Mozambique - HIV/AIDS Response Project

Document of The World Bank Report No: 25003 MOZ PROJECT APPRAISAL DOCUMENT ONA PROPOSED GRANT IN THE AMOUNT OF SDR41.6 MILLION (US$ 55 MILLION EQUIVALENT) TO THE REPUBLIC OF MOZAMBIQUE FOR THE HIV/AIDS RESPONSE PROJECT March 10, 2003 Rural Development Operations 1 Country Department 2 Africa Region  CURRENCY EQUIVALENTS (Exchange Rate Effective October 21, 2002) Currency Unit = Mozambican Meticais MZM 23,733.00 = US$1.00 US$0.000042 = MZM 1.00 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS ADPP Ajuda de Desenvolvimento de Povo para Povo AMODEFA Associacao Mocambicana Para o Desenvolvimento da Familia CCSI Community and Civil Society Initiatives CBO Community Based Organization CDC Centers for Disease Control (USA) CNCS National AIDS Council CRIS Country Response Information System CSO Civil Society Organization DC Direct Contracting FBO Faith Based Organization GACOPI Office of International Cooperation, Ministry of Health HAART Highly Active Anti-retroviral Therapy ICB International Competitive Bidding IEC Information, Education, and Communication MONASO Mozambican National AIDS Services Organization MOU Memorandum of Understanding MTCT Mother-to-Child Transmission NAIMA NGO AIDS Impact Mitigation Association NCB National Competitive Bidding NGO Non-governmental Organization PEN National Strategic Plan to Combat HIV/AIDS PLWHA People Living With HIV/AIDS PSI Population Services International QCBS Quality and Cost Based Selection STD/STI Sexually Transmitted Disease/Sexually Transmitted Infection TOR Terms of Reference VTC Voluntary Testing and Counseling UNDP United Nations Development Program UNICEF United Nations Childrens' Fund UNV United Nations Volunteer USAID United States Agency for International Development Vice President: Callisto Madavo Country Manager/Director: Darius Mans, Country Director Sector Manager/Director: Karen Mcconnell Brooks, Sector Manager Task Team Leader/Task Manager: James Coates, Task Manager  MOZAMBIQUE HIV/AIDS RESPONSE PROJECT CONTENTS A. Project Development Objective Page 1. Project development objective 2 2. Key performance indicators 2 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 3 2. Main sector issues and Government strategy 4 3. Sector issues to be addressed by the project and strategic choices 10 C. Project Description Summary 1. Project components 10 2. Key policy and institutional reforms supported by the project 13 3. Benefits and target population 13 4. Institutional and implementation arrangements 14 D. Project Rationale 1. Project alternatives considered and reasons for rejection 19 2. Major related projects financed by the Bank and/or other development agencies 21 3. Lessons learned and reflected in the project design 23 4. Indications of recipient conmmitment and ownership 24 5. Value added of Bank support in this project: 25 E. Summary Project Analysis 1. Economic 26 2. Financial 27 3. Technical 28 4. Institutional 29 5. Environmental 35 6. Social 37 7. Safeguard Policies 40 F. Sustainability and Risks 1. Sustainability 41 2. Critical risks 41  3. Possible controversial aspects 43 G. Main Conditions 1. Effectiveness Condition 43 2. Other H. Readiness for Implementation 44 I. Compliance with Bank Policies 44 Annexes Annex 1: Project Design Summary 45 Annex 2: Detailed Project Description 51 Annex 3: Estimated Project Costs 79 Annex 4: Cost Benefit Analysis Summary, or Cost-Effectiveness Analysis Summary 80 Annex 5: Financial Summary for Revenue-Earning Project Entities, or Financial Summary 82 Annex 6: (A) Procurement Arrangements 83 (B) Financial Management and Disbursement Arrangements 91 Annex 7: Project Processing Schedule 103 Annex 8: Documents in the Project File 105 Annex 9: Statement of Loans and Credits 106 Annex 10: Country at a Glance 108 Annex 11: Supervision Plan 110 Annex 12: Monitoring and Evaluation 112 MAP(S) IBRD 32324  MOZAMBIQUE HIV/AIDS Response Project Project Appraisal Document Africa Regional Office AFTRI Date: March 10, 2003 Team Leader: James H. Coates Sector Manager/Director: Karen Brooks Sector(s): Health (100%) Country Manager/Director: Darius Mans Theme(s): Other human development (P) Project ID: P078053 Lending Instrument: Specific Investment Loan (SIL) Project Financing Data'. . . '... - - ] Loan [ l Credit [X] Grant [ ] Guarantee [ Other: For Loans/Credits/Others: Amount (US$m): 55.00 'Financing Plan (US$m):. Source -.L.ocal, -- Foreign Total:- BORROWER/RECIPIENT 9.00 0.00 9.00 IDA GRANT FOR HIV/AIDS 23.70 31.30 55.00 Total: 32.70 31.30 64.00 Borrower/Recipient: GOVERNMENT OF MOZAMBIQUE Responsible agency: NATIONAL AIDS SECRETARIAT, MINISTRIES AND CIVIL SOCIETY Executive Secretariat, National Council to Combat HIV/AIDS Address: Rua Antonio Bocarro 106/144, Maputo, Mozambique Contact Person: Mrs Janet Mondlane, Executive Secretary, National Council to Combat HIV/AIDS Tel: 258 1 495 396 Fax: 258 1 495 395 Email: janet@virconn.com Other Agency(ies): Ministry of Health Address: Av Eduardo Mondlane 1008 Contact Person: Dr. Francisco Songane, Minister of Health Tel: 258 1 313 389 Fax: 258 1 427 133 Email: ffsongane@teledata.co.mz Estimated Disbursements ( Bank FY/US$m): Annual 2.90 6.90 11.00 14.40 16.50 3.30 Cumulative 2.90 9.80 20.80 35.20 51.70 55.00 Project implementation period: 2003 - 2008 Expected effectiveness date: 06/25/2003 Expected closing date: 12/31/2008  A. Project Development Objective 1. Project development objective: (see Annex 1) The project will assist the Government of Mozambique to finance the implementation of its National Strategic Plan to Combat STD and HIV/AIDS. The strategy is designed to slow the spread of HIV/AIDS infection and mitigate the effects of the epidemic, through prevention, care, treatment and mitigation activities. The National Strategic Plan is multisectoral in nature, bringing together the efforts of Government, civil society, private sector and communities in a national campaign to slow the rate of infection and provide care for those who suffer from the disease, and for those who depend on them. The effort is led by a National Council to Combat AIDS, chaired by the Prime Minister, which includes key Ministers and leaders in civil society in its membership. The strategy is funded from the National Budget and various local and international bilateral and multilateral contributors, including the United Nations agencies and potentially the Global Fund to Fight AIDS, Tuberculosis and Malaria. The design of the Mozambique strategy is well suited for support by the Bank under its Multicountry HIV/AIDS Program for the Africa Region (MAP II), as it meets all of the strategic and institutional criteria for inclusion (see Section D4). The Bank's MAP II for US $ 500 million was approved at the Board on February 7, 2002 (Doc No. IDA/R2002-4). The project will: (i) improve institutional capacity for planning, delivery and monitoring of HIV/AIDS response interventions through all levels of Government and its line ministries, civil society and the private sector, with a focus on vulnerable groups; (ii) strengthen delivery of health services providing prevention and care, giving priority to the more vulnerable regions of the country, such services to include voluntary testing and counselling services and treatment of sexually transmitted diseases and opportunistic infections related to HIV/AIDS; (iii) enable Government at the national and regional levels, as well as through its line ministries, to carry out programs advocating prevention and providing care for its own staff and communities; and (iv) fund a variety of projects led by civil society, including the private sector, and carried out in urban and rural comnmunities, which cover HIV/AIDS related prevention, advocacy, public awareness creation and care for orphans and PLWHA, with a focus on the needs of vulnerable groups. 2. Key performance indicators: (see Annex 1) The National Strategic Plan to Combat HIV/AIDS and STDs establishes a series of output, process and outcome indicators. The project will support efforts, already underway, to improve the capture and assessment of this information. Indicators on output and process focus on coverage and quality of the various advocacy, prevention, and care programs. Outcome and impact indicators will capture the long term effect of the national AIDS campaign, but are unlikely to show dramatic change during the 5 year implementation cycle of this project. However, by the end of the project period it is likely that certain vulnerable groups will provide evidence of impact, due to the nature of the behaviour change process, and the evolution of the disease. Surveillance has improved with the recent increase in the number of centers -- from 4 to 20 in 2000. There should be 50 surveillance centers operational by full development, permitting a broader and more reliable assessment of the status of the epidemic. This will also permit an assessment of the effectiveness of the various activities being funded under the program. Key indicators to be monitored under the program and targets to be achieved by 2008 are noted below. -2 -  Input and Output Indicators All secondary and tertiary health facilities have the capacity to diagnose and test for sexually transmitted diseases. 100 VTC centers, equitably distributed geographically, are in place. At least 1,000 HIV/AIDS civil society initiatives funded by Province by year, at full development. Have trained 500 national leaders, 5,000 provincial leaders and 2 Facilitating Agents per province in HIV/AIDS elated programs Funded line Ministries have achieved 75% of their annual HNI/AIDS outreach plan, and 75% of all civil servants ave been reached by HIV/AIDS related IEC Process (and coverage) Indicators Over 500,000 clients reached annually by civil society initiatives on HIV/AIDS by 2008 Over 250 private sector clients funded by 2008 All public institutions disbribute condoms, with 30 million condoms distributed annually. All blood for transfusion is screened for HIV At least US$ 7 million per year is channeled to communities for civil society initiatives for HIV/AIDS. Outcome Indicators Use of condoms in sexual encounters outside of primary relationship in the last 12 months by persons 15-19, has ncreased by 20% over levels achieved in 2002. Age of first sexual encounter for youth 15-19 increased by I year from average in 2002 Number of sexual partners outside of primary union in last twelve months for population 15-49 declined by 10 % from 2002 level Impact Indicators HIV infection rate amongst antenatal women and the 15-24 age group reduced by 25 % from rates in 2002 The responsibility for clearing action plans, establishing program indicators, collecting and analyzing this information lies with the Secretariat to the CNCS. Work is underway on the design of a system for capturing and analyzing this information. The operational aspects of the system are to be contracted to private firms -- who will deliver reports and analytical services to the CNCS. This system will be in place by the mid 2003. The basis for the system, targets and goals will continue to be the National Strategic Plan to Combating HIV/AIDS and STDs, produced in 2000. This plan will have to be brought up to date -- and targets realigned with accomplishments, and extended to a new horizon (potentially 2007). The responsibility for generating the epidemiological surveillance data lies with the Ministry of Health - who will work with the CNCS to track the evolution of the disease and the response. B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: 20521 Date of latest CAS disctssion: June 1, 2000 The most recent World Bank CAS for Mozambique has "Improving Human Capabilities" as one of its three pillars, emulating the objectives of the Governments' Five Year program, and the PRSP. Within this category, the CAS highlights the campaign against HIV/AIDS as the first issue, and calls it the "largest single threat to Mozambique's prospects". Mozambique's PRSP (reviewed by the Board in September 2001), calls for a multisectoral approach to the HIV/AIDS campaign, while emphasizing the need for immediate action under the Education and Health sectors. The Government's National Strategy to Combat HIV/AIDS and STDs, approved by Cabinet in October 1999, reinforces the multisectoral approach, and outlines priorities and lines of action. Within the CAS, the HIV/AIDS epidemic ranks as - 3-  one of the key risks to the achievement of the country's poverty reduction targets. The Bank committed itself in the CAS to "galvanizing increased resources and offering new lending, if necessary, to step up the program". The proposed project makes good on this commitment, and responds to a direct request from Government to provide IDA resources to augment its efforts in the struggle against the virus. The IDA grant allocation for this project has been made in accordance with the IDA Grants Implementation Guidelines, under the facility for the financing national HIV/AIDS projects in IDA only countries. This is the second project to be proposed for funding from an IDA grant in FY 2003. It follows the Mozambique Public Sector Reforrn Project, funded with an IDA grant of US$ 25.6 million under the IDA 'poorest countries' facilility, to be considered by the Board in mid March, 2003. 