Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD4153 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PROJECT PAPER ON A PROPOSED ADDITIONAL LOAN IN THE AMOUNT OF US$ 7.4 MILLION TO THE REPUBLIC OF ARMENIA FOR AN ADDITIONAL FINANCING TO THE DISEASE PREVENTION AND CONTROL PROJECT January 20, 2021 Health, Nutrition & Population Global Practice Europe And Central Asia Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Exchange Rate Effective: November 30, 2020 Currency Unit = Armenian Dram (AMD) 487.20 AMD = US$ 1 FISCAL YEAR January 1 - December 31 Regional Vice President: Anna M. Bjerde Country Director: Sebastian-A Molineus Regional Director: Fadia M. Saadah Practice Manager: Tania Dmytraczenko Task Team Leader(s): Adanna Chukwuma ABBREVIATIONS AND ACRONYMS AF Additional Financing ARMEPS Armenian E-Procurement System CPF Country Partnership Framework DPCP Disease Prevention and Control Project ESMF Environmental and Social Management Framework ESMP Environmental and Social Management Plan EU European Union FM Financial Management FMM Financial Management Manual FY Fiscal Year GBV Gender-based Violence GDP Gross Domestic Product GRM Grievance Redress Mechanism GRS Grievance Redress Service HPIU Health Project Implementation Unit HRITF Health Results Innovation Trust Funds IBRD International Bank for Reconstruction and Development IFC International Finance Corporation IFR Interim Financial Reports IMF International Monetary Fund IRI Intermediate Results Indicator ISR Implementation Status and Results Report MC Medical Center MCH Maternal and Child Health MoH Ministry of Health NCD Non-Communicable Disease OECD Organization for Economic Co-operation and Development PBF Performance-Based Financing PDO Project Development Objective PHC Primary Health Care PPSD Project Procurement Strategy for Development RF Results Framework SEA Sexual Exploitation and Abuse SH Sexual Harassment UN United Nations UNFPA United Nations Population Fund WHO World Health Organization ARMENIA ADDITIONAL FINANCING TO THE DISEASE PREVENTION AND CONTROL PROJECT TABLE OF CONTENTS I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING ........................................ 7 II. DESCRIPTION OF ADDITIONAL FINANCING .................................................................... 14 III. DESCRIPTION OF RESTRUCTURING ................................................................................ 15 IV. KEY RISKS ..................................................................................................................... 18 V. APPRAISAL SUMMARY .................................................................................................. 19 VI. CORPORATE REQUIREMENTS ........................................................................................ 24 VII. WORLD BANK GRIEVANCE REDRESS .............................................................................. 29 VIII. SUMMARY TABLE OF CHANGES .................................................................................... 30 IX. DETAILED CHANGE(S).................................................................................................... 30 VIII. RESULTS FRAMEWORK AND MONITORING ................................................................... 33 ANNEX 1: CPF ADJUSTMENT RESPONDING TO COVID-19 ...................................................... 48 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) BASIC INFORMATION – PARENT (Disease Prevention and Control Project - P128442) Country Product Line Team Leader(s) Armenia IBRD/IDA Adanna Deborah Ugochi Chukwuma Project ID Financing Instrument Resp CC Req CC Practice Area (Lead) P128442 Investment Project HECHN (9318) ECCSC (7000) Health, Nutrition & Financing Population Implementing Agency: Ministry of Health, HPIU ADD_FIN_TBL1 Is this a regionally tagged project? No Bank/IFC Collaboration No Expected Original Environmental Approval Date Closing Date Guarantee Current EA Category Assessment Category Expiration Date 27-Mar-2013 30-Sep-2022 Partial Assessment (B) Partial Assessment (B) Financing & Implementation Modalities Parent [ ] Multiphase Programmatic Approach [MPA] [ ] Contingent Emergency Response Component (CERC) [ ] Series of Projects (SOP) [ ] Fragile State(s) [ ] Performance-Based Conditions (PBCs) [ ] Small State(s) [ ] Financial Intermediaries (FI) [ ] Fragile within a Non-fragile Country [ ] Project-Based Guarantee [ ] Conflict [ ] Deferred Drawdown [ ] Responding to Natural or Man-made disaster [ ] Alternate Procurement Arrangements (APA) [ ] Hands-on, Enhanced Implementation Support (HEIS) Page 1 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) Development Objective(s) The objective of the Project is to (i) increase the detection of selected NCDs at the PHC level and among pregnant mothers; (ii) improve the efficiency and quality of selected hospitals; and (iii) prevent, detect and respond to the threat posed by COVID-19. Ratings (from Parent ISR) RATING_DRAFT_ NO Implementation Latest ISR 25-Jul-2018 06-Dec-2018 15-May-2019 22-Oct-2019 18-Apr-2020 26-Oct-2020 Progress towards achievement of MS MS MS S S S PDO Overall Implementation S S S S MS MS Progress (IP) Overall Safeguards S S S S S S Rating Overall Risk M M M M M M Financial Management S S S S S S Project Management MS MS MS S S S Procurement S S S S S S Monitoring and Evaluation S S S S MS MS BASIC INFORMATION – ADDITIONAL FINANCING (Additional Financing to the Disease Prevention and Control Project - P175023) ADDFIN_TABLE Urgent Need or Capacity Project ID Project Name Additional Financing Type Constraints P175023 Additional Financing to the Scale Up Yes Page 2 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) Disease Prevention and Control Project Financing instrument Product line Approval Date Investment Project IBRD/IDA 11-Feb-2021 Financing Projected Date of Full Bank/IFC Collaboration Disbursement 28-Jun-2023 No Is this a regionally tagged project? No Financing & Implementation Modalities Child [ ] Series of Projects (SOP) [ ] Fragile State(s) [ ] Performance-Based Conditions (PBCs) [ ] Small State(s) [ ] Financial Intermediaries (FI) [ ] Fragile within a Non-fragile Country [ ] Project-Based Guarantee [ ] Conflict [ ] Deferred Drawdown [✓] Responding to Natural or Man-made disaster [ ] Alternate Procurement Arrangements (APA) [ ] Hands-on, Enhanced Implementation Support (HEIS) [ ] Contingent Emergency Response Component (CERC) Disbursement Summary (from Parent ISR) Net Source of Funds Total Disbursed Remaining Balance Disbursed Commitments IBRD % IDA 35.00 31.79 0.52 98 % Grants 1.80 1.80 100 % PROJECT FINANCING DATA – ADDITIONAL FINANCING (Additional Financing to the Disease Prevention and Control Project - P175023) PROJECT FINANCING DATA (US$, Millions) Page 3 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) SUMMARY -NewFi n1 SUMMARY (Total Financing) Proposed Additional Total Proposed Current Financing Financing Financing Total Project Cost 45.00 9.74 54.74 Total Financing 45.00 9.74 54.74 of which IBRD/IDA 35.00 7.40 42.40 Financing Gap 0.00 0.00 0.00 DETAILS - Additional Financing NewFinEnh1 World Bank Group Financing International Bank for Reconstruction and Development (IBRD) 7.40 Non-World Bank Group Financing Counterpart Funding 2.34 Borrower/Recipient 2.34 COMPLIANCE Policy Does the project depart from the CPF in content or in other significant respects? [ ] Yes [ ✔ ] No Does the project require any other Policy waiver(s)? [ ✔ ] Yes [ ] No Explanation The Project has obtained a management waiver for exceptional use of Additional Financing under Safeguard Policies to scale-up activities under Component 2. The proposed scale-up will not require a change in the project’s environmental classification and/or trigger any additional Safeguard Policy. Has the waiver(s) been endorsed or approved by Bank Management? Approved by Management [✔] Endorsed by Management for Board Approval [ ] No [ ] Page 4 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) Explanation The waiver request for the exceptional use of Additional Financing (AF) to scale-up activities under the Disease Prevention and Control Project was approved on October 15, 2020. This allows the processing of the proposed Additional Financing to the Disease Prevention and Control Project, IDA – 52220 (P175023), under safeguard policies with COVID-19 Specific Risk Considerations. INSTITUTIONAL DATA Practice Area (Lead) Health, Nutrition & Population Contributing Practice Areas Climate Change and Disaster Screening This operation has been screened for short and long-term climate change and disaster risks PROJECT TEAM Bank Staff Name Role Specialization Unit Adanna Deborah Ugochi Team Leader (ADM Health HECHN Chukwuma Responsible) Procurement Specialist (ADM Armine Aydinyan Procurement Management EECRU Responsible) Financial Management Lusine Grigoryan Financial Management EECG1 Specialist (ADM Responsible) Environmental Specialist (ADM Environmental Safeguards Hmayak Avagyan SCAEN Responsible) Management Social Specialist (ADM Social Safeguards Sophia V. Georgieva SCASO Responsible) Management Armine Grigoryan Team Member Gender ECCAR Arpine Azaryan Team Member Operations ECCAR Catarina Isabel Portelo Team Member Legal LEGLE Darejan Kapanadze Team Member Safeguards SCAEN Estella Tian-Ran Gong Team Member Health HECHN Page 5 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) Maria Luisa G. Juico Team Member Operations IECT1 Marianna Koshkakaryan Team Member Operations HECHN Extended Team Name Title Organization Location Page 6 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING A. Background 1. This Project Paper seeks the approval of the Board to provide additional financing (AF) in the amount of US$ 7.4 million for the Disease Prevention and Control Project (DPCP). The AF will facilitate the health system response to COVID-19 and preparedness for future pandemics by improving hospital capacity for case management and intensive care. The AF will primarily be directed at closing the financing gap for the construction and equipment of Martuni Medical Center (MC) and scale-up for the construction and equipment of Vayots Dzor MC. 2. The Credit for the DPCP was approved on March 27, 2013, in the amount of SDR 22,800,000 (US$ 35 million equivalent) and became effective on July 22, 2013. The Project was co-financed with a grant from the Health Results Innovation Trust Fund (HRITF) for US$ 1.8 million (TF014138). The grant supported Component 1 of the Project (Performance-based incentives to improve maternal and child health (MCH) and non-communicable diseases (NCDs) services in primary health care (PHC) facilities). 3. The original Project Development Objective (PDO) was to improve: (a) MCH services and the prevention, early detection, and management of selected NCDs at the PHC level; and (b) the efficiency and quality of selected hospitals in Armenia. 4. The original Project Components were: (a) Component 1: Performance-based financing to improve MCH and NCD services in PHC facilities. This Component supported: (i) performance-based financing (PBF) as reimbursement for performed screening tests and bonus payments; (ii) strengthening supportive functions for PBF implementation, including improving health information management systems, producing essential equipment, training PHC providers; and (iii) launching national public information campaigns promoting healthy lifestyles and prevention of NCD risk factors. (b) Component 2: Improving the efficiency and quality of selected hospitals. This Component supported: (i) modernization of Lori Marz hospital network; (ii) modernization of the Center of Hematology in Yerevan named after Professor Yeolyan; (iii) modernization of cancer treatment services in Armenia; and (iv) hospital quality improvement, including the development of a cancer registry, hospital clinical guidelines, and scaling up of a hospital quality improvement program. (c) Component 3: Project management. This Component supported administrative and fiduciary tasks and monitoring and evaluation. 5. The Project has been restructured five times since Appraisal. The first (Level II) restructuring was approved on April 30, 2015, to: (a) remove the legal covenant requiring independent counter- verification of performance for incentive payments; (b) remove the construction of Vanadzor MC from the Project, and; (c) modify the Results Framework (RF). The second (Level II) restructuring was approved on April 19, 2018, to: (a) extend the Project closing date from December 15, 2019, to June 30, 2021, because civil works for two additional hospitals were included in the Project scope; and (b) modify the RF. The third (Level II) restructuring was approved on January 31, 2020, to extend the Project closing date from June 30, 2021, to September 30, 2022, due to the additional time needed to complete the construction, following changes in the architectural design, and to modify the RF. Page 7 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) The fourth (Level II) restructuring was approved on March 6, 2020, reflecting the reallocation between disbursement categories and the removal of Vayots Dzor MC from the Project scope. The fifth (Level II) restructuring was approved on March 29, 2020, to reallocate US$ 3 million from Component 2 to finance the procurement of equipment and supplies for case management, infection prevention, and case detection under the new Component 4 (Emergency response to COVID-19). At this time, the PDO was also revised: The objective of the Project is to (a) increase the detection1 of selected NCDs at the PHC level and among pregnant mothers; (b) improve the efficiency and quality of selected hospitals; and (c) prevent, detect, and respond to the threat posed by COVID-19. B. Project Performance 6. Progress toward achieving the PDO has been rated no less than Moderately Satisfactory since becoming effective. It was assessed as Satisfactory in the last Implementation Status and Results Report (ISR) dated October 26, 2020. The four screening-related PDO indicators achieved their end- of-Project target values. The 2019 target values for the PDO indicator that measures bed occupancy rates in two health facilities have also been achieved. The progress towards achieving the target values for the indicators related to intensive care for Component 4 will be assessed in December 2021. 7. Implementation progress has been rated no less than Moderately Satisfactory since becoming effective and was assessed as Moderately Satisfactory in the last ISR dated October 26, 2020. 