministries will be carried out by the PAU including providing the procurement support to the other beneficiary agencies under the project. A complete Procurement Capacity Assessment has not been undertaken because the PAU organization has not yet been established. Therefore, such aspects as procurement cycle management , record keeping and organizations and functions for procurement management could not be assessed. These aspects will be reviewed as the project proceeds and the organization is actually set up. Such a review will establish if the reporting arrangements and procurement set up is suitable for the efficient procurement. Community Response to HIV/AIDS. The project through the CRAIDS component will support community based projects. The CRAIDS component will be carried out by ZAMSIF. ZAMSIF is a Govermnent Department under the MOFNP that is semi-autonomous which supports community based development through the CIF and the DIF. Through these existing structures of ZAMSIF CRAIDS will fund community based activities and will address prevention of HIV/AIDS as well as provide care and support to those affected by HIV/AIDS. The CRAIDS component will provide support to the following activities VCT; condoms promotion and distribution, peer education, community health education, support to youth programs, information dissemination, minor civil works, and capacity building support to District Councils. As procurement capacity is strengthened at district level then the districts will be given increased procurement responsibility - the details will be defined later on. An operations manual has been prepared for the community based component CRAIDS which provides guidelines for procurement for the community-based projects. In addition, a Procurement Manual for all components is also being prepared. This will be ready by effectiveness and is a condition of -64- effectiveness. ZAMSIF will be responsible -for ensuring compliance with the guidelines and ex-post procurement reviews will be carried out for a random sample of sub-projects periodically by the Bank and district staff of the ZAMSIF Management Unit. Procurement methods (Table A) Table A: Project Costs by Procurement Arrangements (US$ million equivalent) Procurement Method Expenditure Category ICB NCB Other N.B.F. 'Total Cost 1. Works 0.00 0.30 0.00 0.00 0.30 (0.00) (0.20) (0.00) (0.00) (0.20) 2. Goods 7.50 8.00 2.65 0.00 18.15 (7.20) (7.00) (2.40) (0.00) (16.60) 3. Services 0.00 0.00 13.30 0.00 13.30 and Training (0.00) (0.00) (13.30) (0.00) (13.30) 4. Grants to Communities 0.00 0.00 8.60 0.00 8.60 (0.00) (0.00) (8.60) (0.00) (8.60) 5. Incremental Operating 0.00 0.00 5.60 0.00 5.60 Costs (0.00) (0.00) (3.30) (0.00) (3.30) Total 7.50 8.30 30.15 0.00 45.95 (7.20) (7.20) (27.60) (0.00) (42.00) "Figures in parenthesis are the amounts to be financed by the Bank Grant. All costs include contingencies. 2'Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units. - 65 - Prior review thresholds (Table B) The procurement of goods whose contracts are valued at US$ 100,000 or more will require prior review by IDA. For works, all contracts valued at US$ 100,000 or more will require prior review by IDA. All contracts exceeding the value of US$ 100,000 under the emergency procurement procedure (para. 6 above) will be subject to IDA prior review. The Bank will review the selection process for the hiring of consultants proposed by the borrower for those consultancy contracts to be awarded to firms and individuals. Prior review will not be required for contracts worth less than US$ 100,000 for firms and contracts worth less than US$ 50,000 for individuals. However, IDA will review: (a) all Terms of Reference of contracts, regardless of value; (b) all single-source contracts exceeding US$ 5,000; (c) assignments of a critical nature as determined by IDA; and (d) amendments of contracts raising the contract value above the prior review thresholds. Prior review will be required for the training plan. Prior review by the PAU's procurement unit The PAU and the Zambia National Tender Board will define prior review thresholds for the line ministries, communities, districts, etc., in consultation with IDA, when the prior review will be conducted by the PAU's Procurement Unit. The prior review thresholds will be set differently for each of three levels of procurement capability for which these agencies will be categorized suitably. PAU will periodically review and revise the categorization and thresholds (below) of individual Implementing Agencies based on demonstrated improvements in procurement capability. The current thresholds agreed are for three categories as below. Goods up to (USD) Works up to (USD) Consultants up to (USD) Category I (Best Capacity) 30,000 15,000 8,000 Category 11 (Medium Capacity) 10,000 10,000 4,000 Category III (Least Capacity) 4,000 4,000 1,000 The criteria for categorization of each implementing agency will be the level of procurement proficiency. Category ratings for selected ministries and agencies Name of implementing agency Procurement capability rating Cabinet Office Category III Ministry of Community Development & Social Services Category III Ministry of Finance & National Planning Category ll Ministry of Health Category II - 66 - Ministry of Science, Technical & Vocational Training Category III Project Adminiistration Unit (PAU) Category III Zambia Social Investment Fund (ZAMSIF) Category II District Councils Category III (Category ratings for other supported ministries and agencies will be completed before effectiveness) Table B: Thresholds for Procurement Methods and Prior Review Contract Value Contracts Subject to Threshold, Procur.ement Prior Review Expenditure Category (uS$'thousands) 'Meth6d (OS$'thousands) 1. Works >50,000 NCB 100,000 or more <50,000 Quotations None 2. Goods <100,000 NCB >First 3 contracts >100,000 ICB 100,000 or more <30,000 Shopping/IAPSO None Emergency requirements as detailed above (Drugs) <200,000 Shopping All (Equipment) <100,000 Shopping/IAPSO All 3. Services >100,000 QCBS 100,000 or more <100,000 CQ & LCS None Individuals >50,000 CQ 50,000 and more <50,000 CQ None Firms/lndividual >5,000 Single Source All <5,000 Single Source None 4. Training Workshops >50,000 QBS None & Seminars <50,000 CQ None 5. Miscellaneous 6. Miscellaneous Total value of contracts subject to prior review: Overall Procurement Risk Assessment High Frequency of procurement supervision missions proposed: One every 4 months (includes special procurement supervision for post-review/audits) The PAU will conduct quarterly reviews of the procurement work of the decentralized agencies on a selective basis. will have procurement audits conducted on an annual basis for its own use and for use by Bank. 