2. Main sector issues and Government strategy: Country and Sector Backeround Mozambique achieved independence in 1975. Since then it has suffered from civil war, flood and drought, while defining and building its economic and social institutions. Since the early 1990's Mozambique has succeeded in creating the institutions necessary to underpin both a democratic form of Government, and an economy based on market principles. This framnework has the potential to deliver rapid, sustained and broad based growth. These institutions, however, are weak, due fundamentally to the lack of sufficient qualified and motivated staff. Incomes are low, with annual GDP per capita in the range of US$ 230. Some 69% of the population consume below a minimum level designated as the 'poverty line', with poverty deeper in rural areas. Indices on literacy (40%), gross primary enrollment (71%) infant mortality (147 per 1,000 live births), maternal mortality (1,083 per 100,000 deliveries) and malnutrition (affecting 41 % of children under 5) are all low by African standards. All of these indicators are averages. When these averages are opened up they reveal sharp differences across: (i) gender, with women and girls having significantly lower living standards than men and boys; (ii) rural-urban space, where the rural population fares significantly worse than the urban population on all counts; and (iii) provinces, where Maputo city and province are significantly ahead of the rest of the country. Prevalence by Location In 1999 life expectancy at birth in Mozambique was 44 years. Without the AIDS epidemic, this was projected to reach 50 years by 2010. If the current rate of infection with HIV continues, AIDS will cause life expectancy to drop to 36.5 years by 2010. The HIV prevalence rate for adults (ages 15-49) in Mozambique has been recently estimated at 12.2% for the year 2000. The first infection was diagnosed in 1986. By 1988 the prevalence rate in the city of Maputo was 1%, increasing to 9.9% ten years later, and reaching 13% in 2000. The installation of 20 surveillance centers spread across the country in 2000 has permitted a much more reliable estimate of the progress of the disease. The new data reveals dramatic differences in prevalence rates across regions as can be seen from the table below. - 4 -  Adult HIV Prevalence by Province in 2000 Adult HIV Total Population Share of Prevalence in 2000 Total Population Maputo City 13.0% 1,019 5.9% Maputo Province 14.3% 934 5.4% Gaza 16.0% 1,203 7.0% Inhambane 9.6% 1,256 7.3% South 13.20% 4,412 25.6% Sofala 18.7% 1,454 8.4% Manica 21.1% 1,137 6.6% Tete 19.8% 1,320 7.7% Zambezia 12,7/o 3,317 19.2% Center 16.50%h 7,228 41.9% Nampula 5.2% 3,266 18.9% Niassa 6.8% 1,466 8.5% Cabo Delgado 6.4% 871 5.1% North 5.70% 5,603 32.5% Uozambiaue 12.20% 17.243 100.0% The highest prevalence rates are found in three provinces in the center of the country, Tete, Manica and Sofala (19.8%, 21.1% and 18.7 % respectively) where there are active, high volume transport corridors to Zimbabwe, Zambia and Malawi (three countries that have higher levels of HIV prevalence than Mozambique -- the first two are above 20 % ). Gaza, the province which is home to the migrant miners who work in South Africa, has the next highest rate, 16%. Maputo Province is home to a key transport corridor to South Africa's industrial heartland, and has a prevalence rate of 13%. Maputo City, the largest urban center, a port, a transport hub, and the highest income levels in the country, has a prevalence rate of 13%. Zambezia, the most populous province with 19% of the population, and extensive links to Malawi and central Africa, has a prevalence rate of 12.7%. The remaining four provinces with 40% of the country's population, are largely rural, with prevalence rates well below the national norm: Inhambane (9.6%), Nampula (5,2%), Cabo Delgado (6.4%) and Niassa (6.8%). Geography matters. Mozambique's position as a transport corridor, which worked to its favor in the past, is now a health liability. It is surrounded by countries with prevalence levels well above its own: Swaziland and Zimbabwe at over 25%, Zambia and South Africa at 20 %, Malawi at 16% and Botswana, in the center of the continent, at over 35%. Prevalence by Age and Gender Women are more likely to be infected than men, and girls 15-25 are more than twice as likely to be infected as boys. In 2000 it is estimated that the prevalence rate for adult women (aged 15-49) was 13 %, vs 11 % for men. There are also differences within age groups. Young women between the ages of 15 and 29 are much more likely to be infected than their male counterparts. On the other hand, men between the ages of 30 and 44 are more likely to be infected than women of the same age group.  Overall HIV Prevalence by A-e GrouD in 2000 25% pt20%- 0 0 0 ' - 5n 0%A O 0) 6 6 6 6 6 6 6 M C c c') 1 n u ( C-. C. < s LO Age group |Male *Female Awareness and Behavior Change Knowledge of the existence of HIV/AIDS appears, (according to a 1997 survey of adults 15-49), to be almost universal in Mozambique, with 97% of those surveyed recognizing HIV/AIDS as a sexually transmitted disease. Knowledge of two or more means of preventing HIV/AIDS is also high (85% among both men and women. Over half (58%) of all respondents considered AIDS a serious problem for their community and 65% thought the situation would get worse. Knowledge of HIV/AIDS is greatest arnongst those in the highest risk categories -- urban men with money and access to mass media outlets. This high level of awareness noted above is contested in other surveys, and doesn't seem to have resulted in changes in sexual behaviour. The main form of infection is an unprotected heterosexual sexual encounter, where women are more vulnerable than men. However, only about one third of all sexually active adults used a condom at some point in the past -- half of the men and one fifth of the women. Young people in the 15-24 age cohort, where women are extremely vulnerable as the above chart indicates, seem to be aware of the dangers of unprotected sex, but their behavior lags behind this knowledge. Recent data from a nationwide survey carried out in 2001 by the National Institute of Statistics on sexual awareness and behavior of people aged 15 to 24 indicates that some 79 % of the men and 82 % of the women in the age cohort had heard of the disease -- with awareness higher in urban areas. A high proportion (85% for men and 70 % for women) of those aware of the disease knew how it was transmitted, and of the measures that could be taken to avoid infection. However, behavior change is not in line with awareness. Condom use is low. As a national average for the age group, only 11% of the young men, and 6% of the young women, said they used condoms in all sexual encounters, with use rates lower in rural areas. The most common behavior change was a shift towards fidelity. The rate of condom use in the first sexual encounter is well below these averages. The main reason given for non-use of contraception was lack of knowledge. Of those young people who were single 25 % of men and 28% of women said they used a condom in their most recent sexual encounter. -6 -  A study on sexual behavior among youth (15-24) carried out by the Ministry of Health in 5 provinces and Maputo City in 2000 indicated that the age of sexual debut was 15.7 years, slightly earlier for men and later for women. At sexual debut, 85% did not use a condom (similar ratios for men and women) with the most frequent reason for non-use being lack of knowledge. Non-availability was the second most frequent reason for both sexes. Some 41 % of the youth reported having multiple sexual partners in the past 6 months, with the ratio much higher for men than for women. Regarding their most recent sexual encounter, this was with a non regular partner for 28% of the men, and 4 % of the women. In the most recent sexual encounter, 37% of the men and 18% of the women used a condom. The most frequent reason given for non-use was trust in the partner (for both men and women). PL WH4 and Orphans By late 2000 it is estimated that there were some 1.2 million people living with HIV/AIDS, 57% of them women, and that the number was increasing at the rate of 500 persons a day. During the year 2000, more than 57,000 persons died from complications associated with AIDS. Of these, some 25,000 were women, many of them mothers. Their death has left an additional 60,000 children without a mother (often without any parents at all). By the end of 2001, it is estimated there were some 400,000 children whose mother had died, with half of these deaths attributable to AIDS. This burden has been absorbed by the extended family, but there are limits to how much support is available. The burden is projected to grow geometrically, as the number of adult deaths from AIDS increases rapidly in the coming years. It is expected there will be some 1 million orphans to be cared for by 2008. Stiema One of the key issues which has affected the momentum of the HIV/AIDS campaign has been the question of stigma. Only a small number of courageous individuals, living in urban areas, have revealed their HIV positive status. They are subject to discrimination andjob loss, and are now slowly organizing themselves into associations which can mobilize resources to care for them, and to allow them to contribute to the advocacy campaign. At higher levels of society the issue is taboo. To date no 'leadership' figures have emerged, such as Magic Johnson in the USA, or Nkosi Jonson or Justice Edwin Cameron of South Africa, declaring themselves positive and encouraging the society to act on the epidemic. The situation is improving however. In November 2001, the Mozamnbique parliament passed a law aimed at protecting workers who are infected with HIV from discrimination at their workplaces. The bill, passed unanimously by both the ruling FRELIMO party and opposition RENAMO lawmakers, makes it illegal to sack workers on the grounds that they carry the HIV virus or suffer from AIDS. The legislation also makes it illegal to carry out HIV tests on workers or job seekers without their consent. The law also makes it clear that no worker is obliged to reveal their HIV status to employers, and health professionals must keep HIV tests results confidential. Heavy fines are planned for breach of the law. While very important, this law is not yet widely known or implemented. Health Care in Mozambique The health system in Mozambique consists of a network of 4 central hospitals, 12 provincial hospitals, 25 rural hospitals, 276 health centers and 736 health posts. It is estimated that about 40 percent of the population have access to basic public preventive and curative health services and live within 10 km of a facility. The National household survey of 1996/7 indicates that the closest medical service is the traditional healer, located an average 1.5 km from the rural household. Doctors on the other hand are on average 46 km away, and a health post 19 km away. Data on where people in the average village receive - 7 -  health care reflect the access data. Traditional healers treat 94 percent of the people in the average village, nurses 17%, midwives 20% and doctors only 2 %. In 1997 about 44 percent of deliveries were assisted by a health professional, and 47 % of children aged 12-23 months received full immunization. While service outputs per capita are increasing, they are unequally distributed with Maputo City residents receiving the best care. Within the provinces, Zambezia (the largest) stands out as the one with the lowest care units per person. The efficiency of the system has been improving gradually, with care units per staff person in 1999 up 12 % over the 1993 level. The quality of care is still low however, as the stark statistics in the previous paragraphs indicate. The public health system in Mozambique is stretched thin, as it attempts to provide coverage for a large, dispersed and poor rural population. Resource allocations have gradually increased, from 9 % of the recurrent budget in 1998 to 13.4 % in 2000. However, coverage will only improve significantly once incomes increase and families are able to finance service delivery from the private sector. Total expenditure on public health in 1997 was $ 140 million, about $ 9.3 per capita. Government Stratezv In 1986 the first case of AIDS was verified in Mozambique. In 1988 the Ministry of Health initiated the National AIDS Control Program -- which developed three medium term plans over the course of the next decade, in the battle against HIV/AIDS. In 1988 and 1990 this Ministry led a multisectoral, cross institutional group which included not only Government, but also civil society, NGOs and donors, in the formulation of the first National Strategic Plan to Combat HIV/AIDS and STDs. The Council of Ministers passed the first Strategic Plan to Combat HIV/AIDS and STD in October 1999. It is a three year plan (2000 - 2002) and required an additional US $ 40 million for its implementation. The Plan proposed the creation of an Inter-Ministerial AIDS Commission (a National Council to Combat HIV/AIDS -- CNCS -- was approved in May 2000) and set out Guiding Principles as follows: (i) addressing Priority vulnerable aroups -- those most vulnerable to infection and impact (young people especially girls, highly mobile adults such as soldiers, miners, prisoners, drivers, and commercial sex workers) and reducing impact for those living with HIV/AIDS. (ii) ensuring relevance - activities funded should be those identified by the vulnerable groups as contributing most to reducing infection rates and the impact of the disease; (iii) involving people living with HIV/AIDS -- recruiting them as activists and giving them status hence reducing stigma; and (iv) focussing action on the three main transport corridors (Maputo, Beira and Nacala) and the communities in and around them. The national response would be to focus on quality and coverage of essential health and care services for the whole population as well as the vulnerable groups. Institutions should be helped to overcome bureaucratic and financial obstacles to action, and a premium would be placed on multisectoral cooperation agreements amongst all actors at various levels to carry out target activities. Emphasis is placed on having this multisectoral approach prevail at the macro and the community level. The HIV/AIDS campaign had been led, from its inception in the late 1980s, by the Ministry of Health which set up the National Program for Combating AIDS. During the initial decade, a broad educational and awareness building program was developed, with wide participation by civil society and NGOs. Condom distribution went up rapidly, reaching 10 million per annum by 2000. In spite of this, infection rates have also increased rapidly, with prevalence going from under 1 % in 1990 to 12 % in 2000. This rapid rate of infection infused new urgency into the program, and caused Government to try and broaden the campaign. The recent approval of the National Strategy, the creation of the National Council and its Secretariat, and the shift in leadership to these new bodies brought a period of change, as the new, broader, multisectoral institutions were put in place. During the first year of implementation, plans were developed for each Ministry and each Province, the Secretariat to the CNCS staffed and located in an - 8 -  office, and a donor Round Table held which yielded commitments of US$ 120 million from donors in support of the National Program (not all of it incremental funding). During the second year, with the new leadership now in place, nationally run activities began to gear up. The focus was on prevention. The Secretariat to the CNCS put professional staff in place in every province, linked to the Governor's office, and began its cross-sectoral advocacy (to "Break the Silence"). It also established coordination functions at all levels