8. Component 1: PBF scheme to improve MCH and NCD services in PHC facilities. The Project has supported increases in screening for NCD detection, verification of reported screenings by providers, and demand-side interventions to increase screening, as described below. (a) Screening coverage: Between January 1, 20152, and August 31, 2020, 1.42 million adults between 35 and 68 years of age have been screened for hypertension; 789,750 people between 35 and 68 years of age have been screened for diabetes mellitus; 281,829 women between 30 and 60 years of age have been screened for cervical cancer, and; 87,760 antenatal care attendees have been screened for diabetes and hypertension. Due to the COVID-19 pandemic and state-imposed restrictions in movement, screening rates have fallen in 2020. Screening rates for hypertension, diabetes mellitus, and cervical cancer have decreased by 40 to 65 percent between January to August 2020 compared to the same period in 2019. Screening rates of antenatal care attendees have reduced by 2.6 percent. (b) Performance verification: The ascertainment of screening performance reported by health care providers is conducted in line with agreed protocols, including on-site review of medical cards and phone calls to randomly selected recipients of care. Due to restrictions in movement, the on-site review of screening reports has not been conducted since March 2020. The on-site 1 Per the World Health Organization, early detection includes evidence-based screening. The project tracks the number of people screened for specific risk factors. See: http://www.emro.who.int/about-who/public-health-functions/health-promotion- disease- prevention.html#:~:text=Secondary%20prevention%20deals%20with%20early,therapies%20of%20proven%20effectiveness%20 when 2 Provider reimbursements through the PBF scheme started in 2015. Page 8 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) verification of screening performance will resume following approval by the Ministry of Health (MoH). An ex-post verification procedure will be approved for adjusting future payments. Verification will be conducted, and adjustments will be made when the restrictions are lifted. (c) Demand-side interventions: The mass media campaign to increase awareness of NCD risk factors and screening is ongoing. A working group monitors the intervention. An impact evaluation of incentives and personal invitations to increase demand for diabetes and hypertension screenings, financed by the HRITF and Strategic Impact Evaluation Fund, was completed in July 2020. The findings were discussed with the client. Personal invitations led to a 15-percentage point increase in screenings for hypertension and diabetes, while conditional cash transfers increased screenings by 31.2 percentage points.3 The client proposes to introduce annual personal invitations to encourage demand for screenings into the scope of Component 1. (d) Other activities: The Project funded a Health System Performance Assessment and a National Health Accounts report in 2015-2016. These reports monitor changes in health outcomes, service delivery, and financing. The Project will fund another round of surveys in 2021. Savings from the contract for the mass media campaign have financed essential supplies and equipment for 620 midwife posts, which provide services in underpopulated, rural areas. 9. Component 2: Improving efficiency and quality of selected hospitals. The Project has financed the construction of Sevan MC, the reconstruction of Artashat MC, design and equipment for Vanadzor MC, and the Hematology Center's reconstruction. About 300 clinical guidelines were developed and incorporated into healthcare professionals' training, contributing to process quality improvements that complement the investments in hospital infrastructure and equipment. 10. Component 3: Project management. In August 2020, a full director was appointed to lead the Health Project Implementation Unit (HPIU) of the MoH of the Republic of Armenia after ten years, ending uncertainty on the autonomous status of the HPIU. The HPIU has expanded its staff to support the response to the COVID-19 pandemic, including hiring a medical equipment specialist and procurement support staff. The HPIU satisfactorily performs Project management functions. 11. Component 4: Emergency response to COVID-19. The Project is financing the procurement of equipment and supplies for case management, infection prevention and control, and case detection for COVID-19. Of the 16 contracts, five are ongoing, and 11 have been delivered. Items delivered include ventilators, pulse-oximeters, thermometers, personal protective equipment, and vehicles for medical personnel. Of the ongoing contracts, four are pending delivery. A request for quotations has been launched for an oxygen-producing station. 12. Compliance. The Project complies with all legal covenants. Performance on safeguards, procurement, and Project management is rated Satisfactory. Performance on monitoring and evaluation and financial management (FM) are rated Moderately Satisfactory, with the latter being downgraded from Satisfactory following a November 2020 FM implementation support mission. The verification of reported screening tests has deteriorated and there are pending audit recommendations for screenings. The FM arrangements at the HPIU, including planning and budgeting, accounting, financial reporting, internal controls, external audits, and fund flows, are 3 de Walque, Damien and Chukwuma, Adanna and Ayivi-Guedehoussou, Nono and Koshkakaryan, Marianna, Invitations, Incentives, and Conditions: A Randomized Evaluation of Demand-Side Interventions for Health Screenings in Armenia (July 31, 2020). Available at SSRN: https://ssrn.com/abstract=3666876 or http://dx.doi.org/10.2139/ssrn.3666876 Page 9 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) otherwise acceptable to the World Bank. Satisfactory procurement arrangements were confirmed in the regular post-review conducted in December 2019. The HPIU has adequate procurement experience under World Bank-funded projects, the Systematic Tracking of Exchanges in Procurement system, and the Armenian e-procurement system (ARMEPS). Compliance with Environmental and Social Safeguard Policies is Satisfactory. Site-specific Environmental and Social Management Plans (ESMPs) for constructing hospitals under the Project are acceptable to the World Bank. 13. Disbursements. As of November 11, 2020, the Project has disbursed US$ 30.01 million from the IDA Credit (93.02 percent of the Project total). Both HRITF Grants under the Project (TF13103 (US$ 0.4 million) and TF14138 (US$ 1.8 million)) are 100 percent disbursed and were closed on December 31, 2019. C. The Rationale for Additional Financing 14. Armenia documented the first case of COVID-19 on March 1, 2020. Following a peak incidence above 700 new cases per day in June 2020, the Government's comprehensive public health measures reduced the daily incidence to below 150 cases in September 2020. Given the regional crisis, there is a second wave of COVID-19 infections, with incidence exceeding 2000 new cases daily on October 23, 2020 (Figure 1). As of November 6, 2020, the country has 3,435 cases per 100,000 population, one of the highest incidence rates in the Europe and Central Asia region. Given the test positivity rate of 23.7 percent as of November 6, 2020, there may be insufficient testing and higher case incidence than estimated.4 Figure 1: Seven-day rolling average of daily COVID-19 case incidence per million population 4The test positivity rate is the proportion of all tests for COVID-19 that are positive. The World Health Organization has recommended that rates above 5 percent may imply widespread infection or reflect gaps in comprehensive surveillance, as in contexts where testing is limited to contact tracing. Page 10 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) 15. Following the State of Emergency declaration on March 16, 2020, the interagency office on the prevention of COVID-19 was given increased authority to respond to the pandemic, under the leadership of a Deputy Prime Minister as Commandant. With support from development partners, the MoH and Commandant’s Office have introduced measures to prevent, detect, and respond to the spread of COVID-19 infections. To prevent the spread of COVID-19, the Government has introduced restrictions in movement, gatherings above 40 people, and foreign citizens' entry.5 The Commandant’s Office, MoH, and Office of the Prime Minister have led public messaging to encourage social distancing. There are fines for failing to wear a face mask in public, and hand sanitizing stations are required in public transportation systems. Suspected cases are quarantined, while health workers are required to use personal protective equipment.6 The World Health Organization (WHO) has provided technical guidance to the MoH to introduce these measures. 16. Contract tracing is performed by regional branches of the National Center for Disease Control, with guidance from the WHO. The hospital sentinel surveillance system for severe acute respiratory infection has also been used for COVID-19 surveillance.7 Individuals with acute respiratory symptoms request testing through their PHC providers or a dedicated hotline. Specific risk groups are prioritized for testing, including health workers, public transport drivers, pregnant women with symptoms. As of October 19, 2020, the national capacity for polymerase chain reaction COVID-19 testing has been increased to 4,000 tests per day across eight laboratories, with four laboratories to be added. The WHO estimates that this increase in testing capacity should be sufficient to cover Armenia’s needs. 8 17. The National Institute of Health has developed training programs to improve the quality of services for COVID-19. Over 5,680 health workers have been trained since the onset of the pandemic. The World Bank provided financial support through a grant for the training programs. The National Institute of Health also received technical assistance to develop the training content from the WHO. There were reported gaps in the supply of anesthesiologists and intensive care physicians. However, these have been addressed by recruiting clinical volunteers from within and outside Armenia. Health care providers receive bonuses for additional time spent on COVID-related care, in addition to special payment rates for COVID-related care for children and pregnant women, and hospitals are paid daily tariffs for COVID-19 cases. COVID-19 services are provided in the country free-of-charge.9 18. Initially, all COVID-19 cases were treated by hospitals. Individuals with mild symptoms and their contacts were housed in 16 hotels with 400 beds. On June 4, 2020, Armenia had run out of beds for intensive care. There was a plan for cases that could not be accommodated to be transported to Georgia for care. There are currently over 2,500 beds available for COVID-19 management across 19 designated facilities; 300 beds are for intensive care.10 Given the need to optimize hospital resource use, the role of PHC in managing mild cases has been increased. Hospitalization is now restricted to 5 The ban on entry of foreign citizens by air was lifted on August 12, 2020, but land borders remain closed. 6 WHO Country Office Team Armenia, “COVID-19 Health System Response Monitor: Armenia.” 7 World Bank, “Workplan for Adapting Armenia’s COVID-19 Strategy to the Ongoing Situation.” 8 WHO Country Office Team Armenia, “COVID-19 Health System Response Monitor: Armenia.” 9 Chukwuma et al., “Strategic Purchasing for Better Health in Armenia.” 10 WHO Country Office Team Armenia, “COVID-19 Health System Response Monitor: Armenia.” These hospitals do not overlap completely with the hospitals supported under the DPCP. One of the six hospitals that has received or will receive support under the DPCP, through Component 2, is also on the government’s list of facilities designated for COVID-19 services (Artashat MC). Page 11 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) specific circumstances, including infections among the aged, individuals with comorbidities, and severe conditions. The World Bank (see paragraph 11), the European Union (EU), and the Asian Development Bank have supported the Government in the emergency procurement of equipment and supplies for case management and intensive care. 19. Since 2004, the Government of Armenia has invested in improving hospital quality and efficiency, supported by the World Bank and other partners. More than 20 regional MCs have been renovated, constructed, and equipped with World Bank support.11 In most regions, the services' profile has been aligned to local needs, the hospital infrastructure quality was improved, and unused bed capacity was eliminated. Between 2004 and 2009, the hospitals that received support recorded an increase in bed occupancy rate from 22 percent to 88 percent. These investments in infrastructure, equipment, and training of staff have been continued through the DPCP. However, the strain on hospital resources for the COVID-19 response demonstrates the need for additional infrastructure investments for case management and intensive care in Armenia. 20. The challenges experienced in providing hospital care are acute in the Vayots Dzor region or Marz. Vayots Dzor is the only region that has not received support under donor-funded investments or through the state budget to upgrade the hospital infrastructure since the Soviet era. During the COVID-19 pandemic, cases requiring intensive care in Vayots Dzor Marz have received emergency transferrals to surrounding regions, putting them at increased risk of mortality. The gaps in hospital quality also have negative implications for managing cases that do not require intensive care. The construction and equipment of Vayots Dzor MC were removed from the Project scope via a restructuring. However, the Government has demonstrated renewed high-level political commitment to improve hospital capacity in Vayots Dzor because of the challenges exposed by the COVID-19 pandemic.12 21. This AF is motivated by the strong political commitment to investing in improving hospital care in the Vayots Dzor region, given the needs highlighted by the COVID-19 pandemic. Also, there is a financing gap in the contract for the multi-profile hospital in Martuni, Gegharkunik region. This gap was created by the emergency reallocation of funds from Component 2 to Component 4 to support the emergency procurement of equipment and supplies for the case management and intensive care for COVID-19 cases. The Ministry of Finance sent a formal request to the World Bank on July 29, 2020, expressing the Government’s commitment to scaling up Component 2 to include Vayots Dzor MC and noting the need to close the financing gap for Martuni MC. 22. The proposed Vayots Dzor MC will have 46 beds, including 5 for intensive care and 14 for general medicine. Inpatient services in the 80 hospital beds in Yeghegnadzor MC and Vayk Medical Union will be relocated to the new Vayots Dzor MC with improved infrastructure and equipment. The construction of Martuni MC commenced in July 2020, with support from the parent Project. Besides enhancing the hospital infrastructure and equipment, the existing polyclinic and hospital's service 11 Chukwuma, Adanna; Gurazada, Srinivas; Jain, Manoj; Tsaturyan, Saro; Khcheyan, Makich. 