'Thresholds generally differ by country and project. Consult OD 11.04 "Review of Procurement Documentation" and contact the Regional Procurement Adviser for guidance. - 67 - Disbursement Allocation of grant proceeds (Table C) Financial management The project will be administered by the PAU, while the NAC is responsible for the co-ordination of the activities by various implementing entities. The MOF is accountable for the proceeds of the entire Grant. The flow of funds is as follows: Figure 1 Flow of Funds Special Account "A" Special Account "B" Part (a) CRAIDS j Parts (b), (c) & (d) Grants DstrictResponse NAC Coordination MOieHiisre Program CBO/NGOs &ME&LnMistesAdministration Capacity Building National Program Disbursement and withdrawal procedures are detailed in the World Bank Disbursement Handbook (1992 edition). All disbursements are subject to the conditions of the IDA Grant Agreement and the procedures defined in the Disbursement Letter. All applications to withdraw proceeds from the IDA Grant account will be fully documented except for expenditures against contracts: (i) with an estimated value of US$ 100,000 each or less for works; (ii) with an estimated value of US$ 100,000 or less for consulting firms and goods; (iii) with an estimated value of US$ 50,000 or less for individual consultants; and (iv) for all training workshops and study tours, which may be claimed on the basis of certified SOEs. Documentation supporting expenditures claimed against SOEs will be retained at the PAU (for Parts B, C and D of the Project), and at ZAMSIF (for Part A of the Project) and will be available for review as requested by IDA supervision missions and project auditors. The allocation of IDA Grant proceeds are shown in Table C; the proceeds of the IDA grant would be made against 100% of consultant services and training, 85% of all expenditures on all local expenditures for goods and 100% of expenditures on all foreign expenditures for goods, and 100% of all expenditures for IDA-financed components of community initiatives under the CRAIDS component. As projected by the Banks standard disbursements profile, disbursement would be completed by four months after project closure. Disbursement would be made against standard IDA documentation. Table C: Allocation of Grant Proceeds E xpendiitue Category Amount In US$mfilion Financing Percentage Goods 20.00 100% of Foreign 85% of Local Technical services, consultants' 10.18 100% - 68 - services, and training Grants to Community Initiatives 8.62 100% Works 0.20 100% of Foreign 85% of Local Incremental Operating Costs 2.57 50% Refinancing of PPF 0.43 100% Total Project Costs 42.00 Total 42.00 Use of statements of expenditures (SOEs): Parts a, b, c and d (Special Accounts 'A' and 'B') During the negotiations, the borrower informed the Bank of its decision to use the traditional transaction-based method of disbursement. Thus, disbursement procedures as outlined in the Bank's Disbursement Handbook will be followed for all components and during the life of the project, i.e. Direct Payment, Reimbursement and Special Commitments. By appointing an internationally qualified person as Finance Manager in the Program Administration Unit, and engaging a consultant to design and implement ZANARA Project's financial management system, it would be possible for the client to produce FMRs, as required by the Bank. Under the project SOEs will be submitted for withdrawals from the IDA Grant Account to be made on the basis of statements of expenditure for (i) goods under contracts costing less than US$ 100,000 equivalent each; (ii) services under contracts costing less than (A) US$ 100,000 equivalent each for consulting firms, and (B) US$ 50,000 equivalent each for individual consultants; (iii) all Incremental Operating Costs and training; and (iv) all Grants to communities under the CRAIDS component costing less than US$ 50,000 equivalent each. Replenishment of funds from IDA to the Special Accounts 'A' and 'B' will be made on evidence of satisfactory utilization of the previous advance , reflected in the consolidated SOEs prepared by the PAU. Withdrawal applications for direct payment and special commitments will be for a minimum of US$ 100,000 or 20 percent of the SA authorized allocations, whichever is lower. Special account: The ZANARA Project will maintain 2 Special Accounts in a Commercial Bank acceptable to IDA as follows: Special Account A, in USD, will exclusively service Part (a) of the project, and will be maintained by ZAMSIF. The funding to the communities will be based on approved project proposals. All community based activities will be handled through ZAMSIF. Approval of the proposals for funding will be by the NAC. On approval the communities will be provided with accountable advances for eligible qualifying activities and will be required to report on the usage of the funds using agreed formats. Additional funding will only be available after accounting for the previous advance. Communities will be expected to maintain separate Kwacha Bank Accounts for IDA funds received from ZAMSIF. Before funds are transferred to the community an assessment will be made of the existence of, at least a basic accounting system and knowledgeable staff to record the transactions and produce basic financial reports of Receipts and Payments. Detailed accounting - 69 - and processing procedures are as per the CRAIDS Implementation Manual appearing as Appendix A. Special Account B in USD, will finance Parts (b), (c) and (d) of the project. The activities under these components will be funded according to approved annual and quarterly work programs. Following the approval of the work program accountable advances will be provided for eligible qualifying activities in accordance with procedures documented in the FMPPM. Replenishments will be on a monthly basis after satisfactory submission of reconciliations to the PAU. The reconciliation will consist of a bank statement and the supporting documents for any expenditure. A Kwacha account will be maintained at a commercial bank exclusively for Part A component of ZANARA with a separate set of books and accounts. Other Kwacha accounts will be opened for each Components Parts B and D and for each of the participating ministries for component (c). These are individual accounts for ZANARA and separate books and accounts will be maintained for them. Bank account signing arrangements will allow for two panel signatories. All bank accounts will be reconciled monthly. Full detailed accounting and control procedures will be documented in the FMPPM. As part of eligibility criteria, a Financial Management capacity assessment will be made by the Finance Manager before funds are transferred to the component recipients. Recommendations for improvements will be made where weaknesses are identified and assistance can be provided. General (Financial Management) The NAC has responsibility for the coordination of the activities under the ZANARA project. The NAC working under a Cabinet Committee of Ministers for H1V/AIDS will establish a secretariat to provide Technical guidance and implement Council decisions. A PAU will be established comprising the ZANARA Project Manager (PM), including Finance, Procurement and Monitoring Managers located at the MOFNP until such time that requisite capacity has been created at the NAC to assume these responsibilities, if appropriate. Under the supervision of the PM, the Finance Manager will be responsible for ensuring that financial management and reporting procedures to be put in place will be acceptable to the Government, the World Bank and other Cooperating Partners. ZANARA proposes to use the existing GRZ Financial regulations to govern the financial procedures for the project funds. The accounting functions for the project will be incorporated within the existing GRZ structures at MOFNP. The principal objective of the ZANARA project's FMS will be to support management in the deployment of resources with due regard to economy, efficiency and effectiveness in the fight against HIV/AIDS and the subsequent relief to the people of Zambia. Specifically, the FMS must be capable of producing timely, understandable, relevant and reliable financial information that will enable management to plan, implement, monitor and appraise the project's overall progress towards the achievement of the objectives. The ZANARA Project FMS will be developed in accordance with the Action Plan presented in Section B below. Financial Management Action Plan Financial Management and Procurement Committee (FMPC) Reporting to the Permanent Secretary of the MOFNP, a representative of FMPC will be appointed to review the quarterly Financial Monitoring Reports (FMRs) comprising: (i) Financial reports. The reports will include as