$ Report No: RES00460 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF Health System Performance Strengthening Project APPROVED ON 06-Aug-2021 TO Republic of Chad Health, Nutrition & Population Western And Central Africa Regional Vice President: Ousmane Diagana Regional Director: Trina S. Haque Country Director: Clara Ana Coutinho De Sousa Practice Manager: Moulay Driss Zine Eddine El Idrissi Task Team Leader(s): Kofi Amponsah, Mariam Noelie Hema, Zenab Konkobo Kouanda The World Bank Health System Performance Strengthening Project (P172504) ABBREVIATIONS AND ACRONYMS CERC Contingent Emergency Response Component CRW Crisis Response Window CTN National Technical Committee FA Financing agreement FAO Food Agriculture Organization GFF Global Financing Facility GoC Government of Chad IDA International Development Association MoH Ministry of Health MTR Mid-Term Review PBF Performance-Based Financing PDO Project Development Objective SDR Standard Drawing Rights SGFI Integrated Financial Management Information system SMP Security Management Plan UN United Nations UNICEF United Nations Children’s Fund WFP World Food Programme The World Bank Health System Performance Strengthening Project (P172504) @#&OPS~Doctype~OPS^dynamics@restrhybridbasicdata#doctemplate BASIC DATA Product Information Operation ID Operation Name P172504 Health System Performance Strengthening Project Product/Financing Instrument Geographical Identifier Investment Project Financing (IPF) Chad Approval Date Current Closing Date 06-Aug-2021 31-Dec-2026 Environmental and Social Risk Classification (ESRC) Moderate Organizations Borrower Responsible Agency Republic of Chad Ministry of Health and National Solidarity @#&OPS~Doctype~OPS^dynamics@restrhybridoperationstatus#doctemplate OPERATION STATUS Project Development Objective (DO) Current Development Objective To improve utilization and quality of service delivery of essential health services with a particular focus on reproductive, maternal, child and adolescent health, and nutrition services for the population of Chad in project- supported areas, and to provide immediate and effective response to an eligible crisis or emergency Disbursement Summary (in USD million) Source of Funds Net Commitment Disbursed Undisbursed % Disbursed IBRD -- -- -- 0 i The World Bank Health System Performance Strengthening Project (P172504) IDA 236.59 161.87 75.48 68.20 Grants 16.50 10.48 6.02 63.49 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 Health System Performance Strengthening Project (P172504) TABLE OF CONTENTS I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING ........................................................................................1 II. DESCRIPTION OF PROPOSED CHANGES ....................................................................................................................2 III. PROPOSED CHANGES ................................................................................................................................................4 IV. DETAILED CHANGE(S) ...............................................................................................................................................5 The World Bank Health System Performance Strengthening Project (P172504) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A.1 Implementation Progress 1. The Health System Performance Strengthening Project (P172504) was approved by the World Bank Board of Executive Directors on August 6, 2021, and the Financing Agreement (FA) was signed by the Government of Chad (GoC) and the World Bank on September 21, 2021. The total budget of the Project is US$106.5 million (IDA grant: US$90 million and Global Financing Facility (GFF) Trust Fund (TF): US$16.5 million). The Additional Financing (AF) was approved for the equivalent of US$150.0 million – US$100.0 million from the national PBA and US$50.0 million from the Crisis Response Window (CRW). The project aimed to achieve three objectives: (i) respond to the nutritional crisis that Chad was facing, (ii) bridge the funding gap and (iii) extend project activities to other provinces. To address these objectives, the Government signed a second Contingent Emergency Response Component (CERC) agreement with the World Food Program (WFP) to provide nutritional and agricultural inputs to the population in need. The Project’s Mid-Term Review (MTR) was held on February 23, 2024. 