2020. FinHealth Armenia: Reforming Public Financial Management to Improve Health Service Delivery. World Bank, Washington, DC. © World Bank. https://openknowledge.worldbank.org/handle/10986/34747 License: CC BY 3.0 IGO. 12 Armenpress. Three new hospitals to be built in Armenia. Accessed at: https://armenpress.am/eng/news/1020390.html Page 12 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) profiles and health workers will be merged into the new multi-functional facility. The proposed Martuni MC will have 55 beds, with improved equipment to support intensive care (5 beds) and general medicine (30 beds) to match the population's needs. The combined population that will benefit from the improved services in both regions is estimated at 137,100. The consolidation of service profiles contributes to the PDO via improving hospital quality and efficiency. 23. The activities financed under the AF align with the World Bank Group COVID-19 Crisis Response Approach Paper: Saving Lives, Saving-Up Impact, and Getting Back on Track.13 These investments contribute to the resilient recovery stage by drawing on the pandemic's lessons to build a more inclusive health system in Armenia. The construction of Vayots Dzor and Martuni MC, financed by the AF, will make improved hospital care available for the respective regions in 2022 and 2023, respectively. At this point, the emergency phase of the COVID-19 pandemic response is likely to have ended, such that these investments may not contribute directly to Pillar 1 in saving lives threatened by the virus. However, the DPCP contributes to Pillar 1 directly through Component 4, which has supported the procurement of ventilators, pulse oximeters, ambulances, and other equipment to facilitate case management and intensive care in the hospitals identified for COVID-19 services by the government. 24. Investing in hospital infrastructure in Martuni and Vayots Dzor MCs will contribute to Pillar 2, protecting poor and vulnerable people, through the introduction of labor-intensive public works under the hospital construction in both regions. It is envisaged that labor will be hired primarily from the surrounding communities, supported by outreach to vulnerable groups through civil society organizations. Creating opportunities for employment and productivity may contribute to smoothing household consumption during the pandemic. The hospital infrastructure and equipment investments will also contribute to Pillar 4 of the Crisis Response, on strengthening policies, institutions, and investments for rebuilding better. The pandemic has highlighted the need for resilient health systems that are better prepared to respond to future epidemics. Rebuilding better includes eliminating distortions in resource allocations that have contributed to subnational disparities in health care access and quality. This need to address spatial inequality in health care applies to the underinvestment within Vayots Dzor relative to other regions. 25. The AF is consistent with the current Country Partnership Framework (CPF) for fiscal year (FY)19- FY23 and the adjustment responding to COVID-19 (Annex 1). The AF contributes to the CPF Focus Area 2 on Human Capital Development and Equity and Objective 6 of improved access to good- quality health care services. The proposed World Bank Group support outlined under the above Objective includes the ongoing DPCP, through improvements in MCH and NCD services in primary care facilities under Component 1 and enhancing the efficiency and quality of hospital services under Component 2. The CPF adjustment responding to COVID-19 envisages the AF within the FY21 lending pipeline. 13World Bank Group COVID-19 Crisis Response Approach Paper, “Saving Lives, Scaling-up Impact and Getting Back on Track,” June 2020. Page 13 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) II. DESCRIPTION OF ADDITIONAL FINANCING 26. The Components and Costs will be revised to reflect the change in scale and scope of the DPCP given the AF. Table 1 reflects the decrease in counterpart funding in Component 2 by US$ 0.75 million in the fifth Project restructuring, and a corresponding increase in counterpart funding of Component 4, by a similar amount, as specified for Category 1 expenditures in Section IV.A.2 of Schedule 2 to the Credit Agreement. This follows the re-allocation of US$ 3 million IDA credit from Component 2 to Component 4 in the fifth Project restructuring. Table 1: Current and Proposed Component Costs (US$ million) Current Additional Proposed Component Cost Financing Cost Counterpart HRITF Total Counterpart Total Counterpart Total IDA + IDA funding IBRD funding funding (incl. IBRD HRITF) Component 1 2.40 0.00 1.80 4.20 0.02 0.50 0.52 2.42 0.50 4.72 Component 2 27.19 6.80 0.00 33.99 6.96 1.74 8.70 34.15 8.54 42.69 Component 3 2.41 0.65 0.00 3.06 0.42 0.10 0.52 2.83 0.75 3.58 Component 4 3.00 0.75 0.00 3.75 0.00 0.00 0.00 3.00 0.75 3.75 Total 35.00 8.20 1.80 45.00 7.40 2.34 9.74 42.40 10.54 54.74 27. Component 1: PBF scheme to improve MCH and NCD services in PHC facilities. (Current Cost: US$ 4.20 million; Proposed Cost: US$ 4.72 million). Component 1 will receive US$ 0.02 million from the IBRD loan to support technical assistance for the verification of the performance reported by health care providers in screening for NCDs. As funding through the IDA Credit for this Component will be fully disbursed in 2021, the state budget will resume 100 percent financing of PBF in 2022 through an increase in counterpart funding of US$ 0.50 million. The proposed changes to the Component scope are discussed in Section IV: Description of Restructuring. 28. Component 2: Improving the efficiency and quality of selected hospitals. (Current Cost: US$ 33.99 million; Proposed Cost: US$ 42.69 million). Component 2 will receive US$ 6.96 million from the IBRD loan and an increase in counterpart funding of US$ 1.74 million. The AF will support the construction and equipment of Martuni MC in the Gegharkunik region. The civil works for Martuni MC started in July 2020, with financing from the parent Project. The AF will also support the construction and equipment of Vayots Dzor MC in the community of Yeghegnadzor. The design documents for the construction of both hospitals were developed in 2019 under the parent Project. The Proposed Component Cost will reflect the reduction in counterpart funding by US$ 0.75 million following the reallocation of US$ 3 million from Component 2 to Component 4 under the fifth Project restructuring. There are no other changes to Component activities. 29. Component 3: Project management. (Current Cost: US$ 3.10 million; Proposed Cost: US$ 3.58 million). Component 3 will receive US$ 0.42 million from the IBRD loan and an increase in counterpart funding of US$ 0.10 million. The AF will support management and administrative expenditures, including a financial audit of the Project. There are no changes to Component Page 14 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) activities. 30. Component 4: Emergency response to COVID-19. (Current Cost: US$ 3.75 million; Proposed Cost: US$ 3.75 million). The reallocation of US$ 3 million from Component 2 to Component 4 under the fifth Project restructuring led to the corresponding subsequent reallocation of the counterpart funding of US$ 0.75 million. There are no changes to Component activities. III. DESCRIPTION OF RESTRUCTURING 31. The PDO will remain unchanged. The Components, closing date, and RF for the Project will be restructured. Table 2: Changes to screening reimbursement rates (AMD) Indicator (as Included in the Current Current Proposed measured under State Budget reimbursement reimbursement reimbursement Project) bonus payment14 per test under per test under per test under Project State Budget Project Hypertension Yes 0 0 None (blood pressure measurement) Diabetes (serum Yes 330 380 380 glucose measurement) Cervical cancer Yes 2400 Not applicable None (pap smear) Antenatal care No 650 660 660 (urine glucose and protein, and blood pressure measurement) 32. Components: The activities under Component 1, PBF scheme to improve MCH and NCD services in PHC facilities, will be modified. The reimbursement rates under the Project for performed screenings are below the levels recommended under the state budget, in some cases. The Project will adjust the unit reimbursements for performed screenings to match the levels recommended under the state budget (Table 2).15 Following the success of the impact evaluation of demand-side incentives for screening, annual personal invitations will be sent by ordinary mail to individuals in 14 The Project contributes 25 percent of the total bonus calculated for PHC provider performance on about 32 indicators, including the screening indicators under Component 1. 15 There are separate codes for screenings linked to the Project and those reimbursed under the State Budget, which cannot be merged given the existing e-health system. Hence, screening under the Project underestimates total screenings performed in PHC. Page 15 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) the target groups, primarily in urban areas, encouraging visits to PHC for screenings under the Project. 33. Closing Date: To accommodate the additional time needed to complete the construction of Vayots Dzor MC, the closing date of the IBRD Loan will be February 28, 2023. The closing date of the IDA Credit will remain as September 30, 2022. 34. RF: The changes to each indicator are discussed below. The definitions of indicators are included in the Monitoring and Evaluation Plan. (a) PDO 1: Percentage of antenatal care (ANC) attendees screened for glycosuria, hypertension, and proteinuria in at least three antenatal visits (Percentage). An end-of-Project target value has been added for the closing date in 2023. Given the proximity to the original closing date, the target value is the same. (b) PDO 2: Percentage of population aged 35-68 screened for hypertension at least once in the last year a) female; b) male (Percentage). The actual values since the start of implementation have been revised downwards. The target values for 2020-2023 have also been revised downwards. An end-of-Project target value has been added for the closing date in 2023. Given the proximity to the original closing date, the target value is the same. The International Society of Hypertension recommends the annual measurement of blood pressure for adults for early detection.16 In line with these recommendations and national clinical guidelines in Armenia, the Project offers financial incentives to health care providers for screening adults aged 35 to 68 years for hypertension at least once a year. Up to this point, the actual values recorded under the Project did not reflect the screening performed between January and December of the calendar year. Instead, the actual values included all screenings performed since the Project start date. The actual values have been revised to comply with the definition of the indicator. The target values for 2020-2023 have been adjusted to reflect an annual two percentage point increase in females and one percentage point increase in males.17 (c) PDO 3: Percentage of population aged 35-68 screened for diabetes mellitus at PHC level at least once during the last three years a) female; b)male (Percentage). The actual values since the start of implementation have been revised downwards. The target values for 2020-2023 have also been revised downwards. An end-of-Project target value has been added for the closing date in 2023. Given the proximity to the original closing date, the target value is the same. The United States Preventive Services Task Force recommends that most adults be screened for diabetes mellitus every three years.18 In line with these recommendations and national guidelines in Armenia, the Project offers financial incentives to health care providers for screening adults aged 35 to 68 years for diabetes mellitus once every three years. Hence, from 2015, providers' performance is measured cumulatively over three-year periods: 2015-2017, 2018-2020, and 16 Unger, Thomas, et al. "2020 International Society of Hypertension global hypertension practice guidelines." Hypertension 75.6 (2020): 1334-1357. 17 Before the launch of the Project, screening levels fell by 2.5 percentage points in females and 1.2 percentage points in males over the past three years. Hence, an annual increase of 2 percentage points and 1 percentage points in males and females respectively is a sufficiently ambitious target. The target values for 2020 and 2021 also reflect the restrictions in movement imposed due to COVID-19 which limits the ability of people to visit facilities and providers to perform screenings. See: https://www.euro.who.int/__data/assets/pdf_file/0018/336123/HSS-NCDs-Armenia.pdf 18 Unger, Thomas, et al. "2020 International Society of Hypertension global hypertension practice guidelines." Hypertension 75.6 (2020): 1334-1357. Page 16 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) 2021-2023. Up to this point, the actual values recorded under the Project did not reflect the screening performed within three years. Instead, the actual values included all screenings performed since the Project start date. The actual and target values have been revised to comply with the definition of the indicator.19 (d) PDO 4: Percentage of women aged 30-60 screened for cervical cancer at least once during the last three years and received the results (Percentage). The actual values since the start of implementation have been revised downwards. The target values for 2020-2023 have also been revised downwards. An end-of-Project target value has been added for the closing date in 2023. Given the proximity to the original closing date, the target value is the same. The United States Preventive Services Task Force recommends screening most women of reproductive age for cervical cancer every three years with a Pap smear.20 In line with these recommendations and national guidelines in Armenia, the Project offers financial incentives to health care providers for screening women aged 30 to 60 years for cervical cancer once every three years. Hence, from 2015, providers' performance is measured cumulatively over three-year periods: 2015-2017, 2018-2020, and 2021-2023. Up to this point, the actual values recorded under the Project did not reflect the screening performed within three years. Instead, the actual values included all screenings performed since the Project start date. The actual and target values have been revised to comply with the definition of the indicator.21 (e) PDO 5: Bed occupancy rate at the a) Artashat Medical Center; b) Sevan Medical Center (Percentage). An end-of-Project target value has been added for the closing date in 2023. Given the proximity to the original closing date, the target value is the same. (f) PDO 6: Percentage of deaths following hospital discharges for acute myocardial infarction or pneumonia, in the last year, at Sevan and Artashat MCs (Percentage). This is a new indicator to monitor the impact of hospital quality improvements under the PDO, given investments in infrastructure, equipment, training, and quality assurance mechanisms within the Project. Similar indicators of mortality that can be avoided with access to high-quality health care are routinely monitored in the EU by the Eurostat Task Force.22 As the indicator monitors impacts of investments that have been made since the Project implementation start date, actual values have been calculated using routine statistics from 201323. 