32501 The Global HIV/AIDS Program THE WORLD BANK Lessons from World Bank-Supported Initiatives to Fight HIV/AIDS in Countries with IBRD loans and IDA credits in Nonaccrual Jean Delion, James E. Rosen and Ann Klofkorn Bloome May 2005 LESSONS FROM WORLD BANK-SUPPORTED INITIATIVES TO FIGHT HIV/AIDS IN COUNTRIES WITH IBRD LOANS AND IDA CREDITS IN NONACCRUAL Jean Delion, James E. Rosen and Ann Klofkorn Bloome World Bank Global HIV/AIDS Program Discussion Paper May 2005 World Bank Global HIV/AIDS Program Discussion Paper This series is produced by the Global HIV/AIDS Program of the World Bank's Human Development Network, to publish interesting new work on HIV/AIDS quickly, make it widely available, and encourage discussion and debate. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations or to members of its Board of Executive Directors or the countries they represent. Citation and the use of material presented in this series should take into account that it may be provisional. Papers are posted at www.worldbank.org/AIDS (go to "publications"). For free print copies of papers in this series please contact the corresponding author whose name appears the bottom of page iii of the paper. Enquiries about the series and submissions should be made directly to Joy de Beyer (jdebeyer@worldbank). Submissions should have been previously reviewed and cleared by the sponsoring department, which will bear the cost of publication. The sponsoring department and author(s) bear full responsibility for the quality of the technical contents and presentation of material in the series. Cover photo: This child-headed family was orphaned by AIDS. © 2002 Dr. Emmanuel Dipo Otolorin, Courtesy of Photoshare © 2005 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 All rights reserved. ii Lessons from World Bank-Supported Initiatives to Fight HIV/AIDS in Countries with IBRD loans and IDA credits in Nonaccrual Jean Delion,a James E. Rosen,b and Ann Klofkorn Bloomec aSenior Social Development Specialist, AFTS2, World Bank bSenior Public Health Specialist, Consultant cPublic Health Specialist, Consultant Prepared with grant funding from the President's Simplification Fund. The paper was written between March and June 2004. The case studies were updated in December 2004. Abstract: This paper describes how Bank country teams have supported HIV/AIDS work in countries whose IBRD loans and/or IDA credits have been placed in nonaccrual status. Although all disbursements are suspended in these countries, Bank task teams can continue to assist governments and non-governmental organizations, especially with capacity building, and can help leverage other funding. Various mechanisms have been used for this support: regional projects; using Bank administrative budget (BB) for continued engagement, technical assistance, and full preparation of an HIV/AIDS project; one exceptional use of a Project Preparation Facility (PPF) to prepare a Multicountry AIDS Program (MAP) project; using the Small Grants Program to fund pilot projects; establishing dedicated bilateral or multilateral trust funds; and tapping into the recently established Implementation Trust Fund for Low Income Countries Under Stress (LICUS). Examples are drawn from case studies on six countries: the Central African Republic, the Democratic Republic of Congo, Somalia, Sudan, Togo, and Zimbabwe. Keywords: HIV/AIDS, World Bank, nonaccrual, funding, technical assistance, capacity building Disclaimer: The findings, interpretations and conclusions expressed in the paper are entirely those of the authors, and do not represent the views of the World Bank, its Executive Directors, or the countries they represent. Correspondence Details: Jean Delion, AFTS2, MSN J6-600,World Bank, 1818 H Street, NW, Washington DC, 20433. tel: (202) 473-5010, fax: (202) 477-0515 email: jdelion@worldbank.org iii Acronyms and Abbreviations AIDS Acquired immunodeficiency syndrome ARV Antiretroviral BB Bank budget CAR Central African Republic CAS Country Assistance Strategy CAN Country with IBRD loans and IDA credits in nonaccrual status CRN Country Re-engagement note DRC Democratic Republic of Congo ESW Economic and sector work EU European Union FBO Faith-based organization FGC Female genital cutting FY Fiscal year GFATM Global Fund to Fight AIDS, Tuberculosis, and Malaria GLIA Great Lakes Initiative on HIV/AIDS HIV Human immunodeficiency virus IBRD International Bank for Reconstruction and Development IDA International Development Association IDF Institutional Development Fund IEC Information, education, and communication IGAD Inter-Governmental Authority on Development, Djibouti JSDF Japan Social Development Fund LICUS Low-income country under stress M&E Monitoring and evaluation MAP Multicountry AIDS Program MDRP Multi-Country Demobilization and Reintegration Project, Great Lakes Region MDTF Multidonor trust fund MTCT Mother-to-child transmission of HIV NAC National AIDS Committee or Council NGO Nongovernmental organization OPEC Organization of petroleum exporting countries OVC Orphans and vulnerable children PCF Post-conflict fund PLWHA People living with HIV/AIDS PPF Project preparation facility PRSP Poverty Reduction Strategy Paper SGP Small Grants Program TB Tuberculosis TF Trust Fund TSS Transitional Support Strategy TT Task Team TTL Task Team Leader UNAIDS Joint United Nations Programme on HIV/AIDS UNDP United Nations Development Program UNHCHR United Nations Office for the High Commissioner for Human Rights UNICEF United Nations Children's Fund VCT Voluntary counseling and testing for HIV/AIDS WFP World Food Program WHO World Health Organization iv Table of Contents FOREWORD............................................................................................................................. VII ACKNOWLEDGEMENTS ....................................................................................................VIII TERMS USED IN THIS REPORT...........................................................................................IX EXECUTIVE SUMMARY ........................................................................................................XI I. INTRODUCTION..................................................................................................................... 1 II. EXAMPLES OF BANK ACTIVITIES TO SUPPORT THE FIGHT AGAINST HIV/AIDS IN CNAS..................................................................................................................... 5 Mechanisms of Support ........................................................................................................... 5 Country Examples ................................................................................................................... 9 III. CONCLUSIONS AND RECOMMENDATIONS.............................................................. 10 APPENDIX A: CASE EXAMPLES OF BANK HIV/AIDS ACTIVITIES IN CNAS ......... 13 APPENDIX B: LOW-INCOME COUNTRIES UNDER STRESS (LICUS) TRUST FUND ....................................................................................................................................................... 25 APPENDIX C: THE GLOBAL FUND TO FIGHT AIDS, TUBERCULOSIS AND MALARIA................................................................................................................................... 27 APPENDIX D: CONTACTS AND KEY DOCUMENTS....................................................... 28 List of Tables Table 1: IDA and IDA/IBRD Blend Countries with Loans in Nonaccrual Status as of January 30, 2005: Basic Data and HIV/AIDS S-situation ......................................................................... 1 Table 2: Examples of Bank Support of HIV/AIDS Activities in CNAs......................................... 5 Table 3: BB Levels for CNAs, FY02, FY03, FY04 ($ `000) ......................................................... 7 Table 4: Other Donor Support to Fight AIDS in CAR, Status of Activities on May 31, 2004.... 15 Table 5: LICUS TF Status and HIV/AIDS Components.............................................................. 26 v vi FOREWORD The World Bank has become one of the leading donors in the fight against HIV/AIDS. In the past five years, the Bank has committed US $1.5 billion to this battle, mostly in the form of grants to sub-Saharan Africa. This paper takes stock of efforts by Bank country teams to support HIV/AIDS work in a set of countries unable to access the full range of Bank resources -- countries whose IBRD loans and IDA credits have been placed in nonaccrual status. These examples show how Bank staff have kept the institution involved as a "knowledge bank" as countries work towards re-engagement with the international financial community. Such assistance has helped build the capacity of the affected countries to cope with the epidemic, and has allowed them to use funds from other donors effectively. The recently established LICUS Implementation Trust Fund gives the Bank a new tool to build capacities and leverage other donor resources in countries with loans in nonaccrual status with the World Bank, thus making them ineligible for new loans. Responding to the health and economic development crisis of the HIV/AIDS epidemic remains central to the Bank's mission. As the paper shows, a careful and strategic approach can be effective even in those countries where the work is most difficult. James D. Wolfensohn President, World Bank May 2005 vii ACKNOWLEDGEMENTS The authors are deeply indebted to all those who gave of their time and expertise in the preparation of this paper. Our thanks to Didem Ayvalikli, Merli Baroudi, Geoffrey Bergen, Stephen Brushett, Sam Carlson, Ayite-Fily d'Almeida, Joy de Beyer, Tess D'souza-Magee, Francois Decaillet, Joelle Dehasse, Frode Davanger, Ishac Diwan, Nichola Dyer, William Experton, Priya Gajraj, Mathurin Gbetibouo, Keith Hansen, Jean-Michel Happi, Danielle Jaekel, Eva Jarawan, Ebrahim Jassat, Barbry Keller, Zoe Kolovou, Kazuhide Kuroda, Christian Lotz, Tonia Marek, Marie Marie-Nelly, Malonga Miatudila, Mary Mulusa, Eileen Murray, Ernestine Ngobo-Njoke, Peter Ngomba, Mirey Ovadiya, Christine Pena, Malvina Pollock, David Potten, Richard Seifman, Albert Voetberg, Nadeem Mohammad, and Cristina Franceshini. We are particularly grateful to the people who reviewed the paper in its various stages: James Adams, OPCS Keith Hansen, ACTAfrica Elizabeth Adu, Legal Vice Presidency Jean-Michel Happi, Country Manager, Togo Ivar Andersen, FRM Alex Iorio, FRM Merli Baroudi, SFR Ebrahim Jassat, Zimbabwe Country Office Jonathan Brown, Global HIV/AIDS Program Barbry Keller, LICUS Ayite-Fily d'Almeida, Togo Country Office Zoe Kolovou, Legal Vice Presidency Frode Davanger, ACTAfrica Malonga Miatudila, DRC Country Team Priya Gajraj, Somalia Country Team Patrick Mullen, Sudan Country Team Our thanks also to the President's Simplification Fund for providing the financial support that made this paper possible, and to the Global HIV/AIDS Program for publishing it. The World Bank's HIV/AIDS Implementation Acceleration Team (IAT) has endorsed this paper. viii TERMS USED IN THIS REPORT The World Bank. As used in this paper, "The World Bank" refers to both IBRD (the International Bank for Reconstruction and Development) and IDA (the International Development Association). Thus, "The Bank" hereafter refers to both IBRD and IDA, the use of "IBRD" refers only to IBRD, and the use of "IDA" refers only to IDA. Loan. In this paper, the term "loan," unless specified otherwise, means IBRD loan, IDA credit, IDA grant, guarantees, PPF advances, IDF grants, and trust funds where the relevant grant agreement provides for suspension. Suspension of Disbursements and Placement of Loans in Nonaccrual: Country with IBRD loans and IDA credits in nonaccrual status. When a borrower fails to make a payment on any World Bank loan, the Bank may suspend disbursements immediately on all financing to that borrower. The Bank's current policy is to exercise this option through a graduated approach, with warnings at every step. The Bank places in nonaccrual status all loans made to or guaranteed by a member country of the Bank if principal, interest or other charges with respect to any such loan is overdue by more than six months (around 180 days). Placement of a loan in nonaccrual status has a negative consequence for the financial statements of the Bank. In addition to suspension of disbursements on existing loans, having loans in nonaccrual status makes countries ineligible for a range of new financing.1 CNA. In this paper, the acronym "CNA" refers to a country whose IBRD loans and IDA credits have been placed in nonaccrual status. Country re-engagement note. In fiscal year 2003 the Bank introduced a new CAS product, the Country Re-engagement Note (CRN), to support work in low-income countries under stress (LICUS) that had loans in nonaccrual. The CRN is a strategy instrument that focuses on analytical work, capacity building, and small demonstration projects, and has a strong emphasis on upstream sociopolitical analysis and collaboration with other donors. This strategy instrument has been used in Haiti, Somalia, and Sudan. Institutional Development Fund. The Institutional Development Fund (IDF) was created in fiscal year 1993, to provide "quick response" funding for small, action- oriented, capacity building programs identified in the Bank's country assistance strategy and policy dialogue. IDF grants are used to strengthen institutions when specific Bank- financed projects are not anticipated and other donor resources (especially those of the United Nations Development Program) are not available. 