and locations of both the Government and the NGOs and private sector activists. A national Coordination Forum was held in March 2001, and again in May 2002. Thematic groups were formed around themes such as prevention, home based care, VCT centers and orphan care. A broad national communication program was launched with assistance from local artists. During the year, new associations of People Living With HTV/AIDS were forTned in Nampula, Inhambane and Sofala -- now come together in a network of PLWHA in Mozambique. Also during 2000, the coverage of the surveillance centers was greatly expanded -- from 4 to 20 centers -- providing much more accurate assessments of the coverage and severity of the epidemic. The Government has recently adopted a policy on ARV treatment, set out in Ministerial Diploma No 183-A/2001 published December 18, 2001. Under this policy, Government would develop its capability to monitor and support ARV treatment in the general population, while at the same time strengthening its capacity to treat and care for patients with opportunistic infections and diseases which result from AIDS. The Government would charge for the 'reference' services provided in the monitoring of ARV treatment, and the medication would have to be provided by the patient, or some source other than Government. An exception to this is made in the case of preventing Mother to Child Transmission, and in the case of health workers who are infected during the course of their work. Here, the Govemrnent finances the cost of ARV treatment, in addition to the follow-up and monitoring costs. The Executive Secretariat to the National AIDS Council has been established under exceptional administrative, financial and personnel management conditions. Standard civil service procedures have been set aside for a more flexible apparatus, which allows for the contracting of staff at market salaries, the design and imnplementation of a 'purpose built' financial management and program monitoring system, and an openness to measures needed to improve effectiveness, including hiring in functions as needed. An Institutional Assessment was completed in December 2002 and provides a roadmap for building an institution capable of discharging its functions in the expanded program. The Secretariat to date has developed a proposal for a pooling mechanism for donor funds (the Common Fund), a Civil Society Facility for Community Projects, and is formulating a national monitoring and evaluation strategy and a communications strategy (see Section C4). These functions should be underway by the end of 2002, which the CNCS has labeled the year for Quality and Integration. Following a period of stock taking and reorganization into a broader, more multisectoral campaign, with larger more forceful presence in the provinces, the National Council is now ready to launch a much broader and more aggressive campaign. It is for that reason that it has approached IDA (along with the Global Fund) for financial support. The Mozambican strategy and approach to the HIV/AIDS campaign is one which conforms well with access criteria set out by the Bank for its Multi-country AIDS Program for Africa (see Section D4) in that a coherent national campaign strategy has been formulated and is under implementation, a high level council has been established to lead the campaign, and the Government is taking extraordinary institutional measures to ensure effective implementation of the program. _9..  3. Sector issues to be addressed by the project and strategic choices: The momentum behind the National Strategy to Combat HIV/AIDS is building. Issues which arise out of the assessment laid out in Section 2 include the need to: (i) build capacity at the Secretariat to the National Council in both the capital and the provinces, (ii) build coordination and coherence across the stakeholders for the program as a whole -- sharing information on what participants are doing; (iii) monitor, evaluate, and learn from what is happening under the campaign at present, and share this learning across participants; (iv) engage more broadly in rural areas, (v) broaden the availability of voluntary counselling and testing facilities - linking them to care in some way, so as to provide an incentive to visit and take the test; (vi) broaden social and institutional support for care for PLWHA and orphans; (vii) obtain increased financial support from donors, in order to ratchet up the amount of money available to those engaged in the campaign and the speed with which it gets to them, and (viii) improve the quality of financial management and reporting on the funds utilized. The proposed project will respond to the priorities of the National Strategic Plan and address those issues noted above under five components (which follow the standard for MAP projects). C. Project Description Summary 1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): The objective of the project is to slow the spread of HIV infection in Mozambique, and mitigate the effects of AIDS, through prevention and care activities. The design process, led by the Executive Secretariat to the CNCS has been transparent and participatory, carried out in frequent consultation with the Ministry of Health and other Government agencies, NGOs, private sector, donors and other stakeholders. The project has five components as described briefly below. Implementation issues are discussed in section C 4. (i) Community and Civil Society Initiatives (- US$ 28 million) - This component would empower communities to respond effectively to the HIV/AIDS epidemic. A central activity would be mobilizing communities, promoting local initiatives and strengthening the capacity of local actors. A Community and Civil Society Facility held by the CNCS would be created to finance appropriate HIV/AIDS related activities carried out by eligible applicants. These include community and faith-based organizations, NGOs, the private sector, associations and other organizations. The management of the facility would be decentralized to the provincial level, in support of a provincial program to combat HIV/AIDS. Significant resources would be invested at the Province level to strengthen the Secretariat and other organizations -- public, private and NGOs -- to carry out the program. Criteria and procedures for project preparation and approval are specified in the Operational Manual, and cover: (i) the principles of operation; (ii) eligible applicants; (iii) institutional arrangements and facilitating agents; (iv) eligible activities, (v) the allocation of resources by province, and (vi) the features of the project identification, preparation, approval and supervision cycle. Activities to be funded, all of which link to the HIV/AIDS campaign, include dramatic representations, seminars and talks to emphasize prevention, seminars and other kinds of assistance providing guidance and support to care-givers and those providing foster homes for orphans and widows, schemes for generating income to replace losses due to AIDS deaths, and guidance on treatment for oportunistic diseases, and ARVs. The implementation process is designed to be managed in a decentralized fashion, with support and decisions making occurring at provincial level. The process should be open and participatory, with the main stakeholders represented on a provincial Technical Council which will oversee the process. Subprojects would be for two or three year duration. Subprojects valued at less than $ 20,000 would be approved at the provincial level. A maximum project size of $100,000 is envisioned. Facilitating Agents, potentially NGOs or private sector entities, would be - 1 0 -  contracted to work with community agents to foster program identification and proj ect preparation at the community level, and the preparation of project proposals to be funded by the Community and Civil Society Facility. One set aside of US$ 5 million from the CCSF is allocated to support large NGOs providing voluntary counselling and testing services and supplementary health care services related to HIV/AIDS in collaboration with, and under the supervision of, the Ministry of Health. A second set aside of US$ 2 million will be used to support HIV/AIDS initiatives to be carried out by the private sector, under conditions set out in the Operations Manual. fii) Camacitv Buildine for the Civil Society HIV/AIDS Response (- US$ 5.5 million) -- this component will support efforts to create AIDS competent communities by improving skills and increasing implementation capacity for the implementers, supporters, and target groups active under the Community and Civil Society Initiatives. Activites to be funded would include (i) hiring and training 'Facilitating Agents' who would take the lead, in each province, in identifying and training up organizations for community mobilization; (ii) courses and activities to build awareness development and build capacity for leadership in the public sector, civil society and the private sector, and (iii) and the formulation of training modules in HIV/AIDS awareness for use in public and private sector enterprises. Specialized packages of Information, Education and Communications (IEC) materials would be developed and distributed through this effort. (iii) Government Multisector Response (- US$ 7 million) -- Ministries and subordinate institutions will be supported under this component in the development and implementation of HIV/AIDS related programs directed toward their own personnel (particularly high risk staff such as soldiers, police, extension agents, teachers, health workers) and their families, as well as programs directed toward their clients. Under this component, ministries are encouraged to expand their activities in the area of HIV/AIDS according to the National Strategic Plan for combating HIV/AIDS and the Ministerial Plans. The program will therefore concentrate on non-health ministries and other key public sector institutions to effectively respond to the epidemic. Emphasis will be made on prevention and care for infected and affected families. The activities included in the program for financing are categorised in two parts: part (i) will focus on staff and their families by providing them with HIV/AIDS education, training, condoms, support for caring for infected and affected, encouraging behavioural change, and destigmatizing the illness at the work place; and part (ii) will focus on the external clients of the respective ministries. It is envisaged that the second part activities will have a close link with activities to be implemented under the civil society component. Support will be provided to facilitate respective outreach programs of various ministries. These would include conmnunity based activities involving youth associations, sporting clubs, cultural groups, farmers clubs, women's groups, street children, orphans, teachers, school councils, parents-teacher associations, activists, and any other groups as may be identified with relevant agencies. In each of the line ministries, a Focal Point has been appointed, and is supported by ministerial and/or departmental management committees designated to oversee the design and carrying out of HIV/AIDS related policies and action plans. The Focal Points have received, and will continue to receive training and day-to-day guidance on their roles and responsibilities form the Ministry Response Coordinator situated at CNCS head office. As the case may be, the project will facilitate the operations of the Focal Points through ensuring availability of basic office equipment, facilities, and incremental operating costs. With guidance from the Provincial Government and the Ministry of State Administration, District Administrators would be engaged to foster the development of District HIV/AIDS plans. (iv) Strenathenine and Scaline UD Health Sector Services for HIV/AIDS (- US$17.5 million) -- With the objective of scaling up the response of the health sector to the H1V/AIDS epidemic and to provide technical leadership on treatment and care for people living with HIV/AIDS, this component would include: (i) the strengthening of the Integrated Health Network providing voluntary counselling -I1 -  and testing and HIV/AIDS related services in the four provinces in the center of the country (Tete, Manica, Sofala and Zambezia) where prevalence rates are highest, and where there is still no significant upscaling prograrn underway; (ii) increasing the supply of HIV/AIDS related drugs and materials, such as the supply of condoms, drugs to treat opportunistic infections, anti-retrovirals for the reduction of MTCT and post exposure prophylaxis; (iii) strengthening clinical laboratory capacity to enable diagnosis and monitoring of HIV therapy including those for CD4 monitoring and diagnosis of opportunistic infections; (iv) measures to enhance bio-security; (v) measures to enhance blood safety; (vi) training and antiretroviral drugs for post-exposure profilaxis for health sector workers; (vii) improved management of opportunistic infections, focussing on their prevention via prophylaxis, as well as their treatment as mentioned; and (viii) improved management monitoring and evaluation of the component and the overall progress of the epidemic. In line with Government priorities, and consonant with the distribution of current efforts to combat the epidemic, the project would support the strengthening of a network of health centers in the center of the country, in order to respond to the high prevalence rates and density of vulnerable groups. These centers would be specialized in providing voluntary counselling and testing for HlV, treatment for STDs, guidance and training for individuals and associations in ARV treatment, and guidance in Home Based Care for PLWHA and their families, and orphans. They would be established under the guidelines and with overall supervision and monitoring from the Ministry of Health. Modern health care in Mozambique is heavily reliant on public sector delivery in tirban areas. In rural areas, the public sector is the only source of modem health care, with few exceptions. The component would focus on strengthening the strategic planning and monitoring capabilities of the Ministry, as well as its capacity to deliver care. However, due to current capacity limitations in the Ministry, operations linked to HIV/AIDS such as voluntary counselling and testing and support for home based care, would be contracted out initially to NGOs and other partners. These contracts are costed under the Community and Civil Society Initiatives component, as they will be funded from the