19 Before the launch of the Project activities, screening levels fell by more than 50 percent in males and females over three years. The revised target values reflect on average screening coverage of 15 percent of the target females and 10 percent of target males in 2021 (the first year in the three-year cycle), and an increase of 20 percentage points among females and 15 percentage points among males in 2022 (the second year in the three-year cycle). The target values for 2020 and 2021 also reflect the restrictions in movement imposed due to COVID-19 which limits the ability of providers to perform screenings. See: https://www.euro.who.int/__data/assets/pdf_file/0018/336123/HSS-NCDs-Armenia.pdf 20 See: https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/cervical-cancer- screening?ds=1&s=Cervical%20cancer#:~:text=The%20USPSTF%20recommends%20screening%20for,HPV)%20testing%20every %205%20years. 21 The Project aimed to replicate the success of cervical cancer programs that had facilitated an annual 1 percentage point increase in screening rates. The revised target values reflect an average screening coverage of 9 percent in 2021 (the first year in the three-year cycle), and an increase of 9 percentage points in 2022 (the second year in the three-year cycle). The target values for 2020 and 2021 also reflect the restrictions in movement imposed due to COVID-19 which limits the ability of providers to perform screenings. See: https://www.euro.who.int/__data/assets/pdf_file/0018/336123/HSS-NCDs-Armenia.pdf 22 See: https://ec.europa.eu/health/sites/health/files/state/docs/2018_healthatglance_rep_en.pdf 23 Empirical publications demonstrate that quality assurance and training can lead to reductions in avoidable mortality that may range from 0.44 to 0.88 percentage points. This Project aims to reduce mortality, from baseline at 10.6 percent, by 2.6 percentage points, to 8 percent at endline. See: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3386642/ Page 17 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) (g) PDO 7: Number of designated intensive care units that are fully equipped and functional, without stock-outs in the final two weeks of the calendar year (Number). The indicator has been modified to specify that intensive care units' equipment and functionality will be measured at the end of the calendar year. The designated intensive care units are units in hospitals on the Government’s list of hospitals involved in providing services for COVID-19 cases, only one of which was supported under Component 2 of the DPCP. An end-of-Project target value has been added for the closing date in 2023. Given the proximity to the original closing date, the target value is the same. (h) Intermediate Results Indicator (IRI) 1: Percentage of PHC facilities undergoing enhanced verification of results by the HPIU (Percentage). An end-of-Project target value has been added for the closing date in 2023. Given the proximity to the original closing date, the target value is the same. (i) IRI 2: Percentage of adults aware of key NCD risk factors a) high blood pressure; b) high cholesterol level; c) high salt intake; d) obesity; e) high glucose level (disaggregated by gender) (Percentage). An end-of-Project target value has been added for the closing date in 2023. Given the proximity to the original closing date, the target value is the same. (j) IRI 3: Health facilities constructed, renovated, and/or equipped (Number). An end-of-Project target value has been added for the closing date in 2023 and to reflect the scale-up of Component 2 to include the construction of and procurement of equipment for Vayots Dzor MC. (k) IRI 4: Number of hospital health workers receiving training on new clinical practice guidelines (Number). An end-of-Project target value has been added for the closing date in 2023. Given the proximity to the original closing date, the target value is the same. (l) IRI 5: Medical Centers operational a) Sevan MC; b) Artashat MC; c) Martuni MC; d) Vayots Dzor MC (Text). An end-of-Project target value has been added for the closing date in 2023 and to reflect the completion of Vayots Dzor MC. (m) IRI 6: Percentage of workers under the Project with adequate awareness of gender-based violence (GBV), including sexual exploitation and abuse (SEA) and sexual harrassment (SH), in the last year: a) Male; b) Female (Percentage). This is a new indicator to monitor GBV awareness under the Project. Adequacy of GBV awareness equals a score of 70 percent or higher on a survey developed by the HPIU and World Bank gender team. Actions to improve awareness of GBV have been introduced under the AF. Hence, this indicator is monitored from 2020 until the closing date. (n) IRI 7: Percentage of beneficiaries in annual consultations that express satisfaction with the Project, including the community engagement process: (a) Gegharkunik Marz (b) Vayots Dzor Marz (Percentage). This is a new indicator to monitor citizen engagement under the Project. Beneficiary satisfaction will be measured during annual consultations in Gegharkunik and Vayots Dzor Marzes. Actions to improve citizen engagement have been introduced under the AF. Hence, this indicator is monitored from 2020 until the closing date. (o) IRI 8: Number of ventilators for management of COVID-19 cases, financed through the Project (Number). The endline target value has been revised from 75 to 70. This change reflects a review of the equipment needed for COVID-19 case management by the MoH. An end-of-Project target value has been added for the closing date in 2023. IV. KEY RISKS Page 18 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) 35. The overall risk rating of the AF is Moderate. However, the four categories rated as Substantial are Political and Governance, Institutional Capacity for Implementation and Sustainability, Fiduciary, and Other risk categories. 36. Fiduciary: This is due to the risk involved in the PBF scheme supported by the Project. The inherent risk arises from the number of PHC facilities involved and the complexity of PBF. The control risk arises from budgeting, accounting, financial reporting, funds flow, auditing, and internal controls. The risk is mitigated through improved control of the PBF scheme, including completeness of verification of reported screenings. There is an adequate internal control system in the HPIU. 37. Political and Governance; Institutional Capacity for Implementation and Sustainability. On September 27, 2020, Armenia declared martial law and general mobilization towards the conflict with Azerbaijan.24 An agreement to end the war was reached on November 9, 2020. There is a Substantial residual risk that may arise from resumptions in the conflict and protests that have followed the truce. This risk will be mitigated through two-weekly updates from the HPIU to the Bank team on implementation progress, staffing challenges, and proposed actions to address any gaps. Furthermore, the MoH has obtained waivers for essential staff within the HPIU to forestall their mobilization towards the conflict and ensure sufficient implementation capacity. 38. Other. The restrictions in movement to contain the spread of COVID-19 have limited health facility visits, preventing screening. Furthermore, the increase in workload at PHCs as a result of the pandemic has limited opportunities for verification of screening performance. PBF payments will be paid to providers without prior verification to encourage screenings within the safety precautions introduced by the MoH to reduce the facility-level spread of infections. This measure will mitigate the risk. An ex-post verification procedure will be approved for adjusting future payments. Verification will be conducted, and adjustments will be made when the restrictions are lifted. V. APPRAISAL SUMMARY A. Economic Analysis 39. There are significant potential returns to the investments supported by the AF from reduced mortality and morbidity from conditions amenable to hospital care. The COVID-19 pandemic has resulted in substantial illness and death in Armenia. Empirical evidence suggests that case fatality increases in the absence of high-quality hospital care, even in the presence of mild symptoms. The COVID-19 pandemic has also led to falls in household productivity and remittances. The decline in remittances is projected to be higher in Europe and Central Asia than in any other region.25 On aggregate, the COVID-19 pandemic will lead to a contraction of 6.3 percent in Armenia in 2020. 40. Armenia faces a high and growing burden of chronic diseases. The estimated annual cost to the Armenian economy of these diseases, due to premature mortality and productivity losses, is 362.7 billion Armenian Drams. The chronic disease burden and COVID-19 pandemic are interlinked, as 24 https://www.politico.eu/article/armenia-declares-martial-law-azerbaijan-military/ 25 World Bank. 2020. COVID-19 Crisis Through a Migration Lens. Migration and Development Brief 32 Page 19 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) chronic diseases increase vulnerability to COVID-19. Enhancing hospital capacity may facilitate better chronic disease control, reduce economic losses from absenteeism, premature death, and reduced work capacity. Improving hospital quality will also contribute to enhancing preparedness for and reducing mortality in future epidemics. An estimated 75 percent of fatalities from COVID-19 may be prevented by increasing intensive care capacity from 45 to 100 beds and improving hospital resource use efficiency.26 B. Technical 41. There is empirical evidence supporting investments in hospital network optimization to improve the quality and efficiency of care. Armenia has invested in improving the quality and efficiency of the hospital network, with support from the World Bank, since 2004. Investments in hospital infrastructure and equipment improve structural quality and are necessary conditions for high- quality hospital care. Many national health systems' ability to respond to the COVID-19 pandemic has been constrained by inadequate infrastructure, equipment, and supplies.27 In Armenia, hospital network optimization investments have been accompanied by improvements in infrastructure and equipment, addressing gaps in access to high-quality health care in underserved areas while improving efficiency. Hospital investments that enhance both efficiency and quality have been undertaken in other countries. In another post-Soviet country, Kazakhstan, a reduction in rural hospital beds was accompanied by quality improvements and more intensive use of existing resources.28 42. Health systems that are successful at reducing NCDs' are PHC-centric and limit hospital involvement to care for complications.29 Armenia’s efforts to optimize the hospital network can reduce the overuse of hospital services related to primary care. 30 Several Organization for Economic Co- operation (OECD) countries that have reduced their hospital bed capacity also increased bed occupancy, indicating greater efficiency.31 For example, following the elimination of almost 10 percent of acute hospital beds in Manitoba (Canada), hospital access was not affected, and there was an increase in early discharges and ambulatory surgeries.32 The RF for the DPCP monitors bed occupancy rates in hospitals supported under Component 2 to measure efficiency. However, hospital network optimization should be informed by an overall plan for service delivery capacity in the health system to avoid shortages in inpatient care following optimization efforts. 26 Wood, R.M., McWilliams, C.J., Thomas, M.J. et al. COVID-19 scenario modelling for the mitigation of capacity-dependent deaths in intensive care. Health Care Manag Sci 23, 315–324 (2020). https://doi.org/10.1007/s10729-020-09511-7 27 Phua, Jason, et al. "Intensive care management of coronavirus disease 2019 (COVID-19): challenges and recommendations." The Lancet Respiratory Medicine (2020). 28 McKee, “Reducing Hospital Beds: What Are the Lessons to Be Learned?” 29 Starfield, Barbara, Leiyu Shi, and James Macinko. "Contribution of primary care to health systems and health." The milbank quarterly 83.3 (2005): 457-502. 30 Martin McKee, “Reducing Hospital Beds: What Are the Lessons to Be Learned?” 2004. 31 OECD, “Competition in Hospital Services.” 32 Roos NP, Shapiro E. Using the information system to assess change: the impact of downsizing the acute sector. Medical Care, 1995, 33(12 Suppl.):DS109–DS126. Page 20 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) C. Financial Management 43. The HPIU will carry out project FM and is responsible for planning and budgeting, accounting, financial reporting, internal controls, funds flow, and external auditing. Under the AF, the HPIU will prepare semiannual, un-audited interim financial reports (IFRs) to be submitted to the World Bank within 45 days of the end of each calendar semester, from the first disbursement and throughout the life of the AF. The HPIU will manage the project Designated Account. It will be a pooled account for the parent project and AF, as proposed by the World Bank Group Finance and Accounting, Loan Operations, and Loan Accounting. The Designated Account will be in the Single Treasury Account of the Ministry of Finance at the Central Bank of Armenia, which holds almost all Designated Accounts for ongoing World Bank-financed projects in Armenia. 44. As part of the Project Operational Manual, HPIU will update its Financial Management Manual (FMM) by the effectiveness date of the AF to reflect specific activities and controls under DPCP and the AF. The annual audited Project financial statements will be submitted to the World Bank within six months of the end of each fiscal year and at the closing date of the IBRD Loan. The Borrower will disclose the Project's audit report, including the AF, within one month of their receipt from the auditors and acceptance by the World Bank, by posting the reports on the MoH website (www.moh.am). 45. The FM arrangements at the HPIU have been reviewed periodically as part of the ongoing project FM implementation support missions. The arrangements have consistently been found Satisfactory and acceptable to the World Bank. Following a November 2020 FM implementation support mission, FM performance has been downgraded from Satisfactory to Moderately Satisfactory due to the deterioration of verification of reported screening tests and pending audit recommendations for screening services. The FM covenants for the ongoing project have been met. Thus, there will be no change in the current FM and disbursement arrangements under the AF. The accounting staff of the HPIU is experienced in using the World Bank’s FM and disbursement procedures. No issues are expected with the Government counterpart funding, as the level and timeliness under the Armenian portfolio have been adequate. 