1In the future, changes in accounting literature (such as the International Financial Reporting Standards) may result in the Bank's use of a different term than "nonaccrual" when referring to overdue loans. If such accounting literature defines "nonaccrual" differently than the Bank, the Bank will then decide whether to continue to use the term in this way. ix Low Income Country Under Stress (LICUS) Initiative. The LICUS Initiative is a new approach to Bank engagement in countries where traditional aid programs have often not been effective. Home to at least 500 million of the world's poorest citizens, LICUS are characterized by weak policies, institutions, and governance; a lack of capacity or inclination to use finance effectively to reduce poverty; and, often, restrictions on freedom of speech and public participation. For more information on the LICUS Initiative and the LICUS Implementation Trust Fund see http://www1.worldbank.org/operations/licus/index.html. Post-Conflict Fund. The Post-Conflict Fund (PCF) of the World Bank was established in 1997, to enhance the World Bank's ability to support countries in transition from conflict to sustainable peace and economic growth. The PCF makes grants to a wide range of partners (institutions, nongovernmental organizations, United Nations agencies, transitional authorities, governments, and other civil society institutions) to provide earlier and broader World Bank assistance to conflict-affected countries. For more information on the PCF see http://lnweb18.worldbank.org/ESSD/sdvext.nsf/67ByDocName/ThePostConflictFund Small Grants Program. Administered by participating World Bank Country Offices, the Small Grants Program (SGP) provides grants in the range of $3,000 ­ $7,000 to civil society organizations for activities related to civic engagement for the empowerment of marginalized and vulnerable groups. See http://lnweb18.worldbank.org/ESSD/sdvext.nsf/64ByDocName/SmallGrants Transitional Support Strategy. In countries emerging from conflict, the World Bank prepares a Transitional Support Strategy (TSS) in partnership with other donors to position further resource mobilization and action, especially creative use of trust funds. The TSS is a short- to medium-term plan for Bank involvement in the country and precedes and prepares Bank involvement in comprehensive reconstruction through grants and loans. For TSS examples, see http://lnweb18.worldbank.org/essd/essd.nsf/CPR/TSSGP x EXECUTIVE SUMMARY 1. This paper describes examples of how Bank country teams have supported HIV/AIDS work in countries whose IBRD loans and IDA credits have been placed in nonaccrual status (CNAs). It is intended for Bank task teams (TTs) interested in developing and managing such activities. As of January 30, 2005, loans in eight low- income countries, with a combined population of about 83.5 million, were in nonaccrual status (overdue on loan repayments to the Bank by more than six months). Nonaccrual status triggers suspension of Bank disbursements and ineligibility for new Bank loans, credits, and grants. The social, political, and economic conditions that lead to nonaccrual status are often the same ones that expose populations to the HIV/AIDS epidemic. Not surprisingly, HIV/AIDS deeply affects many CNAs; together they account for over four million persons living with HIV/AIDS, one-tenth of the global total. 2. Bank engagement on HIV/AIDS in CNAs saves lives and serves the long-term interests of the Bank, the CNAs, and neighboring countries that feel the spillover effects of the pandemic. Although the work in CNAs is challenging, the examples reviewed in this paper clearly show it can be done. Operating within the legal and policy constraints of nonaccrual status, Bank country teams in the Central African Republic, Democratic Republic of the Congo, Somalia, Sudan, Togo, and Zimbabwe have used several mechanisms to support knowledge and capacity building on HIV/AIDS. These mechanisms have included: tapping into the newly-established LICUS Trust Fund; inclusion of CNAs in regional projects; use of Bank administrative budget (BB) for continued engagement, technical assistance, and full preparation of an HIV/AIDS project; use of PPF to prepare a Multicountry AIDS Program (MAP) project2; use of the Small Grants Program (SGP) to fund pilot projects; and establishment of dedicated bilateral or multilateral trust funds. 3. No single approach best addresses the HIV/AIDS needs in all CNAs. Country teams contemplating HIV/AIDS activities in CNAs should adapt activities to the country context, with a focus on capacity building, using the LICUS Trust Fund,3 and pro- actively preparing larger programs as arrears clearance approaches. 4. The Bank's efforts to support HIV/AIDS activities in CNAs have had an important impact. They have kept the Bank involved, contributed to the building of knowledge, capacity, and institutions, and leveraged the involvement of other donors. These efforts have protected the investments already made in CNAs, and inhibited cross- border transmission of the epidemic. 2In the Central African Republic (CAR). This PPF could be provided only with a waiver, due to the extraordinary circumstances in CAR at the time, which included Bank expectations that CAR would soon clear its arrears. See Section 2 and Appendix A for more details. 3 Policies with respect to the use of grant financing from the LICUS Implementation Trust Fund may be changing for countries with IBRD loans in nonaccrual status. Staff should check with the Credit Department (SFRCR) before moving forward with an operation. xi xii Lessons from World Bank-Supported Initiatives to Fight HIV/AIDS in Countries with IBRD loans and IDA credits in Nonaccrual 1. INTRODUCTION 1.1 When a borrower fails to make a payment on any loan extended by IBRD or IDA, the Bank has an option to suspend disbursements immediately on all loans. The Bank's current policy is to exercise this option through a graduated approach, with warnings at every step. The Bank places in nonaccrual status all loans made to or guaranteed by a member country of the Bank if principal, interest or other charges with respect to any loan is overdue by more than six months (around 180 days). Placement of a loan in nonaccrual status has a negative consequence for the financial statements of the IBRD and IDA. A country with loans in nonaccrual status is ineligible for most Bank support, including disbursements on existing loans, and access to new loans, credits, and trust funds (see discussion of nonaccrual status in box below). 1.2 As of January 30, 2005, eight low-income IDA and IDA/IBRD blend countries, with a combined population of 83.5 million people (Table 1), had loans in nonaccrual status. Table 1: IDA and IDA/IBRD Blend Countries with loans in nonaccrual status as of January 30, 2005: Basic Data and HIV/AIDS Situation Country with loans in Nonaccrual Population Adult HIV People GFATM nonaccrual period (million) Prevalence Living HIV grant with ($ million) HIV/AIDS (`000) Current CNAs as of January 30, 2005 Central African Republic 2002- 3.7 12.9% 250 8.2 Cote d'Ivoire **+ 2001­2002, 17.0 9.7% 770 $66.7 2004 Liberia ** 1987- 3.1 2.8% 46 7.6 Myanmar 1998- 2.7 N/A N/A 0 Somalia 1991- 8.8 1% 43 0 Sudan 1994- 31.1 2.6 % 450 Northern Sudan: 20.8 Southern Sudan: 28.4 Togo 2002- 4.5 6.0% 150 20.0 Zimbabwe ** 2000- 12.6 33.7% 2300 14.0 Examples of other AIDS-affected countries that recently emerged from nonaccrual status Democratic Republic of Congo 1993-2002 56.6 4.9% 1300 $35.0 Haiti 2001-2005 8.0 6.1% 250 24.3 Sierra Leone 1998 5.7 7.0% 170 0 **+ Cote d'Ivoire re-entered nonaccrual status in November 2004. ** IBRD and IDA arrears; all other countries in arrears to IDA only. Sources: World Bank Annual Reports, website and staff; UNAIDS; GFATM. 1.3 In addition to the low-income IDA and IDA/IBRD blend countries listed in the table above, only one middle-income IBRD country had overdue payments over six months in duration as of January 30, 2005: Seychelles. For countries with IBRD loans in nonaccrual, options for supporting HIV/AIDS activities are somewhat different. Although the present report can provide some indications for IBRD countries, such countries are not the focus of this report. 1 1.4 The social, political, and economic conditions that lead to nonaccrual status are often the same ones that expose populations to the HIV/AIDS epidemic. Grossly inadequate health and social services, conflicts, and internal displacements of people all contribute directly to the continued growth of the epidemic, harming households and communities and dimming prospects for economic growth. These conditions feed into a vicious cycle of poverty and despair that make it even harder for countries to clear their arrears with the Bank. 1.5 Not surprisingly, HIV/AIDS already deeply affects many of the CNAs (Table 1). Together, current CNAs account for over 4,000,000 persons living with HIV/AIDS, or ten percent of the global total of about 40 million. Even where HIV/AIDS has yet to gain a deep foothold, the danger remains that a chaotic social and economic environment will facilitate rapid expansion of the epidemic. 1.6 Recognizing the risk of inaction, country teams in the Bank have, within the legal and policy constraints of nonaccrual status, found limited ways to support HIV/AIDS activities in CNAs. These efforts fall within the Bank's policy to continue engagement in CNAs on important economic and social policy matters. They also reflect the importance of HIV/AIDS as a development issue and the Bank's overall commitment to fighting HIV/AIDS. 1.7 Bank engagement on HIV/AIDS in CNAs serves the long-term interests of the Bank's client countries and, ultimately, of the Bank itself. HIV/AIDS activities can catalyze broad support and bring different political groups together in constructive cooperation and could therefore help national reconciliation and reduce political tensions in CNAs. Moreover, counterparts in CNAs and leaders in neighboring countries recognize the cross-border importance of continued Bank engagement in CNAs. Maintaining a presence on such a high profile and crosscutting development issue as HIV/AIDS also is good for the Bank's reputation in the country. Such efforts make it easier for the Bank to quickly employ its full range of support once a country has cleared arrears. 1.8 Such efforts are not without their challenges. Work in CNAs is generally difficult and time consuming, and may divert staff from pressing matters in other Bank client countries. In CNAs, issues of financial management are paramount. Overall macroeconomic policies and systems are typically in disarray. More specifically, basic public sector financial management procedures are often lacking. Falling into nonaccrual is often symptomatic of these broader difficulties and not a cause of problems such as HIV/AIDS. While financing for activities such as HIV/AIDS is important in CNAs, the Bank is understandably extremely cautious about using its funds in such situations, particularly when the needs are strong in other well-performing countries. Nonaccrual status has real and serious consequences for both the Bank and the affected country, and Bank officials naturally wish to apply the penalties for nonaccrual consistently. 1.9 Resources from other donors can be an answer. But, in many CNAs, the majority of donors are not keen to provide assistance. They often wait for better conditions to implement assistance programs, viewing Bank activity as a signal to re-engage themselves; few donors are present and they have very limited activities. Some humanitarian agencies and nongovernmental 2 organizations (NGOs) are doing their best, but they focus on dramatic situations, and they lack the resources to have a major impact. 1.10 One of the few groups that does consistently finance HIV/AIDS work in CNAs is the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM). Funding amounts are often quite significant (Table 1). Nonetheless, the Global Fund faces difficulties due to lack of basic institutions and capacities at the country level. As a funding mechanism, the GFATM is not currently equipped to fill this gap and must rely on other development partners to facilitate effective use of GFATM resources. (See Appendix C for more information on the Global Fund.) The Bank can play a unique role in filling this knowledge and capacity gap. 1.11 The legal and policy environment is evolving and the Bank is developing new instruments to respond to the situation in CNAs. For example, in March 2004 the Bank established the Low Income Counties Under Stress Implementation Trust Fund (LICUS TF). Through a multidonor approach, the new trust fund aims to help LICUS with loans in nonaccrual status to carry out reforms needed for international re-engagement and to address critical areas such as HIV/AIDS (see Appendix B for a detailed discussion of the LICUS TF). 