a minimum a statement showing for the period and - 70 - cumulatively cash receipts by sources and expenditures by main expenditure categories; the starting and closing cash balances; and supporting schedules comparing actual and planned expenditures. Members of the FMPC will review and approve Quarterly and Annual Financial Statements; they will examine material variances between budget and actual figures, seeking appropriate remedial action within an agreed timeframe. (ii) Physical Progress reports. The reports will include accompanying narrative interpreting the Program's progress with agreed performance(output) indicators and how costs to date relate to those planned at appraisal; highlight issues that require attention and the likely effect on the Program by completion. (iii) Procurement reports The reports will provide information on procurement of Goods, Works and Services; including the selection of Consultants; and compliance with agreed procurement methods. The format and contents of FMRs will be agreed with IDA. Staffing The recruitment of staff has started and an internationally qualified Finance Manager will be appointed to direct and guide the financial operations. To assist the Finance Manager suitably qualified and experienced staff will be made available from MOFNP or competitively sourced from the open market. Varying levels of staff training may be required in financial management, government accounting; information systems and computer applications; and procedures relating to the utilization of funds (e.g. Special Accounts, Disbursements, SOEs, Special Commitments, Procurement, etc.). On-the-job training will be provided. Accounting System/Financial Procedures/Internal Audit A Financial Management Consultant will be recruited to advise on the selection and installation of the Program's computerized FMS (using an integrated accounts package) which must be compatible with IFMS at MOFNP, to prepare the (FMPPM and to train staff in the operation of the system. Provision has been made in the Project Preparation Fund budget for recruiting the consultant, procuring computer hardware and software. The consultant and the Finance Manager will be required to train the recipient ministries in IDA guidelines/procedures, and communities in basic bookkeeping and provide accounting guidelines. [An operations manual will spell out: eligibility criteria and eligible expenditures description; funding mechanisms and channel forflow of funds to recipients; review and screening and authorization (ex-ante); payments; accountability and transparency measures; monitoring and compliance assessment (ex-post); relation with IDA and other donors and methods of withdrawal; forms andformats.] The Internal Audit Department at MOFNP and ZAMSIF will be involved in the periodic review of the project's activities. Due to the large resources going down to the Community level it is proposed that extensive internal audits are carried out for all funds transferred to the Community with reasonable frequency. The Internal audit should work in close collaboration with the M&E Unit. Through well structured workshops the Communities can be sensitized to provide the internal checks at the community level. - 71 - Planning and Budgeting. Counterpart Funding if part of this project will be approved in line with the Government's budgetary process. The Finance Manager, in consultation with the PM, the Procurement, the Monitoring Manager and the FMPC, will be responsible for preparing the Program's Consolidated Quarterly/Annual, Work plans and Cash Flow Forecast in line with generally accepted accounting practice. Government Accounting - Cash vs. Accruals Base. The ZANARA Project will meet the MOFNP requirement for modified cash accounting. Thus, for the period of the project, Project funds will be accounted for on a cash basis. Procurement of Goods, Works and Services. Procurement procedures will be documented in the FMPPM. World Bank and Government procurement regulations will be observed. The Finance Manager and support staff must be conversant with those procedures, as internal control issues and the incurring of liabilities on behalf of the Project will be matters of concern to the financial management function. A Procurement Management Report, showing procurement status and contract commitments, will be prepared quarterly for consideration by the FMPC (see above). Withdrawals/Disbursements. Existing disbursement procedures as outlined in the Bank's Disbursement Handbook will be applied on the project, i.e. Direct Payment, Reimbursements and Special Commitments. By appointing an internationally qualified person as Finance Manager, and engaging a consultant to design and implement ZANARA Project's FMS, it should be possible for the client to move towards report (FMR)-based disbursements as a possible option. However, considering the nature of the project:anticipated rapid disbursements and it's short duration(4 years) the Client has decided to stick to the transaction based disbursements for the duration of the project. Fixed Assets/Civil Works/Consultants. Control procedures will be documented in the FMPPM. A Fixed Assets Register will be prepared, regularly updated and checked. Regarding Capital Work in Progress, controls will be established to ensure that payments are made only for certified work (including physical verification). A Contracts Register will be maintained for all contracts with consultants. A Procurement Management Report, showing procurement status and contract commitments, will be prepared quarterly for consideration by the FMPC. Financial Reporting (i) Monthly Cash. In compliance with Government requirements, the Finance Manager will be responsible for preparing a Monthly Return to the Accountant General, MOFNP. (ii) Quarterly. Financial Monitoring Reports will be produced and submitted to the FMPC (iii) Annually. The Program's Financial Statements will include: (a) A Consolidated Statement of Sources and Uses of Funds analyzed by Cooperating Partner ( i.e., IDA, counterpart and donor funds; uses of funds according to categories) (b) Program Balance Sheet as at the reporting date; (c) Notes on significant accounting policies and standards adopted by management when preparing the accounts; and on any supplementary information or explanations deemed appropriate by management to enhance the presentation of a "true and fair view"; (d) A Statement reconciling the balances on the various Bank Accounts to the bank balances on the Statement of Sources and Applications of Funds; (d) SOE Withdrawal Schedule, listing individual withdrawal applications relating to disbursements by the SOE Method, by reference number, date and amount; (e) A Cash Forecast for the next two quarters. - 72 - Indicative formats for Financial Statements are outlined in a number of World Bank publications - Financial Accounting Reporting and Auditing Handbook (January 1995), Financial Monitoring Reports: Guidelines to Staff/Borrowers (November 30, 2001). In due course, the agreed formats adopted by the FMPC will be documented in the FMPM. External Audit Audited financial statements will be submitted to the Bank within six months after the financial year end. In Zambia, the Office of the Auditor General (AG), as outlined in the Constitution of Zambia Act 1996, is responsible for the external auditing of all Government Funds. In practice, because of capacity constraints, the AG frequently appoints relevantly qualified, experienced and independent private sector auditors as his/her agents on approved terms of reference. In such cases, the private sector auditor reports directly to the AG who retains the overall signing responsibility for the audit opinion. Besides expressing a primary opinion on thefinancial