2. The project continues to make progress towards achieving its Development Objective (PDO). Three (3) out of the six (6) PDO indicators have been achieved or surpassed their intended targets and the remaining three (3) have attained at least 80% of their final targets. Progress towards project implementation remains satisfactory. Ten (10) out of the twenty (20) Intermediate Indicators have been achieved or surpassed and the remaining indicators are bound to be achieved before the end of the project. Overall, implementation of project activities is progressing well. 3. The scaling up of the Performance Based Financing (PBF) is currently underway with significant progress made 52 percent of the project provinces covered, which includes 12 out of 23 provinces, representing 96 percent of the health facilities, totaling 1,288 health facilities; 100 percent of regulatory entities are included. Additionally, the PBF institutionalization process at national level has been reinforced for 94 percent of health facilities by appointing Ministry of Health (MoH) staff as full members of the National Technical Committee (CTN) in lieu of consultants. The integration of regulatory entities into the PBF strategy marked a significant shift towards strengthening service delivery readiness to provide quality Reproductive, Maternal, Newborn, Child, Adolescent Health and Nutrition (RMNCAH-N) services. In addition, analytical work has been carried out and more is underway to inform the effectiveness of implementation and the project sustainability. PBF verification and counter-verification activities have now been regularly conducted to ensure project performance has been assessed and rewarded accordingly. Finally, interoperability between PBF portal, District Health Information Software 2 (DHIS2) and Integrated Financial Management Information system (SGFI) is a realty now. DHIS2 software has been deployed in all district’s health facilities in the 12 provinces and at the health center level. 4. Overall, the project remains relevant and in line with national health development policies and strategies, such as the National Health Development Plan (PNDS 4 2022-2030) and the Investment Case for the reduction of maternal, neonatal, infant and child mortality and improvement of adolescent health and civil registration and vital statistics (DI SRMNIAN-EC). The project effectively contributes to achieving national priorities and objectives. To this end, it contributes to providing solutions to the problems identified and to the real needs of the population, particularly women and children. Page 1 The World Bank Health System Performance Strengthening Project (P172504) A.2 CERC Implementation Progress 5. The project has supported the GoC to address the country’s nutrition crisis through activation of two CERC operations (CERC1 and CERC2). Despite the initial delays, implementation of CERC1 activities which covered eight provinces (Barh-el-Gazel, Ennedi Est, Kanem, Lac, Logone Oriental, Ouaddai, Sila and Wadi Fira) has progressed well. The activities are implemented by the United Nations agencies (WFP, UNICEF, and FAO). Under CERC1, the WFP has reached a total of 444,707 children and moderately malnourished pregnant and lactating women. UNICEF distributed 243,733 boxes of Ready-to-Use Therapeutic Foods (RUTF) and associated products for treatment under five children suffering from severe acute malnutrition (SAM), and FAO distributed 684,799 kg of seeds to 11,528 households. The CERC2 activities implemented mainly by WFP has progressed remarkably well with 794,766 beneficiaries reached in eight provinces (Kanem, Lac, Barh-el-Gazal, Ennedi Est, Wadi Fira, Ouaddai, Sila and Logone Oriental) of the country. A. RATIONALE FOR RESTRUCTURING 6. Chad faces a complex food security situation due to a combination of factors, including climate shocks, conflicts, and economic vulnerabilities. Frequent droughts and erratic weather patterns impact agricultural productivity, leaving communities vulnerable to food shortages and malnutrition. Estimated cereal production for the 2023/2024 crop year is 5.5 percent lower than last year and 7.2 percent lower than the five-year average. Geographically, the provinces of Lac, Kanem, Bahr El Gazal, Hadjer Lamis, Batha, Ouaddaï and Wadi Fira have recorded the largest declines. Prices of local cereals, compared to the five-year average, are generally increasing. In the provinces of the Sahelian strip, the early depletion of household cereal stocks leads to a strong dependence on markets. A marked increase in demand has been recorded in the areas hosting Sudanese refugees and returnees from the East, mainly in the provinces of Ouaddaï, Sila and Wadi Fira. In addition, atypical price increases compared to the five-year average are therefore observed on the country's various markets. Increases of 40 percent and 53 percent compared to the five-year average in millet prices are recorded in Ati and Ngouri respectively. 7. On February 15, 2024, the Government of Chad (GoC), through the Minister of Economy, Planning and International Cooperation, again declared a state of food and nutrition emergency throughout the territory. At the request of the Government, a second CERC was triggered on April 24, 2024, to mobilize US$ 60.0 million to respond to the nutritional and food emergency that Chad has experienced since 2022 to the present day. Since the emergency response component was not allocated when the project was approved, it is necessary to reallocate the project proceeds from Categories 1 and 2 to Category 3 to implement emergency activities under category 3. 