1.12 This paper draws on country case examples (Appendix A) to describe how Bank country teams have supported HIV/AIDS work in CNAs (Section 2), and outlines some simple steps for Bank task teams (TTs) interested in developing and managing such activities (Section 3). It discusses the new LICUS TF (Appendix B), and the Global Fund to Fights AIDS, TB, and Malaria (Appendix C). The paper also provides contact information for persons involved in HIV/AIDS activities in CNAs and lists key resources including documents and web sites (Appendix D). The paper does not aim to give task teams detailed operational guidelines. To the extent possible, the paper directs readers to existing guidelines in the Bank's library of operational policies, trust fund procedures, etc. 3 World Bank's Policy on Suspension of Disbursements and Placement of Loans in Nonaccrual Suspension of disbursements. When a borrower fails to make a payment on any loan extended by IBRD or IDA, the Bank has an option to suspend disbursements immediately on all loans. The Bank's current policy is to exercise this option through a graduated approach with warnings at every step (see OP13.40). When a payment becomes 30 days overdue, no new loans to or to be guaranteed by the borrower in default are presented to the board for approval and the borrower loses its eligibility for any waiver of interest charges in effect at the time. When a loan payment becomes 45 days overdue the provisions cited above extend to all borrowers in the country, and there are additional measures, such as no replenishment of special accounts. When a payment becomes 60 days overdue the Bank suspends disbursements on all loans to or guaranteed by the country. The suspension is only lifted when the country makes all payments due to the Bank, regardless of the number of days since they fell due. The policy on nonaccrual. As a major participant in global capital markets, IBRD financial statements must accurately reflect IBRD income and net worth and be consistent with generally accepted accounting principles. In this context it is the policy of the Bank to place in nonaccrual status all loans made to or guaranteed by a member country of the Bank if principal, interest or other charges with respect to any such loan is overdue by more than six months (around 180 days). The trigger date for placing a loan in nonaccrual is the date on which the second consecutive service payment due on a loan is missed. Placement of a loan in nonaccrual status has two immediate consequences on the financial statements of IBRD: all interest and charges accrued on loans outstanding to the member country which remain unpaid are deducted from the income of the current period: and, as long as the loans remain in nonaccrual status all interest and charges due after the date of nonaccrual are recorded as income only when payments are actually received. As with the suspension of disbursements, a member country remains in nonaccrual status until all amounts due and outstanding under all loans have been repaid. In IBRD's 60- year history, 20 countries have had loans in nonaccrual at some point in time. As of September 30, 2004, four countries had loans with past due payments to IBRD over six months: Iraq, Liberia, Seychelles, and Zimbabwe. The total volume of overdue payments at that date was $0.7 billion. (Iraq cleared all arrears to IBRD in December 2004. Loans to Cote d'Ivoire fell into nonaccrual status in November 2004.) The nonaccrual policy for IBRD and IDA is identical but loan loss provisioning is not applicable to IDA. The focus of IDA financial statements is on the commitment authority of IDA rather than on its net income and worth. This is consistent with the status of IDA as an administrator of grant resources. Overdue IDA credits are deducted from the amount available for new commitments and the reduction is noted in the Statement of Commitment Resources in IDA financial statements. As of September 30, 2004, eight countries had overdue payments to IDA of more than 180 days: Central African Republic, Haiti, Liberia, Myanmar, Somalia, Sudan, Togo, and Zimbabwe. Emerging from nonaccrual status. World Bank policy is to make every effort to maintain a dialogue with the CNA and work towards arrears clearance so that the country can regain its standing within the international donor and financial community and have access to new financial flows. However, the Bank recognizes that CNA status is often related to extremely difficult political, social, and economic conditions, exacerbated by war and other conflict. IBRD cannot under any circumstances clear its own arrears, nor does it reschedule loans, except in very exceptional circumstances. In practice, member countries clear their arrears to IBRD using a combination of their own resources, grants from donors, and bridge financing from bilateral, multilateral or commercial sources. IDA follows the same policies as IBRD with respect to arrears. 4 2. Examples of Bank Activities to Support the Fight against HIV/AIDS in CNAs 2.1 This section describes the different ways Bank country teams have provided support for HIV/AIDS activities in CNAs. First, the information is presented by type of mechanism. Then, the section summarizes the information for each of six countries. For more details by country, see Appendix A. Mechanisms of Support 2.2 Country teams have used at least eight different mechanisms in recent years to support HIV/AIDS work in CNAs (Table 2). The mechanisms have included various trust funds, bank administrative budget, post-conflict funds, and regional projects. The amounts have been small, typically not exceeding $1 million per year, and often much less. In general, country teams have used a wider range of mechanisms when countries have been closer to clearing arrears than when they have not been close to clearing arrears. All the examples are relatively recent, after 2000. Some mechanisms used are of very recent origin, such as the LICUS TF, which the Bank established in March 2004. Based on this limited number of examples, the most widely used approaches appear to be regional funding mechanisms and continued engagement with countries through use of Bank Budget. Table 2: Examples of Bank Support of HIV/AIDS Activities in CNAs Example Typical When Used Country Case Amount Country close to Not Examples (US $m) clearing arrears close 1. Prepared LICUS Implementation Trust 0.5-1.0 X X Togo Fund Request with an HIV/AIDS for 2 Component years 2. Included CNA in Regional Post- Ad hoc X X CAR Conflict Project 3. Included CNA in a regional Ad hoc X X Sudan; Somalia; Togo; HIV/AIDS project or grant Zimbabwe 4. Used Bank Budget to remain engaged 0.3-1.3 X X CAR; DRC; Togo; in technical assistance and donor (see table Zimbabwe collaboration and support, and to prepare 3) implementation of an IDA project 5. Prepared a Bank HIV/AIDS project up to 2.0 X CAR 6. Used small grants program (SGP) < 0.1 X Togo 7. Used dedicated bilateral or multidonor ad hoc X X CAR trust funds 8. Prepared a country-specific Post- 1.0-2.0 X Somalia Conflict Fund grant especially on HIV/AIDS, or an HIV/AIDS component in a Post-Conflict Fund grant 2.3 Prepared LICUS Implementation Trust Fund Request. As of January 2004, TTLs from all CNAs can access a new $25 million, two-year development grant facility window, the LICUS 5 Implementation Trust Fund.4 HIV/AIDS is a priority area for the LICUS TF and particularly supports building the institutional capacity necessary for managing other grant financing, such as the GFATM. The LICUS team has prepared detailed guidelines for use of the trust fund, which are posted on its web site. The Togo, CAR, and Zimbabwe country teams are in various stages of developing LICUS TF proposals with HIV/AIDS components. The CAR team plans to facilitate access to HIV tests and condoms in areas not yet served by the Global Fund. (See Appendix B for more details on the LICUS Implementation TF.) 2.4 Included CNA in Regional Post-Conflict Project. One Bank country team used funding from a regional post-conflict project for limited support to HIV/AIDS activities.5 The country team for the CAR secured a $10 million grant through the Multi-Country Demobilization and Reintegration Project (MDRP) in the Greater Great Lakes Region and included a small HIV/AIDS component in the funding. Two separate but complementary windows finance the MDRP--World Bank/IDA funds of up to US$150 million, and a multidonor trust fund (MDTF) of US$350 million. The Bank's contributions support only national programs, while the MDTF can finance some regional activities reaching various countries, and activities reaching special groups such as the social reintegration of ex-combatants or child soldiers. 2.5 As is normally the case with MDTFs, resources from all donors are pooled in a single account, with no earmarking of funds for specific countries or program activities.6 The regional MDRP in the Great Lakes Region of Africa plans to demobilize 7,000 ex-combatants, and to assist the communities into which they are reintegrating. Activities can include community development and community action plans, including social support such as access to HIV testing for ex-combatants and support for infected ex-combatants and their families. 2.6 Included CNA in a regional project. Regional programs try to address spillover effects of the HIV/AIDS epidemic in a comprehensive way. In recognition of the importance of a regional approach, IDA allows the limited use of its resources for regional projects that include components in a country whose IBRD loans and IDA credits have been placed in nonaccrual status. At least four CNAs have benefited from participation in regional or subregional HIV/AIDS projects or grants. For example, Togo participates in the Lagos-Abidjan Corridor HIV/AIDS Project; and Sudan and Somalia are included in the IGAD Horn of Africa Regional HIV/AIDS Institutional Development Fund (IDF) grant. Zimbabwe may be included in a future subregional project in southern Africa. 4Policies for the use of grant financing under the LICUS Implementation Trust Fund for countries with loans in nonaccrual status to IBRD may be changing. Staff should check with the Credit Department (SFRCR) before moving ahead with an operation. 5Pre-arrears clearance grants for eligible post-conflict countries were introduced in IDA 12, continued in IDA 13, and it is proposed that they be extended for IDA 14. These grants can only be given as part of a Bank re- engagement strategy to countries that demonstrate solid progress towards normalizing relations with the Bank. 6IDA and IBRD's Articles of Agreement require a statutory committee recommendation or report for all countries that benefit from a regional project financed through an IDA credit or IBRD loan, including those with loans in non- accrual status. 6 2.7 As the Bank moves towards institutionalizing the subregional approach in Africa on a range of development issues,7 such projects may become more common. Activities in regional programs often focus on border crossings, as in the Lagos-Abidjan project, and on strengthening monitoring and evaluation in the affected countries. CNAs included in regional projects do not receive resources directly. Any resources must flow through a regional entity, such as IGAD in the Horn of Africa, or via another country participating in the project, to ensure that low capacity to act in a particular CNA does not compromise the benefits of the regional project. 2.8 Used Bank administrative budget. Although nonaccrual status disqualifies a country from use of loans, credits, and IDA-managed trust funds, it places no limits on the use of the Bank's own administrative budget (also known as Bank Budget or BB) to further HIV/AIDS activities in a CNA. In fact, the Bank encourages the use of administrative budget to support project preparation in CNAs, to work with other donors to ensure funding of these projects out of their resources, to provide some limited technical assistance, to maintain dialogue with key country actors, and to prepare IDA support when clearance of arrears appears imminent. Many of the country teams working in CNAs have used BB for such activities, including in the CAR, DRC, Togo, and Zimbabwe. For example, the Togo team used BB to prepare an HIV/AIDS project in anticipation of arrears clearance. 2.9 Another common use of BB has been to contribute to the preparation and supervision of the programs of other donors, including of the Global Fund. In the CAR, for instance, Bank support helped to establish the fiduciary architecture for an effective HIV/AIDS response and to attract more cofinancing from a range of donors. The amount of BB available for country teams to work in CNAs is not inconsequential (Table 3). In FY03, BB levels ranged from $13,000 (Myanmar) to over $1 million (Sudan). According to preliminary figures for FY04, BB levels for five of eight CNAs increased substantially. In part, the rise is linked to new BB norm calculations that de-link ESW from lending, thus allowing more administrative budget to be allocated to countries--such as LICUS CNAs--with low levels of lending. Table 3: BB Levels for CNAs, FY02, FY03, FY04 ($ `000) CNA Nonaccrual FY02 FY03 FY04 % Increase % Increase period (prelim.) FY03/FY02 FY04/FY03 Current CNAs Central African 2002- 459 488 626 6 28 Republic Liberia 1987- 35 42 820 22 >100 Myanmar 1981- 0 13 n/a -- -- Somalia 1991- 12 231 351 >100 52 Sudan 1994- 416 1364 1867 >100 37 Togo 2002- 816 771 513 -6 -33 Zimbabwe 2000- 1088 650 444 -40 -32 Example of other AIDS-Affected Countries that Recently Cleared their arrears to the Bank Democratic 1993 - 2002 3134 2820 4819 -10 71 Republic of Congo Haiti 2001- 2005 508 435 990 -14 >100 Source: Strategy, Finance and Resource Management (SFRM) 7 The Bank is in the process of setting up a special unit in the Africa region for regional and subregional initiatives. 7 2.10 Used Bank budget to send a team to prepare an HIV/AIDS project. The Bank can assist CNAs to prepare new projects, if there are signs of clearance of arrears in the near future. Preparation of a project creates an opportunity to build knowledge on the HIV/AIDS situation and to trigger other donors' involvement against HIV/AIDS. This was done in Togo, for example: the country team prepared a project while Togo still had loans in nonaccrual status, so when the country clears its arrears, the Bank will be able to quickly finalize a project, updating the planned project. 2.11 Used dedicated bilateral and/or multidonor Trust Funds. The CAR country team used bilateral and multidonor trust funds in a CNA. A Japanese Social Development Fund (JSDF) grant agreement had been signed before the country's loans fell into nonaccrual status, and this grant was used along with the multi-donor trust fund described in paragraph 2.4 above. The task teams required and were granted a waiver, which was approved in 2003 to allow the resumption of disbursements on both the PPF and the JSDF grant supporting the HIV/AIDS Prevention and Control Project in CAR.8 Bilateral donors are often reluctant to provide trust fund financing to CNAs without some financial participation by the Bank; therefore, it is important for the Bank to be able to provide seed money, because it encourages bilateral engagement. 