Community and Civil Society Facility. The World Bank has supported the development of the health care system in Mozambique since 1995 through the Health Care Recovery Project. This component, focussing on HIV/AIDS related care, will build on the accomplishments in the prior operation. Results and achievements under the Health Care Recovery Project are reviewed in section D2. (v) Institutional Develooment for Program Mananement (- US$ 6 million) -- This component would target the Executive Secretariat of the National Council, strengthening its capacity to lead the country in the campaign. The CNCS Secretariat is one of two implementing agencies for the IDA Grant, the other being the Ministry of Health. Under this component the CNCS will significantly improve its capacity to coordinate the National HIV/AIDS Program and carry out project management. This includes carrying out overall planning, budgeting and coordination of the National Aids Program, catalyzing greater involvement by society in the HIV/AIDS response, channeling of funds to implementing agents and monitoring of program execution to ensure compliance with Program objectives and fiduciary responsibilities. A major objective is to build the capacity of the CNCS provincial nucleos to undertake responsibility for planning, mobilizing and channeling resources, and coordinating and monitoring of HIV/AIDS activities in a particular province. Institutional development efforts include: (i) capacity building for the CNCS Board and the Executive Secretariat; (ii) strengthening organizational arrangements and financial management at the center and province; (iii) strengthening monitoring and evaluation; (iv) formulation and monitoring of a national communications strategy; (v) creation of a supportive regulatory environment and (vi) building a strong coalition across civil society and donors at national and provincial level in support of a multi-agent, multi-faceted community based approach to HIV/AIDS prevention, care and treatment in Mozambique. A key principle of the HIV/AIDS program is that the Secretariat is charged with coordination and oversight, but actual implementation of programs would be contracted out to NGOs or private sector or other civil society agents, or invested in line agencies. Further information on these tasks is provided in Section E 4. - 12 -  Indicative Project Costs are listed below: get.,~~~~~~~~~~~~~~~IU. 'Bi 4l :tfff Community and Civil Society Initiatives 27.80 43.4 25.00 45.5 Capacity Building for Civil Society HIV/AIDS Response 5.50 8.6 4.70 8.5 Government Multisectoral Response 7.20 11.3 5.60 10.2 Strengthening and Scaling Up Health Sector HIV/AIDS 17.50 27.3 14.60 26.5 Institutional Development for Program Management 6.00 9.4 5.10 9.3 Total Project Costs 64.00 100.0 55.00 100.0 Total Financing Required 64.00 100.0 55.00 100.0 2. Key policy and institutional reforms supported by the project: The basic policy and institutional platform for a successful multisectoral campaign has been set. The project would support the implementation of the National Strategic Plan to Combat H1VYAIDS -- formulated in 1999 in a consultative fashion with civil society and donors, and approved by the Council of Ministers in October 1999. The National AIDS Council (CNCS), established in 2000 brings together the key Government and civil society players, and will enable them to lead the campaign. Legislation aimed at reducing discrimination and stigma has been passed. In the context of the National Plan, the Bank funded project would seek to (i) ensure buy-in frorn the various ministries on their pro-active support for the program; (ii) develop a decentralized promotion force, through the National Secretariat, to carry action out to the Provinces and Districts -- including the funding of the civil society and comnmunity action plans; (iii) carry the promotion, (treatment where appropriate) and care activities down to the community level -- with particular emphasis on the rural communities where indices of awareness and involvement lag; (iv) target youth, using the communication strategy and the counselling and testing facilities as well as Ministry of Education and Ministry of Youth programs -- making sure that the approach is one which will indeed respond to their susceptibility's and needs; and (v) work with People Living With HIV/AIDS (PLWHA) and the general population to reduce stigma, particularly in rural areas, following on the successful work started in Maputo and other urban centers. 3. Benefits and target population: The entire population, 17.5 million people, will benefit from the broader advocacy and awareness creation programs supported by the project, as well as fiom the voluntary counselling and testing services, promotion of condoms, increased quality and coverage of health services, safer blood supplies, and reduced transmission from the high risk groups to the rest of the population. In consonance with the priorities set out in the National Strategy, the project will address the needs of: (i) the high risk groups including young people especially girls, highly mobile adults, teachers, soldiers, migrant miners, prisoners, drivers and commercial sex workers (see section A.2 of the PAD); (ii) the high risk areas listed in the Strategy, particularly the three East-West transport corridors in the South, Center and North of the country (see section A.2); (iii) people living with HIV/AIDS (estimated at 1.2 million in 2000) with the objectives of reducing stigma, improving care and-treatment services provided by the Government and the community, and also including them in the advocacy and prevention programs; and (iv) orphans - improving the care and assistance provided institutionally, or to the families that have assumed responsibility for them. -13 -  4. Institutional and implementation arrangements: Implementation Period -- 5 years Government Institutions The National Council to Combat HIV/AIDS was approved by the Council of Ministers in 2000 -- as part of the National Strategy. The members of the Council and its Executive Secretary were in place by mid 2000. The National Council is headed by the Prime Minister (President), and includes: (i) Government: Six Ministries as follows: Minister of Health (Vice President), Minister of Foreign Affairs and Cooperation; Minister of Finance and Planning, Minister of Women and Social Action, Minister of Youth and Sports; and Minister of Education; (ii) Nongovernment Organizations: Five NGOs as follows: MONASO (the umbrella NGO for AIDS), Kindlimuka (the largest NGO for PLWHA), AMODEFA (provides health care), OMM (present in almost every community), ADPP (with Danish affiliation, involved in education); (iii) Individuals from Civil Societv a Frelimo Parliamentarian; the Rector of the Catholic University, and the Head of a prominent Youth Association. The Executive Secretariat to the National Council has been given the mandate to lead, catalyse,. coordinate and monitor all activities in support of the National Strategy -- while not involving itself in the actual implementation of programs. It functions in close cooperation with the Ministry of Health. The Secretariat has established a National Office in Maputo, and a Provincial Nucleus in each of the ten provinces. Headed by the Executive Secretary, the agency is divided into a Planning and Budgeting Unit, a Technical Unit, and a Project Support Unit. Over the past two years, a network of HIV/AIDS focal points has been created across Government and the Provinces. Every Ministry has named an AIDS focal point, and while some Ministries have developed an indicative Ministry Plan to Combat HIV/AIDS -- few of these are actually being implemented. Focal point functions remain incipient, and weak in influence and power. In addition, the Secretariat has worked with each Province to formulate a Provincial Plan to Combat HIV/AIDS --- in an effort to mobilize provincial Government and civil society within the province. Many of these plans are still dormant, for lack of funding and leadership. The Executive Secretariat has also convened two National Fora to review the status of the HIV/AIDS Campaign-- one in March 200l, and a second in May 2002. This event, which is expected to continue to occur annually, brings together all the key institutions active in the HIV/AIDS campaign, from both Government and civil society, for two days of review, reflection, guidance and training. Civil Society Institutions Civil society has formed an umbrella NGO, to lead on all aspects of the campaign: MONASO. While they have limited capacity at the national level, they are well recognized in the large urban centers, including Maputo, and they serve as a center for discussion and coordination for AIDS related topics with NGOs. A society of PLWHA - Kindlimuka -- plays a lead advocacy role, mainly in the South of the country. In addition, there are a large number of local and international NGOs who, working collaboratively, are active in the HIV/AIDS field. The international NGOs have grouped themselves into an association called NAIMO, and include Medecines Sans Frontiers, PSI, CARE, ADPP, World Vision and others. The CNCS Executive Secretariat is also active in coordinating the activities of civil society at a national level. A series of four thematic groups have been created, to bring together the many NGOs, donors and private sector participants engaged in HIV/AIDS awareness building or care activities. These groups cover: (i) Prevention; (ii) Home based care; (iii) Voluntary counselling and testing; and (iv) the care of child orphans. The level of involvement of the NGOs in the campaign depends on the activity and the Province. Associations of Persons Living With HIV/AIDS have been formed in Maputo (Kindlimuka) and are in the process of being set up in Inhambane (UTOMI), Nampula (Nivenyee), Sofala (Kulupira) and Manica (Kubatsirana). The CNCS Provincial Coordinators in Niassa, Cabo Delgado, Nampula, Zambezia, Tete, Manica, Sofala, Inhambane, Gaza, Maputo Province and Maputo - 14 -  City have brought together groups of NGOs, churches, private companies and other actors to carry forward the camnpaign. Funding for these activities is largely provided from own sources, or from donor funds designated for the purpose, and such funding has been scarce. A Civil Society Fund is proposed under the project, to respond civil society's needs. Donor SuDDort To date, the donors have channelled most of their support through NGOs, the UN System, or civil society organizations. Due to the diversity of implementation channels and contracting mechanisms, it is difficult to track all the activities, or account for all the donor funds being used in the campaign. The donors with the largest program commitments (multi-year data, which makes comparisons difficult) include DFID with US$ 30 million, USAID (and CDC) with some US$ 28 million, followed by Denmark with US$ 11 million, the UN system with $ 10 million (where UNFPA and UNICEF provide over half the total, and where there may be some double counting of donor contributions), Norway with US$ 7 million, the European Union with US $ 6 million (for Mozambique, out of a larger allocation for regional SADC and Africa wide initiatives), Germany with US$5 million, and then Canada, Australia, France, Italy, and Netherlands with between US$1 and US$3 million each. Ireland and Spain made contributions as well. The donors have a group which meets regularly to coordinate HIV/AIDS and Health activities. The CNCS Secretariat is also active in donor coordination and resource mobilization. In November 2000 and again in November 2001 the Executive Secretariat organized a Donor round table in Maputo, to report on the Government's activities in the implementation of the National Plan, and to raise funding. The first Roundtable in 2000 raised commitments from of donors of $ 120 million (for multiyear implementation). In the second Roundtable in 2001, the Common Fund was introduced, as a mechanism for pooling donor funds received in support of alr activities in the HIV/AIDS campaign. This event raised about US$ 10 million from donors as a contribution to the Common Fund. It is the hope of the Executive Secretariat that, once the issues regarding review and govemance procedures and the financial management and reporting systems have been ironed out, donors will be able to channel an increasing share of their support via the Common Fund. Implementation of the IDA Funded Activities At the national level the CNCS Executive Secretariat would coordinate implementation of all the activities funded under the project. The Secretariat has been building up the capacity to operate in a decentralized fashion over the past two years. An office has been established in each Province, and staffed with a Provincial coordinator and a financial specialist. Financial management and monitoring systems have been designed. However, very few programs have been funded through the CNCS Secretariat to date, for lack of its own funds. During preparation for the IDA project, an Institutional Assessment was carried out, and will be used to recommend on ways to strengthen the Secretariat, to the CNCS Board. The assessment will also guide IDA's investments under the Program Coordination component, and its recommendations for project implementation. The implementation of the PPF, approved in October of 2002, will enable the Secretariat, and other implementing agencies, to test different insitutional modalities, thresholds, preparation and review procedures. Results will be included in the final consolidated Operational Manual. Under this umbrella, there would be two coordination foci: (i) the Executive Secretariat, which would hold two Special Accounts, one to finance the Civil Society Facility, and a second one to finance the remaining components, with the exception of the health component; and (ii) the Ministry of Health, which would receive its funds directly from IDA via a third Special Account, and would implement its agreed workplan for the Health Sector component. Project implementation, financial management, procurement, monitoring and evaluation would be operated through the institutional management and accounting systems of the Executive Secretariat and of the Ministry of Health. - 15 -  All aspects of implementation of the program, and the Bank funded project are set out in the Operational Manual. The manual sets out performance objectives, institutional modalities, criteria and processes. It also has model forms and contracts to guide the various actors during the implementation period The manual has been prepared