46. There are no pending IFRs or audits under the ongoing Project implemented by the HPIU. Similar audit arrangements would be adopted for the AF. In particular, the audit of the Project will be conducted: (a) by an independent private auditor acceptable to the World Bank, on terms of reference acceptable to the World Bank; and (b) according to the International Standards on Auditing issued by the International Auditing and Assurance Standards Board of the International Federation of Accountants. 47. Adequate control measures have been established and are closely monitored to ensure that the residual project risk remains acceptable. These measures include: (a) a formal internal control framework described in the FMM, which will be updated for this AF; (b) enforcement of a flow of funds mechanism via the Treasury agreed with the Recipient; (c) audit of the project financial statements by independent auditors and on terms of reference acceptable to the Bank; and (d) regular FM implementation support and supervision, and procurement prior and post reviews will be conducted to monitor and assess the corruption risk. Page 21 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) D. Procurement 48. Procurement activities will be carried out by the full-time procurement specialist, who has extensive experience in implementing procurement under World Bank-funded Projects. Procurement of all civil works and goods will be implemented using ARMEPS. The AF will be subject to the new Procurement Regulations for Investment Project Financing Borrowers, issued in July 2016 and revised in August 2018. The draft Project Procurement Strategy for Development (PPSD) has been developed based on the scope of procurement envisaged under the AF. 49. The procurement for the Martuni MC construction has been completed under the parent Project. The AF will finance a percentage of the construction contract. However, provisions for advance contracting for the construction and technical supervision of Vayots Dzor MC have been included in the PPSD. The procurement of equipment for both MCs will follow the World Bank Procurement Regulations. During supervision, the World Bank will propose suitable procurement that ensures due diligence of contracting. Based on the post review of the Project, the overall risk is Moderate, and the performance is rated Satisfactory. E. Social (including Safeguards) 50. The proposed AF involves completing the construction of Martuni MC and construction of Vayots Dzor MC. The ESMPs for both sites have been completed and reviewed by that World Bank. No land acquisition nor resettlement impacts are anticipated. The sites have been screened for informal owners and users of public land plots. The transfer of ownership of the plots allocated for construction to the MoH has been confirmed. The parent Project did not trigger the Operational Policy (OP) 4.12 on Involuntary Resettlement. Given the AF activities, Operational Policy 4.12 will not need to be triggered. 51. As part of the fifth restructuring, the Project’s Environmental Management Framework was expanded as an Environmental and Social Management Framework (ESMF). The updated ESMF includes provisions on social inclusion and non-discrimination in the provision of services, labor terms and conditions, occupational health and safety, community health and safety, protocols for the disposal of medical waste, stakeholder engagement, information disclosure, and grievance redress. The Project will integrate the requirement for a worker’s Grievance Redress Mechanism (GRM) in all contracts, including retroactive inclusion in the contract for Martuni MC. The worker’s GRM will enable streamlined procedures for addressing workers' grievances, including the lack of personal protective equipment. The HPIU has two full-time environmental and social safeguards specialists responsible for screening, mitigation, monitoring, and reporting on environmental and social risks and impacts. The HPIU has demonstrated sufficient capacity to manage social risks. F. Environment (including Safeguards) 52. The proposed AF does not change the Project’s environmental classification or trigger any new safeguard policies. It does not require exceptions to any environmental safeguard policies. The AF will support the completion of a new building for Martuni MC and the construction of a new building Page 22 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) for Vayots Dzor MC. The AF will also finance the provision of medical equipment and furniture to these medical facilities, that according to the Operational Policy/Bank Procedure 4.01, are classified as environmental Category B. The sites of these MCs are “transformed urban areas.” No large-scale or otherwise significant adverse environmental and social impacts are expected from AF implementation. 53. The ESMF was disclosed, opened for stakeholder feedback, finalized, and re-disclosed in June 2020. A self-standing ESMP was deemed an adequate instrument for mitigating the environmental and social risks associated with the Project interventions, which are typical for constructing medium- sized buildings in an urban setting. The ESMPs for constructing Martuni and Vayots Dzor MCs were prepared by the Borrower, approved by the World Bank, disclosed, and finalized with the attached minutes of public consultations. The ESMP for Vayots Dzor MC will be updated to incorporate the COVID-19 specific risk considerations, including on occupational and health safety of workers and contractors; community health and safety risks and impacts related to noise, dust, and traffic management; ensuring inclusion and non-discrimination; labor and working conditions; social impact monitoring; sexual exploitation and abuse, and sexual harassment monitoring; and risks related to asbestos-containing materials. The ESMP for Martuni MC will be updated to reflect the risks and impacts of the helipad's construction and operations, including lighting, noise, accidents, fuel storage, and management. The ESMPs for both MCs will also reflect the proposed budget and a training plan for all activities relevant to the AF, including trainees, the topics, and frequency. Given the scale of the Project, a Stakeholder Engagement Plan will be prepared, using the COVID-19 template, which outlines the project's GRM and the community engagement strategy, including results from previous meetings, how feedback will be acted on, and how consultations will be conducted given the COVID-19 pandemic and ongoing tensions. 54. The Project's environmental and social monitoring is integrated into the overall technical supervision of civil works. The Project uses field environmental and social monitoring checklists for tracking compliance regularly. Bi-annual Project progress reporting will include analyzing environmental and social performance, issues identified, and corrective measures applied. In June 2020, the HPIU participated in a Bank workshop on the enhanced requirements for occupational and health safety, community safety, monitoring and supervision, and stakeholder engagement in the context of COVID-19. A COVID-19 reporting template has been introduced into civil works projects. The HPIU has a long history of implementing World Bank-supported projects with a good track record of complying with safeguard policies. Ratings on safeguard compliance under the parent Project have been consistently Satisfactory. G. Climate and Disasters 55. Armenia is vulnerable to the impacts of climate change. It is a land-locked country in the South Caucasus region between Europe and Asia. Most of the country is at a high altitude of over 1,000 meters above sea-level. Within the national boundaries is Lake Sevan, a freshwater lake, which, at 5,000 square kilometers, spans approximately one-sixth of its area. Armenia has a history of drought, significant land degradation, and active desertification processes. Frequent landslides, mudflows, floods, and other natural hazards negatively impact infrastructure, agriculture, and water resources. Page 23 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) These hazards increase the country’s vulnerability to climate variability and change. Agriculture is vital to the economy, but production is vulnerable to increasing temperatures and reduced precipitation. River flows are projected to decline, reducing freshwater supply. Forests are at risk due to increased aridity, which reduces growth rates and regeneration, making trees more susceptible to pests, diseases, and forest fires. More frequent and more prolonged heatwaves pose health risks, especially to vulnerable populations, including the aged. 56. The earthquake hazard is classified as high. This classification means more than a two percent chance of a potentially damaging earthquake occurring in the Project area in the next 50 years. An earthquake's impact will be considered in all phases of the Project, including design and construction. The designs of civil works procured under the Project will make the new buildings more climate-resilient and energy-efficient to support Armenia’s mitigation and adaptation climate action. Project planning decisions and design of works will consider the level of earthquake hazard in the country. 57. In the scope of the Project (parent and additional), the building designs incorporate energy-efficient construction materials and methods. Energy-efficient lighting, heating, ventilation, air conditioning and hot water supply systems are included in design documents. The outer walls of all sub-buildings will receive thermal insulation. If the basement level is exploited for the provision of additional medical services, the following requirements should be applied: the floors and the walls will be waterproofed, and the size of the windows will be increased to provide as much natural light as possible. The Project will finance a course for health providers and related staff on energy saving in construction and resilience to climate change impacts. VI. CORPORATE REQUIREMENTS A. Gender 58. There are 1.3 million women of reproductive age in Armenia.33 Women, during reproductive ages, have suboptimal health outcomes. Between 1990 and 2008, the maternal mortality ratio in Armenia declined from 47 deaths per 100,000 live births in 1990 to 29 deaths per 100,000 live births. Nevertheless, the maternal mortality ratio in Armenia is eight times higher than the EU’s average.34 About 25 percent of maternal deaths result from hypertensive disorders in pregnancy. There are also male-female gaps in the prevalence of key risk factors for NCDs. For example, in a 2013 country profile, the percentage of overweight or obese women was 61 percent compared to 49 percent of men.35 Between 1999 and 2004, the prevalence of cervical cancer rose from 10.9 to 13.8 cases per 100,000 persons. The absolute number of deaths due to cervical cancer rose from 33 United Nations Population Fund. Maternal Health. Accessed at: https://armenia.unfpa.org/en/node/9648#:~:text=The%20main%20causes%20of%20maternal,causes%20(6%20per%20cent). 34 World Health Organization. Armenia: https://www.euro.who.int/en/health-topics/Life-stages/maternal-and-newborn- health/country-work/armenia 35 World Health Organization. https://www.euro.who.int/__data/assets/pdf_file/0005/243284/Armenia-WHO-Country- Profile.pdf Page 24 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) 136 to 152 deaths.36 By 2018, the age-standardized cervical cancer mortality rate was 5.6 per 100,000, and more than twice the rate of 2.5 per 100,000 in western Asia.37 59. Mortality due to hypertension, diabetes, and cervical cancer can be prevented with increased awareness of risk and screening for early detection of disease. In 2010, 88.8 percent of women in rural areas and 95.6 percent of women in urban areas in Armenia had four or more antenatal care visits during their pregnancy. However, only 64 percent of women in urban areas and 47.3 percent of women in rural areas were adequately informed of signs of pregnancy complications such as preeclampsia (a hypertensive disorder of pregnancy) and gestational diabetes. 60. Further, in the general population, attendance at health checks that screen for hypertension and diabetes is low, with 25 percent of women and 19 percent of men visiting a health facility for a routine check-up in the preceding three years.38 For cervical cancer, 35 percent of diagnoses were late-stage (Stage III and IV) in 2003.39 Screening rates for cervical cancer are low as well. Only 9.3 percent of women have ever had a pap smear test to screen for cervical cancer in 2010, despite national recommendations for women aged 30 to 60 to screen once every three years.40 On the supply-side, the low uptake of screening was due to factors that reduced the quality of health care, including a lack of adequate equipment and supplies, gaps in clinical guidelines and providers' training, and a lack of health worker motivation. On the demand side, the factors contributing to low uptake of screening included a lack of awareness of screening benefits and the inconvenience of pap smears and other costs of undertaking screenings. Table 3: Overview of Project actions to improve screenings among reproductive-aged women Reproductive health challenges Underlying drivers Project actions Supply-side Supply-side - Maternal mortality is 8X EU average - Inadequate supplies to perform - Trained 1960 PHC providers on care - 25% of maternal deaths are due to screenings for cervical cancer and NCDs in hypertension in pregnancy - Gaps in clinical guidelines for pregnancy - Females have a higher prevalence of cervical cancer, hypertension, and - Trained 28 cytologists to improve overweight and obesity diabetes screening diagnosis of cervical cancer - Cervical cancer mortality is 2X - Lack of health worker motivation to - Developed new clinical guidelines Western Asian average perform screenings for cervical cancer screenings - Gaps in provider ability to perform - PBF rewards for screening and - Late detection of NCDs due to low high-quality screenings and supplies screening rates and annual check-up counseling attendance - Late detection of cervical cancer due Demand-side Demand-side 36 United Nations Population Fund, “A Clinical and Epidemiological Study of the Prevalence of Cervical Precancer/Cancer and Sexually Transmitted Diseases.” 37 Bruni et al., “Human Papillomavirus and Related Diseases Report.” 38 “Armenia Demographic and Health Survey 2010.” 39 Farrington et al., “Better Non-Communicable Disease Outcomes: Challenges and Opportunities for Health Systems. Armenia Country Assessment.” 