statements in compliance with International Auditing Standards (IFAC/INTOSAI), the AG must include a separate paragraph commenting on the accuracy and propriety of expenditures withdrawn under SOE procedures and the extent to which these can be relied upon as a basis for loan disbursements. Regarding the Special Account, the AG will also be expected to form an opinion as to the degree of compliance with Bank procedures and the balance at the year-end. Additionally, the AG will be required to prepare a separate Management Letter giving observations and comments, and providing recommendations for improvements of accounting records, systems, controls and compliance with financial covenants. - 73 - Annex 7: Project Processing Schedule ZAMBIA: Zambia National Response to HIVIAIDS (ZANARA) Project Schedule, Planned Actual Time taken to prepare the project (months) First Bank mission (identification) 10/02/2000 10/02/2000 Appraisal mission departure 04/16/2001 04/16/2001 Negotiations 04/08/2002 04/12/2002 Planned Date of Effectiveness 02/28/2003 Prepared by: Ministry of Finance and National Planning, supported by a Project Preparation Team including the (Interim) National AIDS Council, Ministry of Health, Central Board of Health, NGOs, private sector. Preparation assistance: IDA Project Preparation Facility Q2670-ZA for the sum of US$ 435,300 was provided for various preparation activities. The preparation activities involved consultancies (PIM, procurement and financial management), office equipment and furniture, and training workshops. Bank staff who worked on the project included: Name Speciality Albertus Voetberg Lead Health Specialist/Team Leader Andrew Follmer Operations Officer Muhammad Ali Pate Young Professional/Public Health Specialist Helen Mbao Social Development Specialist Trina Haque Senior Economist Bwalya Mumba Procurement Specialist Subhash Dhingra Procurement Specialist Fenwick Chitalu Financial Management Specialist Chris Walker Lead Specialist - Quality Assurance/Peer Reviewer Rollinah Mudenda Task Team Assistant Debrework Zewdie Adviser - Peer Reviewer Susan Stout Lead Implementation Specialist - Peer Reviewer Vanessa Saldanha Program Assistant - 74 - Annex 8: Documents in the Project File* ZAMBIA: Zambia National Response to HIV/AIDS (ZANARA) A. Project Implementation Plan Draft (March, 2001) -- final document is a condition for effectiveness B. Bank Staff Assessments Economic Assessment for MAP Projects -- August, 2000 Institutional Assessment -- March, 2001 Social and Gender Assessment - March, 2001 C. Other HIV/AIDS in Zambia: Background Projections, Impacts and Interventions ---September 1999 Zambia National Strategic Framework on HIV/AIDS -- 2000 Costing the Zambia National HIV/AIDS Strategic Framework 2001-2003, October 2000 Orphans and Vulnerable Children: A Situational Analysis, Zambia 1999 Database of External Contributions to Zambia's HIV/AIDS Response, GRZ/WB/UNAIDS, April 2000 HIV/AIDS Bibliography, an annotated review of research on HIV/AIDS in Zambia, GRZ/UNICEF, 1996 World Bank Identification Mission Aide-Memoire - September, 2000 World Bank Preparation Mission Aide-Memoire, report on the HIV/AIDS Round table -- November, 2000 World Bank Project Concept Document - February, 2001 World Bank Pre-Appraisal Mission Aide-memoire -- February, 2001 *Including electronic files - 75 - Annex 9: Statement of Loans and Credits ZAMBIA: Zambia National Response to HIVIAIDS (ZANARA) 02-Dec-2002 Difference between expected and actual Original Amount In US$ Millions disbursements Project ID FY Purpose IBRD IDA Cancel Undlsb. Orig Fnn Rev'd P070122 2001 RegionalTradeFac Proj -Zambia 000 1500 000 1139 156 000 P057167 2001 TEVET 0 00 25 00 0 00 24 73 -0 21 0.00 P003227 2001 RAILWAYS RESTRUCTURING PROJECT 0 00 2700 0 00 8.51 4 78 0 00 P050400 2000 PUB SVC CAP (PSCAP) 0 00 28 00 0 00 19 83 22 59 0 00 P063584 2000 Sodal InvesbmentFund (ZAMSIF) 000 6470 000 47 89 1130 000 P064064 2000 MINE TOWNSHIP SERVICES PROJECT 000 3770 000 28.37 1920 000 P003249 1999 BASICEDSECINVPRG 000 4000 000 21.20 2388 401 P003236 1998 NATIONAL ROAD 0 00 70 00 0 00 13 93 1418 0 00 P035076 1998 POWERREHAB 0o00 75.00 0.00 35.07 3852 2642 P003253 1997 Environmental Support Program 00o0 1280 000 665 6.87 000 P044324 1997 ENTERPRISE OEVELPMNT 0 00 45 00 0 00 0.72 3 74 0 81 P040642 1996 ERIPTA 0.00 23 00 0.00 8 56 231 2 31 Total: 0 00 463 20 000 226 86 148 72 33 55 ZAMBIA STATEMENT OF IFC's Held and Disbursed Portfolio Jun 30 - 2002 In Millions US Dollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1998 AEF Amaka Cotton 1.30 0.00 0.00 0.00 1.30 0.00 0.00 0.00 2001 AEF Chingola Htl 0.96 0.00 0.00 0.00 0.96 0.00 0.00 0.00 1998 AEF Drilltech 0 12 0.00 0.15 0.00 0.12 0.00 0.15 0.00 1999 AEF Esquire 0.30 0.00 0.00 0.00 0.30 0.00 0.00 0.00 1997 AEF JY Estates 0.89 0.00 0.00 0.00 0.89 0.00 0.00 0.00 2001 AEF Michelangelo 0.20 0.00 0.00 0.00 0.20 0.00 0.00 0.00 1997 AEF Pentire 0.38 0.00 0.00 0.00 0.38 0.00 0.00 0.00 2000 APC Ltd. 2.50 0.00 0.00 0.00 2.50 0.00 0.00 0.00 1972/73 Bata Shoe ZA 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1997 Finance Bank 0.25 0.00 0.00 0.00 0.25 0.00 0.00 0.00 2000 KCM 0.00 5.67 26.31 0 00 0.00 5.67 19 69 0.00 2000 Marasa Holdings 4.60 0.00 0.00 0.00 4.60 0.00 0 00 0.00 1998 Nicozam 0.00 0.30 0.00 0.00 0.00 0.30 0.00 0.00 1999/00 Zamncell 2.97 0.44 0.00 0.00 2.97 0.44 0.00 0.00 Total Portfolio: 14.47 6.41 26.46 0.00 14.47 6.41 19.84 0.00 Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic 2000 AEF QNet 0.34 0.00 0.08 0.00 Total Pending Commitment: 0.34 0.00 0.08 0.00 - 76 - Annex 10: Country at a Glance ZAMBIA: Zambia National Response to HIVAIDS (ZANARA) Sub- POVERTY and SOCIAL Saharan Low- Zambia Africa Income Development dlamond' 2001 Populaton, mid-year (mnillIons) 10.3 674 2,511 Life expectancy GNI per capita (Atlas method, US$) 320 470 430 GNI (Alias method, US$ billions) 3.3 317 1,069 Average annual growth, 1995-01 Population (%) 2.3 2 5 1.9 Laborfrce (b96) 2.8 2.6 2.3 GNl Gross per prmary Most recent estimate (latest year available, 1995-01) capita enrollment Poverty (% ofpopulation below natlonal poverty line) 73 Urban population (% of total population) 40 32 31 Life expectancy at birth (years) 45 47 59 Infant mortality (per 1,000 lIve births) 114 91 76 Child malnutritlon (% of children under 5) 24 .. . Access to Improved water source Access to an improved water source (% of population) 63 55 76 Illiteracy (% ofpopulaton age 15+) 22 37 37 Gross prmary enrollment (% of school-age population) 79 78 96 -Z mbra Male 81 85 103 Low-income group Female 76 72 88 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1981 1991 2000 2001 Economic mtlos' GOP (US$ bUllons) 4.0 3 4 3 2 3.6 Gross domesUc InvestmentGDP 19.5 11.0 19.2 20.9 Trade Exports of goods and services/GDP 28.7 34.6 17.3 22.1 Gross domestic savings/GDP 7.6 8.4 -3.2 3.5 Gross national savings/GDP 0 6 4.2 -8.3 -0.8 Current ascount balance/GDP -19.7 -15.2 -18.8 -20 4 Domestc Investment Interest payments/GDP 2.5 7.1 savings Total debVGDP 91.3 206.3 194.9 161.3 Total debt servicelexports 36.0 51.1 36.8 Present value of debVGDP .. .. 129.3 114.6 Present value of debt/exports .. .. 