$ Report No: RES00396 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF Lesotho Nutrition and Health System Strengthening Project APPROVED ON 25-Jun-2021 TO Kingdom of Lesotho Health, Nutrition & Population Eastern And Southern Africa Regional Vice President: Victoria Kwakwa Regional Director: Daniel Dulitzky Country Director: Satu Kristiina Jyrintytar Kahkonen Practice Manager: Francisca Ayodeji Akala Task Team Leader(s): Nkosinathi Vusizihlobo Mbuya, Noel Chisaka The World Bank Lesotho Nutrition and Health System Strengthening Project (P170278) ABBREVIATIONS AND ACRONYMS ANIS Achieving Nutrition Impact at Scale E&S Environmental and Social ESCP Environmental and Social Commitment Plan GoL Government of Lesotho GRM Grievance Redress Mechanism IDA International Development Association IRI Intermediate Results Indicator LNHSSP Lesotho Nutrition and Health System Strengthening Project M&E Monitoring and Evaluation MDTF Multi-Donor Trust Fund MoH Ministry of Health PDO Project Development Objective SDR Special Drawing Rights The World Bank Lesotho Nutrition and Health System Strengthening Project (P170278) @#&OPS~Doctype~OPS^dynamics@restrhybridbasicdata#doctemplate BASIC DATA Product Information Operation ID Operation Name Lesotho Nutrition and Health System Strengthening P170278 Project Product/Financing Instrument Geographical Identifier Investment Project Financing (IPF) Lesotho Approval Date Current Closing Date 25-Jun-2021 30-Jun-2026 Environmental and Social Risk Classification (ESRC) Moderate Organizations Borrower Responsible Agency Kingdom of Lesotho Ministry of Health @#&OPS~Doctype~OPS^dynamics@restrhybridoperationstatus#doctemplate OPERATION STATUS Project Development Objective (DO) Original Development Objective The objective is to increase the utilization and quality of key nutrition and health services and improve selected nutrition behaviors known to reduce stunting. Disbursement Summary (in USD million) Source of Funds Net Commitment Disbursed Undisbursed % Disbursed IBRD -- -- -- 0 i The World Bank Lesotho Nutrition and Health System Strengthening Project (P170278) IDA 20.24 12.29 8.33 59.60 Grants 4.40 3.23 1.17 73.36 Policy Waivers Does this restructuring trigger the need for any policy waiver(s)? No @#&OPS~Doctype~OPS^dynamics@restrhybridmpa#doctemplate @#&OPS~Doctype~OPS^dynamics@restrhybridmpa#doctemplate ii The World Bank Lesotho Nutrition and Health System Strengthening Project (P170278) TABLE OF CONTENTS I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING ........................................................................................1 II. DESCRIPTION OF PROPOSED CHANGES ....................................................................................................................2 III. PROPOSED CHANGES ................................................................................................................................................6 IV. DETAILED CHANGE(S) ...............................................................................................................................................6 The World Bank Lesotho Nutrition and Health System Strengthening Project (P170278) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project Status 1. The objective of this Restructuring Paper is to seek approval for the proposed Level 2 restructuring of the Lesotho Nutrition and Health System Strengthening Project (LNHSSP). This restructuring is in response to the request from the Government of Lesotho (GoL) (FIN/DEV/140-24/25 dated December 17, 2024) to the World Bank to restructure the project as follows: (a) optimize the full utilization of the Achieving Nutrition Impact at Scale Grant (ANIS, TF0B5884) by extending the closing date from February 28, 2025 to May 30, 2025 and revising the co-financing percentages of expenditures for Disbursement Category 1; (b) reallocate savings totaling US$1,719,117 from Disbursement Category 2 to Disbursement Category 1 (US$1,235,804), Disbursement Category 3 (US$83,825), and Disbursement Category 4 (US$399,488) to support procurement of nutrition commodities, procurement of essential medical equipment and implementation of the endline nutrition survey; (c) remove the 2 year timeline for Disbursement Category 2; and (d) modify the results framework to better reflect the project scope. 2. The project was approved by the World Bank Board of Executive Directors on June 25, 2021 and became effective on August 19, 2021. The total project financing is US$26.4 million of which Special Drawing Rights (SDR) 15.4 million/US$22.0 million equivalent is a credit from the International Development Association (IDA, Credit 69320) and US$4.4 million is a grant from the multi-donor trust fund (MDTF) Achieving Nutrition Impact at Scale (ANIS, Grant TF0B5884). The grant closes on February 28, 2025, which is 16 months before the project closing date of June 30, 2026. 