2.12 The multidonor, multicountry Nile Basin Trust Fund is another example, where the Bank used a small IDF contribution as seed money in large multidonor trust fund. In the same way, the Bank may be able to use a small contribution from a LICUS Trust Fund grant as seed money in a multidonor trust fund against HIV/AIDS in CNAs.9 2.13 Used Small Grants Program (SGP). The SGP is administered by Bank Country Offices and provides grants to civil society organizations for civic engagement and community empowerment. In at least one CNA, Togo, the country office used the SGP to fund pilot HIV/AIDS activities. Such support, albeit small, can allow testing of mechanisms to support civil society organizations. 2.14 Drew on a Country-Specific Post-Conflict Fund (PCF). For CNAs rated "conflict- affected" by the Bank's Conflict Prevention and Reconstruction Unit, TTs have, under special circumstances, drawn on Post-Conflict Funds (PCF) for HIV/AIDS activities. PCFs are financed by non-IDA trust funds, and the Bank can disburse them under criteria that are somewhat more flexible than those IDA uses for its post-conflict grants. But, of course, CNAs that are not in a post-conflict situation are not eligible for PCF. Moreover, the total amount available for PCF is just $8 million per year, and PCF funds are already proving insufficient to meet the needs of countries not in arrears. The PCF has provided critical support for LICUS capacity building, service delivery, and HIV/AIDS prevention only in conflict-affected countries. However, the 8This resumption was in accordance with the provisions of OP/BP 7.30 on Dealings with De Facto Governments. 9Board Document R2005-0059, "Low-Income Countries Under Stress Implementation Trust Fund: Proposed Amendment," March 8, 2005. 8 PCF is designed to finance discrete interventions only in conflict-prone countries and is not available for more intensive programs of transitional support.10 Country Examples 2.15 Country teams have often used a mix of different mechanisms for the support of HIV/AIDS work in CNAs. This section summarizes the experience by country (see Appendix A for more detailed descriptions). 2.16 Central African Republic. The Bank team has used a wide range of mechanisms to maintain attention to HIV/AIDS issues since the country's loans fell into nonaccrual status in 2002. CAR had signed a development credit agreement before the country's loans fell into nonaccrual status. Between 1997-2001, CAR experienced a series of short periods in nonaccrual status; in this context, the country team requested and was granted a waiver to allow CAR to use a $450,000 Project Preparation Facility (PPF) advance, as it was expected that the nonaccrual status would not last more than a few months. Unfortunately, CAR has had loans in nonaccrual since 2002; however, the PPF advance was renewed twice. Each year, the Bank TT was allocated a full supervision budget: $180,000 in FY02, FY03 and FY04. However, CAR is the only country for which such waivers have ever been granted by Bank management. 2.17 Staff used BB to set up coordinating structures at the national level and in pilot provinces, to mobilize funds from other donors and build capacities and to advise on program implementation. In parallel, the CAR country team secured $10 million from the Multi-Country Demobilization and Reintegration Program (MDRP) for the Greater Great Lakes Region. Although such grants generally do not focus on HIV/AIDS, the team was able to include a small HIV/AIDS component. By mid-2004 the team prepared an HIV/AIDS component in a LICUS grant: the team focused on facilitating access to tests and condoms, in areas not yet covered by the Global Fund. 2.18 Democratic Republic of Congo. DRC had loans in nonaccrual from 1993-2002. In 2001, the Bank approved a reengagement strategy, and a Bank task team used the IDA-12 post-conflict grant authority to launch pilot HIV/AIDS activities through non-governmental organizations (NGOs). This was an IDA pre-arrears clearance grant, the first of its kind. Eight million of the $50 million fund was set aside for HIV/AIDS control activities, and was disbursed in a 14-month period. This resulted in dramatically improved blood transfusion safety as well as increased access to condoms and treatment for sexually transmitted infections (STIs). Bank staff also used BB to carry out technical assistance and donor coordination activities throughout the long period of re-engagement. 2.19 Somalia. Somalia has had loans in nonaccrual status since 1991. In 2003 a Bank task team prepared a three-year PCF grant with an HIV/AIDS component totaling $4.6 million. The grant included support for development of a multisectoral strategy for HIV/AIDS awareness and control, through: a coordinated HIV/AIDS action plan; the first comprehensive seroprevalence 10Board Document R2003-0221, "Low-Income Countries Under Stress Implementation Trust Fund," December 19, 2003. 9 survey; raising awareness; capacity building for skills development and centers of training; and sponsoring a resource-mobilization roundtable on HIV/AIDS. 2.20 Somalia, Sudan. A subregional IDF grant to the Inter-Governmental Authority on Development (IGAD) in the amount of $495,000 includes support for HIV/AIDS activities in two countries with loans in nonaccrual, Sudan and Somalia. IGAD has its headquarters in Djibouti, and represents Djibouti, Eritrea, Ethiopia, Kenya, Somalia, Sudan and Uganda. The objective of the grant is to strengthen capacity for HIV/AIDS monitoring and evaluation (M&E), addressing cross-border issues. If the Bank pursues a subregional MAP, both countries may further benefit. In addition to the assistance from IGAD, a Post-Conflict Fund grant for $1.5 million has been approved for Sudan and will finance many capacity building activities managed by the United Nations Development Program (UNDP) and United Nations Children's Fund (UNICEF). Supporting these activities will be a range of World Bank Institute learning activities. 2.21 Togo. Despite loans in nonaccrual since May 2002, Togo's country team has taken a variety of steps to maintain the Bank's involvement in HIV/AIDS issues. Using BB, the team was able to fully prepare a new IDA-funded project, provide assistance to communities preparing proposals for the GFATM, and continue to collaborate closely with other donors and advise the government. The team has used about $10,000 from the Bank's small grants program (SGP) to fund pilot community-based HIV/AIDS activities. Togo also will also benefit from the IDA-funded subregional Abidjan-Lagos Corridor HIV/AIDS project, for activities along the coastal road. The country team is currently preparing a LICUS TF proposal with HIV/AIDS components. 2.22 Zimbabwe. In Zimbabwe, which has had loans in nonaccrual status since October 2000, the Bank task team used BB during the nonaccrual period to continue the social sector dialogue, including on HIV/AIDS, and to access grant funds. The TT is now using BB to prepare a possible LICUS Trust Fund proposal. The country team is also attempting to obtain preparation funding for a subregional HIV/AIDS Transport Corridor project that would benefit Zimbabwe. 3. Conclusions and Recommendations 3.1 Although working on HIV/AIDS issues in CNAs is challenging, the examples above clearly show that the Bank can pay special attention to HIV/AIDS and trigger some activities mainly for capacity building. Operating within the legal and policy constraints of nonaccrual status, country teams have used different mechanisms to address HIV/AIDS in various types of situations. These mechanisms have included: tapping into the newly-established LICUS Trust Fund; inclusion of CNAs in regional projects; use of Bank administrative budget (BB) for continued engagement, technical assistance, and full preparation of an HIV/AIDS project; keeping a PPF open after a country's loans fell into nonaccrual status (an exceptional situation, granted by a waiver); use of the Small Grants Program (SGP) to fund pilot projects; and establishment of dedicated bilateral or multilateral trust funds. 10 3.2 The examples illustrate that each CNA is unique. A country's loans fall into nonaccrual for various reasons and the paths that countries take to re-engagement can be widely divergent. Nonaccrual status may be long anticipated or may happen to a country relatively unexpectedly. Although no single approach equally addresses the HIV/AIDS needs in all CNAs, country teams contemplating HIV/AIDS activities in CNAs may find it helpful to take the following steps: 3.3 Step 1: Build knowledge and capacity at the country level. Using BB, country teams can conduct a country mission and include other donors. Knowledge building could focus on carrying out analysis and technical assistance in helping the country to consolidate its national AIDS strategy. The presence of World Bank staff in country uses the reputation of the Bank, increases the focus on HIV/AIDS, and helps to leverage funding from other donors. Engaging with other development partners is clearly important. When other donors understand the lending restrictions placed on the Bank, they may try to fill the financing gap. 3.4 Although the Global Fund is the HIV/AIDS donor with the largest presence in CNAs, country teams can also explore working with other partners. These include: · The Economic Commission for Africa (ECA), · United Nations Children's Fund (UNICEF), · Joint United Nations Programme on HIV/AIDS (UNAIDS), · United Nations Office for the High Commissioner for Human Rights (UNHCHR), · UN Theme Groups on HIV/AIDS, · World Food Program (WFP), · World Health Organization (WHO), · International NGOs, · Large Foundations especially the Gates and Clinton Foundations, and · Bilateral Aid agencies, especially DFID, USAID. 3.5 Step 2: Use the LICUS Trust Fund.11 Developing an effective HIV/AIDS component in a LICUS TF proposal builds on the analysis carried out in Step 1. Bank staff who have contributed to country assessments on HIV/AIDS can provide quality analysis, preparing the ground for strategic activities to build capacities and to leverage contributions from other donors. It is important that senior staff be engaged on the LICUS TF proposal team to ensure the quality of these LICUS activities and avoid isolated emergency interventions. 3.6 LICUS TF proposals on HIV/AIDS could put emphasis on institution and capacity building to meet the needs of other donors and to leverage funding. Bringing other donors along on the LICUS mission is one way to make sure that activities support the kinds of strong institutional structures they need. For example, a donor that is not accustomed to working with the private sector may need to know how to select and work with NGOs, faith-based organizations (FBOs), communities in the specific context of the country, etc. 11 Policies for the use of grant financing under the LICUS Implementation Trust Fund for countries with loans in nonaccrual status to IBRD may be changing. Staff should check with the Credit Department (SFRCR) before moving forward with an operation. 11 3.7 Step 3: In countries close to arrears clearance, be pro-active and prepare larger programs. For a country close to arrears clearance, task teams planning Bank interventions in support of HIV/AIDS could prepare the ground for future IDA financing, as in Togo, by preparing a project, to be ready when arrears are cleared. Even if the timing of arrears clearance is uncertain, preparing a project triggers attention to HIV/AIDS, paves the way for priority interventions, and encourages other donors to contribute to the fight against HIV/AIDS. 12 Appendix A: Case Examples of Bank HIV/AIDS Activities in CNAs 1 Each case example begins with a brief description of the approach that Bank staff used. This is followed by background information on the country including a short history of the Bank's engagement with the country and its nonaccrual status; the HIV/AIDS situation in the country and the degree of institutional capacity; and the degree to which other donors are involved in HIV/AIDS work. Then, the case example succinctly describes steps taken by the Bank staff, detailing the various mechanisms that were employed to allow the Bank to work in the country on HIV/AIDS during the period of nonaccrual. For some countries, staff used multiple mechanisms. Indeed, this illustrates the changing nature of the actions that Bank staff have taken, depending on the stage at which the country was in its arrears clearance. For contacts and key documents related to the country cases, see appendix D. Case Example 1: Central African Republic 2 Bank staff have used a wide range of mechanisms to maintain attention to HIV/AIDS since loans in the Central African Republic (CAR) went into nonaccrual status in early 2002. These include use of BB; including CAR in a Regional Project ­ Multi-Country Demobilization and Reintegration (MDRP) in the Greater Great Lakes Region; and use of PPF (through a series of extraordinary waivers) to prepare a Bank HIV/AIDS project signed before the country's loans fell into nonaccrual. The Bank Task Team also prepared a proposal for a LICUS Trust Fund grant, with an HIV/AIDS component to focus on access to tests and condoms, as these are not included in the areas supported by the Global Fund (see Table 4). Country Background 3 Bank engagement. Loans in CAR fell into nonaccrual in 2002, related to the unstable political situation. UN troops withdrew from the CAR in 2000, and the international community agreed to provide technical and financial support. At the time the loans entered nonaccrual status, CAR and the Bank had signed a Development Credit Agreement for a MAP project. Bank missions were caught twice in civil unrest, including during a coup in March 2003. The task team was evacuated twice by the UN. The national AIDS committee, with the same staff as under the previous regime, continued its work, and the Bank task team did not stop its support. With Bank support, CAR mobilized funding from the Global Fund and various public and private donors. The Country team prepared a CRN (approved early 2004) and a successful LICUS TF proposal (started mid-2004). If all conditions are met, CAR should clear its loans out of nonaccrual status by the end of 2005. 