469.0 393.3 Indebtedness 198141 199141 2000 2001 200145 (average annual growth) GDP 1.0 1.0 3.6 5.2 42 Zambia GDP per capIta -2.0 -1.5 1.5 3.1 2 1 Low-income group Exports of goods and services -3.0 4.1 4.9 2.8 5.0 STRUCTURE of the ECONOMY 1981 1991 2000 2001 Growth of Investment and GOP (%) ff of GOP) lo Agriculture 17.0 17.4 22.3 22.0 Industry 40.1 51.0 25.3 25.7 so Manufacturing 19.3 36.7 11.4 11.2 Services 43.0 31.6 52.4 52.3 o 9 97 Be 99 oo 01 Private consumption 61.8 59.8 91.3 84.6 .so General govemment consumption 30.6 31.8 12.0 11.8 GDI --*-GDP Imports of goods and servIces 40.6 37.3 39.7 39.5 (average annual growth) 1981-91 199141 2000 2001 Growth of exports and Imports (%) Agricuture 3.4 4.3 1.4 -2 4 30 Industry 1 2 -3 7 2.9 9.8 i Manufacturing 4.5 1.3 3.6 5.7 Services -0.5 3.0 4 4 5.1 [ 97 5 Private consumption 3.3 1.4 -1.3 3.5 General govemment consumption -1.1 -7.0 -1.6 6 4 Gross domestic Investment -5.0 8.9 17.3 18 3 -Exporte ---mports Importsofgoodsandservices -1.7 3.8 0.9 6.9 Note. 2001 data are prelirrinary estimates. *The diamonds show four key indicators in the ountry (in bold) compared with its incom-group average it data are nissing, the diamond will be incornplete - 77 - Zambia PRICES and GOVERNMENT FINANCE 1981 1991 2000 2001 InflatIon (%) Domestic prices so (% change) Consumer prices 13 0 92.6 26.0 21.7 40 Implicit GDP deflator 7.8 92 7 30 0 24.3 z 20 Government finance is (Y. of GDP, includes current grants) o Current revenue 23 5 18.7 19 4 19.1 as 97 9s 99 00 01 Current budget balance -9 8 -10 6 3 4 -0 5 - GOP deflator * CPl Overall surplus/deficit . -16 0 -10.7 -12.9 TRADE (US$ millions) 1981 1991 2000 2001 Export and Import levels (USS mill.) Total exports (fob) 996 1,085 746 871 1 Copper 895 430 504 Cobalt 94 67 86 oo i0 Manufactures .. 46 163 190 Total imports (cf) 1,065 952 978 1,253 Food . . 9 10 r Fuel and energy .. 83 177 220 Capital goods . 285 284 460 0 05 go 97 a8 9s 00 0 Export pnce index (1995=100) . 83 69 65 Import price index (1995=100) 62 87 92 86 U Exports UImp-wrts Terms of trade (1995=100) . 95 74 75 BALANCE of PAYMENTS (US$ millions) 1981 1991 2000 2001 Current account balance to GDP (%) Exports of goods and services 1,149 1,169 872 1,041 o Imports of goods and services 1,650 1,258 1,317 1,625 - Resource balance -501 -89 -445 -564 s Net Income -156 4384 -145 -139 -10 Net current transfers -123 -40 -18 -20 101111111 Current account balance -780 -513 -608 -743 Financing items (net) 371 544 716 860 Changes in net reserves 409 -31 -108 -117 2 Memo: Reserves including gold (USS millions) 142 194 113 186 Conversion rate (DEC, IocallUS$) 0.9 64.6 3,110.8 3,610.9 EXTERNAL DEBT and RESOURCE FLOWS 1981 1991 2000 2001 (USS millions) Composition of 2000 debt (USS mill.) Total debt outstanding and disbursed 3,621 6,968 6.311 5,884 IBRD 347 373 25 17 G 111 IDA 4 493 1,828 1,869 F 86 A 25 Total debt service 421 599 329 . 8- 1,828 IBRD 43 344 10 10 IDA 0 10 17 23 E. 2,151 Composition of net resource flows OfFicial grants 26 521 185 211 OffIcial creditors 183 115 Pfivate creditors -20 -7 Foreign direct Investment -38 0 122 140 D-912 C 1.198 Portfolio equity Worid Bank program Commitments 26 273 A - IBRD E - Bilateral Disbursements 20 210 210 .. i-IDA D -Other rnublateral F- Pnvate Principal repayments 17 168 12 17 C-IMF G - Short-term Netflows 3 41 198 Interest payments 26 186 14 16 Net transfers -23 -145 184 uevelopment tconomics wa.iue- - 78 - Additional Annex 11 Supervision Strategy ZAMBIA: Zambia National Response to HIV/AIDS (ZANARA) Objectives The first year of implementation for the ZANARA is expected to be FY03. Although the project preparation has been extensive, it is still anticipated that there will be considerable need for close supervision during the initial years of project implementation. The main objectives of the supervision in the first year are to (a) ensure that there is adequate implementation capacity at the district levels and all the participating line ministries; (b) ensure that the NAC and Secretariat have adequate capacity and support to begin carrying out their mandate of coordination and M&E; and (c) ensure adherence to appropriate safeguards and fiduciary responsibilities. Strategic focus The supervision strategy will focus on the following critical areas in the first year. However, as is the case with the overall project design, flexibility in focus for support supervision will be required in order to be responsive to evolving priorities or emerging problems. Institutional arrangements for the implementation.. The supervision will focus on the essential institutional arrangements in order for the project to carry out the planned project activities. The role of the DATFs and the District Planning Sub-Committees in the district level coordination of project activities under the CRAIDS component will be evaluated during the first year of implementation. The project cycle for the district and sub-district proposals will also be reviewed with regards to efficiency and timeliness of implementation. At the national level, the evolution of the Joint Project/PAU located under the MOFNP and the role of the Joint HIV/AIDS Steering Committee with the participation of all the donors will both be closely monitored. During the initial stages of the project there will be a strategic focus on the strengthening and creation of partnerships - with civil society organizations, private sector organizations and within the public sector - for the implementation of the national program. Such partnerships are seen as the main vehicle to address concems about the absorptive capacity to intensify the national response to HIV/AIDS as significant as foreseen under the project. Monitoring and Evaluation. In a multi-sector project with diverse implementing agencies such as this, it will be important to have a sound M&E system in place early during project implementation. At the core of the mandate of the NAC is the M&E function for the overall national program. The project will strengthen the M&E capacity within NAC in collaboration with the ADB and other cooperating partners. During the first year, the supervision activities will focus on achieving an adequate level of functioning for the M&E. It is anticipated that participatory stakeholder meetings will form part of the annual project reviews for the CRAIDS and the Line Ministry components. Joint M&E systems, such as being developed for the Kenya and the (proposed) Tanzania programs will be used to give the NAC Secretariat the advantage of sample tools and lessons learned elsewhere. Coordination. The core function of the NAC is the co-ordination of a large range of activities and initiatives implemented by a host of agencies from the public sector, the pnvate sector and civil society organizations, from national level to decentralized level. The supervision strategy will concentrate on supporting the NAC Secretariat in this formidable task. Key targets in the inital year will be the development of a Joint M&E Framework for the national program, the development of a model for Joint HIV/AIDS Program Reviews, the elaboration of a joint financing framework for HIV/AIDS, and the functioning of the PAU as the institution for joint administrative functions. Procurement. Supervision will provide problem-solving support on procurement and evaluate whether capacity and procedures for the centralized procurement are in place. - 79 - Financial management. During the first year the project, supervision will focus on the establishment and management of the two Special Accounts and facilitate timely flow of funds directly to implementation entities. The argument for the fast tracking of this project hinges on an efficient and fast-disbursement channel to support the community and multi-sector responses to HIV/AIDS. Partnerships. Many UN and bilateral agencies such as UNAIDS, WHO, UNICEF, ADB, EU, DFID, USAID, SIDA and the Dutch have made useful contributions during the ZANARA project preparation. Such contributions resulted in the proposition for establishing joint coordination mechanisms. The supervision of the project will continue to build such partnership and collaboration. Three methods are identified to further develop the partnership and collaboration: (i) Joint-missions. The IDA team will participate in the annual joint review of the national HIV/AIDS program as organized by the NAC Secretariat