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The World Bank for Official Use Only Document of The World Bank For Official Use Only Public Disclosure Authorized Report No: 75232-LS PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT FROM THE INTERNATIONAL DEVELOPMENT ASSOCIATION IN THE AMOUNT OF SDR 7.8 MILLION (US$12 MILLION EQUIVALENT) Public Disclosure Authorized AND PROPOSED GRANT IN THE AMOUNT OF US$4 MILLION FROM THE HEALTH RESULTS INNOVATION TRUST FUND TO THE KINGDOM OF LESOTHO FOR A Public Disclosure Authorized MATERNAL AND NEWBORN HEALTH PERFORMANCE-BASED FINANCING PROJECT March 15, 2013 Health, Nutrition and Population, Eastern and Southern Africa Country Department AFCS1 Africa Region Public Disclosure Authorized This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank’s policy on Access to Information. CURRENCY EQUIVALENTS (Exchange Rate Effective January 31, 2013) Currency Unit = LSL LSL 8.97 = US$ 1 US$ 1.5413403 = SDR 1 FISCAL YEAR April 1 – March 31 ABBREVIATIONS AND ACRONYMS ADF Africa Development Fund AFTME Africa Region Financial Management - East unit AFTHE Africa Health, Nutrition & Population East/South unit AFTSG Africa Region Safeguards Group AIDS Acquired Immune Deficiency Syndrome AJR Annual Joint Review ANC Antenatal Care ARV Antiretroviral Drugs BCG Bacillus Calmette Guerin BOS Bureau of Statistics CAS Country Assistance Strategy CBA Cost Benefit Analysis CBO Community-Based Organization CHAL Christian Health Association of Lesotho CIPS Center for International Policy Studies CLNHCWMP Consolidated Lesotho National Health Care Waste Management Plan CPA Complementary Package of Activities CPAR Country Procurement Assessment Report CQS Selection Based on Consultants’ Qualifications CS Cesarean Section (surgical delivery of a baby) DA Designated Account DC District Council DHIO District Health Information Officer DHMT District Health Management Team DHS Demographic and Health Survey DOTs Directly Observed Treatment DP Development Partner DPT Diphtheria, Pertussis and Tetanus ii EGPAF Elisabeth Glaser Pediatric AIDS Foundation EmONC Emergency Obstetric and Neonatal Care EMR Electronic Medical Record ERR Economic Rate of Return ESAMI Eastern and Southern African Management Institute FBS Fixed Budget Selection FMO Financial Management Officer GDP Gross Domestic Product GOL Government of the Kingdom of Lesotho GPOBA Global Partnership on Output-based Aid HCGW Health Care General Waste HCRW Health Care Risk Waste HDI Human Development Index HDNHE Human Development Network Health Unit HIV Human Immunodeficiency Virus HMIS Health Management Information System HPSD Health Planning and Statistics Department HRH Human Resources for Health HRITF Health Results Innovation Trust Fund IBRD International Bank for Reconstruction and Development ICAP International Center for HIV/AIDS Programs ICB International Competitive Bidding ICT Information and Communication Technology IDA International Development Association IFAC International Federation of Accountants IFC International Finance Corporation IFMIS Integrated Financial Management Information System IFR Interim unaudited Financial Report IHM Institute for Health Measurement IMF International Monetary Fund LCS Least Cost Selection LRCS Lesotho Red Cross Society LSL Lesotho Loti M&E Monitoring and Evaluation MCA Millennium Challenge Account MCC Millennium Challenge Corporation MDG Millennium Development Goal MNH Maternal and Newborn Health MMR Maternal Mortality Ratio MODP Ministry of Development Planning MOF Ministry of Finance iii MOH Ministry of Health MOLGC Ministry of Local Government and Chieftainship MOU Memorandum of Understanding MPA Minimum Package of Activities MTEF Mid-Term Expenditure Framework MVA Manual Vacuum Aspiration NCB National Competitive Bidding NDSO National Drug Service Organization NGO Non-Governmental Organization NPV Net Present Value NSDP National Strategic Development Plan NSRHSC National Sexual and Reproductive Health Steering Committee ORAF Operational Risk Assessment Framework ORS Oral Rehydration Solution PAD Project Appraisal Document PAU Project Accounting Unit PBF Performance-based Financing PDO Project Development Objective PEFA Public Expenditure and Financial Accountability PEPFAR The U.S President's Emergency Plan For AIDS Relief PFM Public financial management PFMA Public Financial Management and Accountability PIH Partners in Health PIM Project Implementation Manual PMTCT Prevention of Mother-to-Child Transmission of HIV PO Procurement Officer PPA Project Preparation Advance PPAD Procurement Policy Advisory Division PPP Public Private Partnership PPR Public Procurement Regulation PPTA Performance Purchasing Technical Assistance QBS Quality-Based Selection QCBS Quality and Cost-Based Selection RBF Results-Based Financing RHAP Reproductive Health Action Plan SACU South Africa Customs Union SBD Standard Bidding Document SOE Statement of Expenditures STI Sexually Transmitted Infection TA Technical Assistance TB Tuberculosis iv TOR Terms of Reference TWG Technical Working Group UN United Nations UNDP United Nations Development Programme UNFPA United Nations Population Fund UNICEF United Nations Children's Fund USAID United States Agency for International Development VHW Village Health Worker WHO World Health Organization Regional Vice President: Makhtar Diop Country Director: Asad Alam Sector Director: Ritva S. Reinikka Sector Manager: Olusoji O. Adeyi Task Team Leader: Kanako Yamashita-Allen v LESOTHO Maternal and Newborn Health Performance Based Financing Project TABLE OF CONTENTS Page I. STRATEGIC CONTEXT .................................................................................................1 A. Country Context ............................................................................................................ 1 B. Sectoral and Institutional Context ................................................................................. 1 C. Higher Level Objectives to which the Project Contributes .......................................... 5 II. PROJECT DEVELOPMENT OBJECTIVES ................................................................5 A. PDO............................................................................................................................... 5 Project Beneficiaries ........................................................................................................... 5 PDO Level Results Indicators ............................................................................................. 6 III. PROJECT DESCRIPTION ..............................................................................................6 A. Project Components ...................................................................................................... 6 B. Project Financing ........................................................................................................ 10 Lending Instrument ........................................................................................................... 10 Project Cost and Financing ............................................................................................... 10 C. Lessons Learned and Reflected in the Project Design ................................................ 11 IV. IMPLEMENTATION .....................................................................................................13 A. Institutional and Implementation Arrangements ........................................................ 13 B. Results Monitoring and Evaluation ............................................................................ 17 C. Sustainability............................................................................................................... 18 V. KEY RISKS AND MITIGATION MEASURES ..........................................................19 A. Risk Ratings Summary Table ..................................................................................... 19 B. Overall Risk Rating Explanation ................................................................................ 20 VI. APPRAISAL SUMMARY ..............................................................................................20 A. Economic and Financial Analyses .............................................................................. 20 B. Technical ..................................................................................................................... 21 C. Financial Management ................................................................................................ 22 D. Procurement ................................................................................................................ 23 vi E. Social (including Safeguards) ..................................................................................... 24 F. Environment (including Safeguards) .......................................................................... 24 G. Other Safeguards Policies Triggered (if required)...................................................... 25 Annex 1: Results Framework and Monitoring .........................................................................26 Annex 2: Detailed Project Description .......................................................................................33 Annex 3: Implementation Arrangements ..................................................................................44 Project Institutional and
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