4 HIV/AIDS situation and institutional capacity. CAR, with 13.8% of adults infected with HIV, has a comprehensive national strategic plan on AIDS. Its national AIDS council was established before CAR's loans fell into nonaccrual status. 5 Other donor involvement. In September 2003, the GFATM started implementation of a two-year, $8 million project, as a first phase of its support. The project, managed by UNDP, addresses voluntary counseling and testing (VCT) and mother-to-child transmission (MTCT) screening in the main town in each province and is providing access to treatment. The project hopes to develop more partnerships with local NGOs and a study is underway to identify field-based NGOs that can serve as technical partners. With Bank support, the NAC prepared two additional requests to the GFATM, one on malaria, and another to support AIDS orphans, implementation of which should start in early 2005. Description of what Bank staff did 13 6 Use of BB. While loans in CAR were in nonaccrual status, the Bank country team requested and was allocated a full supervision budget of US$180,000 per year for FY02, FY03 and FY04. Staff used BB to prepare and help launch programs funded by other donors and to set up coordinating structures at the national level and in one pilot province. These structures were able to prepare requests that were quickly approved by donors that included GFATM, World Food Program (WFP), European Union (EU), Organization of Petroleum Exporting Countries (OPEC) and Catholic Relief Services (CRS/Caritas). As these partners move towards implementation, they are asking the Bank to expand support to create and train decentralized coordinating institutions in each province. 7 With the BB allocation, staff have been able to visit the country three or four times a year. The Bank also worked with UNAIDS to establish a Monitoring and Evaluation (M&E) framework to enable supervision, and assisted in identifying mechanisms to implement HIV/AIDS programs. For example, the task team helped design a way for the WFP to identify capable local NGOs to distribute food at the community level. 8 Use of PPF. Shortly before its loans fell into nonaccrual status, CAR received a $450,000 PPF as an advance on a credit approved and signed before the loans fell into nonaccrual status. The PPF advance was designed to prepare the MAP project and support institutions to coordinate the national strategy against AIDS. The PPF was renewed in 2003, and again in 2004; each allocation was for $450,000 (the total remained within the limit of $2 million set by Bank rules).12 The PPF allowed the government, under supervision of the Bank task team, to (i) work with UNAIDS to establish a National AIDS Committee and decentralized structures of this committee; and (ii) to conduct pilot activities to define procedures to select, fund and evaluate action plans presented by public and private partners. The NAC Secretariat is managing the funds and activities. 9 The government and UNAIDS also used PPF funds to mobilize contributions from other donors, prepare proposals and build capacities to carry out activities funded by other donors. The PPF funded: · recurrent costs for the NAC and first level decentralized structures; · pilot activities in the capital and in one province; · work with community- and faith-based based groups and other NGOs to help implement NGO action plans, e.g. opening VCT centers and assisting PLWHA; · action plans submitted and implemented by FBOs, NGOs and a federation of associations of PLWHA; · information, education and communication material and activities; · training doctors nationwide in AIDS diagnosis; and · a national HIV prevalence survey. 10 In 2003, PPF funds helped expand capacity building activities to five additional provinces. In 2004, the third PPF advance was used to build capacity in the ten remaining provinces, including training administrators, doctors, counselors and PLWHA; rehabilitation of offices; and some operating costs, consultant services, and medicines. PPF funding allowed the NAC to test ways to support action plans. Other donors then used these procedures in programs they funded. For instance, the NAC tested ways to channel WFP food support to PLWHA, it used PPF resources to train local NGOs in selection of beneficiaries, logistics, reporting, and management of transport allocations. As a result, the WFP was able to increase dramatically its support to PLWHA in various provinces. 12After CAR fell into arrears, the PPF could only be used through a series of waivers, one for each year 2002 - 2004. 14 11 The relatively small Bank support to the NAC (a total of three $450,000 advances since early 2002) has allowed the NAC to leverage the contributions of several other donors (Table 4). A well- functioning NAC and clear procedures adapted to the country context have allowed the country to use such donor support effectively. In CAR, many projects are following procedures established for supporting PLWHA, NGOs, FBOs, and communities, using pilot activities financed by this small amount of Bank funding. Table 4: Other Donor Support to Fight AIDS in CAR, Status of Activities on May 31, 2004 Donor Agency Planned assistance Implementation status/ comments Global Fund Total allocation of $25 million Activities started: training of health officers on (5 year maximum). Grant ARVs, procurement of vehicles, identification of approved in early 2003, to be the eight sites for testing and ARVs, selection of implemented by UNDP as contractors to build health centers. The Conseil Principal Beneficiary. National de Lutte Contre le SIDA (CNLS) took part in all steps, from training to accompanying the GF team in all provinces, linking them with Provincial AIDS Committees (CPLS), assisting them to select the sites at the national level. OPEC grant Total allocation of $500,000 Activities implemented by CNLS: NGO leaders approved early 2003, to support trained, Implementing NGOs selected and pilot testing and prevention contracted in the main site (Berberati), supervision activities in selected sites. of their activities, under CPLS control. ADB - Regional Total allocation $5,000,000. Experts hired. CAR provided an M&E expert in the HIV/AIDS Program program. CNLS took part in the launching Congo Oubangui workshop in Brazzaville and contributed to Chari River preparation of action plan in selected sites for prevention, testing, counseling and access to treatment, along the river. Contracts in preparation with NGOs, based on CNLS experience in contracting NGO under PPF pilot activities. Gates Foundation Grant of $500,000 to Amis Activities started, 50 NGO staff trained. Contracts D'Afrique, a Japanese NGO, to signed with NGOs, with involvement of CPLS support capacity building of established under the PPF. CNLS team took part in NGOs in two provinces. missions in the selected provinces. CARITAS IPHD HIV/AIDS prevention, care and Activities under implementation on two (International treatment support now reaching components: PLWHA and their families are Partnership for $500,000; Food support now receiving support. CNLS team took part in missions Human reaching $1,200,000. in four selected provinces, where CNLS had well Development) grant functioning CPLS. financed by the USA Department of Agriculture. World Food Program Revised Food allocation for Activities expanding in Bangui and in two 2004, 12,000 tons for families provinces, in close collaboration with CNLS and of PLWHA and orphans. CPLS. Food delivery is still limited by low Allocations could be increased capacities of NGOs and provincial committees. but are limited by low WFP works in provinces where CNLS built up 15 Donor Agency Planned assistance Implementation status/ comments capacities. The Government capacities. CNLS is directly involved with WFP to and CNLS put food supplies as Identified capable NGOs to assist them to select one of their priorities to try to beneficiaries and to monitor their activities through save most of the 500,000 CPLS. CNLS plans to expand WFP support using PLWHA, keeping them alive PPF 3 to train more NGOs and CPLS on food aid for two or three more years, management. until access to ARV will be improved. UNDP, prevention UNDP added $500,000 of its CNLS is the implementing agency, with a special activities with NGOs own funds, to continue unit implementing pilot activities with NGOs and and communities supporting CNLS to conduct communities. CNLS and the provincial AIDS pilot activities with NGOs in committees take part in selection of NGOs, provinces where CNLS supervision missions and fiduciary control. established provincial AIDS committees. European Union EU offered to hire an The Government decided to ask the EU to international consultant for a concentrate on supporting a reference ARV center. two-year position in CNLS, as None of these activities has started. Still, EU is M&E specialist. funding pilot activities with NGOs and communities in its focus provinces. CNLS and CPLS are actively involved. International Red Piloting access to ARV The project is still at an early stage. CNLS is Cross and French ESTHER program. closely involved as the program serves as a Cooperation reference ARV center. UNFPA Support to an AIDS Center well established, disseminating IEC information Center in Ministry materials. CNLS communication specialist of Health. supported by PPF closely involved, disseminating lessons from the center to other partners. Pasteur Institute (IP) Laboratory services and CNLS signed agreements with IP, which conducted support to Ministry of health on an epidemiological survey using PPF funds. This M&E epidemic. provided the most extensive national assessment of the epidemic. IP is continuing to M&E the epidemic in close collaboration with CNLS. Gender trust fund Training of trainers in women's Training modules finalized with the American NGO (managed by the associations to train 1,000 peer "Advocates for Youth," participants selected, Bank as a counselors who will form 1,000 Kenyan consultants from Girls Guides Associations contribution to the youth groups (5,000 youth contracted early 2004. The Kenyan consultants PPF) involved, mainly young cancelled their contracts due to unrest in CAR, but women) who will serve as were replaced with a trainer from Burkina Faso. catalysts and role models in Training took place in October 2004, and grants their communities on were given to ten women's associations to train behavioral change, care and Lead Peer Counselors, who will train more peer support. counselors. 12 LICUS Trust Fund. The Bank Task Team prepared a proposal for a LICUS Trust Fund grant, with an HIV/AIDS component to focus on access to tests and condoms, which were not supported by the 16 Global Fund. The LICUS grant of $2,596,000 was approved in mid-December 2004, including $180,000 for HIV tests and $293,110 for condoms in rural areas not covered by the Global Fund. 13 Participation in Regional Post-Conflict Project. The CAR country team secured $10 million from the Multi-Country Demobilization and Reintegration Project (MDRP) in the Greater Great Lakes Region. Although such grants generally do not focus on HIV/AIDS, the team was able to include a small AIDS component. Activities include community development and community action plans, including social support such as access to HIV testing for ex-combatants and support for infected ex-combatants and their families. Such a project can be drafted and approved relatively quickly; the CAR was eligible for post- conflict funding in 2003, and the MDRP grant was approved in early 2004. 14 The MDRP Secretariat is based at Bank headquarters, with regional representatives in Kinshasa, Democratic Republic of Congo, and Kigali, Rwanda. UNDP implements the grant in close cooperation with the CAR government. MDRP Trust Funds are managed according to Bank rules. However, as a country with loans in nonaccrual status, CAR needed an exemption from IDA to be allowed to manage disbursement of a trust fund. IDA allowed this exemption and the MDRP project is being carried out. Case example 2: Democratic Republic of Congo 15 In the DRC, with loans in nonaccrual status from 1993-2002, the TT established the Emergency Early Recovery Project of 2001 (EERP), through the IDA-12 post-conflict grant authority. This was an IDA pre-arrears clearance grant, the first of its kind. Eight million of the $50 million fund was set aside for HIV/AIDS activities, to launch pilot activities by non-governmental organizations (NGOs). Bank staff also used BB to carry out technical assistance and donor coordination activities throughout the long period of re-engagement. Country Background 16 Bank engagement. By the early 1990s, the unstable political situation had prompted most donors to leave the DRC. When the country's loans entered nonaccrual status in 1993, the Bank suspended activities. After the change in government in 1997, a long period of re-engagement began, culminating in the country clearing its arrears with the Bank in 2002. 17 HIV/AIDS situation and institutional capacity. The long period of international isolation and economic mismanagement left the DRC with few functioning national institutions. The non-government sector, both for-profit and non-profit, had traditionally provided the bulk of social services, including health and education. In 1986, the DRC created the National AIDS Control Commission, which developed a short-term plan to assess the scope of the problem in the country. This was followed by a medium term plan from 1991 ­ 1994, the implementation of which was disrupted by two waves of social uprising (known as the 1991 and 1993 pillages). In 2001, the National Anti-AIDS Program, responsible for coordinating activities, was in the first phases of reestablishing its capacity. And, there were few competent organizations working outside of Kinshasa. 