3. The project development objective (PDO) is to increase the utilization and quality of key nutrition and health services and improve selected nutrition behaviors known to reduce stunting. The project has four components: (a) Community-Based Health and Nutrition Services (US$14.0 million); (b) District Level Health System Strengthening (US$8.4 million); (c) Strengthen Government Stewardship, Project Management and Monitoring & Evaluation (M&E) (US$4.0 million); and (d) Contingency Emergency Response (US$0). 4. The project was restructured once on June 14, 2023 to: (a) reallocate US$700,000 from Disbursement Category 1 to Disbursement Category 3 for part B.2 of the project; (b) modify the results framework; (c) include Mokhotlong District as one of the beneficiary districts of Component 1; and (d) change the legal representative of the Recipient from Ministry of Finance to Ministry of Finance and Development Planning. 5. Progress towards achievement of the PDO and overall implementation progress are rated Moderately Unsatisfactory and Moderately Satisfactory respectively (Implementation Status and Results Report archived on November 11, 2024). The overall implementation progress rating was upgraded from Moderately Unsatisfactory to Moderately Satisfactory due to progress made in activity implementation since the Mid-Term Review (July 2024). The rating for Progress towards achieving the PDO will be reviewed during the next mission (February 2025). The project has disbursed approximately two-thirds of overall financing with total disbursement at US$15.5 million (as of November 30, 2024). Page 1 The World Bank Lesotho Nutrition and Health System Strengthening Project (P170278) 6. Other ratings. The overall environmental and social (E&S) performance rating of the project is Satisfactory. Performance of procurement is rated as Moderately Satisfactory and financial management is rated as Satisfactory. B. Rationale for Restructuring 7. ANIS Grant (TF0B5884). The ANIS Grant has a closing date of February 28, 2025. As of November 26, 2024, US$3.2 million has been disbursed (73 percent of total grant) with the most recent disbursement of US$1,096,977 made on November 19, 2024. The grant along with IDA credit-69310, co-finance Component 1 (Disbursement Category 1) with percentages of expenditures at 33 percent and 67 percent respectively. Given the current level of expenditure and disbursement projections for Component 1 up until the grant closing date, it is unlikely that the grant will be fully utilized before February 28, 2025. Therefore, to optimize use of the grant, the Government proposes to (a) extend the grant closing date until May 30, 2025, and (b) revise the percentages of expenditures to 70 percent grant and 30 percent IDA credit until the grant closing date or the grant is fully disbursed (whichever comes first). 8. Reallocation across disbursement categories. There are savings totaling US$1,719,117 under Sub-component 2.1 due to over-estimating the cost of operationalizing the quality improvement grants. The Government therefore proposes to reallocate the savings from Disbursement Category 3 as follows: (a) US$1,235,804 to Component 1 (Disbursement Category 1) to support the procurement and distribution of nutrition commodities known to improve the nutrition status of pregnant women and children (e.g., Vitamin A and multiple micronutrient powders, Ready-to-Use Therapeutic Foods); (b) US$83,825 to Sub-Component 2.2 (Disbursement Category 3) to support the procurement and distribution of essential medical equipment to hospitals to improve the delivery of quality services; and (c) US$399,488 to Component 3 (Disbursement Category 4) to support the implementation of the project’s endline survey. 9. Implementation timeline of the quality grants. The timeline of two years for implementing the quality improvement performance grants is no longer relevant as the implementation of activities is staggered until the close of the project. Therefore, the Government proposes to drop the reference to the two-year implementation timeline in the table found under Section III of the Financing Agreement. 