8. The GoC sent a formal request dated December 9, 2024, to the World Bank requesting the restructuring of the Project and amendment of the FA to account for the activation and allocation of the emergency expenditure category. II. DESCRIPTION OF PROPOSED CHANGES 9. The proposed restructuring would introduce a reallocation of proceeds between expenditure categories to account for the activation of the CERC, including an allocation of US$60 million (45,3 million SDR equivalent). The detailed changes are presented in Table 1 below. Page 2 The World Bank Health System Performance Strengthening Project (P172504) TABLE 1 – PROPOSED REVISED EXPENDITURE CATEGORIES Category Amount of the Revised Percentage of Grant Allocated Amount of the Grant Expenditures to be (expressed in SDR) Allocated (expressed Financed in SDR) (inclusive of Taxes) (1) Goods, works, non-consulting services, and consulting services, Training and Operating Costs for Parts 2 100% upon full (except Part 2.1(b), Part 3 of the Project commitment or 46,760,000 19,580,000 disbursement of the Original Financing Agreement (2) PBF Payments under Part 1 and Part 100% upon full 2.1(b) of the Project commitment or 70,140,000 52,020,000 disbursement of the Original Financing Agreement (3) Emergency Expenditures for Part 4 of 100% 0 45,300,000 the Project TOTAL AMOUNT 116,900,000 116,900,000 Summary of Performance of E&S Risk Compliance The Project is up to date on the preparation and validation of environmental and social management instruments. The Grievance mechanism is operational, with committees established and four complaints recorded and addressed. The Project has also mapped Gender Based Violence IGBV), Sexual Exploitation and Abuse (SEA), and Sexual Harassment (SH) service providers and adopted the Code of Conduct. The CERC component is currently being activated. The Project have prepared a CERC manual and a CERC Environmental and Social Management Framework (ESMF), both of which have been validated and published on the country and Bank websites . However, several planned activities for 2023 have not been implemented, including: (i) the dissemination of the instruments, (ii) the preparation of the Security Risk Assessment (SRA) and (iii) the development of the related Security Management Plan (SMP). The Project experienced two incidents this year: a fire and an armed attack at the coordination headquarters. Although there were no fatalities, the seriousness of the armed attack prompted notification to the management of the World Bank. However, the Bank’s incident management procedures were not fully followed through to completion. 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. Page 3 The World Bank Health System Performance Strengthening Project (P172504) 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. 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 Development Objective No Reallocations Yes Summary Description No Loan Closing Date Extension No (Operation Abstract) Legal Operational Policies No Loan Cancellations No MFD/PCE No Financial Management No Results 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 Page 4 The World Bank Health System Performance Strengthening Project (P172504) Components No @#&OPS~Doctype~OPS^dynamics@restrhybriddetailedchanges-disclose#doctemplate IV. DETAILED CHANGE(S) COSTS & FINANCING Private Capital Facilitation Is this an MFD-Enabling Project (MFD-EP)? Is this project Private Capital Enabling (PCE)? LOANS Reallocations IDA-D8070-001 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 GD,WK,N/CS,TRN&O 6,049,500.00 6,819,028.56 0.00 55.00 0.00 C Pt.2 exp Pt2.1b&3; 2 PBF Payments Pt 18,000,000.00 12,475,935.20 0.00 73.00 0.00 1&Pt 2.1b; 3 Emergency 38,200,000.00 10,594,270.29 0.00 100.00 0.00 Expenditure Pt 4; 4 Refund of Project 350,500.00 350,498.64 0.00 0.00 0.00 Preparation Advan; 5 Emergency 0.00 0.00 0.00 100.00 0.00 Expenditures Pt 4.2; Total 62,600,000.00 0.00 IDA-E1550-001 Cancellations (if any): New Allocation: Currency: XDR 0.00 0.00 Category Expenditure Current Actuals + Proposed Financing % No. Category Allocation Committed Allocation (Type Total) Page 5 The World Bank Health System Performance Strengthening Project (P172504) Current Proposed 1 GD,WK,N/CS,TRN&O 46,760,000.00 5,959,024.38 19,580,000.00 100.00 100.00 C Pt.2 exp Pt2.1b&3; 2 PBF Payments Pt 70,140,000.00 12,657,445.85 52,020,000.00 100.00 100.00 1&Pt 2.1b; 3 Emergency 0.00 0.00 45,300,000.00 100.00 100.00 Expenditures Pt 4.1; Total 116,900,000.0 116,900,000.0 0 0 TF-B5488-001 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 GD,WK,N/CS,TRN&O 7,000,000.00 5,425,912.34 0.00 45.00 0.00 C Pt.2 exp Pt2.1b&3; 2 PBF Payments Pt 9,500,000.00 4,104,566.34 0.00 27.00 0.00 1&Pt 2.1b; Total 16,500,000.00 0.00 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 6