18 Although the National Anti-AIDS Program has succeeded in maintaining the national HIV prevalence among adults at around 5% since 1985 (4.9% at the end of 2001), some surveys have been reporting higher rates in areas under control of armed forces from neighboring countries, as half of the members of some of the forces engaged in the conflict were reportedly HIV-positive. 19 Other donor involvement. A Global Fund grant for $35 million has been approved. The focus of the grant is on advocacy, blood safety, ARV provision, and improving management information. USAID 17 allocated $3.5 million to HIV/AIDS prevention and care activities in DRC in 2002, mainly through NGOs, and expected to spend $4 million in 2003. USAID efforts focus on prevention and surveillance activities, enhancing care and community support activities, increasing political and social commitment to HIV/AIDS, and reducing the stigma of persons living with the disease. Description of what Bank staff did 20 Use of BB. After the change in government in 1997, the Bank team sought ways to re-engage with the country to address pressing social needs, including for HIV/AIDS prevention. A large country with a large population in the middle of the continent, DRC has an important influence on projects in neighboring countries. In 1998, the Bank Country Team began using BB to provide technical assistance to the Ministry of Finance and the Ministry of Planning. Capacity building ­ including some training ­ and equipment such as computers formed the bulk of this technical assistance. 21 Use of IDA-12 post-conflict grant authority. In 2001, the Bank TT designed the Emergency Early Recovery Project of 2001 (EERP). The task team decided on a multisectoral project with priority given to infrastructure, with some interventions in the social sectors. The social sector interventions included $8 million for HIV/AIDS activities, to be spent in 18 months. Another $2.3 million to consolidate results while waiting for a MAP project to begin later supplemented this initial $8 million. 22 Given weak government capacity and the need to act quickly, the team decided to directly fund established international NGOs doing work in blood safety, condom social marketing, and control of sexually transmitted infections (STIs). With the approval of the country director, the team got a waiver from the usual Bank procurement rules because of the emergency situation and because the NGOs were established, reliable groups with good track records in procurement and implementation. From approval to disbursement took four months, partly because of difficulties in adapting Bank procedures to the unique nature of the project. The total amount (US$8 million) was disbursed in 14 months, resulting in dramatically improved blood transfusion safety and increased access to condoms and treatment for STIs. 23 The original plan was for a Bank-funded MAP project to take over and continue the HIV/AIDS work immediately after the end of the EERP project, at the end of 2002. However, the MAP was not approved until April 2004. In the interim period the Country Team again used BB to provide continuous advice and follow the HIV/AIDS situation. The HIV/AIDS activities continue to be funded and scaled up from the MAP. Case example 3: Somalia 24 In Somalia, with loans in nonaccrual status since 1991, Bank staff have taken the approach of working through a Country Re-Engagement Note (CRN) funded by the Post-Conflict Fund, with an HIV/AIDS component totaling $5 million. Somalia is also benefiting from the regional project run through the IGAD (see IGAD case example below). Country Background 25 Bank engagement. Somalia's loans fell into nonaccrual in 1991 and are still in nonaccrual. The World Bank has not had an active lending program in Somalia since 1991, because of significant arrears, the lack of a fully functional national government, and the unstable security situation. A civil war lasted most of the 1990s, and continued civil unrest has been the primary obstacle to policymaking and development. The peace process, which began in 2002 in Kenya, resulted in the establishment of a Parliament, election of a President in October 2004 and the nomination of a Cabinet in December 2004. 18 A conference with the international community was held in Stockholm at the end of October 2004 to discuss initial support to the new government. 26 Before the June 2003 CRN, Somalia had a Post-Conflict Fund Watching Brief, approved in February 2002 for US$1 million. The Watching Brief activities supported the collection of key macro- economic and socio-economic data for the country as well as a community-managed health model, implemented by the International Federation of the Red Cross/Crescent and Somali Red Cross/Crescent. 27 HIV/AIDS situation and institutional capacity. HIV prevalence in Somalia was estimated to be 0.9% in 1999, based on a study in Northwest Somalia. It is important to note, however, that WHO and UNICEF suggest that Somalia should be classified as a country with a "Generalized HIV Epidemic," based on other available proxy indicators, such as a 1999 study of antenatal clinics that showed the prevalence rate of STDs to be 30% among the pregnant women, and a 2002 study of TB patients that showed HIV prevalence of more than 10%. Furthermore, many Somalis migrate into neighboring countries such as Ethiopia, Kenya and Djibouti, which all have high prevalence rates. Through its grant financing, the Bank is supporting a sero-prevalence survey, with the results expected in early 2005. 28 HIV/AIDS control activities started in Somalia in mid-1999. A National AIDS Strategic Framework and regional action plans have been formulated. Despite the lack of a fully functional national government, the Ministers of Health from all three regional administrations have agreed to a national, coordinated framework on HIV/AIDS. The Somali response to HIV/AIDS includes a) the Somali AIDS Committee (SAC), which is the governing body; b) the Technical Advisory Committee (TAC), which is the executive management body; and c) the Zonal Coordination Committees (ZCCs), which are the implementation management bodies for the HIV/AIDS Action plan. 29 Other donor involvement. Donor support to Somalia has focused on humanitarian relief and development assistance. The Somalia Aid Coordination Body (SACB) provides a framework for allocating international aid. The Bank has been an active participant in all levels of the SACB. The SACB has an HIV/AIDS Working Group, which prioritized the development of the National Strategic Framework for HIV/AIDS. Somalia recently was approved for a Global Fund submission on HIV/AIDS, with UNICEF acting as the principal recipient. Funds will be accessible in 2005. 30 UN agencies and NGOs provide a framework for a common approach to the allocation and distribution of aid resources in Somalia, and focus on key areas of rehabilitation and development assistance. Somalia receives aid from several multilateral and bilateral sources. In recent years the European Union has been the largest donor to Somalia. The EU provides assistance in primary health care and rural development. Major bilateral donors include Italy, Japan, Sweden, Norway, the Netherlands, the US, the UK and Denmark. Other donors include Canada, Finland, Germany and Egypt. Description of what Bank staff did 31 Country-specific Post-Conflict Fund. The Bank team prepared a three-year PCF grant for $6.3 million to cover FY2003-FY2005. The Bank provided $4.6 million and the rest came from the implementing partners. The grant funds the joint Bank/UNDP CRN and focuses on key public goods, and on interventions which are not likely to be reversed in the event of instability, including knowledge- intensive investments aimed at capacity- and institution-building. These include support in the preparation and implementation of a multisectoral strategy for HIV/AIDS awareness and control, through: dissemination and implementation of the HIV/AIDS action plan; the first comprehensive seroprevalence survey; awareness-raising and advocacy interventions; capacity building; sponsoring a resource- mobilization roundtable on HIV/AIDS; and HIV/AIDS resource centers. 19 32 The Bank's resources were catalytic in supporting the country's application process to the Global Fund. Partners carrying out the HIV/AIDS activities in the Bank/UNDP CRN include the International Federation of Red Cross and Red Crescent Societies, UNDP, UNFPA, and WHO. The Bank and UNDP jointly supervise the activities. This support helped to attract other sources and partners, e.g. DfID. 33 The country team prepared the HIV/AIDS activities in the PCF grant as part of a comprehensive country strategy, not as a separate component. The Board approved it under a no-objection basis, and the PCF released the funds. The CRN is a joint Bank/UNDP product, developed in consultation with implementing partners, the SACB mechanism and Somali counterparts. The assistance goes to UNDP and then to selected implementers based on their comparative strengths. WHO and UNDP carry out the HIV/AIDS activities, along with the IFRC. UNICEF is a technical partner but is not receiving any funds. UNDP, WHO, IFRC and UNICEF are all on the ground in Somalia, with bases in Nairobi. 34 The main challenges the country team faced were in developing a strategy in a country where the Bank had not worked in a decade. The team also had to make a convincing argument that HIV/AIDS is a priority and could be a portal for support to other priorities such as FGC, safe water, and MCH care. Case example 4 ­ Somalia, Sudan, -- Regional project for the Horn of Africa, through the Inter Governmental Authority on Development (IGAD) 35 This subregional IDF grant includes support for HIV/AIDS activities in two countries with loans in nonaccrual status, Sudan and Somalia. If the Bank pursues a subregional MAP, both countries may further benefit. In addition to the assistance from IGAD, a Post-Conflict Fund grant for $1.5 million has been approved for Sudan and will finance many capacity building activities managed by the UNDP and UNICEF. Supporting these activities will be a range of WBI learning activities. Country Background Somalia ­ see Somalia case example above Sudan Country Background 36 Bank engagement. In the 1970s and 1980s, the Bank was a major player in the development of Sudan, with IDA assistance covering all sectors, particularly infrastructure and rural development. However, the Bank mostly has been absent from Sudan since 1992 and the country's loans fell into nonaccrual status in January 1994. Sudan's external debt was estimated to be $21.1 billion at the end of 2003, 86% of which was in arrears, including $262 million to IDA. Sudan's 2003 CRN includes a discussion of a plan for arrears clearance. The civil war, ongoing for over two decades, has hampered re- engagement efforts. 37 HIV/AIDS situation and institutional capacity. Sudan's adult HIV prevalence is 2.6%, but the virus may potentially spread further as displaced populations begin to move. Efficient institutions are absent, and many assets such as schools and hospitals have been damaged by the war. In parts of the country not controlled by the government, the capacity to deliver social services is extremely scarce, with no administrative infrastructure for budget management. Sudan established a National AIDS Program (SNAP) in 1986. Sudan also has an AIDS Network, and a National Council for HIV/AIDS at the federal level. By 1994 SNAP evolved from an implementing body into one that coordinates various stakeholders including state authorities, NGOs, CBOs, and private sector institutions. In 1999, the Sudan People's Liberation Movement adopted an HIV/AIDS policy for Southern Sudan. 20 38 Other donor involvement. International development assistance plummeted from about $1.9 billion in 1985 to $50 million by the late 1990s, with the main focus on humanitarian relief. However, the Global Fund approved a $20.8 million grant for Northern Sudan, and a $28.4 million grant for Southern Sudan. These will fund capacity building, including the development and distribution of implementation and evaluation guidelines, logistics management, and management training. The Country Coordinating Mechanism for the grants is the Sudan Coordinating Mechanism for Communicable Disease Control, established in March 2002. In addition, USAID is funding a $1.9 million pilot HIV/AIDS project in a limited geographical area of Southern Sudan. 39 The UK has taken the lead in organizing creditors and donors to support Sudan's debt resolution. The Bank developed the CRN with many bilateral and multilateral partners, including the UNDP, in the context of a broader LICUS partnership. Donor coordination efforts were facilitated by the IGAD Partners' Forum. Without a full office in Sudan, the Bank will need to rely on other partners, especially UNDP and UNICEF, to provide operational capability. Description of what Bank staff did 40 Inclusion in Sub-regional IDF Grant. The Bank has awarded an IDF grant in the amount of $495,000 to the Inter-Governmental Authority on Development (IGAD). IGAD has its headquarters in Djibouti, and represents Djibouti, Eritrea, Ethiopia, Kenya, Somalia, Sudan and Uganda. The objective of the grant is to strengthen capacity for HIV/AIDS M&E, since the epidemic is a cross-border issue. Through subregional and national workshops, Somalia and Sudan both will benefit from the grant, just like other members of IGAD. IGAD hosted an initial workshop in Ethiopia in December 2003 to develop a clear subregional action plan. There was full participation from Somalia and Sudan. 41 The Bank task team is in dialogue with the different partners on how to contribute further to strengthening the IGAD's technical capacity in health issues, possibly through a subregional MAP for the Horn of Africa. If the Bank pursued such a course and implemented the project through IGAD, Somalia and Sudan would, like the other member states, receive support in fighting the epidemic. 