40 “Armenia Demographic and Health Survey 2010.” Page 25 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) to low screening rates - Low awareness of the risk of cervical - Annual mass media campaign to cancer, obesity, hypertension, and increase awareness of risk and need diabetes for screenings - The inconvenience of pap smears - Personal invitations that clarify that and other costs screenings are free, providers are trained, and there are no other costs - Focus group discussions on the content, frequency, and channels for improving awareness among reproductive-aged women 61. The parent Project has incorporated actions to increase screening and improve maternal and reproductive health (Table 3). The Project has financed 1,960 PHC providers' training on providing high-quality screening care, including for cervical cancer, hypertension, and diabetes in pregnancy. This training also increased provider capacity to engage in risk factor communication and advice on lifestyle changes. Furthermore, 28 cytologists were trained to perform pap smears examinations for the early diagnosis of cervical cancer. The Project has provided financial rewards to providers for a total of 281,829 screens for cervical cancer screens and 87,760 screens for diabetes and hypertension in pregnancy. The unit cost reimbursement for each test has provided income to refurbish essential supplies for conducting screenings. Focus groups were conducted with reproductive-aged women to pilot test different mass media campaign strategies. These groups examined the messaging on risk, benefits of screening, cost of screening, images used, mass media channels, and broadcast frequency. The outputs of the groups informed the mass media campaign to increase awareness of risk factors and screenings. The AF will continue to sustain these impactful interventions and introduce a new intervention – personalized invitations will be sent by ordinary mail to all reproductive-age women. The invitations will inform them of the PHC closest to them, the benefits of screening for NCDs, the absence of cost, and steps to take. 62. The Project includes four PDO indicators that monitor these actions' success, including awareness of NCD risk and screening rates for early detection of hypertension, diabetes, and cervical cancer among women of reproductive age. The first indicator monitors the percentage of pregnant women screened for glycosuria, hypertension, and proteinuria. This indicator monitors the early detection of hypertension and diabetes in pregnancy within the first three antenatal care visits. The second indicator monitors the percentage of women aged 30-60 who are screened for cervical cancer at least once during the last three years and received the results. The third indicator monitors the percentage of the population aged 35-68 who are screened for hypertension at least once in the last year. This indicator disaggregates results by gender. The fourth indicator monitors the percentage of the population aged 35-68 who are screened for diabetes at least once in the last three years. This indicator also disaggregates results by gender. An IRI also monitors the level of awareness among adults, disaggregated by gender, of NCD risk factors such as high blood pressure, high cholesterol, high salt intake, obesity, and high glucose. 63. The Project has incorporated actions related to addressing GBV within the context of civil works under Component 2. In 2017, the lifetime physical and sexual intimate partner violence rate in Armenia was 8 percent. Furthermore, the rate of physical or sexual intimate partner violence in the last twelve months was 4 percent.41 More than 50 percent of males have practiced emotional 41 Proportion of ever-partnered women aged 15-59 years experiencing intimate partner physical and/or sexual violence at least Page 26 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) violence towards their partner, and more than 35 percent of men report physical violence towards a partner in the last 12 months.42 There is a higher prevalence of GBV in the workplace. About 5 percent of informally employed and 4.5 percent of formally employed women report being physically attacked. In contrast, 0.8 percent of women who have never worked report being physically attacked.43 64. Armenia has ratified several international treaties on women’s rights, including the Convention on the Elimination of all Forms of Discrimination.44 In 2013, the national law on Guaranteeing Equal Rights and Opportunities for Women and Men was adopted.45 In 2017, Armenia also adopted the law on domestic violence,46 and in 2019, the Government approved the country’s 2019-2023 gender strategy.47 Non-governmental organizations are working against GBV through advocacy, awareness- raising, and service provision. These include the Sexual Assault Crisis Center, Women Support Center, Women’s Rights Center, and the Women Resource Center. Many of these organizations are members of the “Coalition to Stop Violence against Women.” Furthermore, with funding provided by the Development Marketplace to Address Gender-based Violence,48 a local information technology company is rolling out a mobile application called “Safe You” to help protect women from GBV.49 65. Men show a higher level of acceptance and a lower level of awareness of GBV in Armenia. About 30 percent of men and 17 percent of women in Armenia’s nine Marzes justify violence against women. 50 Also, 45 percent of male respondents and 28 percent of female respondents think that a woman should tolerate violence to keep her family together. An estimated 31 percent of men and 23 percent of women think there is no national law on violence against women, and 22 percent of men and 19 percent of women do not know that there is a national law on gender equality.51 Programs targeting GBV should increase participation and awareness among men and mitigate GBV in the workplace. 66. Projects involving civil works can expose community members and workers to GBV. To mitigate the risks of GBV, including SEA and SH, this AF will incorporate the recommendations of the World Bank’s Good Practice Note “Addressing Sexual Exploitation and Abuse and Sexual Harassment in Investment once in their lifetime. Source: National Statistical Service, Ministry of Health, and ICF. 2017. Armenia Demographic and Health Survey 2015-16. Rockville, Maryland, USA: National Statistical Service, Ministry of Health, and ICF. See at: https://evaw-global- database.unwomen.org/en/countries/asia/armenia?pageNumber=1 42 World Vision Armenia. Caring for Equality Baseline Report. Data collection: July-September 2016, 1 March 2017 43 UNFPA. Men and Gender Equality in Armenia. Report on Sociological Survey Findings. Yerevan 2016: https://armenia.unfpa.org/sites/default/files/pub-pdf/MEN%20AND%20GENDER%20EQUALITY_Final_0.pdf 44 “GBV risk assessment and GBV service mapping for Armenia Disease Prevention and Control Project - Additional Financing”. 45 Law NO. HO-57-N of 20 May 2013 on Guaranteeing Equal Rights and Opportunities for Women and Men: https://www.ilo.org/dyn/natlex/natlex4.detail?p_lang=en&p_isn=94756 46 Law on Prevention of Violence within the Family, Protection of Victims of Violence within the Family and Restoration of Peace in the Family: https://www.arlis.am/documentview.aspx?docID=118672 47 N 1334-Լ Decision of the Republic of Armenia on Approving the Implementation of the 2019-2023 Gender Strategy and Action Plan of the Republic of Armenia: https://www.ilo.org/dyn/natlex/natlex4.detail?p_lang=en&p_isn=94756 48 Development Marketplace to Address Gender-Based Violence, the World Bank and Sexual Violence Research Initiative (SVRI). See at: https://www.worldbank.org/en/programs/development-marketplace-innovations-to-address-gender-based-violence 49 “Safe You”. See at: https://safeyou.space/ 50 USAID/Armenia Gender Analysis Report. August 2019: https://banyanglobal.com/wp-content/uploads/2019/09/USAID- Armenia-Gender-Analysis-Report-1.pdf 51 UNFPA. Men and Gender Equality in Armenia. Report on Sociological Survey Findings. Yerevan 2016: https://armenia.unfpa.org/sites/default/files/pub-pdf/MEN%20AND%20GENDER%20EQUALITY_Final_0.pdf Page 27 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) Project Financing involving Major Civil Works.”52 The note reflects the Bank’s heightened focus on identifying and addressing GBV, including SEA and SH risks, that can emerge in projects involving civil works contracts. The HPIU and Bank team conducted a joint assessment of the risk of GBV in the AF and country. The risk of GBV is assessed as Low with a score of 6.5. 53,54 67. The Project will implement measures that are proportional to this risk level. The Project has mapped the service providers for GBV in the beneficiary communities and enhance the Project GRM to integrate specific procedures for GBV-related complaints. A Code of Conduct will be signed by everyone working under the Project in Gegharkunik and Vayots Dzor Marzes, including the HPIU staff. The Code of Conduct defines all the staff's obligations regarding policies related to GBV, including SEA and SH, at the workplace. The HPIU will post information bulletins about GBV on the construction sites. The HPIU will also provide information booklets to all staff. Information sessions will be held to explain the bulletins and booklets' content on the prevention of GBV. The HPIU will undertake annual surveys to measure the GBV awareness levels among male and female workers involved in the Project. The survey will be based on a questionnaire that is endorsed by the World Bank team. 68. The Project is introducing an IRI in the RF to monitor the percentage of workers under the Project, including in the HPIU, who have adequate GBV awareness. The Bank team will regularly review the GBV risk assessment and mapping of the service providers. The assessment and mapping will be updated by the HPIU to reflect the changes in the GBV risks should they arise. The HPIU will appoint a focal point to monitor awareness-raising activities and the overall implementation of the Project’s gender framework. The focal point will receive information and guidance from the Bank team. The HPIU will modify the Project Operational Manual and the ESMF to reflect these changes. B. Citizen Engagement 69. Engagement with communities under the Project is primarily ensured via annual consultations established under the parent Project and the Project-level GRM. The HPIU will endeavor to ensure an inclusive consultation process for those who face more significant participation barriers. These individuals include the elderly, persons with disabilities, and persons living in remote locations. In the Project's final years, the HPIU will focus consultations on just-in-time feedback and lesson learning. To this end, venues of consultations will be fully accessible: consultations will be held at times convenient to the public and at venues that are centrally located and easily accessible through public transportation. Given COVID-19, the HPIU will draw on available technologies to support consultations and receive feedback on project activities, including email, virtual meetings, and 52 World Bank. 2020. http://pubdocs.worldbank.org/en/741681582580194727/ESF-Good-Practice-Note-on-GBV-in-Major-Civil- Works-v2.pdf 53 Armenia GBV Risk Assessment. https://worldbankgroup.sharepoint.com/:x:/r/sites/gsg/SPS/_layouts/15/doc2.aspx?sourcedoc=%7B0B09E3B5-DA21-43E4- A509- F8526A55A883%7D&file=FINAL_GBV_RiskAssessment_Infrastructure_Autoformat.xlsx&action=default&mobileredirect=true&ci d=56662df0-396f-4fa3-8979-9dfe549a513d&CID=bc2082c3-903e-3a14-f6d8-fbdea1fce41a 54 Low risk: 0 - 12.25, moderate risk: 12.5 – 16, substantial risk: 16.25 – 18, high risk: 18.25 – 25. Page 28 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) dedicated phone lines with knowledgeable operators. Information about the Project and consultations will be disseminated widely (at least ten days in advance) in all communities to be served by the investment, with outreach efforts tailored to suit beneficiary groups. The Project will incorporate an IRI to monitor the proportion of beneficiaries in the annual consultations in the Project locations who express satisfaction with the Project interventions, including community engagement. 70. Tailored consultations may be organized as needed, with specific stakeholder groups, including patients, caregivers, or medical personnel, on investments of interest. Focus group discussions will be held for vulnerable groups to articulate their views and provide feedback to the HPIU. The HPIU operates a GRM which allows for the submission of feedback or grievances via telephone hotline/mobile, mail, short message service, social media (WhatsApp, Viber, Facebook, etc.), email, website, and via community leaders, or any of the three tiers (Tier 1: Local service provider [hospitals or medical facility designated staff]; Tier 2: Local Governments [municipal offices]; Tier 3: National, Project-level [HPIU]). The GRM allows for anonymous grievances to be raised and addressed. After the fifth Project Restructuring, the GRM is being sensitized to the receipt of GBV, including SEA and SH related complaints. These complaints will be referred to service providers. The community will also be informed of the mechanism for reporting GBV, including SEA and SH related complaints, and follow-up actions to respond to these requests. The HPIU publishes the GRM report annually on the Project website. 71. There will be specific outreach to groups identified as vulnerable. The outreach will ensure a balance of gender and promote women’s leadership. Also, messages will be tailored for older people and ensure consultation venues will be made accessible. The HPIU will ensure accessibility for those with disabilities through braille, large print, text captions, and online resources with accessibility options. Following consultations, the HPIU will be responsible for conveying concerns to senior policymakers in the MoH for consideration. Subsequent consultation will include feedback on the measures introduced in response to feedback from stakeholders. Stakeholder groups will also be informed on the implementation of the stakeholder engagement plan and grievance mechanism. VII. WORLD BANK GRIEVANCE REDRESS Communities and individuals who believe that they are adversely affected by a World Bank (WB) supported project may submit complaints to existing project-level grievance redress mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non- compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate GRS, please visit http://www.worldbank.org/en/projects-operations/products-and-services/grievance-redress-service. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org Page 29 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) VIII. SUMMARY TABLE OF CHANGES Changed Not Changed Results Framework ✔ Components and Cost ✔ Procurement ✔ Implementing Agency ✔ Project's Development Objectives ✔ Loan Closing Date(s) ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ APA Reliance ✔ IX. DETAILED CHANGE(S) COMPONENTS Current Component Name Current Cost Action Proposed Component Proposed Cost (US$, (US$, millions) Name millions) Emergency response to 3.75 No Change Emergency response to 3.75 COVID-19 COVID-19 Performance-based 4.20 Revised Performance-based 4.72 incentives to improve MCH incentives to improve and NCD services in primary MCH and NCD services care faci in primary care faci Page 30 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) Hospital Modernization 33.99 Revised Hospital Modernization 42.69 Project Management 3.06 Revised Project Management 3.58 TOTAL 45.00 54.74 Expected Disbursements (in US$) DISBURSTBL Fiscal Year Annual Cumulative 2013 0.00 0.00 2014 0.00 0.00 2015 0.00 0.00 2016 0.00 0.00 2017 0.00 0.00 2018 0.00 0.00 2019 0.00 0.00 2020 0.00 0.00 2021 1,400,000.00 1,400,000.00 2022 5,000,000.00 6,400,000.00 2023 1,000,000.00 7,400,000.00 SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Latest ISR Rating Current Rating Political and Governance ⚫ Substantial ⚫ Substantial Macroeconomic ⚫ Moderate ⚫ Moderate Sector Strategies and Policies ⚫ Low ⚫ Low Technical Design of Project or Program ⚫ Low ⚫ Low Institutional Capacity for Implementation and ⚫ Moderate ⚫ Substantial Sustainability Fiduciary ⚫ Substantial ⚫ Substantial Environment and Social ⚫ Low ⚫ Low Stakeholders ⚫ Moderate ⚫ Moderate Page 31 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) Other ⚫ Substantial ⚫ Substantial Overall ⚫ Moderate ⚫ Moderate LEGAL COVENANTS2 LEGAL COVENANTS – Additional Financing to the Disease Prevention and Control Project (P175023) Sections and Description The Operational Manual means the manual dated March 2013 and amended April 2020 and shall be updated by the Borrower and agreed by the Bank not later than 30 days from the date of this Agreement. Conditions Page 32 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) VIII. RESULTS FRAMEWORK AND MONITORING Results Framework COUNTRY: Armenia Additional Financing to the Disease Prevention and Control Project Project Development Objective(s) The objective of the Project is to (i) increase the detection of selected NCDs at the PHC level and among pregnant mothers; (ii) improve the efficiency and quality of selected hospitals; and (iii) prevent, detect and respond to the threat posed by COVID-19. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_ PD O Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 To increase the detection of selected non-communicable diseases (NCDs) in Primary Health Care (PHC) Percentage of antenatal care (ANC) attendees screened for glycosuria, hypertension and 0.00 0.00 40.00 60.00 75.00 75.00 85.00 85.00 85.00 85.00 85.00 proteinuria in at least three antenatal visits (Percentage) (Percentage) Action: This Rationale: indicator has been Revised A target value for the closing date in February 2023 has been added. Page 33 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) RESULT_FRAME_TBL_ PD O Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 Percentage of population aged 35- 68 screened for a)39.00 a)35.90 a)20.10 a)30.30 a)41.50 a)35.00 a)37.00 a)39.00 hypertension at a)22.50 a)25.00 a)30.30 b)27.00 least once in the last b)16.00 b)19.70 b)21.00 b)28.70 b)25.00 b)26.00 b)27.00 b)17.80 b)20.00 b)19.70 year a) female; b) male (Percentage) (Text) Rationale: Action: This A target value for the closing date in February 2023 has been added. The actual and target values have been revised downwards. In the RF, the revised actual values indicator has been are shown under the columns for intermediate targets 1-6, while the revised target values are shown under the columns for intermediate targets 7-9 and the end Revised target. Percentage of population aged 35- 68 screened for diabetes mellitus at a)9.80 a)12.00 a)26.70 a)37.30 a)51.40 a)15.70 a)33.90 a)35.00 a)15.00 a)35.00 a)35.00 PHC level at least b)7.50 b)10.00 b)15.30 b)23.70 b)33.00 b)8.90 b)20.60 once during the last b)25.00 b)10.00 b)25.00 b)25.00 3 years a) female; b) male (Percentage) (Text) Rationale: Action: This A target value for the closing date in Feburary 2023 has been added. The actual and target values have been revised. In the RF, the revised actual values are shown indicator has been under the columns for intermediate targets 1-6, while the revised target values are shown under the columns for intermediate targets 7-9 and the end target. Revised Percentage of women aged 30-60 8.50 9.00 9.20 17.50 26.60 7.90 19.00 25.00 9.00 18.00 18.00 screened for cervical cancer at least once Page 34 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) RESULT_FRAME_TBL_ PD O Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 during the last 3 years and received the results (Percentage) (Percentage) Rationale: Action: This A target value for the closing date in February 2023 has been added. The actual and target values have been revised. In the RF, the revised actual values are shown indicator has been under the columns for intermediate targets 1-6, while the revised target values are shown under the columns for intermediate targets 7-9 and the end target. Revised To improve the efficiency and quality of selected hospitals in Armenia Bed occupancy rate at the a) Artashat Medical Center; b) a)64.00 a)64.00 a)64.00 a)64.00 a)64.00 a)64.00 a)64.00 a)68.00 a)70.00 a)70.00 a)70.00 Sevan Medical b)51.00 b)51.00 b)51.00 b)51.00 b)51.00 b)51.00 b)51.00 b)60.00 b)70.00 b)70.00 b)70.00 Center (Percentage) (Text) Action: This Rationale: indicator has been A target value for the closing date in February 2023 has been added. Revised Percentage of deaths following hospital discharges for acute myocardial infarction or pneumonia, in the 10.60 13.40 15.40 5.30 7.00 3.50 6.70 8.00 8.00 8.00 8.00 last year, at Sevan and Artashat MCs (Percentage) (Number) Action: This Rationale: indicator is New Page 35 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) RESULT_FRAME_TBL_ PD O Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 In the RF, the actual values are shown under the columns for intermediate targets 1-6, while the target values are shown under the columns for intermediate targets 7- 9 and the end target. To prevent, detect and respond to the threat posed by COVID-19 Number of designated intensive care units that are fully equipped and functional, without 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.00 4.00 4.00 4.00 stock-outs in the final two weeks of the calendar year (Number) (Number) Rationale: Action: This The definition has been modified to specify the two weeks over which attainment will be measured. A target value for the closing date in February 2023 has been indicator has been Revised added. PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 To increase the detection of selected non-communicable diseases (NCDs) in Primary Health Care (PHC) Percentage of PHC facilities undergoing 0.00 10.00 20.00 30.00 97.00 97.00 97.00 98.00 98.00 98.00 98.00 enhanced Page 36 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 verification of results by the HPIU (Percentage) (Percentage) Action: This Rationale: indicator has been A target value for the closing date in February 2023 has been added. Revised Male a)45.00 Male Male Male b)24.00 a)45.00 a)47.00 a)47.00 c)55.00 Percentage of adults b)24.00 b)26.00 b)26.00 d)65.00 aware of key NCD c)55.00 c)57.00 c)57.00 risk factors a) high e)33.00 d)65.00 d)66.00 d)66.00 blood pressure; b) e)33.00 e)35.00 e)35.00 high cholesterol Female level; c) high salt a)58.00 intake; d) obesity; e) Female Female Female b)32.00 high glucose level a)58.00 a)60.00 a)60.00 c)64.00 (disaggregated by b)32.00 b)40.00 b)40.00 gender) d)64.00 c)64.00 c)70.00 c)70.00 (Percentage) (Text) e)42.00 d)64.00 d)78.00 d)78.00 e)42.00 e)45.00 e)45.00 (2012 HSPA data) Action: This Rationale: indicator has been A target value for the closing date in February 2023 has been added. Revised To improve the efficiency and quality of selected hospitals Page 37 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 Health facilities constructed, renovated, and/or 0.00 0.00 0.00 1.00 2.00 4.00 4.00 4.00 4.00 5.00 6.00 equipped (Number) (Number) Rationale: Action: This indicator has been The endline target value has been revised from 5 to 6 to reflect the inclusion of Vayots Dzor MC in the Project scope. A target value for the closing date in February 2023 has been added. Revised Number of hospital health workers receiving training on 0.00 0.00 0.00 0.00 0.00 0.00 90.00 210.00 300.00 300.00 300.00 new clinical practice guidelines (Number) (Number) Action: This Rationale: indicator has been Target value for the closing date in February 2023 has been added. Revised a)Not a)Not a)Not a)Not a)Civil works Medical Centers operational operational operational operational ongoing a)Operational a)Operational a)Operational a)Operational a)Operational operational a) Sevan b)Not b)Not b)Not b)Not b)Civil works b)Operational b)Operational b)Operational b)Operational a)Operational b)Operational MC; b) Artashat MC; operational operational operational operational ongoing c)Not c)Not c)Civil works c)Civil works b)Operational c) Martuni MC; d) c)Operational c)Not c)Not c)Not c)Not c)Not operational operational ongoing ongoing c)Operational Vayots Dzor MC operational operational operational operational operational d)Not d)Civil works d)Not d)Not d)Not d)Operational (Text) (Text) operational ongoing d)Not d)Not d)Not d)Not d)Not operational operational operational operational operational operational operational operational Rationale: Action: This indicator has been The definition has been modified to reflect the inclusion of Vayots Dzor Medical Center in the Project scope. A target value for the closing date in February 2023 has been added. Revised Page 38 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 Percentage of workers under the Project with adequate awareness a)9.50 a)9.50 a)50.00 a)70.00 a)70.00 of GBV, including SEA and SH, in the b)14.20 b)14.20 b)70.00 b)80.00 b)80.00 last year: a) Male; b) Female (Percentage) (Text) Action: This indicator is New Percentage of beneficiaries in annual consultations that express satisfaction with the Project, including a)0.00 a)0.00 a)60.00 a)60.00 a)60.00 the community engagement b)0.00 b)0.00 b)60.00 b)60.00 b)60.00 process: (a) Gegharkunik Marz (b) Vayots Dzor Marz (Percentage) (Text) Action: This indicator is New To prevent, detect and respond to the threat posed by COVID-19 Number of ventilators for management of 0.00 0.00 0.00 0.00 0.00 0.00 0.00 70.00 70.00 70.00 70.00 COVID-19 cases, financed through Page 39 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 5 6 7 8 9 the Project (Number) (Number) Rationale: Action: This The endline target value has been revised from 75 to 70 to reflect a review of equipment needed for COVID-19 case management. A target value for the closing date in indicator has been Revised February 2023 has been added. IO Table SPACE Monitoring & Evaluation Plan: PDO Indicators Mapped Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Numerator: [Number of ANC visits in which tests This indicator monitors, or examinations for annually, the percentage of glycosuria, hypertension, pregnant women who are and proteinuria were Percentage of antenatal care (ANC) screened for detection of E-health performed in the last State Health Agency attendees screened for glycosuria, diabetes and hypertensive Annual system calendar year X 100] (SHA) hypertension and proteinuria in at least disorders in pregnancy, three antenatal visits (Percentage) through tests for glycosuria Denominator: Number and proteinuria, and of ANC visits in the last examinations for raised calendar year blood pressure. Percentage of population aged 35-68 This indicator monitors the For each gender: Annual E-health SHA screened for hypertension at least once in percentage of people aged the last year a) female; b) male 35-68 years who are Numerator: [Number of Page 40 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) (Percentage) screened for detection of adults, aged 35-68, hypertension at least once screened for in the calendar year. hypertension at least once in the last calendar year X 100] Denominator: Number of adults, aged 35-68, in the last calendar year PHC providers are reimbursed for screening adults aged 35-68 that are enrolled in their health facilities for detection no For each gender: diabetes mellitus once every three years. The Numerator: [Number of screening program adults aged 35-68 Percentage of population aged 35-68 launched in 2015. The screened for diabetes screened for diabetes mellitus at PHC three-year periods over Annual E-health SHA mellitus for at least once level at least once during the last 3 years which screening in the last 3 years X 100] a) female; b) male (Percentage) performance is combined are 2015-2017, 2018-2020, Denominator: Number and 2021-2023. For each of adults aged 35-68 three-year period, screening of the entire population starts from zero percent in year one (2015, 2018, and 2021), and is cumulated until year three Page 41 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) (2017, 2020, and 2023). PHC providers are reimbursed for screening women aged 30-60 that are enrolled in their health facilities for detection of cervical cancer once every Numerator: [Number of three years. The screening women aged 30-60 program launched in 2015. screened for cervical Percentage of women aged 30-60 The three-year periods cancer at least once and screened for cervical cancer at least once over which screening Annual E-health received the results in SHA during the last 3 years and received the performance is combined the 3 years X 100] results (Percentage) are 2015-2017, 2018-2020, and 2021-2023. For each Denominator: Number three-year period, of women aged 30-60 screening of the entire population starts from zero percent in year one (2015, 2018, and 2021), and is cumulated until year three (2017, 2020, and 2023). For Sevan or Artashat This indicator monitors the MC: percentage of available beds which have been Numerator: [Number of Bed occupancy rate at the a) Artashat occupied over the last Annual MoH utilized bed-days during MoH/HPIU Medical Center; b) Sevan Medical Center calendar year, in Sevan and the last calendar year X (Percentage) Artashat MCs, as a 100] measure of hospital efficiency. Denominator: Number of available bed days Page 42 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) during the last calendar year Numerator: [Number of This is a new indicator to deaths following monitor improvements in hospital discharges of hospital outcome quality, patients admitted with a in terms of reduction in diagnosis of acute mortality following hospital myocardial infarction or discharges for acute pneumonia in Sevan and myocardial infarction or Artashat MCs in the last Percentage of deaths following hospital pneumonia, given calendar year X 100] discharges for acute myocardial infarction Annual NIH NIH/HPIU investments in hospital or pneumonia, in the last year, at Sevan equipment and Denominator: Number and Artashat MCs (Percentage) infrastructure in two of hospital discharges of facilities, Sevan and patients admitted with a Artashat