10. Results framework. The Government requested that the project’s results framework be revised to better monitor the achievement of the project’s objectives. This includes: (a) deleting a PDO indicator whose achievement falls outside of the project scope and an intermediate results indicator (IRI) measuring achievement of an activity which has experienced significant implementation delays; (b) revising targets of one PDO indicator and four IRI indicators to more accurately align with the project’s scope; and (c) replacing one IRI to better align with the project scope. Furthermore, the end target date of most indicators was aligned with the project closing date (June 30, 2026). Details are provided in Table 1. II. DESCRIPTION OF PROPOSED CHANGES Page 2 The World Bank Lesotho Nutrition and Health System Strengthening Project (P170278) 11. Change to ANIS Grant TF0B5884 including disbursement category co-financing percentage and closing date. (a) revise the percentages of expenditures for disbursement category 1 which will be effective from January 1, 2025: (i) ANIS grant (revise to “70 percent”); and (ii) IDA credit (revise to “30 percent”); and (b) extend the grant closing date from February 28, 2025, to May 30, 2025. 12. Reallocation between disbursement categories. In regard to IDA Credit-69310, the Government has requested reallocation of a total of SDR 1,306,528.92 (US$1,719,117 equivalent) from Disbursement Category 2 to disbursement categories as follows: (a) SDR 939,211.04(US$1,235,804 equivalent) to Disbursement Category 1; (b) SDR 63,707.00 (US$83,825 equivalent) to Disbursement Category 3; and (c) SDR 303,610.88 (US$ 399,488 equivalent) to Disbursement Category 4. 13. Two-year implementation timeline for Disbursement Category 2. Replace “100% up to 2 years” to “100%.” 14. Changes to results framework. The proposed changes are shown in Table 1. Table 1: Proposed changes to the results framework Indicator Change Rationale PDO level Women ages 15-49 who took iron tablets for 90+ Align end target date to days during the pregnancy of the most recent birth project closing date. (Percentage) Adolescents ages 15-19 currently using a modern Align end target date to contraceptive method (Percentage) project closing date. Interventions that increase availability of Children ages 6-23 months with minimum dietary This indicator will be diverse foods, an essential component of this diversity (Percentage) deleted. indicator, are beyond the scope of the project. There were significant delays in initiating the The end target will be implementation of community-based reduced from 67 percent Children under 6 months exclusively breastfed nutrition interventions which has to 64 percent and (Percentage) consequently reduced the possibility of the aligned to project closing project achieving the original target for this date. indicator. Align end target date to Women with institutional deliveries (Percentage) project closing date. Health facilities certified as Level 2 or above with Align end target date to quality rating system (Percentage) project closing date. Page 3 The World Bank Lesotho Nutrition and Health System Strengthening Project (P170278) Intermediate Results Indicators People who have received essential health, The end target will Target increase is based on current project nutrition, and population (HNP) services (CRI, increase from 700 000 to performance. Number) 950 000 and aligned to project closing date. The indicator is consistent with the Corporate Scorecard Indicator for HNP "Millions of people receiving quality health, nutrition, and population services" People who have received essential health, The end target will Target increase is based on the current nutrition, and population (HNP) services - Female increase from 347, 000 project performance. (RMS requirement) (CRI, Number) to 470 000. The indicator is consistent with the Corporate Scorecard Indicator for HNP "Millions of people receiving quality health, nutrition, and population services" Number of children immunized (CRI, Number) Align end target date to project closing date. Villages with a package of services (health, WASH, Indicator will be deleted The implementation of WASH, Agriculture Agric, Education) and replaced with and Education activities are beyond the “Number of Village control and scope of the project or the MoH. Health Nutrition Hence the new indicator (replacement) better Committees Established represents the project interventions. and Functional” Adolescents (ages 15-19) reached with The end target will be The change is aligned to the project scope comprehensive sexuality education by a peer reduced from 160,000 to which focuses on four high burden districts educator (Number) 23,500. for adolescent health interventions and not the entire country. Newborns breastfed within first hour of delivery This indicator will be The intervention supporting the indicator has (Percentage) deleted. been delayed due to inability to secure a consultant to develop the relevant policy and conduct training of hospitals to achieve Baby- Friendly Hospital Initiative (BFHI) status. Page 4 The World Bank Lesotho Nutrition and Health System Strengthening Project (P170278) Pregnant women screened for anaemia before 36 Align end target date to weeks GA (percentage of 1st ANC visits) project closing date. Facilities that have presented their quality Align end target date to improvement plans for the semester project closing date Referral guidelines developed and adopted Align end target date to project closing date Annual food and nutrition multisectoral steering Align end target date to committees meetings held project closing date Creation and utilization of recurrent MOH budget Align end target date to line for quality and bonus grant financing project closing date Number of focus group discussions at the The end target will The target was increased based on the community level to record various perceptions increase from 10 to 30. midterm performance of the project on this about the project (Number) indicator. Summary of Performance of E&S Risk Compliance The E&S Performance Rating of the project is Satisfactory with the Environmental Performance Rating as Satisfactory and the Social Performance Rating as Satisfactory. To date, implementation of environmental and social management measures has been satisfactory and in compliance with the approved E&S instruments including the Environmental and Social Commitment Plan (ESCP). The project grievance redress mechanism (GRM) is operational, inclusive stakeholder engagement activities, including training and awareness about the project, the GRM, as well as GBV/SEA/SH have been conducted satisfactorily. Further, the gender mainstreaming action plan is being satisfactorily implemented through a multi-sectoral approach. Chiefs and councilors monthly sittings, peer educators training sessions and Primary Health Care meetings at district level have been ongoing. The project GRM is equipped with multiple uptake channels and is fully operational. Describe any E&S issues and impacts associated with the change in project design. Identify and describe any potential large scale, significant and/or irreversible impacts. Describe any potential indirect and/or long-term impacts due to anticipated future activities in the project areas. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. Describe measures taken by the borrower to address E&S policy issues. Provide an assessment of borrower capacity to plan and implement the measure described. Page 5 The World Bank Lesotho Nutrition and Health System Strengthening Project (P170278) Identify key stakeholders and describe the mechanism for consultation and disclosure on E&S policies, with an emphasis of potentially affected people. @#&OPS~Doctype~OPS^dynamics@restrhybridsummarychanges#doctemplate Summary changes III. PROPOSED CHANGES Operation Information Proposed Changes Operation Information Proposed Changes Results Yes Reallocations Yes Development Objective No Loan Closing Date Extension No Summary Description No Loan Cancellations No (Operation Abstract) Legal Operational Policies No Financial Management No MFD/PCE No Procurement No Risks No Institutional Arrangement No Legal Covenants No Implementation Schedule No Conditions No Implementation Modalities No Disbursements Estimates No Disbursements Arrangements No DDO No Clients No Appraisal Summary No Components No @#&OPS~Doctype~OPS^dynamics@restrhybriddetailedchanges-disclose#doctemplate IV. DETAILED CHANGE(S) COSTS & FINANCING Page 6 The World Bank Lesotho Nutrition and Health System Strengthening Project (P170278) Private Capital Facilitation Is this an MFD-Enabling Project (MFD-EP)? Is this project Private Capital Enabling (PCE)? LOANS Reallocations IDA-69310-001 Cancellations (if any): New Allocation: Currency: XDR 0.00 0.00 Financing % (Type Total) Category Expenditure Current Actuals + Proposed No. Category Allocation Committed Allocation Current Proposed 1 Gds,Ncs,Cs,Tr,Oc Prt 6,746,405.00 4,237,481.90 7,685,616.00 67.00 30.00 A project; 2 Quality Improvement 5,000,000.00 748,090.22 3,693,471.00 100.00 100.00 Grants Prt B.1; 3 Gds,Ncs,Cs,Tr,Oc Prt 543,595.00 146,680.92 607,302.00 100.00 100.00 B.2 Project; 4 Gds,Ncs,Cs,Tr,Oc Part 2,799,197.00 1,021,400.23 3,102,808.00 100.00 100.00 C Project; 5 PPF REFINANCING; 310,803.00 275,959.79 310,803.00 0.00 100.00 6 Emergency 0.00 0.00 0.00 100.00 0.00 Expenditure; Total 15,400,000.00 15,400,000.00 TF-B5884-001 Cancellations (if any): New Allocation: Currency: USD 0.00 0.00 Financing % (Type Total) Category