in a participatory fashion, led by the CNCS, and has been reviewed and will be agreed on with the Government and stakeholders prior to Grant effectiveness. Procedures and institutional arrangements set out in the Manual are being tested under the IDA funded.Project Preparation Facility of $ 880,000. Implementation of the Community and Civil Society Initiatives and the Civil Society Capacity Building components would be delegated to a large number of insititutions, in the NGO, private and public sector, best placed to lead HIV/AIDS campaign activities in their particular community. These organizations would be appraised by the'Secretariat, or institutions contracted to the Secretariat, prior to entering into funding agreements with them. A training and strengthening building program would be put in place to strengthen administrative capacity for local institutions with the mandate, interest and community relationships needed to carry out HIV/AIDS related activities. The activities under this, the largest component, would be carried out following the procedures and criteria set out in the Operational Manual. Promotion, preparation, review and approval procedures and thresholds and structures are based on a decentralized management structure. They have been designed based on experience to date with this kind of program in country, and in other parts of Africa. The structure and approval points and thresholds will be tested under the PPF, and may need to be revisited by the CNCS management. IDA would need to be consulted on any changes in such thresholds and procedures. In addition, certain fmnancial and monitoring activities may need to be outsourced by the Secretiariat. An assessment of potential workload and number of transactions should guide the capacity building and the decisionmaking on the option of in-house as opposed to out sourcing. We recognize the overall shortage of professionals in financial management in the country and recommend a careful workload assessment and decision making as to how much capacity should be built in-house and how much should be targeted for out sourcing. The component supporting the Government Multisectoral Response would be implemented by each of the sectoral ministries, making use of their internal management and financial systems, strengthened to carry the HIV/AIDS related activities with funds provided under the project. Ministries would not be funded unless they had an HIV/AIDS action plan approved by the CNCS, with a focal point and an HIV/AIDS office in place. The Ministry of Health would implement the Scaling Up of Health Care Services component by making use of management systems developed in the course of implementing the Bank funded Health Recovery Project (Cr 27880). Recently, the MOH has developed a financial management system and an epidemiological monitoring system which are already operational. Project coordination would be the responsibility of the CNCS Secretariat. The Secretariat is receiving support for institutional strengthening under a project funded by USAID which includes technical assistance, hardware and training for the design and installation of a purpose built financial management system, and a national database of HIV/AIDS related activities. These will result in the production of all procedures manuals and training in the operation of the systems. Technical assistance on the financial side is provided by two internationally recognized management consulting and auditing firms. Technical assistance on the activities database and monitoring is provided by the Centers for Disease Control. Design of these systems has been completed, and training is underway. The CNCS is also in the process of recruitment of accountants and internal auditors based on the proposed design and structure of the internal control systems. The UNDP is also funding a capacity strengthening program for the CNCS, which is in its first year. This project will provide technical assistance to support internal training programs, and staff to strengthen the coordination of the Civil Society Initiatives component at Provincial - 16 -  level. The Bank funded project would provide additional financial, procurement and program staff, along the requisite hardware and training, as needed to enable the decentralized coordination of the growing HIV/AIDS program. Financial Manaeement. Accounting and Auditin2 As noted above and described more fully in Annex 6,-the Secretariat would be responsible to the Government, the Bank and other donors for ensuring that sound financial management principles are used in support of prograrn implementation. Significant resources (provided by USAID) have been invested in the design and setup of financial management and administrative systems for the Secretariat. A management consulting and auditing firm of international repute has been contracted to carry out these tasks. After over a year of effort, an accounting system is in place (which is designed to respond to the reporting needs of both the donors and the Government), the hardware has been purchased and installed at the center and all provincial offices, financial management staff have been hired for all locations, and comprehensive training programs are underway. The Secretariat has an Administrative Manual, which establishes personnel management policies and the procedures for maintenance and management of its assets. A separate contract has been entered into with another international management consulting and auditing firm, to design and put in place a financial system for tracking funds received from donors for use in support of Community and Civil Society Initiatives. This system is now operational, and being used for the funds received to date from the Irish Government and the DFID. An internal auditing function for the Secretariat has been designed, and two auditors have been hired to provide continuous visits to the provincial offices to ensure procedures are being followed. Executing agencies of the project include the Secretariat and its eleven Provincial Nuclei, the Ministry of Health, the various Ministries which receive support for their HIV/AIDS programs, the larger NGOs who lead in the civil society initiatives, and a multitude of recipients of funds at the local and community level (including NGOs, CBOs, and Private Sector companies). Agents responsible for the use of funds provided under the project will be appraised by the Secretariat prior to entering into funding arrangements with them. Forms and procedures are spelled out in the Operational Manual. A capacity building program has been designed to bring agents under the project up the appropriate level of financial and admninistrative sophistication (this will vary by the magnitude of the funding involved) prior to providing implementation responsibility. The program will rely on other sources to strengthen agents' internal control structures. The Government is improving its own financial and administrative structures under the SISTAFE program supported by the Bank's Public Sector Reform project. A number of NGOs receive support from donors, or from their international affiliates, and will be required to provide assurances of good fiduciary practices. In particular, there will be a number of large NGOs (most of them of international origin) who will carry out voluntary counselling and testing, training in home based care, and treatment for opportunistic diseases -- under the technical supervision of the Ministry of Health -- who will be financed from the Civil Society Initiatives fund. Specific forms and procedures will be designed under the PPF for use in this activity, which has been budgeted at up to $ 5 million over the project period. The Ministry of Health would be responsible for the imnplementation of the Upscaling of Health Services component. Due to the volume of funds to be managed under this component, a separate Special Account will be established for the Ministry of Health. Voluntary counselling and testing and other health care functions, contracted out initially to large international NGOs with sufficient capacity and expertise, will be supervised by the Ministry of Health, but funded by the Secretariat under the civil society initiatives - 17 -  component. The Project Management Office (GACOPI) in the Ministry of Health which has supported the implementation of the IDA funded Heath Sector Recovery Project (IDA Credit 27880) since 1996, will be strengthened in order to have it continue to provide both procurement and financial services to the Ministry of Health and the Secretariat (for large international purchases) under the proposed project. Consistent with guidelines issued by the Financial Management Board to ensure compliance with OP/BP 10.02, during the appraisal mission a Bank AFTQK team carried out its assessment of financial systems, procedures and capacities to determine whether, when project implementation starts, there will be adequate financial management systems and capacity in place to ensure the production of reliable and useful reports on the project resources and expenditures and other useful information on a timely manner. The conclusions of this assessment are that additional measures are needed to strengthen the system. Key actions will be taken by Grant effectiveness (see Section G. 1 of the PAD). Further aspects of the assessments are noted in Annex 6. A final review of the financial management system and capacity will be carried out by the Bank staff to assess readiness, before the Grant is declared effective. Plannink and Budgeting The planning and budgeting cycle has been designed to fit the National Budget. Annual budget requests would be prepared at the provincial level by mid-year, within ceilings provided by the Secretariat. Allocations for the annual funding of community and civil society activities for each province would be arrived at following criteria based on population, prevalence and prior year performance. The budget requests would be reviewed at provincial and central level, and then consolidated for presentation to the Ministry of Planning and Finance. Approval of the final allocation and spending authority from the National Budget would be received prior to the start of the fiscal (calendar) year. In addition, the budget request would be submitted to the Bank and donors for comment and review, at an armual event to be organized in a fashion which follows successful precedents set in the Sector Wide Approach used for Agriculture, Health and Education in Mozambique. The approvals for civil society initiatives would be carried out over the course of the year, using procedures, criteria and thresholds provided in the Operations Manual. Support for the Community and Civil Society Initiatives component, and the Civil Society Capacity Building component would be through a decentralized, province-based program management system. The planning and budgeting exercise for these components was initiated in the 2002 budgeting cycle. The provincial plans have been carried to a reasonable level of detail, although further work wiUl be needed before they can be implemented. The formulation of consolidated Provincial plans has been well executed, and will provide an excellent basis for a decentralized planning and implementation process. The planning and budgeting for the Multisectoral Ministry Response component takes place at the central level. Indicative ministerial plans had been prepared. The Secretariat is working with each of the ten key Ministries in the formulation of a much tighter, targeted, program, to fit within the available resources. While the planning and budgeting procedures have been set out and discussed at the central level, much further training and documentation is needed at the Province level to put in place participatory systems which will produce plans which reflect local capacity, and can indeed be implemented. Procurement The Secretariat has defined positions and is hiring staff to carry out the procurement process to be used in each of the components, in a manner consistent with the appropriate Bank guidelines. The Secretariat intends to rely on the office of GACOPI in the Ministry of Health for any large procurement procedure, including any international competitive bidding. A Procurement Plan has been prepared as part of the draft Project Implementation Plan -- and procedures and thresholds for each item have been set out in Annex 6 and the draft Operational Manual. A large share of the project will be used as grants in support of a large number of small community development subprojects, and will be subject to simplified  procedures specified in the Operational Manual. Monitorina and Evaluation The current M and E framework is characterized by one component that is well developed (the biological subcomponent of the surveillance system), one component that is under active development (financial monitoring) and two components that require further attention (the overall M and E architecture and program activity monitoring). The status of the system as a whole is described in more detail in Annex 2. The design of the overall M and E architecture is well advanced. The M and E manuals and the Country Response Information System (CRIS) represent major contributions. The indicator sets that have been developed are of high quality, and reflect intensive commitment and consultation. However, these indicators may be too complex to be implemented initially, and a more simple set has been agreed on for startup. In addition, to bring the system architecture to a. position where implementation can be initiated, there is a need for: (i) a single governing flowchart and database, to ensure that all information is captured in a single structured form; and (ii) a single unitary system, based on nationally agreed data collection forms and pathways, leading to a single data base. External consultants will be hired under the project to work on further refmement of the system, and assist in startup activities. Periodic assessments of key aspects of the program will be organized by the Secretariat and carried out under contract. These will provide the background and material for annual Learning Events and Progress Reviews by all stakeholders, starting at the provincial level and leading to a National Assessment. Other learning events and study tours would be built into the program. ODerations Manual A draft Operations Manual has been prepared, in close consultation with the Secretariat. During appraisal the review was extended to donors, NGOs and other stakeholders who are likely to make use of the procedures