MCs, and support diagnosis of acute for development and myocardial infarction of training in line with clinical pneumonia in Sevan and guidelines. Artashat MCs in the last calendar year The Government of Armenia has designated hospitals throughout Number of designated intensive care units Armenia whose intensive that are fully equipped and functional, care units will be equipped Cumulative MoH MoH/HPIU without stock-outs in the final two weeks for intensive care of of the calendar year (Number) moderate to severe cases of COVID-19. The Project will provide support for equipment and supplies in Page 43 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) up to four intensive care units within the designated hospital list. This indicator monitors the equipment and functionality of the intensive care units, within the list of designated hospitals, supported by the Project. ME PDO Table SPACE Monitoring & Evaluation Plan: Intermediate Results Indicators Mapped Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Numerator: [Number of PHC facilities receiving enhanced verifications of results, in line with the agreed protocol, in Percentage of PHC facilities undergoing Results Annual the last calendar year X MoH/HPIU enhanced verification of results by the verification 100] HPIU (Percentage) Denominator: Number of PHC facilities in the sample for verification in the last calendar year Percentage of adults aware of key NCD This indicator monitors Periodic; For each risk factor and risk factors a) high blood pressure; b) high changes in awareness of aligned gender: HSPA MoH/HPIU cholesterol level; c) high salt intake; d) risk factors for NCDs with with timing obesity; e) high glucose level the Project interventions, of Health Numerator: [Number of (disaggregated by gender) (Percentage) including performance- System adults, aged 15 years Page 44 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) based financing to health Performan and above, that care providers to increase ce indicates awareness of screening; a mass media Assessmen the risk factor for NCDs campaign to promote an t (HSPA) during the relevant understanding of risk and survey. HSPA survey X 100] the benefits of screening; Denominator: Number and personal invitations to of adults, aged 15 years increase awareness of risk and above, included in factors and encourage the relevant HSPA screening. survey This indicator measures the cumulative number of Health facilities constructed, renovated, health facilities Annual MoH MoH/HPIU and/or equipped (Number) constructed, renovated and/or equipped through the Project. This indicator monitors the development of clinical guidelines for medical practice, their approval and incorporation into training programs for health Number of hospital health workers professionals, and the Cumulative MoH MoH/HPIU receiving training on new clinical practice completion of training of guidelines (Number) health professionals on these guidelines. Clinical guideline training contributes to improvements in hospital care quality. Page 45 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) This indicator monitors progress in construction, Medical Centers operational a) Sevan MC; equipment, and Annual HPIU HPIU b) Artashat MC; c) Martuni MC; d) Vayots operationalization of Dzor MC (Text) hospitals supported under Component 2 of the Project. This is a new indicator to monitor and evaluate the changes of GBV, including SEA and SH, awareness in For each gender: the percentage of people involved in civil works for Numerator: [Number of Martuni and Vayots Dzor workers under the MCs under the Project. Project that scored 70 Awareness is measured percent or higher in the Percentage of workers under the Project through a survey that has annual survey of with adequate awareness of GBV, Annual MoH/HPIU been vetted by the Bank awareness of GBV X 100] including SEA and SH, in the last year: a) gender team, whereas Male; b) Female (Percentage) adequacy of awareness Denominator: Number equals a score of 70 of workers under the percent or higher on the Project in the last questions in the survey. calendar year Interventions to improve awareness of GBV have been introduced under the AF. Percentage of beneficiaries in annual This is a new indicator to Annual For Gegharkunik or consultations that express satisfaction meet the corporate Annual consultation Vayots Dzor Marz: MoH/HPIU with the Project, including the community requirement for survey engagement process: (a) Gegharkunik monitoring and evaluating Numerator: [Number of Page 46 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) Marz (b) Vayots Dzor Marz (Percentage) community engagement beneficiaries in annual under the Project. consultations that Beneficiary satisfaction will express satisfaction with be measured within the the Project, including context of annual the community consultations in engagement process X Gegharkunik and Vayots 100] Dzor Marzes. Denominator: Number of beneficiaries in annual consultations This indicator monitors procurement of ventilators Number of ventilators for management of for intensive care units Cumulative MoH MoH/HPIU COVID-19 cases, financed through the supported through Project (Number) Component 4 of the Project. ME IO Table SPACE Page 47 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) ANNEX 1: CPF ADJUSTMENT RESPONDING TO COVID-19 1. The World Bank Group’s engagement in Armenia is guided by the CPF for FY19-23 discussed by the Board on March 28, 2019 (Report No.123902-AM). The CPF supports the rebalancing of Armenia’s economy toward a new growth model focused on boosting exports, enhancing human capital, and sustainably managing natural resources and the environment. The CPF’s indicative IBRD lending envelope totals US$ 300–400 million. In the first two FYs (FY19-20) IBRD support to Armenia amounted to US$ 85 million in roads, social investments and governance sectors. The flexible principles of engagement introduced in the CPF allow the WBG’s program to adjust and respond to existing or new development challenges that have been exacerbated by the COVID-19 pandemic and, more recently, the conflict with Azerbaijan. 2. Impact of COVID-19 on Armenia’s economy. The COVID-19 pandemic has hit Armenia’s economy hard. The outlook has significantly weakened, with the economy projected to contract by 6.3 percent in 2020.55 Private consumption and investment will contract sharply, which will be only partially offset by higher government spending and import compression. On the supply side, the COVID-19 restrictions and border closures are expected to significantly impact construction, trade and services, particularly the hospitality industry, while agricultural output is expected to grow marginally from a low base. With economic activities being curtailed, the unemployment rate is expected to increase, and poverty, measured at the upper middle-income poverty line of US$ 5.5 per day in 2011 PPP, could increase by 4.8 percentage points to 41.8 percent of the population in 2020. The fiscal deficit is projected to widen to 5.4 percent of Gross Domestic Product (GDP) in 2020 from 0.8 percent in 2019, reflecting weaker revenue collection and higher current spending for healthcare, social, and economic support.56 Together with the decline in GDP, this is expected to push public debt up by 10 percentage points to 63 percent of GDP in 2020. Economic recovery is expected to be slow with the economy projected to recover to pre-COVID-19 output levels at the earliest by 2022. 3. Government’s response. The response has focused on strengthening the provision of public health services, limiting domestic contagion, and introducing targeted economic and social relief measures aimed at assisting viable businesses and vulnerable people. The first case of COVID-19 was confirmed on March 1, and a national state of emergency was declared on March 16, followed by a nation-wide lock-down from March 24 to April 13. Strong social distancing and containment measures were put in place such as domestic and international travel bans, prohibiting public gatherings, closing schools, universities, and restaurants, imposing restrictions on recreational facilities and public transportation, and mandating the wearing of masks in public places inside and outside. 4. While the Government’s initial response to contain the pandemic was adequate, restrictions were lifted too early (only twenty days after the introduction of the lockdown), which led to a rapid increase in the number of cases following the gradual reopening. Stricter precautionary measures 55 With the new wave of COVID-19 infections being stronger-than-expected and the conflict with Azerbaijan, growth rate in 2020 could easily be closer to the downside scenario of 8 percent contractions in 2020. 56 With stronger economic contraction and higher defense spending, the fiscal deficit could increase to around 8 percent of GDP. Page 48 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) imposed by the Government led to a gradual decline in the number of new cases starting second half of July and the burden on the health system eased considerably. On September 11, 2020 the Government introduced a four-months “quarantine” regime (in lieu of the previous state of emergency) which allows the government, regional governors, and the mayor of Yerevan to impose targeted lockdowns as needed. The requirement to wear masks remains. However, the progress has been reversed more recently. With schools and university reopening, the conflict intensifying and an increase in testing, the number of daily cases has increased. As of November 9, Armenia had 3,628 confirmed cases and 53 deaths per 100 000 population, which is higher than in other countries in the region: Georgia – 1,633 confirmed cases, 13 deaths; Russia – 1,231 confirmed cases and 21 deaths; Ukraine – 1,075 confirmed cases, 20 deaths. 5. To support the economy, the Government enacted a set of 25 social and economic support packages totaling US$ 300 million. Social support packages included direct social assistance to vulnerable families, subsidized utility payments, and cash transfers to employees of heavily affected sectors. Economic support packages included labor subsidies to help SMEs maintain core employees, subsidized or interest-free lending, and special support to the agriculture, high-tech and tourism sectors and Micro, Small, & Medium-Sized Enterprises. Early action helped blunt the potential socio- economic damage from the crisis. Beyond the above immediate crisis response measures, the Government is considering various options to support the recovery. To this end, it approved at the end of May a long-term economic development package aimed at crowding private investment into priority export-oriented or import-substitution projects by co-financing up to 25 percent of the project’s equity. 6. The WBG program in Armenia for FY20 and FY21 has been adjusted to allow for an effective COVID- 19 response. The Bank’s response is aligned with the WBG COVID -19 Crisis Response Paper: Saving Lives, Scaling up Impact, and Getting Back on Track, with the CPF being adjusted to support the emergency response and strengthening the economy post-COVID-19. (a) To save lives and protect the poor and vulnerable: the ongoing Disease Prevention and Control Project (US$ 35 million) was restructured to reallocate funds to a new component on “Emergency response to COVID-19” (US$ 3 million). Activities are focused on preventing, detecting and responding to the threat posed by COVID-19, and procuring emergency medical equipment and supplies through the UN system. A Bank-supported training program—conducted by the National Institution of Health and using funds under a repurposed Mineral Sector Policy Grant—helped train 1,750 doctors and nurses to work with COVID-19 cases and temporarily relieve overburdened or infected medical staff. Under the Local Economy and Infrastructure Development Project, a Contingency Emergency Response Component Annex was prepared, which can be promptly activated upon request. (b) To save livelihoods, preserve jobs, and ensure more sustainable business growth and job creation: the proposed Water-secure Armenia Project (US$ 80 million) will introduce a package of interventions aimed at improving access to reliable quality irrigation services – a precondition for increasing agricultural productivity and higher farm incomes in Armenia. With improved access to reliable quality irrigation services and its emphasis on collective action, the project will generate job opportunities in the water and the agriculture sectors, thereby contributing to Page 49 of 50 The World Bank Additional Financing to the Disease Prevention and Control Project (P175023) sustainable rural economic post-COVID-19 recovery. In July 2020, as part of its COVID-19 response program, IFC deployed a US$ 15 million short-term facility to Inecobank to support working capital for Micro, Small, & Medium-Sized Enterprises. (c) To strengthen policies, institutions and investments for resilient, inclusive, and sustainable growth. Additional Financing (AF) for the Armenia Education Improvement Project (US$ 25 million) will help strengthen policies and institutions to improve equity and quality of education through distant learning. The project will aim to build resilience in the education system allowing it to respond more effectively to COVID-19 and any future crisis. 7. Partnerships. The WBG is working closely with its Development Partners to ensure coordinated support to the Government, drawing on each partner’s respective comparative advantages in terms of knowledge, financing instruments, target beneficiaries, funding availability, and speed of intervention. The International Monetary Fund (IMF), for example, repurposed and augmented its existing stand-by arrangement program in Armenia (US$ 422 million in aggregate) to support the Government’s projected increased emergency financing needs in 2020. The WHO and EU deployed foreign Emergency Medical Teams (EMTs) of doctors and nurses to help Armenia’s medical staff cope with the fast-rising infection rates in the early summer of 2020. The EU continues to provide grant financing, including to support Bank initiatives across many sectors. Following the significant spike in COVID-19 cases at the end of May and concerns about the overwhelmed health system, the World Bank initiated a donor country platform with other Development Partners (WHO, UN, IMF, EU, and United States) as part of a “Collective Call for Action”. This resulted in a close partnership with the Government’s COVID-19 Crisis Unit on designing a COVID-19 Strategic Management Plan based on a smart COVID response framework and risk assessment guide for decision-making during the pandemic. This platform continues to be used to coordinate partner assistance in shoring up the government’s health, social, and economic policy response to the crisis. It is also ensuring that financing support is well-coordinated, collaborative, and sequenced. Page 50 of 50