and supported by the PAU. Whenever there would be need for additional missions, the IDA team will invite other partners to participate in these supervision missions and reviews of the project. Donor agencies have experts in the area that they may have comparative advantages to be part of the IDA supervision mission team. (ii) Sharing international experiences and best practices through supervision. Inviting people with experiences of implementing successful HIV/AIDS related programs outside to join the mission to share their expertise and experiences. Such support can be provided and financed by the donor community, and (iii) Periodic evaluation of the partnerships with a view (i) to strengthen of the relations; (ii) achieve our common goals in Zambia; and (iii) improving coordination. During the project launch workshop, the IDA team will discuss the options described above with various partners to confirm possible arrangements and support. Supervision The project will need intensive supervision given the large span of activities, its blend of public and private sector interventions, and its multi-sectoral as well as its multi-agency nature. In addition, concems about a limited capacity will require intensive support to develop partnerships for the implementation of the national program. The project will be implemented by many entities only recently established and whose capacity will need strengthening. A budget of US$200,000 and a full-time staff based in the Lusaka Country Office is needed to supervise the project during the first 12 months of project implementation. The Country Director has already committed to provide a supervision budget of up to $200,000 during the first twelve months of implementation. The project task team would consult with the Bank's Global HIV-AIDS Office early on during implementation to explore additional financial contributions for M&E. Some of the skills required for the supervision of the ZANARA project will be needed on a regular basis while others will be required on an ad hoc basis. It is therefore proposed to establish a project team, which will emphasize financial, procurement and operational basic needs, complemented by technical specialists, in particular those covering M&E, community participation, maternal and child needs, sectoral concems and sub-regional matters. A much more intensive than normal supervision program should be carried out during the first year of the project to put in place a sound institutional base and properly begin interventions to be undertaken by this complex operation. Clearly there will be an incubation period for the main new institution, the NAC, whose staff will have just come on board, developing a management culture, preparing terms of reference, and with limited World Bank procurement/financial management experience. The project team will need to assess-on the ground-whether the indicators levels chosen are realistic, given the - 80 - Zambia situation and do conform to those in the Joint M&E framework that will be developed, or need adjustments. The staff in the Lusaka Country Office will provide support on a continuous basis and will sollicit support in specialized areas as required. Project supervision will also benefit from the Bank's: (i) Senior Health Specialist with extensive experience in operations and MAP projects elsewhere; (ii) education team involved in the Bank's new education sector program; and (iii) the Bank's team in the Country Office working on the ZAMSIF. In addition there will be an (i) M&E specialist consultant; (ii) implementation specialist to provide longer term support and to troubleshoot implementation issues at an early stage, (iii) maternal and child needs specialist, and (iv) NGO/CBO/community participation specialist. The project team therefore includes the following members: (i) Task Team Leader with experience in HIV/AlDS operations; (ii) health/nutrition/population specialist, (iii) senior implementation specialist, to help in the critical first half year of project's implementation; (iv) financial management specialist who will review adherence to Bank procedures with regard to fiduciary responsibilities; and (v) procurement and implementation specialists, responsible for the procurement, implementation, and institutional issues and (vi) sectoral specialists in the areas of education, gender, maternal and child needs, and community participation. The ZANARA project team will be complemented by representatives of Zambia's development partners who are active in the fight against HIV/AIDS. The wide variety of stakeholders, both in terms of technical focus as well as geographic coverage, poses an enormous challenge to the forging of a framework for coherent programme implementation. While the various stakeholders work well together under the umbrella of NAC it was felt that the consideration of more formal working arrangements including the development of joint planning and monitoring processes would be helpful. This could start with a joint review of progress towards the delivery of the strategic plan. The ZANARA project team will provide support to the process as well as the content of the joint program reviews as required. The establishment of a specific Joint HIV/AIDS Steering Committee with the participation of all the donors will further facilitate and enhance their role and technical input to the broader project implementation issues. Staff Allocations [Bank Budget (BB)] Staff # of staff weeks Task Team Leader (Lusaka) or designee 14 Lead Health Specialist 8 Education Specialist 4 Social Sector / Community Participation Spec. 8 Procurement Specialist 4 Financial Management Specialist 6 Other 3 Total 47 - 81 - Consultants (BB, Trust Funds, or Partner support) # of staff weeks # of missions Monitoring and Evaluation 10 4 Community Participation 4 2 Nutrition 10 3 Procurement/Financial 12 4 Other 8 2 Total 44 15 -82 - Additional Annex 12 Supervision Strategy ZAMBIA: Zambia National Response to HIV/AIDS (ZANARA) PROJECT IMPLEMENTATION MANUAL CRAIDS COMMUNITY RESPONSE TO HIV/AIDS COMPONENT Of the National Response to HIV/AIDS ZANARA Ministry of Finance and Economic Development Lusaka Zambia 18/06/01 - 83 - Section 1 Introduction and Situation Analysis 1.1 The HIVIAIDS Epidemic In Zambia HIV/AIDS is Zambia's most challenging development problem today. The 1998 antenatal survey found HIV prevalence rates of 27 percent in Zambia's major cities. Rates are very high along major highways and in trading centres and border, farming and mining towns. The 1998 survey reported rates of 31 percent in the border town of Livingstone and 27 percent in Chipata. A Ministry of Health expert group estimated that provincial adult HIV prevalence was 26 percent in Lusaka, 23 percent in the Copperbelt and 19 percent in the Northern Province. National adult HIV prevalence is estimated to be 20 percent, which means that more than 1 million Zambians have HIV. The context of the current HIV/AIDS epidemic is alarming. More than 50 percent of the country's population are less than 20 years of age and they constitute the most vulnerable group to HIV/AIDS. As one of the most urban countries in Africa, urban migration characterised as movement from smaller towns to larger cities is still in occurrence. The mobility of Zambians is directly relevant to the epidemic. A recent survey indicates that less than ten percent of Zambians had lived in their present location for less than five years. This type of movement increases the likelihood that sexual activity with non-regular partners occurs. It also reinforces the need for dissemination constant and consistent prevention messages to the population as new people move in and out of communities. While recent sentinel surveillance data and