spelled out therein. An effort has been made to define the general institutional framework for the program, and to delineate the strategies, policies and procedures for financial management and procurement to be followed by the Secretariat in coordinating implementation of the program as a whole. Separate sections have then been set aside to describe the procedures required by particular donors, with a special section for the World Bank. The manual covers not only the financial management and procurement procedures required by the Banks fiduciary regulations, but also the appraisal procedures, thresholds, guidelines, criteria, and forms, as well as contractual and supervision procedures to be used in the implementation of the Community and Civil Society Initiatives component --- the component with the largest financial allocation, and the largest number of participating institutions, under the project. The Operations Manual will include (and be consistent with) overlapping sections of the Administrative Manual, and the Financial Systems Manual (mentioned above). The draft Operations Manual will be the focus for an extended process of consultation and review within the Secretariat, the CNCS Board, the donors, and the larger NGOs who will be called on to follow the procedures. A final version of the manual, satisfactory to the Bank, will be ready prior to Grant effectiveness. D. Project Rationale 1. Project alternatives considered and reasons for rejection: The proposed project is a Sector Investment Loan under the Second Multi-Country HLV/AIDS Program (MAP II) approved for the Africa Region on February 7, 2002. The background and rationale for the MAP II have been set out in Report P 7497 of December 20, 2001. The project will follow the design criteria laid out in Mozambique's National Strategic Plan, which is entirely consistent with the access criteria set out for the MAP II noted above. Implicit in the Plan are the following tradeoffs: - 19 -  Tareetina vs the Broadly Inclusive Approach: The focus of advocacy and preventive measures will be in the three large transport corridors -- Maputo (Maputo - Johannesburg axis), Beira (Beira - Harare and Beira - Blantyre axis) and Nampula (Nacala - Blantyre axis), and will focus on high risk and vulnerable groups (truckers, sex workers, soldiers). The targeted approach was favored over a more broad-based effort, due to the rapid rise in the infections in the country, and the need to make more effective use of the meager resources available so far to the campaign. There is a strong emphasis on building monitoring systems, to make sure that the funds are being used as effectively as possible in addressing the various outcomes targeted by the program (condom use, sexual behavior change, stigma reduction, orphan care). As the availability of resources and the capability to utilize them effectively increases, additional attention will be provided to prevention and awareness activities in those geographic areas with lower prevalence. Multi- aeent and Multi - sector vs Government (Ministry of Health) led approach The Ministry of Health initiated and led the campaign from 1989 through 1999. Despite its best efforts at prevention and creating awareness, prevalence rates rose from 0 % to 12 %. By 1999 it was recognized that a much broader approach was necessary if the campaign was to succeed, and the National Strategic Plan was drafted and the broad based National AIDS Council was formed. Six months later (mid 2000) the Executive Secretary to the Council was named, and the Secretariat formed. The HIV/AIDS campaign now includes all players. The health services system is being strengthened to respond to the demand and needs generated by the epidemic. HAART and Supervision of Treatment: The Government has recently published its policy on public support for treatment (Boletim da Republica, 4o Suplemento, December 18, 2001). The public sector will focus on treating opportunistic diseases caused by the onset of AIDS. It will not provide free anti-retroviral treatment to the public. Rather, it will train staff to monitor and supervise those who are administering or taking self funded anti-retroviral treatments. This supervision would be charged for, where the client has the ability to pay. In certain special cases -- (i) for health sector personnel who have been infected with HIV on the job, and (ii) for the prevention of vertical transmission from mother to child -- a pilot HAART program will be offered, and closely monitored as a learning experience for all involved. This stance was taken due to the extreme scarcity of resources available in the health system -- and hence the impossibility of providing treatment on an equitable basis to the society -- and the need to ensure that those that do take ARVs do so effectively, and do not contribute to the build up of resistance to the few drugs available cheaply. Under this approach, funds for treatment mobilized and applied outside the public sector will be effectively utilized -- and the effectiveness of the drugs will be maintained. The project will follow Government policy. IDA will provide funding for anti-retrovirals, for use in the above-mentioned special cases. An Italian NGO has already invested heavily in strengthening the laboratory facilities in the Ministry of Health in Maputo, which are needed to provide the tests for the surveillance of anti-retroviral use mentioned above. This NGO and will continue to expand access to these testing and surveillance facilities in the center and north of the country . The rapid decline in the cost of ART will make such treatment more attractive for a public sector intervention. Supervision missions will monitor this situation and the development of Government policy on this issue, with a view to adjusting the activities and funding available under the Project at the time of the Mid Term review, as appropriate. - 20-  2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing and planned). The Bank has provided Credit No. 27880 for SDR 66.3 million in support of a Health Sector Recovery Project (HSRP) which became effective in 1996. The program supports the Mozambique national health strategy aimed at improving health status of the population through improved coverage and use of health services. The IDA credit was designed as part of a Sector Investment Program financed by a number of donors. The project has disbursed US$ 71.7 million (82%) to date. The project closes on April 30, 2003. The program supports three main areas: (i) health services delivery including: rehabilitation and equipment of rural health facilities, maintenance program; pharmaceuticals and support to operational support for provincial operations; (ii) institutional strengthening including: strengthening the supply and logistics systems; provincial management systems; health management information system and program management and policy development; and (iii) human resources development: to support manpower development through pre-service and in-service training. Most planned activities are complete with varying levels of success. The most successful elements of the project were pre-service training and the rehabilitation of a significant number of facilities - though most of them suffered start-up delays. The project also made an important contribution to the development of the new health policy and plan. Some key activities such as provincial management systems and the health management information system were later financed by other agencies. Two areas, namely, operational support for provincial operations and in-service training were not undertaken due to capacity weakness and failure to identify a suitable system for implementing the activities. Impact assessment of the IDA credit is measured by looking at overall achievements in the health status of the population. During the period of this operation, improvements have been recorded in key health status indicators such as a reduction in the infant and child mortality rates. Output indicators also show improvements in immunization coverage. However, the overall sector program objective of increasing the proportion of the population using modem health services has not changed during this period - remaining at 40%. More importantly, any gains in health status achieved in the last few years are at risk of being reversed due to the HIV/AIDS epidemic. A number of lessons can be drawn from the experience with the HSRP that are relevant to scaling up the response to HIV/AIDS in Mozambique: * Mozambique still faces a major challenge to ensure access to health services especially for the poor and rural populations. This challenge has been increased by the demands on the health care system arising from the HlV/AIDS epidemic. A significant part of the national response to the epidemic depends on a strong health care system to provide services for prevention and treatment related to HIV/AIDS. Among the needs are: strengthening skills of health workers especially for services related to HIV/AIDS prevention and treatment , training and recruiting health workers to compensate for high attrition rate among health workers (partly due to the epidemic); drugs and medical supplies (testing, sexually transmitted diseases, opportunistic infections including tuberculosis); condoms and continued awareness raising for behavior change. * Institutional capacity is still a major constraint to implementation at both central and decentralized levels. Practical solutions to this central problem are needed. These include contracting out services and obtaining technical assistance where Government capacity is weak. * There is need to reduce transaction costs for the Government by harmonizing procedures as was done for pharmaceuticals procurement and for management of the large civil works through the GACOPI project management unit (which was financed by IDA but covered other donor-financed rehabilitation of the program). * It is important to pay attention to advance planning and arrangements for procurement (all stages: -21 -  identifying needs, carrying out the tender and distribution), to ensure that the project funded commodities are available when needed. * There is need to strengthen the financial management system and strengthen staff skills especially at the provincial level, given the expected level of decentralized implementation. * The Government needs to ensure that adequate counterpart funds are provided in a timely fashion. * IDA support for MOH HIV/AIDS activities can play a critical role in catalyzing other agency support, particularly by assisting the Government to define transparent implementation arrangements. In addition, the Bank provided an Institutional Development Facility grant of US$ 270,000 to the Secretariat in 2000 (the year it was established) to assist it with startup activities. This grant has been fully utilized in the design of a HIV/AIDS communications program to be provided using local and community radio. Design was successfully completed. The program is under implementation with funding from DFID. Donors who have been heavily involved in Health have been more likely to contribute to the HIV/AIDS program. Most of the donors listed below have strong programs in support of health service delivery, and HIV/AIDS related activities, but not necessarily through the Government. NGOs are heavily involved in implementing Donor funded HIV/AIDS action plans. Latest Supervision C Sector Issue Project (PSR) Ratings ._______________________________ _________________________ (Bank-financed projects only) Implementation Development Bank-financed Progress (IP) Objective (DO) Health, Nutrition and Population Health Sector Recovery Project S S HIV/AIDS Institutional Development Fund S S Grant of Sept 2000 Other development agencies UNFPA Program support and condoms supplies UNICEF Adolescent awareness, health friendly health services, home based care, orphan care EU Program support and condom marketing, health sector support DFID Program support, condom supply and distribution USAID and CDC Program support, NGO based targeting high risk groups and hot spot regions, M&E design WHO Surveillance support, assistance in combatting HIV, STD and other infectious diseases Norway Program support, Health sector support, Netherlands Program support, health sector - 22 -  support Germany Program support, health sector support Denmark Program support, health sector support Italy Program support, specialized lab equipment IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory) 3. Lessons learned and reflected in the project design: This project will incorporate in its design the lessons learned in the course of designing and supervising implementation of the eleven projects which have been approved under Multicountry HIV/AIDS Programs I and 2. The main lessons learned are set forth in pages 11-13 of the MAP 2 Report P 7497 AFR and are summarized below. These lessons were taken into consideration during project project preparation, and incorporated into project design where appropriate. * The MAP projects were designed and launched too rapidly to build effective implementation mechanisms -- and momentum slowed after launch. It is important that: (i) operation manuals and first year implementation plans be completed, following a participatory process involving all stakeholders; (ii) pilot activities be tested prior to launch under PPF or PHRD funding; (iii) program targets be defined quarterly for the first year; (iv) mechanisms be put in place to keep civil society advocates involved during implementation; (v) extensive technical assistance be provided to NGOs and CBOs to improve the absorptive capacity of civil society, and (vi) the role of the Ministry of Health be re-asserted in the definition of medical policy, and the procurement of medical supplies. * Eligibility criteria for access to MAP funds were appropriate, but more emphasis should be placed on Government adopting "exceptional" implementation arrangements -- including wide scale contracting out in those areas where a country lacks capacity, but needs immediate and effective results. * Program implementation is more successful in countries where the national AIDS council has defined its role as "facilitation" and "coordination" rather than as "control" and "implementation". It is important that the secretariat to the Council lead and coordinate from a position of competence, with mechanisms for monitoring performance and providing accountability to civil society and the campaign participants as a whole. The formation of a Civil Society Review Board is a potential mechanism for creating this accountability -- if necessary. * Priority to fiduciary mechanisms (financial management, accounting, procurement, review and approval procedures) should not detract from attention to monitoring of program implementation and evaluation of program impact. Design of such systems, and even execution can be contracted in as needed so that they do not lag behind the implementation process. * Priority should be given to the 'software' side of the program -- giving attention to getting the right people for the task, and paying them and motivating them appropriately. Procurement of the 'hardware' - buildings and equipment -- can then follow its normal course without affecting the startup of activities. * Mozambique can learn from "best practices" developed both in country, regionally and internationally. Resources should be channelled to creating Technical Theme Groups at all three levels, to connect into and leam from external experiences. In addition, the monitoring and evaluation system to be established for Mozambique should be pressed to provide assessments and - 23 -  guidance on the successes and failures of the national program. * Commitment from public sector Ministries and agencies to the program can be hastened and deepened by undertaking an assessment of the impact of the disease on agency staff and their families, and on agency capacity for service delivery, in light of an accellerating loss of experienced staff, and the high cost of finding and training up replacement staff. * The practice of carrying out a social assessment, by program and geographic area, can help civil society institutions ensure that their activities are relevant to social needs and can generate stakeholder commitment. 