42 A Joint UN -- World Bank Assessment Mission is doing a needs assessment, focusing on HIV/AIDS as a cross-cutting issue, with HIV/AIDS-related concerns mainstreamed throughout. The needs assessment will inform a donors' conference in April 2005, following the signature of a North- South peace agreement in January 2005. Case example 5: Togo 43 Despite having loans in nonaccrual status since May 2002, Togo's country team has taken a variety of steps to maintain the Bank's involvement in HIV/AIDS issues. Using BB, the team was able to prepare a new IDA-funded project, provide assistance to communities preparing proposals for the GFATM, and continue to collaborate closely with other donors and advise the government. Togo also benefits in a limited way from the IDA-funded subregional HIV/AIDS project. The country team is currently preparing a LICUS TF proposal with HIV/AIDS components. Country Background 44 Bank engagement. When Togo's loans went into nonaccrual status in May 2002, IDA commitments totaled US$107.4 million. The CRN for Togo being prepared under the LICUS Initiative is expected to place high priority on capacity building activities. Togo also has a FY04 Business Plan, 21 which includes the processing of the HIV/AIDS Emergency Response Project, contingent upon clearance of arrears. 45 HIV/AIDS situation and institutional capacity. The government's Interim National Poverty Reduction Strategy identifies the prevention and control of HIV/AIDS, now estimated to infect 6% of adults, as a key development objective. The National HIV/AIDS Strategic Plan for the period 2001 ­ 2005 aims at strengthening national capacity to bring about a multisectoral response. In October 2001, the government formed a National AIDS Control Council (NACC), which has a permanent secretariat composed of technical staff. 46 Other donor involvement. The flow of public aid to Togo declined in 1993, with the European Union and other bilateral donors formally linking resumption of assistance to increased democracy and transparency. Major donors are limiting their assistance to small social sector projects, though many international and local NGOs are present in Togo. Some partners, like the UN agencies (including $3 million from UNAIDS), French Cooperation, USAID, and GTZ, continue to finance HIV/AIDS activities throughout Togo. USAID has no Togo office and does not provide direct assistance. However, the U.S. has a number of regional and worldwide programs that help Togo fight HIV/AIDS. 47 Togo received a two-year $20 million grant from the GFATM in July 2003. The grant aims to "widen the partnership in the setting up of interventions by obtaining the coordinated participation of the government, private sectors and NGOs." The grant focuses on improving the provision of antiretroviral treatment and of medical and social care to people living with HIV/AIDS; and on blood safety programs. Target groups include youth, and sex workers and their partners. The GFATM grant, like other donor assistance, has largely been unable to fund capacity building activities. UNAIDS, the government and the NACC have identified a pressing need for short-term technical assistance to help the NACC in setting up its managerial and organizational procedures, and the Programme National de Lutte contre le VIH/SIDA (PNLS) in improving its surveillance. Description of what Bank staff did 48 Use of BB. Using Bank administrative budget, the Togo country team has been able to carry out a variety of activities during the nonaccrual period. These include: · Preparing a project and appraising it while loans were in nonaccrual status. This has allowed Togo to have a project ready to be funded as soon as the country clears its arrears. It has also allowed a strengthening of the national AIDS strategy, bringing an operational perspective, and asking other donors to clarify their interventions. The Bank provided a regular project preparation and appraisal budget to a large team, which worked over one year to prepare a project. · Mainstreaming HIV/AIDS in the PSRP process. · Advising UNDP in its role as executing agency of the GFATM grant and providing assistance to communities preparing proposals for the GFATM. · Coordinating with other donors within the framework of the country-based HIV/AIDS Thematic Group. The Bank chaired this Group in 2002 and is currently chairing the Group again. 49 Inclusion in subregional HIV/AIDS project. The Bank is providing limited support to Togo in the context of the $16 million Abidjan-Lagos HIV/AIDS corridor project. This includes roughly $500,000 to support border activities for truck drivers and sex workers, and IEC campaigns along the road and at truck stops. The project provides grants to NGOs for specific activities in Togo. 22 50 Preparation of LICUS TF Request. The World Bank's Togo team is currently working on preparing a LICUS TF with HIV/AIDS components ­ likely to be partly based on the former IDF request, which was turned down due to Togo's CNA status. The IDF request focused on capacity building and institutional development ­ especially to support the NACC and the PNLS -- as the implementation capacity at the central and local levels is weak. The various implementing agencies, such as public/private institutions, civil society organizations and community-based organizations, also need support in implementing the National Plan. 51 Use of small grants program (SGP). The country office in Togo has used about $10,000 from the Bank's Small Grants Program (SGP) to assist communities in piloting activities for HIV/AIDS prevention, treatment, support, and mitigation of the impact of the epidemic on infected/affected persons. The SGP Committee approved use of SGP funds in Togo while the country had loans in nonaccrual status. Case example 6: Zimbabwe 52 Zimbabwe has had loans in nonaccrual status since October 2000. The TT used BB during the nonaccrual period to access trust funds to fight HIV/AIDS. Zimbabwe put in an IDF funding request, but was turned down due to its CNA status. The TT is now using BB to prepare a LICUS Trust Fund proposal. Country Background 53 Bank engagement. From October 2000 to June 2003, Zimbabwe's arrears to the Bank amounted to US$210 million. The Bank's role is now limited to technical assistance and analytical work focusing on macroeconomic policy, land reform and the agriculture sector, and the social sectors, including HIV/AIDS. Based on information in the recent IDF proposal, the Bank country team believes that the likelihood of the government clearing arrears is remote, due to Zimbabwe's continuing severe foreign exchange shortages. 54 HIV/AIDS situation and institutional capacity. Zimbabwe's adult HIV prevalence rate has remained at around 25% for the past four years. The current estimate of prevalence is 24.6 percent of the adult population (aged 15 to 49 years), although in some areas it is as high as 35 percent, placing Zimbabwe among the countries with the highest rates in the world. Zimbabwe has more HIV-infected persons than North America and Western Europe combined. The epidemic could lower potential GDP growth during 2000-2010 by 1.5 to 2% per annum. 55 In 1999, the government adopted a National HIV/AIDS Policy, established a multisectoral National AIDS Council, and enacted a `national AIDS levy' to finance the national response. A National HIV Strategic Framework 2000 ­ 2004 is operational. District AIDS Action Committees (DAACs) were set up in 2000 to respond to village-level needs. Zimbabwe also has a non-governmental national AIDS network, with provincial coordinators and over 300 members -- mostly local NGOs and community and support groups. 56 The country HIV/AIDS response has multiple capacity needs, including for strengthening multisectoral leadership at all levels; improving access to technical and financial resources by the decentralized structures of the NAC; improving the ability of the NAC to manage information; and mobilizing public, private and civil society partnerships. 23 57 The biggest challenge in Zimbabwe is maintaining or building on existing public sector capacity to be able to implement these programs. Inadequate numbers of health staff and shortages of essential drugs are among the biggest challenges to implementing any program. 58 Other donor involvement. A large number of donors have recently scaled back or suspended their operations in Zimbabwe. Nonetheless, donors continue to provide substantial support for HIV/AIDS activities. USAID's annual funding for HIV/AIDS work is about $10 million, including for VCT centers, prevention and care services, and orphans and vulnerable children (OVCs). The GFATM has earmarked $14 million for Zimbabwe, but the grant agreement has not yet been signed. The NAC is the principal recipient of the Global Fund for the HIV/AIDS component, and UNDP Zimbabwe is the Local Fund Agent. The grant will fund some capacity building through training for the NAC's implementing partners. 59 The GFATM is not planning capacity building in fiduciary management, information systems, or reviewing institutional arrangements. Disbursement of GFATM resources, monitoring and reporting of activities is constrained by limited capacity at all levels of the NAC; no other donor is funding these activities. The UN is financing several senior positions in the NAC. Description of what Bank staff did 60 Use of Bank Budget. Using BB, the country team continued the social sector dialogue, including on HIV/AIDS, after Zimbabwe's loans went into nonaccrual status. Bank staff recognized the vital importance of keeping the institution involved despite the nonaccrual status. Although not specifically supporting any HIV/AIDS related activities during this period, the team is finalizing proposals for accessing grant funds. The proposals now being considered under the LICUS Trust Fund window cover treatment and care; extending VCT outreach by non-state actors to poor rural communities; and institutional support to the national AIDS agency. 61 Inclusion in Regional HIV/AIDS Project. The country team is attempting to obtain preparation funding for a subregional HIV/AIDS Transport Corridor project, for which the Government of Zimbabwe has given agreement. If approved, the project will eventually benefit Zimbabwe, along with Malawi, Mozambique, and Zambia. 24 Appendix B: Low-Income Countries under Stress (LICUS) Trust Fund Purpose and eligibility 1 In March 2004, the Bank's Board of Governors established a new $25 million, two-year fund primarily for CNAs, the LICUS Implementation Trust Fund. The LICUS TF supports integrated re- engagement strategies for countries in transition prior to arrears clearance. The resolution establishing the LICUS TF identifies HIV/AIDS activities as a high priority for funding, stating that one of the purposes of the grants will be to "develop resilient systems for social service delivery, including HIV/AIDS programs, that can continue to operate effectively and mobilize multidonor support even in situations of political instability." The LICUS TF is open to all CNAs, although policies for the use of grant financing under the LIUCS Implementation Trust fund for countries with loans in nonaccrual status to IBRD may be changing. Staff should check with the Credit Department (SFRCR) before moving ahead with an operation. Rationale for HIV/AIDS Focus 2 The Board paper on the LICUS TF recognizes that strengthening basic service delivery, especially for HIV/AIDS, is one way to encourage political consensus and help countries through conflict or post-conflict situations. It also recognizes that, while many of the CNAs have adequate resources from the Global Fund, they lack the necessary institutional capacity to manage and implement programs. The Board paper on the LICUS TF suggests that the new trust fund will be able to fill this gap in many LICUS with loans in nonaccrual that have formal access to GFATM funding. Relation to PCF 3 The LICUS TF is designed to complement the PCF. It uses the same operational procedures as the PCF and is governed by an expanded PCF Committee. LICUS TF guidelines 4 The Bank's Operational Policy Unit has developed guidelines to assist task teams in the preparation of LICUS Implementation Trust Fund (LICUS TF) grant proposals and to outline the steps for their administration, review, and approval. Types of Activities Supported 5 Funding for HIV/AIDS activities from the LICUS TF is intended to target needs for institutional capacity building in these countries and could help them access GFATM funding. It is possible for LICUS TF to provide resources directly to development agencies or NGOs. 6 The criteria for applications to the LICUS TF require that proposed activities are grounded in a strategic framework, and groups of sector proposals would normally be combined to form one proposal in support of a country strategy. There may be country cases where HIV/AIDS activities would have a relatively low priority in the application of the very limited Bank resources that are available through the LICUS TF. The country team in the strategy process would determine this, and it is therefore crucial that sector specialists work through the country team when they prepare proposals for LICUS TF financing. 