population surveys indicate encouraging signs of a decreasing prevalence among the younger, urban and more educated, overall infection rates are not expected to decrease significantly for many years. Furthermore, the death rate will not decrease for some time even if infection rates are stablised. In general, it is estimated, even with a levelling of infection rates, rates will remain high through 2010. Furthermore, the death rate will not decrease until 2030 and an impact on the orphan rate will not be felt until nearly 2050. People living with AIDS in Zambia are stigmatised and they experience some form of discrimination. This in part is due to beliefs that AIDS is associated with illicit sex and the result of sin. Some of the stigma is associated with misconceptions of how HIV is acquired. Some of the adverse consequences of such stigma include but are not limited to an increased burden and suffering among those living with AIDS, a reluctance of individuals to know their HIV status, delay in seeking health care, and delays by communities to respond to HIV prevention in their communities. This stigma is even extended to the family members, friends, caretakers and contacts of people living with AIDS. The overall burden of HIV on the Zambian economy is tremendous. Frequently the primary bread winner of the family falls ill first placing the family in economic jeopardy. The burden of caring for the ill comes at opportunity costs for earning family income, attending school and caring for small children. The increased health care costs are too much for most families to absorb and the chronically ill patient does without. Given the slow progression of AIDS, many families exhaust - 84 - their entire savings long before the transition of the person with AIDS. The illness and and death of these economically active prime-age adults result not only in higher medical expenses and lower incomes for family members, but also in worsened health and little or no investment in the future of the survivors. Survivors, especially women and children, may also lose access to land, housing, livestock and other assets because they have no protected rights to inherit property from their husbands or fathers. Neither children nor women have any legal recourse to recovering their husbands' or fathers' property removed from them. The impact on the work force has been felt at all levels including private sector and government. No government ministry is immunised against losing trained and skilled members. The costs to the private sector of losing trained labour are forcing many private sector companies to develop HIV/AIDS work place policies directed at both prevention, but also protection policies for chronically ill members of staff. It is perhaps on the children that the AIDS epidemic is most acutely felt. Fifteen percent of Zambian children are orphans. An estimated 23% of those orphans result from AIDS. Projections for 2010 indicate that AIDS may likely account for two-thirds of orphan children. The children witness the slow deterioration of their parents' health and the subsequent shunning from the extended family and community, where AIDS remains a highly stigmatised disease. Children frequently drop out of school as the family income decreases and/or to care for an ill parent. The extended family system has absorbed orphans into their families, but give the magnitude of the epidemic, the question becomes for how much longer before it buckles. The National Strategic Plan for HIV/AIDS places people at the centre of the solution. Experience has shown that communities in Zambia have proved to be the driving force behind HIV/AIDS prevention and care. The young too have shown that behavioural change is possible. The community has had to bear the major impact in terms of caring for the sick and orphans, widows and widowers. Communities have also been able to some extent to take ownership of the problem - this is evidenced by the emergence of prevention, care and mitigation activities that have been successfully initiated and implemented by community members. This response however needs support, co-ordination and facilitation in order to effectively scale up. 1.2 Background Information on ZAMSIF The Government of the Republic of Zambia has already committed itself to a programme of poverty reduction, which emphasises empowerment, and subsequent involvement of the people not only as beneficiaries but also as providers of their own services. GRZ has recently launched ZAMSIF, which supports community based development for poverty reduction. The ZAMSIF goal is to contribute to the improved, expanded and sustainable use of services provided in a governance system where local governments and communities are mutually accountable. ZAMSIF has three development objectives, which are to: * Achieve sustainable improved availability and use of quality basic social services by beneficiary communities and specific vulnerable groups; * Contribute to the building of capacity for improved local governance; and - 85 - * Strengthen the capacity to provide timely information on poverty and social conditions and facilitate its use in policy making. In order to achieve these objectives, ZAMSIF has three components: * The Community Investment Fund (CIF) which aims to empower local communities through the financing of sub projects identified, implemented, managed and maintained by communities; * The District Investment Fund (DIF) which addresses the second objective and aims to strengthen the capacity of local government to respond to community needs and initiatives; * The Poverty Monitoring and Analysis (PMA) component which addresses the third objective and which supports policy related research. The Government has agreed that ZAMSIF will be the most appropriate implementing agency for the Community Response to HIV/AIDS (CRAIDS) component of the National Response to HIV/AIDS for the following reasons: * ZAMSIF is based on 10 years of successful experience of community based development and has established administrative procedures, monitoring and information systems for funding communities; * ZAMSIF DIF component has an existing emphasis and focus on capacity building at the district level which will also address the needs of the District AIDS Task Forces. * ZAMSIF is a multi-sector agency, HIV/AIDS cuts across all sectors; * ZAMSIF has been found to be efficient and effective. This component will use existing management systems and support which obviates the need to set up parallel structures in order to achieve a quick response; * ZAMSIF is able to respond to the management needs of different donors and programmes. Section 2 Project Summary - Community Response to HIV /AIDS Component 2.1 CRAIDS Component Objectives The Community Response to HIV/AIDS (CRAIDS) component of the Zambia National Response to HIV/AIDS (ZANARA) will be based on the National Strategic Plan for HIV/AIDS and the experience of community based development gained by ZAMSIF and its the predecessors Social Recovery Projects I and II. Objective The objective of Community Response to HIV/AIDS CRAIDS component is: To improve the response of communities to the HIV/AIDS epidemic, which contributes to the prevention of HIV/AIDS, mitigates the impact of HIV/AIDS on households and improves the quality and access to care of those affected by HIV/AIDS. - 86 - In order to achieve these objectives the component will have the following activities: * Support to Community aased Initiatives - financing community based projects which are identified, planned, managed and operated by communities themselves. * Support to the District Response to HIV/ AIDS - supporting capacity building activities to enable a district response to HIV/AIDS which effectively supports and facilitates the community response; * Support to Non Governmental Organisations - supporting NGOs with programmes which address the expressed needs of communities and which meet the agreed criteria; * Information Dissemination - establishing mechanisms for the dissemination of relevant information to communities, districts and other relevant bodies in close collaboration with NAC. These activities are described in this Project Implementation Manual for CRAIDS. 