4. Indications of recipient commitment and ownership The Mozambique program meets the access criteria agreed to for MAP2 as laid out in page 15 and 16 of the Appraisal Report (No. P 7497 AFR) for the Multi-country HIV/AIDS Programn for Africa, as follows: * Evidence of a strategic approach to HIV/AIDS -- the country has been pursuing a national strategy since 1988. Initially health sector oriented, a new National Strategic Plan was approved in 2000 -- making the campaign truly multisectoral, broadening the number of institutions involved and increasing civil society involvement in prevention, care and treatment. * Establishment of a high level HIV/AIDS coordinating body -- this was accomplished in May 2000 with the nomination of the National Council to Combat HIV/AIDS -- headed by the Prime Minister, and including key Ministers, NGOs and members of society. * Agreement to use exceptional implementation arrangements -- the Secretariat, a Governmerit institution, has been set up in the year 2000 (two years prior to Bank involvement) under exceptional administrative conditions, which has permitted the design of its own, purpose made financial management, accouting, auditing, procurement and personnel management procedures. Staff are brought in on contract at market salaries, and competent international firms are brought in to design operating systems and training programs. The ongoing discussion on what functions will be contracted in, vs being developed in house, is an open dialogue (deepened by the recent Institutional Assessment, which provided concrete proposals for contracting out, vs technical assistance to build own capacity) based on effectiveness in achieving program goals. * Agreement to use and fund multiple implementation agencies -- this issue is being dealt with on a case by case basis. For example, the Ministry of Health has agreed to continue its current practice of contracting with NGOs, many of them foreign, to open and run Voluntary Counselling and Testing services in Government Hospitals under Ministry supervision. Also, the CNCS Secretariat intends to contract the operation of the private sector subproject grant facility to a management agent. Under the Community and Civil Society Initiatives component, the CNCS Secretariat will contract Facilitating Agents to provide training and technical assistance to CBOs, NGOs, FBOs in subproject preparation and supervision and implementation support. In another example, the Secretariat to the National Council (using donor funding) has contracted out the design of its own financial management and accounting system, as well as the financial management system for donor funds, to two international consulting firms. Management of portions of these systems is likely to be contracted in. Similarly, the design of the program database has been contracted out. Government financial commitment to the program is reasonable. The Ministry of Finance and Planning has allocated US$ 3 million a year out of its recurrent budget (funded from its own scarce resources) to - 24-  kickstart the program. These funds have been used to establish the Secretariat to the National Council and initiate coordination activities. Health had expenditure levels of around US$ 50 million out of the recurrent Budget in the late 1990s, which increased to levels of around US$ 73 million in the year 2000, following HIPC approval. One source of this funding is the HIPC Debt Relief program -- where funds released from having to service the country's debt, are used to fund social programs in health and education. Substantial additional recurrent resources should be allocated to the HIV/AIDS program in future years if an impact is to be made in containing the pandemic dealing with its effects. Government's political commitment is strong. The Prime Minister, a medical doctor, is a strong supporter of the campaign, and the President of the National Council to Combat AIDS (CNCS). He has been active in the IPAA meetings and spoke at the UN General Assembly Special Session on HIV/AIDS in June 2001. The President mentions the pandemic in every political speech. The Secretariat to the CNCS is headed by a figure of national stature. All of the Government Ministers endorse the campaign, but there is much variation in actual efforts on the ground to adjust personnel policies and reduce stigma inside their organizations, and to include HIV/AIDS topics and actions in agency programs. At the provincial levels, Government has paid keen attention to the campaign,and there are signs of advocacy in all the capitals. This awareness should now be carried down to the district. Commitment by the civil society and the private sector is growing. There is increasing awareness and advocacy across all of civil society institutions. All minibuses in the capital city carry large AIDS awareness signs. Artists give free concerts, or auction off paintings to support the campaign. The private sector has established an NGO (Empresarios Contra Sida) which is actively mobilizing resources and engaging with business on an assessment of the impact of the disease on profitability, and measures to be taken to reduce its impact. The Chamber of Commerce has developed its own action plan. 5. Value added of Bank support in this project: The rationale for World Bank involvement includes: * The World Bank can add substantially to the resources available to support a broad multi-agent, multi-sectoral program -- particularly in an environment in which the Government is committed to increasing service delivery, outreach and advocacy through a multiplicity of institutions and agencies. * The Bank can bring to bear its broad experience in funding HIV/AIDS campaigns around the world, including in Portuguese speaking countries such as Brasil and Cabo Verde, where specific media and communications materials, assessments and operational manuals and expertise can be identified for Mozambican use. * The Bank has much experience in the mechanics of such national programs, particularly in dealing with financial and procurement issues affecting Government agencies and communities. This experience, translated into operational guidelines and manuals, can help Mozambique structure its own institutions to manage the campaign and deliver the services. * The Bank has access to a broad range of international contacts which (when combined with the networks offered by the UN system and UNAIDS in particular) will enable Mozambique to visit -- be aware of -- and consult with -- those national programs which have been most effective, and which have the closest similarity and applicability to the Mozambican cultural, geographic and economic situation. * By virtue of its financial presence, its technical expertise, its multilateral ownership, its close links to the key economic and social sectors in Government, and its global network, the World Bank can - 25-  assist the Secretariat to the National Council to develop strategic positions and overcome coordination problems -- to the benefit of the campaign. E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8) 1. Economic (see Annex 4): o Cost benefit NPV=US$ million; ERR = % (see Annex 4) o Cost effectiveness * Other (specify) The "Economic Analysis of HIV/AIDS" contained in Annex 5 of Report No. 20727 AFR of August 14, 2000 (the document which rnade the case for the first Multi-Country HIV/AIDS Program for the Africa Region) provides the theoretical framework and the economic justification for the IDA's support for the HIV/AIDS program in Mozambique. In addition, the Bank has sponsored the preparation of a detailed paper which looks into the impact of the epidemic in Mozambique. The paper titled "HIV/AIDS and Macroeconomic Prospects for Mozambique: An Initial Assessment" was released in mid 2001. This section is drawn from the paper. An attempt has been made in the above paper to quantify the effects of the HIV/AIDS pandemic on key economic variables over the next 10 years, using a recursive computable general equilibrium approach with adaptive expectations. The analysis also helps identify the channels through which this impact will occur. Particular attention is paid to projecting implications for human capital accumulation. Policy options for blunting the major negative impact channels are then considered. Due to the long time lags between infection and onset of AIDS, the AIDS case projections to 2010 are, barring rapid advance in medical technologies, essentially programmed into the system, since nearly all of the people projected to die in this decade, including the latter parts, are already HfIV positive. The analysis indicates that these impending AIDS cases and deaths could have large economic impacts. Projecting to 2010, per capita GDP growth rates are between 0.3 % and 1.0% lower than in a fictional no-AIDS scenario. GDP per capita has grown an average of 6.4 percent per annum between 1995 and 2002. With GDP per capita in 2002 estimated at about US$ 210, and some 17 million inhabitants, the average annual value of the economic loss is equivalent to between US $ 11 mnillion and US$ 37 million in 2002, rising gradually as the population and GDP increase. The major sources of this slowdown in growth are (1) reduced productivity growth, (2) reduced population growth and human capital accumulation, and (3) reduced physical capital accumulation. All three of these effects are significant though the productivity effect is the strongest. In addition, impacts on school enrollments are potentially very large with implications for growth rates in the latter part of this decade and beyond. Due to a variety of knowledge gaps, a high degree of uncertainty must be associated with these results. However, if AIDS indeed reduces per capita economic growth for extended periods of time as the analysis suggests, then initiatives that effectively combat AIDS will pay handsomely in purely economic terms. Given the nearly decade long time lags between infection and death, policy actions can be divided into two categories: (1) reactive policies to face the ramifications of the pandemic in the current decade and (2) preventive policies designed to reduce HIV/AIDS prevalence in future decades. Under reactive policies, education policy was explicitly considered. The scenario which analyses the implications of taking extra efforts in education, looks at the impact on GDP which would result from a strong effort to maintain school enrollment rates, graduation rates, and educational quality. The effect of such policies results in a 0.6% increment to GDP growth by 2010, relative to the base scenario (with - 26-  AIDS). This increment is due to the enhanced productivity of a more skilled workforce. This increment is likely to persist well into the future due to much larger school enrollments in 2010. Assuming this increment persists to 2020, net present value calculations justify very large incremental education expenditure focussed on those aspects noted above (more than 5% of GDP per year from 2002 to 2010) with linear phase out over the following three years. Similarly, prevention is a worthwhile investment, even though its economic effects are only seen eight years down the line. If successful preventive policies substantially reduce AIDS deaths in the next decade -- and have an incremental effect on growth of 0.3% per annum between 2010 and 2020, the lower end of the potential AIDS impact on per capita income, this outcome would justify large expenditures on prevention -- in the order of 3% of GDP per annum between 2002 and 2007, with a linear phase out over the subsequent three years. Some kinds of ARV treatment are also considered to be economically justified, in certain circumstances. The question of when it makes social and economic sense to initiate broader ARV treatment should continue to be investigated, as prices for generic ARV clrugs decline. The lesson from these numbers is only partially that large quantities of resources should be allocated to education and prevention of HIV infection. The lesson is also that these activities have to be effective to be justified. Given the extent of the payoff, imaginative initiatives, even if they are costly, should be considered if they can be shown to work. 2. Financial (see Annex 4 and Annex 5): NPV=US$ million; FRR = % (see Annex 4) Financial and Fiscal Impact The financial and fiscal impact of the Bank project itself is likely to be small. Total project funded recurrent and investment expenditure of about US$ 10 million a year is small when compared to the Government's total budgetary expenditure of US$ 1 billion a year, or to the health budget of US$ 143 million. Additional operating costs generated by the IDA project of around US$ 3 million a year will be met by Government, which is currently providing this amount to the AIDS campaign from its own resources. The issue of availability