7 Draft guidelines identify the following potential HIV/AIDS-related activities to be funded: preparation of capacity needs assessment; supporting reform of policies and institutions; and establishing 25 and equipping effective service delivery institutions. The LICUS Trust Fund could serve a similar purpose to a PPF, e.g. the way the TT used PPF money in the Central African Republic in 2002 ­ 2004. Status of LICUS Trust Funds Prepared/Under Preparation 8 The Bank has already approved six LICUS TF proposals (CAR, Haiti, Liberia Comoros, Somalia, and Sudan). Additional proposals are under preparation for CAR, Togo and Zimbabwe, which include HIV/AIDS components. Table 5: LICUS TF Status and HIV/AIDS Components Country Status of proposal HIV/AIDS component Liberia Approved April 2004 No Comoros Approved April 2004 No CAR Under preparation Yes Haiti Approved Sept. 2004 No Somalia Approved Sept. 2004 No Togo Under preparation Yes Zimbabwe Under preparation Yes Source: Bank country teams and LICUS Unit. 26 Appendix C: The Global Fund to Fight AIDS, Tuberculosis and Malaria 1 The Global Fund is an important resource for funding in CNAs. Global Fund resources should be used to the maximum extent possible, taking into account the Fund's limitations, especially in institutional capacity building. Eligibility 2 Essentially, any of the LICUS CNAs are fully eligible to apply for GFATM funding. Types of Activities Funded 3 The GFATM has staff to purchase equipment and disburse funds, but not staff for training and institutional capacity building. The scope of activities it funds is widening but the Global Fund still prefers to fund direct interventions, not infrastructure, capacity building institutions, or initial training for implementers nationwide. They can provide training for medical staff, but prefer not to do training such as counseling nationwide. Bank complementarities 4 The Bank's comparative advantage in working with the GFATM is in the policymaking arena; it can influence HIV-related laws and policies, for instance, reducing the cost of drugs. The Bank can help a country to set up a procurement commission, so the country can purchase equipment. It can also help to establish financial controls in Ministries of Finance. The Bank also helps create committees, and monitoring and evaluation systems. GFTAM has been calling on the World Bank and other donors to provide assistance to create the necessary infrastructure, indicating that GFATM has no capacity to address institutional development and capacity building. 5 Other donors might be able to fill this gap, but until now they have not answered to the needs of countries with IBRD loans and IDA credits in nonaccrual status (CNAs). CNAs continue to call for the Bank to fill in the gap, using its advantage in dealing with institutional development and fiduciary architecture. Funding Cycle 6 The Global Fund launched its Fifth Round of funding in November 2004 and issued its Fifth Call for Proposals in March 2005. Four previous rounds were held in April 2002, January 2003, October 2003, and April 2004. Future funding rounds will depend on funds available. GFATM Links and Resources · GFATM web site: www.theglobalfund.org · Draft report, "Coordination and Cooperation between Bank and Global Fund: Issues and Opportunities Revisited in Light of Operational Experience in FY03" · GFATM calls for proposals: www.theglobalfund.org/en/apply/call. 27 Appendix D: Contacts and Key Documents Nonaccrual Status Contacts: Ivar Andersen, FRM; Malvina Pollock and Merli Baroudi, SFR Key Documents - World Bank Annual Reports, 2002, 2003, Financial Statements and Appendices. http://www.worldbank.org/annualreport/2003/ http://www.worldbank.org/annualreport/2003/pdf/v2_3.pdf - Delion, Jean, "Bank assistance to fight HIV/AIDS in Countries in Nonaccrual (CNAs): Ideas for Simplification Fund," 9/11/2003, internal AFTS2 document, September 2003. - Moody's Investor Analysis, October 2003. IBRD Ratings Rationale and Outlook. http://www.worldbank.org/debtsecurities/pdf/Moodys_IBRD_Report_FY2003.pdf - Standard and Poor's Ratings Direct. Research: International Bank for Reconstruction and Development. 20-Feb-2004 http://www.worldbank.org/debtsecurities/pdf/S_P_Feb_2004.pdf - Suspension of Disbursement. World Bank Operational Policy Manual OP 13.40. http://wbln0018.worldbank.org/Institutional/Manuals/OpManual.nsf/0/85d1f2b3665e831085 25672c007d07a1?OpenDocument LICUS Initiative Contacts: Sarah Cliffe, Barbry Keller, LICUS Initiative Key Documents - Operations Policy and Country Services, World Bank, "Low-Income Countries Under Stress Implementation Trust Fund," December 2003 - Social Development Department and Operations Policy and Country Services, Draft Memo: "Guidelines for Working with the LICUS Implementation Trust Fund," March 23, 2004 http://intranet.worldbank.org/WBSITE/INTRANET/UNITS/INTOPCS/INTLICUS/0,,content MDK:20244705~menuPK:504230~pagePK:64137152~piPK:64136883~theSitePK:388759,0 0.html - LICUS Implementation Trust Fund. Questions and Answers with Sarah Cliffe, LICUS coordinator. http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:20152163%7Emen uPK:34457%7EpagePK:64003015%7EpiPK:64003012%7EtheSitePK:4607,00.html - World Bank Establishes Trust Fund for World's Poorest Countries. Press Release, January 15, 2004. http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:20152023%7Emen uPK:34463%7EpagePK:64003015%7EpiPK:64003012%7EtheSitePK:4607,00.html - Liberia is the first country to tap into the LICUS TF http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:20179401%7Emen uPK:34463%7EpagePK:64003015%7EpiPK:64003012%7EtheSitePK:4607,00.html ) - World Bank, "Low-Income Countries Under Stress Implementation Trust Fund," Memorandum from the President to the Executive Directors, 12/18/2003 - Low-Income Countries Under Stress Implementation Overview. December 19, 2003. Prepared for the January 15, 2004 Board Meeting. http://www1.worldbank.org/operations/licus/documents/secm2003-0560.pdf 28 MDRP Contact: Mathurin Gbetibouo, AFTS3 Key Documents - "MDRP Special Projects Procedures" - "Multi-Country Demobilization and Reintegration (MDRP) in the Greater Great Lakes Region," www.mdrp.org, 4/9/2004 - "Multi-Country Demobilization and Reintegration Program: Guidelines and Procedures for Special Projects for Potential Implementing Partners," April 15, 2003 Post-Conflict Key Documents - S. Schiavo-Campo, Social Development Department, World Bank, "Financing and Aid Arrangements in Post-Conflict Situations," May 2003 - World Bank, "World Bank Group: Conflict Prevention and Reconstruction," lnweb18.worldbank.org/ESSD/sdvext.nsf/67ByDocName/ConflictPreventionandReconstructi on, 4/9/2004 Other Development Grant Agreement (Regional HIV/AIDS Treatment Acceleration Project) between United Nations Economic Commission For Africa (Acting On Behalf Of The United Nations) And International Development Association. May 2004. Country Case Examples Central African Republic Contacts: Jean Delion Key Documents - Global Fund proposal and grant agreement: www.theglobalfund.org/search/portfolio.aspx?lang=en&countryID=CAF, 4/9/2004 - Multi-Country Demobilization and Reintegration Project (MDRP) www.mdrp.org - USAID CAR Program http://www.usaid.gov/press/releases/2002/02fs_car.html - "Project Status Report: Central African Republic CAR: HIV/AIDS," World Bank - UNAIDS, "Central African Republic," www.unaids.org/en/grographical+area/by+country/central+african+republic.asp, 4/21/2004 Cote d'Ivoire Contacts: Ayite-Fily d'Almeida, MAP TTL, Danielle Jaekel, Peter Ngomba, Tonia Marek (AFTH2) Key Documents: - Project Information Document, MAP, Project, 3/31/2004 - World Bank Country Brief www.worldbank.org/afr/ci2.htm - "Project Information Document: Republic of Cote d'Ivoire ­ Economic Recovery," www- wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2002, 5/12/2004 - World Bank, "Interim Country Assistance Strategy for the Republic of Cote D'Ivoire" May 2002 29 - World Bank, "Updated Project Information Document, Cote D'Ivoire ­ HIV/AIDS Multi- Sector Response Project," March 2004 - World Bank, "The World Bank Group Countries: Cote d'Ivoire," www.worldbank.org/afr/ci2/htm, 4/9/2004 Democratic Republic of Congo Contact: Malonga Miatudila Key Documents - DRC EERP Trust Fund Document - USAID Activities in the DRC. http://www.usaid.gov/our_work/global_health/aids/Countries/africa/congo.html - GFATM Grant in DRC. http://www.theglobalfund.org/search/portfolio.aspx?lang=en&countryID=ZAR#HIV/AIDS - "Portfolio of Grants in Congo (Democratic Republic)," The Global Fund to Fight AIDS, Tuberculosis and Malaria, www.theglobalfund.org/search/portfolio.aspx?countryID=ZAR, 4/9/2004 - World Bank, "Updated Project Information Document, Congo, Democratic Republic of, Multisectoral HIV/AIDS Project," 1/21/2004 - "Technical Annex for a Proposed Grant of SDR39.8 Million to the Democratic Republic of Congo for and Emergency Early Recovery Project," World Bank, 6/29/2001 - World Bank, "The World Bank Group in the Democratic Republic of Congo," www.worldbank.org/afr/cd/cd_ctry_brief.htm, 4/28/2004 Equatorial Guinea Key Documents - World Bank Country Brief, "Equatorial Guinea," www.worldbank.org/afr/gq/gq_ctry_brief.htm, 4/9/2004 Eritrea Contacts: Eva Jarawan, Didem Ayvalikli (ACTAfrica), Christine Pena Key Documents - World Bank, "Project Appraisal Document on a Proposed Credit in the Amount of SDR 31.4 Million to the Government of Eritrea for HIV/AIDS, Malaria, STDs & TB (HAMSET) Control Project," November 2000 - "The World Bank Group in Eritrea," www.worldbank.org/afr/er/er_ctry_brief.htm, 4/9/2004 Haiti Contacts: Joelle Dehasse, Country Officer, Haiti, William Experton, HD sector leader for the Caribbean, Sam Carlson, HD specialist for Haiti, Mary Mulusa, HIV/AIDS specialist on the Caribbean Key Documents - "Portfolio of Grants in Haiti," The Global Fund to Fight AIDS, Tuberculosis and Malaria, www.theglobalfund.org/search/portfolio.aspx?countryID=HTI - UNAIDS, "Haiti," www.unaids.org/en/geograpical+area/by+country/haiti.asp, 4/21/2004 - World Bank Country Brief, "Haiti," lnweb18.worldbank.org/External/lac/lac/nsf 30 IGAD Contacts: Frode Devanger, ACTAfrica, AIDS Campaign Team for Africa Key Documents - "Profile: InterGovernmental Authority on Development (IGAD)," www.iss.co.za/AF/RegOrg/unity_to_union/pdfs/igad/IGADProfile.pdf - US Department of State, "Intergovernmental Authority on Development (IGAD)," www.state.gov/p/af/rls/fs/4455.htm, 5/15/2004 Liberia Contacts: Eileen Murray, Kazuhida Kuroda, Post-Conflict Unit, Nicola Dyer, former Country Program Coordinator Key Documents - "Portfolio of Grants in Liberia," The Global Fund to Fight AIDS, Tuberculosis and Malaria, www.theglobalfund.org/search/portfolio.aspx?countryID=LBR, 4/9/2004 - UNAIDS, "Liberia," www.unaids.org/en/geographical+area/by+country/liberia.asp, 4/21/2004 - World Bank, "The World Bank Group Countries: Liberia," www.worldbank.org/afr/lr2.htm, 4/9/2004 Myanmar Key Documents - "Portfolio of Grants in Myanmar," The Global Fund to Fight AIDS, Tuberculosis and Malaria, www.theglobalfund.org/search/portfolio.aspx?countryID=MYN, 4/9/2004 - "The World Bank Group in Myanmar," lnweb18.worldbank.org/eap/eap.nsf, 4/9/2004 Sierra Leone Contact: Nichola Dyer Key Document - World Bank, "The World Bank Group Countries: Sierra Leone," www.worldbank.org/afr/s12.htm, 4/9/2004 Somalia Contacts: Priya Gajraj, Albert Voetberg, Kenya, Geoffrey Bergen, Country Program Coordinator Key Documents - "Country Re-Engagement Note, UNDP/World Bank, Somalia," April 2003. http://www.worldbank.org/afr/so/somaliaext.pdf - World Bank Somalia Country Brief (www.worldbank.org/afr/so/so_ctry_brief.htm). - Somalia HIV/AIDS Prevention, Advocacy and Communication Framework, August 2003 - Global Fund Request. http://www.theglobalfund.org/search/portfolio.aspx?countryID=SOM - USAID Activities. www.usaid.gov/locations/sub-saharan_africa/countries/somalia - Somalia Watching Brief on the Bank's Conflict, World Bank Prevention and Reconstruction website: http://lnweb18.worldbank.org/ESSD/sdvext.nsf/67ByDocName/SomaliaWatchingBrief, 4/9/2004 - "The World Bank Group in Somalia," www.worldbank.org/afr/so, 4/9/2004 31 Sudan Contacts: Francois Decaillet, AFTH3, Ishac Diwan, AFC06, Patrick Mullen, Sudan Country Team Key Documents - World Bank Country Program Brief. www.worldbank.org/afr/sd - Sudan Stabilization and Reconstruction Country Economic Memorandum, June 30, 2003 - "Portfolio of Grants in Sudan," The Global Fund to Fight AIDS, Tuberculosis and Malaria, www.theglobalfund.org/search/portfolio.aspx?countryID=SUD, 4/29/2004 - The Global Fund to Fight AIDS, Tuberculosis and Malaria, "Proposal Form, Sudan," July 2002 Togo Contacts: Jean-Michel Happi, Country Manager for Togo, Marie Marie-Nelly, Stephen Brushett, Lagos-Abidjan Transport Corridor Project Key Documents - Global Fund Request (www.theglobalfund.org/search/portfolio.aspx?countryID=TGO) - "Portfolio of Grants in Togo," The Global Fund to Fight AIDS, Tuberculosis and Malaria, www.theglobalfund.org/search/portfolio.aspx?countryID=TGO, 4/9/2004 - d'Almeida, Ayite-Fily, "The World Bank Group Request for IDF Financing, Country: Togo" - World Bank Country Profile (www.worldbank.org/afr/tg2.htm): - USAID Activities in Togo. http://www.usaid.gov/press/factsheets/2003/03fs_togo.html - HIV/AIDS Project for Abidjan-Lagos Transport Corridor, web.worldbank.org/external/projects/main?page, 4/23/2004 - World Bank, "The World Bank Group Countries: Togo," www.worldbank.org/afr/tg2.htm, 4/9/2004 - IDF Grant Proposal Zimbabwe Contacts: Ebrahim Jassat, Zimbabwe Country Office; Mirey Ovadiya, Operations Officer, Malawi, Zambia and Zimbabwe, Africa Region. Key Documents - Jassat, Ebrahim, "The World Bank Group Request for IDF Financing, Country: Zimbabwe," 2003 - USAID activities in Zimbabwe. http://www.usaid.gov/zw/ - "Portfolio of Grants in Zimbabwe," The Global Fund to Fight AIDS, Tuberculosis and Malaria, www.theglobalfund.org/search/portfolio.aspx?countryID=ZIM, 4/9/2004 - World Bank Country profile. : www.worldbank.org/aft/zw/zw_ctry_brief.htm - World Bank, "The World Bank Group in Zimbabwe," www.worldbank.org/afr/zw/zw_ctry_brief.htm, 4/9/2004 32 Useful Web Sites World Bank Web Sites - HIV/AIDS. http://www.worldbank.org/aids/ - HNP, HIV/AIDS at a Glance. http://www.worldbank.org/phataglance http://wbln0018.worldbank.org/HDNet/hddocs.nsf/c840b59b6982d2498525670c004def60/05 60436b70e56de385256a4800524119?OpenDocument - LICUS. http://www1.worldbank.org/operations/licus/ - Post-Conflict Fund. http://lnweb18.worldbank.org/ESSD/sdvext.nsf/67ByDocName/ThePostConflictFund External Web Sites - Global Fund to Fight AIDS, TB, and Malaria web site: www.theglobalfund.org - UNAIDS: www.unaids.org - USAID: www.usaid.gov 33 WWW.WORLDBANK.ORG/AIDS For more information, please contact: The Global HIV/AIDS Program The World bank Group 1818 H Street, NW Washington DC 20433 USA Tel: 202 458 4946 Fax: 202 522 1252 wbglobalHIVAIDS@worldbank.org