2.2 Institutional Support The Community Response to HIV/AIDS (CRAIDS) component of the National Response to HIV/AIDS (ZANARA) will use the existing administrative capacity and management expertise within the ZAMSIF Management Unit (MU). The MU, however, will be augmented with qualified personnel, according to agreed terms of reference'. The ZAMSIF MU is a semi-autonomous unit within the Ministry of Finance and Economic Development (MOFED) and is headed by a Programme Director supported by the necessary departments and staff. The existing ZAMSIF departments, including Field Operations and its Regional Network, Finance, Technical Departments, Capacity Building, Information and Communications and Monitoring and Evaluation departments, will support CRAIDS component. The Programme Director will report to the NAC , Project Administration Unit in MOFED and to the ZANARA Technical Steering Committee. 2.3 Guiding Principles and Strategic Approach of the Community Response to HIV/AIDS 2.3.1 CRAIDS Approach to Community Based Development CRAIDS will support community-based projects where communities manage, plan, implement and sustain their own development. Communities own their own projects and participate in all stages of the project cycle. CRAIDS will support activities which address HIV/AIDS and that enhance this approach. 2.3.2 Consistency with National Strategic Plan CRAIDS is designed to support the National Strategic Plan for HIV/AIDS. The guiding - 87 - principles of the national response to HIV/AIDS are: * People are in the centre of the solution; * Respect for the basic human rights of all persons; * Cultural norms, values and practices should be an integral part of the response; * Prioritisation by vulnerable groups and respective geographical areas; * Go to scale from the on-going projects in order to cover priority vulnerable groups; * Develop an integrated strategic management approach, which develops and monitors best practice as well as the progress in going to scale for priority areas. It is expected that, at the national level, the National HIV/AIDS, STD, and TB Council (NAC) will provide the co-ordination required as well as policy direction, co-ordination with other donor, sector, private sector programmes and identification of potential partners. Several working groups will assist and advise the NAC. At the district level, the co-ordination, policy direction, identification of local partners will be provided by the appropriate district level co-ordination mechanisms, the District Development Co-ordinating Committees (DDCC) and possibly the District AIDS Task Forces (DATF). Priority Interventions identified by the National HIV/AIDS Strategic Plan are: * Mobilisation of a multi sector response, especially at district level; * Promotion of behaviour change and reduction of high risk behaviours; * Increased and improved STD prevention and control; * De-stigmatisation of HIV/AIDS; * Increased voluntary counselling and testing; * Reduced mother to child transmission; * Improved home based care and support for people living with AIDS; * Community based support for orphans and vulnerable children; * Improved drug supply for the treatment of STD, TB and HIV positive clients; * Improved hospital level care. 2.3.3 Consistency with Specific Sector Standards, Guidelines and Policy. CRAIDS will use national technical standards and support community based projects which use recognised best practice, where these exist. Where the standards are not available, CRAIDS will assist in the development of these in co-operation with the relevant stakeholders and NAC Technical Working Groups. Particular attention will be paid to sustainability issues of self-reliance, community management and maintenance and sector social service delivery obligations. NAC will provide and maintain networking links with relevant stakeholders and sector ministries so as to keep informed of sector policy change that might impact on interventions. NAC will also provide the link between the CRAIDS programme and the NAC Technical Working Groups, which provide technical advice to the NAC and its secretariat. 2.3.4 Targeting The targeting mechanism will be demand-led self targeting. The component will respond to community demand but appraisal and approval procedures will favour the identified priority - 88 - areas and groups. The demand for community projects, which address the needs of those already affected, is likely to be highest from those geographical areas with show very high prevalence rates. These have been identified in the National Strategic Framework and are: * Lusaka and Copperbelt Provinces; * Districts along the main trucking routes, well defined fishing areas, refugee populations and tourism; * Towns with frequent cross border traders. These areas show the highest prevalence rates mostly due to high mobility of populations. CRAIDS will also support programmes that aim to prevent HIV in those areas with low prevalence rates. The priority target groups for the CRAIDS component are: * Women; * People Living with HIV/AIDS; * Orphans and vulnerable children; * Youth in and out-of-school, especially girls; * Commercial sex workers; * Truck drivers. Special attention will be given to the gender factors of HIV/AIDS in the context of the imbalance of power between men and women. Women face a greater risk of infection than men. Women are also the main caregivers. 2.3.5 Elements of Community Based Interventions CRAIDS will actively seek partnerships at all levels and will support community-based interventions which include the following elements: * Decentralisation of decision-making and devolution of responsibilities to local levels, community and district levels, through a co-ordinating mechanism at district level, possibly District AIDS Task Forces; * Interventions are based on needs and priorities identified by the community; * Local and traditional leadership structures are respected and used; * Communities take an active role to identify and manage interventions. CRAIDS support will supplement community initiatives and not displace them; * Information is disseminated to community members, through a vigorous information dissemination; * Community projects supported by CRAIDS are linked with a more permanent institution such as a hospital, clinic, church or school, wherever possible, to provide continuity and sustainability. 2.3.6 Expected Benefits. The project is expected to generate the following benefits: - 89 - * improving access and availability to measures which prevent HIV/AIDS; * improving care to persons affected by HIV/AIDS; * strengthening the capacity of communities to design, plan and manage commurity based interventions which aim to prevent HIV/AIDS and care for those affected by HIV/AIDS; * strengthening the capacity of district authorities' to respond to community initiatives which aim to address HIV/AIDS; * improved response and co-ordination of community based initiatives related to HIV/AIDS at the district and community level. - 90 - CD | / Z A M B I A > ~~~~~~~~~~~~~~~~~~~T A N Z A N I A -TRUNK AND MAIN ROADS RIVERS /:eng \ ~~~~~RAILROADS PROVINCE BOUNDARIES ¢ -,^ \ o~~~~ SELECTED CITIES INTERNA:llONALEBOUNDARIES k ^ 3 @ ~~PROVINCE CAPITALS KAS ORTj F~~~~~~~~~DM RE. 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