Expenditure Current Actuals + Proposed No. Category Allocation Committed Allocation Current Proposed 1 GDS,NCS,CS,OC&TR 4,400,000.00 1,142,730.84 0.00 33.00 70.00 PT. A of project; Total 4,400,000.00 0.00 Page 7 The World Bank Lesotho Nutrition and Health System Strengthening Project (P170278) ENVIRONMENTAL & SOCIAL Environmental & Social Assessment According to the E/S Specialist are there changes proposed to the operation’s design that No would impact the Bank’s E&S assessment?” Page 8 The World Bank Lesotho Nutrition and Health System Strengthening Project (P170278) RESULTS COUNTRY: Lesotho Lesotho Nutrition and Health System Strengthening Project @#&OPS~Doctype~OPS^dynamics@restrannexpolicyandresult#doctemplate PDO Indicators by PDO Outcomes To increase the utilization and quality of key nutrition and health services. Indicator Name Baseline Actual (Previous) Actual (Current) Closing Period Result Month/Year Result Date Result Date Result Month/Year ReviseWomen ages 15-49 who took 51.00 Dec/2018 51.00 31-Mar-2024 63 30-Jun-2024 66.00 Jun/2026 iron tablets for 90+ days during the pregnancy of the most recent birth (Percentage) ReviseAdolescents ages 15-19 45.20 Dec/2018 45.20 31-Mar-2024 53 30-Jun-2024 50.00 Jun/2026 currently using a modern contraceptive method in selected districts (Percentage) To improve selected nutrition behaviors known to reduce stunting Indicator Name Baseline Actual (Previous) Actual (Current) Closing Period Result Month/Year Result Date Result Date Result Month/Year Revise Children under 6 months 59.00 Mar/2020 59.00 31-Mar-2024 61 30-Jun-2024 64.00 Jun/2026 exclusively breastfed. (Percentage) Improve quality of selected health services Indicator Name Baseline Actual (Previous) Actual (Current) Closing Period Result Month/Year Result Date Result Date Result Month/Year Page 9 The World Bank Lesotho Nutrition and Health System Strengthening Project (P170278) Revise Women with institutional 89.40 Dec/2018 89.40 31-Mar-2024 85.30 30-Jun-2024 92.00 Jun/2026 deliveries (Percentage) Revise Health facilities certified as 0.00 Nov/2020 47.00 31-Mar-2024 59 30-Jun-2024 50.00 Jun/2026 Level 2 or above with quality rating system (Percentage) Intermediate Results Indicators by Components Community-Based Health and Nutrition Services Indicator Name Baseline Actual (Previous) Actual (Current) Closing Period Result Month/Year Result Date Result Date Result Month/Year Revise People who have received 0.00 Dec/2019 745,168.00 31-Mar-2024 841,620 30-Jun-2024 950,000.00 Jun/2026 essential health, nutrition, and population (HNP) services (Number) Revise People who have 0.00 377,207.00 411,651 470,000 received essential health, nutrition, and population (HNP) services - Female (RMS requirement) (Number) Revise Number of children 0.00 Dec/2019 37,554.00 31-Mar-2024 41,651 30-Jun-2024 43,000.00 Jun/2026 immunized (Number) NewNumber of Village Health 0 Nov/2024 0 30-Nov-2024 76 Jun/2026 Nutrition Committees Established and Functional (Number) Revise Adolescents (ages 15-19) 0.00 Dec/2019 10,040.00 31-Mar-2024 14,581 30-Jun-2024 23,500 Jun/2026 reached with comprehensive sexuality education by a peer educator (Number) District level health system strengthening Page 10 The World Bank Lesotho Nutrition and Health System Strengthening Project (P170278) Indicator Name Baseline Actual (Previous) Actual (Current) Closing Period Result Month/Year Result Date Result Date Result Month/Year RevisePregnant women screened for 77.10 Dec/2018 85.00 31-Mar-2024 77 30-Jun-2024 85.00 Jun/2026 anaemia before 36 weeks of gestation (percentage of 1st ANC visits) (Percentage) ReviseFacilities that have presented 0.00 Jan/2021 41.00 31-Mar-2024 10 30-Jun-2024 85.00 Jun/2026 their Quality Improvement Plan for the semester (Percentage) Revise Creation and utilization of No Jun/2020 No 31-Mar-2024 No 31-Mar-2024 Yes Jun/2026 recurrent MOH budget line for quality and bonus grant financing (Yes/No) Strengthen Government Stewardship, Project Management, and M&E Indicator Name Baseline Actual (Previous) Actual (Current) Closing Period Result Month/Year Result Date Result Date Result Month/Year Revise Referral guidelines developed No Oct/2020 No 31-Mar-2024 No 31-Mar-2024 Yes Jun/2026 and adopted (Yes/No) Revise Annual food and nutrition 0.00 Dec/2019 0.00 31-Mar-2024 1 30-Jun-2024 4.00 Jun/2026 multisectoral steering committees meetings held (Number) Revise Number of focus group 0.00 May/2021 0.00 31-Mar-2024 0.00 30-Jun-2024 30 Jun/2026 discussions at the community level to record various perceptions about the project (Number) Page 11 The World Bank Lesotho Nutrition and Health System Strengthening Project (P170278) Page 12