of counterpart funding has been flagged with Government, and there is a commitment to provide timely and adequate funding from local resources. Cost effectiveness of the various measures supported under the program will be evaluated over the course of project implementation, drawing on the monitoring and evaluation data collected from around the country. However, the financial and fiscal impact of the disease is likely to be large, for many reasons. Firstly, the burden of caring for people who develop AIDS is large, and will increase rapidly. It was estimated that some 1.2 million people were HIV positive in 2000. In 2003, it is estimated that over 100,000 new AIDS cases will develop. At a treatment cost per patient year of around US$ 200 (the low estimate, which does not include anti-retroviral treatment) and assuming that only 50% of these new AIDS cases are treated by the Government health service (the only health care system with significant coverage outside of Maputo), the demand for treatment will require an additional $20 million in health expenditure. This is 14 % of the recurrent health budget. The incremental requirement will be larger every year. Secondly, the cost of fighting the spread of the epidemic will rise. The HIV/AIDS program is currently deeply underfunded. The total budgetary allocation for HIV/AIDS for 2002 is only $ 8.5 million (to which the Government's contributes own resources of US$ 3 million). The cost of the HIV/AIDS campaign has been budgeted at about US$ 80 million a year, for the period 2001 - 2003. This estimate, at about US$ 4.5 per capita, corresponds to data from international assessments of funding - 27 -  needs in countries with prevalence rates in the order of 12%. And thirdly, the burden of the disease on the educational system and the quality of the labor force is likely to slow economic growth, reducing tax revenues. As noted in the economic analysis above, if the spread of the disease is not contained, total GDP in ten years time could be up to 23% less than it would otherwise have been. As the economic assessment notes, the Government would be justified in spending up to 3% of GDP per annum, in trying to contain the spread of the epidemic. This is in the order of US$ 90 million a year -- about 10 times the current budgetary allocation. The Bank should engage with Government and donors on ways to increase allocations to prevention and care, due to their human and economic impact. Continued attention should be paid to investing in the capacity to monitor the use of ARVs and in analysing the cost effectiveness of broadening public financing for ARVs, beyond the limitations of current policy. Fiscal Impact: See above 3. Technical: The project will support the technical approach set out in its National Strategy to Combat HIV/AIDS and STDs, approved in late 1999. The national strategy, which was developed in close consultation with international specialists, including those from WHO, UNAIDS and UNICEF, and follows the best practice as understood in 1999. The strategy is reviewed and updated every year as information is gathered from the experience in Mozambique and elsewhere, through networks fostered by UNAIDS and other organizations. The objectives and priorities include: (i) reduce HIV transmission through promotion of safe sex practices among the population at high risk of infection, estimated at some 1.6 million persons who include: young women, youth, sex workers and their clients, teachers, and highly mobile populations such as truckers; (ii) reduce the impact on PLWHA (some 1.2 million people in 2000) and orphans (60,000); and (iii) focus activities on the transport corridors. There is no central vetting of approaches or messages, and each institution has developed its own approach to prevention and care. Prevention techniques include: promotion of condom use, sexual education and delay of sexual debut; IEC (including theatre, video and drama); STD control and treatment, voluntary testing and counselling; youth friendly health services, increasing the negotiating power of women and girls, and mobilizing communities. The strategy also focuses on reducing impact, where techniques include: voluntary counselling and testing, promotion of condom use, treatment of opportunistic infections, home based care, vocational training, and development of income generating activities for affected families. The project would support a strengthened monitoring and evaluation system which would permit learning from experience, and the adjustment of new programs to the lessons learned. The network of sites collecting epidemiological information on prevalence has tripled in size since 1995, permitting a more accurate assessment of the progress and impact of the disease. The AIDS campaign has been underway for more than 10 years, and there is a rapidly growing cadre of professional staff leading the activities. International assistance has also increased rapidly in recent years. The entry of a series of large, well organized health oriented NGOs with broad international experience has helped keep the country on the technological frontier. Contributors to this phenomenon include PSI which is leading in sexual education and condom distribution, MSF which leads in the extension of the network of voluntary counselling and testing centers, and Comunita Sant'Egidio which is leading in the setup of the monitoring and supervision capabilities needed to support an increase in the use of anti retrovirals. - 28 -  4. Institutional: The institutional framework for carrying forwards a broad multisectoral campaign, supported by all segments of society, is set forth in the National Strategy to Combat HIV/AIDS and STDs, approved in 1999. The elements of this framework are set forth below. The project would be nianaged within this national framework. 4.1 Executing agencies: Secretariat to the National AIDS Council. The lead agency for the national AIDS campaign, and for the Bank project, will be the Secretariat to the National Aids Council. Established in May 2000, the Secretariat is led by the Executive Secretary to the National AIDS Council. The Secretariat is small, and is designed to carry out a coordination, resource mobilization, allocation and monitoring function. It is lightly staffed, with an Executive Secretary and 7 professional level staff in the National Office in Maputo. In addition, it maintains 10 provincial offices, each with a professional level Provincial Coordinator, and two support staff. To date, the funding program administered by the Secretariat is quite small. Efforts to date have been spent in designing and putting in place the systems necessary to provide the fiduciary guarantees and implementation efficiency which donors require prior to providing programmatic funds. It is expected that program funding will increase markedly once the Secretariat has demonstrated it has the capability to coordinate such a program effectively. An Institutional Assessment of the Secretariat, funded by the Irish Government has made the case for strengthening capacity at both national and provincial levels. Under the proposal (recently approved by the National AIDS Council) the Secretariat would add a Deputy Executive Secretary, to deal with the managerial and implementation aspects of the program, freeing up the Executive Secretary for higher level advocacy and representational functions. The Secretariat would be divided into 4 departments, to cover the administrative, financial management, program coordination and monitoring and evaluation fimctions. At the provincial level, additional financial management staff have been approved. In addition, the proposal includes provision for contracting in a "supervision and technical assistance" agent -- which would provide strong guidance and build capacity in problem solving on financial, administrative and operational issues. The Secretariat itself is funded directly by the national budget, from own resources. Donors (in particular USAID) are currently providing substantial assistance to the Secretariat, supporting it in the design of (i) a financial system for the program; (ii) a common pooling mechanism for channeling donor funds to community projects and activist institutions; (iii) a database which will capture information on all the HIV/AIDS related programs underway in the country; (iv) a monitoring and evaluation system, designed to track implementation and enable learning from ongoing programs. Future support is planned under this project, and from the UNDP, to enable the Secretariat to develop its own administrative systems, and develop administrative and programmatic capacity in its own staff. Under the project, the Secretariat will be charged with: (i) preparing and submitting the annual program and budget for HIV/AIDS activities to the Ministry of Finance and the Donors, including the Bank, (ii) channelling Government, Bank and Donor funds to HIlV/AIDS programs (excluding Government Ministries, which will be funded directly from the Ministry of Finance); (iii) monitoring program execution, to ensure compliance with program objectives and fiduciary procedures; - 29-  The Ministry of Health The Ministry of Health will be charged with implementation of the component on Strengthening and Scaling Up Health Sector Services for HIVIAIDS. As noted in section B 2, the ministry operates a network of 4 central hospitals, 12 provincial hospitals, 25 rural hospitals, 276 health centers and 736 -health posts, providing access to the public health service to about 50% of the population. The Ministry of Health, with a budget of $ 143 million per annum is supported by a large consortium of donors, including the World Bank (Credit No. 27880 Approved in November 1995). The recent Health Sector Strategy document sets the stage for reform and a renewed partnership with the donors under the Sector Wide Approach, providing for agreement on joint review, reporting and procurement procedures, and increasingly, the pooling of donor funds in support of program needs. The Ministry has a Project Coordination Unit (GACOPI) which has developed expertise in managing large scale projects, procuring under international competitive conditions, and dealing with the disbursement and financial reporting procedures required by various multilateral and bilateral donors. The proposed Health component under the HIV/AIDS Response project would take advantage of this expertise. The Ministry of Health was the agency in the country which conceptualized and initiated the HIV/AIDS campaign in the late 1980s, and led the campaign until 2000, when the leadership was broadened to become multisectoral. A strong epidemiological surveillance function has been developed within the Ministry to monitor the epidemic. Within the Ministry, leadership in the implementation of this component would be provided by the Minister and the Advisory Council. The Directorate of Planning and Cooperation (DPC) will provide overall coordination. The National Directorate of Health will take responsibility for technical implementation. Key specialized departments such as pharmaceuticals administration, human resources would support the project as needed. The Ministry of Health would be in charge of all epidemiological surveillance, through the 20 centers established in 2000, as well as for the assessment of behavior change and impact of the program. NGOs. CBOs and Private Sector Mozambique has a large number of NGOs and civil society organizations. Many have responded to calls for action in the HIV/AIDS campaign. However, with few exceptions, local NGOs are extremely short of funds and assets. They have contributed under the campaign by reaching out to the communities they serve. However, they are dependant on resources, materials, ideas and initiatives from the larger institutions, local or international. Many lack the capacity to manage additional funds. Only a few of locally 'owned' and managed NGOs, such the Foundation for the Development of the Community (FDC), the Mozambican Red Cross (CVRM) or MONASO have the capability to act in more than one province. The strongest NGOs, and those capable of raising resources and rapidly increasing their outreach and impact, are those with international affiliations such as CARE, Medecines Sans Frontieres, Population Services International, ADPP and Save the Children. Two of these organizations, MSF and PSI have started to provide Voluntary Counselling and Testing service, in collaboration with the Ministry of Health. Over the past two years, the number of VCTs has expanded from 1 to 27 -- most of them opened by international NGOs in public health facilities. The private sector has also been organizing itself to respond to the epidemic. Many large enterprises, led by MOZAL, the internationally owned aluminium smelter in a suburb of Maputo, and Coca Cola, have initiated prevention and awareness programs. An NGO composed of commercial enterprises was recently formed. Called "Empresarios Contra SIDA", it is actively engaged in assessing the impact of AIDS on local firms, and investigating ways of instituting prevention, care and possibly treatment programs. The project would seek to work through this NGO in reaching out to the private sector. - 30 -  The project would seek to work with and through NGOs in two fundamental ways. Firstly, in reaching out to those affected by the epidemic, the project would seek to carry a broad range of prevention and care activities out to urban and rural communities, with a decentralized effort to fund programs executed by community based organizations and NGOs. In line with experience in other HIV/AIDS programs, the project would seek to build capacity in select NGOs to act as intermediaries between community based organizations, and the Government offices where the funding is made available. In each of the 10 provinces, select NGOs would have their financial and administrative systems and knowledge base strengthened by the project to enable them to, in turn, improve the management and reporting capabilities of the associations and groups who implement the projects. Criteria have been developed (in the Operational Manual) to select these intermediary NGOs. Further support would be contingent on performance. Similarly, implementing NGOs and CBOs would be chosen based on criteria that reflected experience in working with target groups, credibility and respect commanded within the community, commitment to the HIV/AIDS campaign, desire to work, and ability to manage money and report. Management ability would be something that would be developed in the selected candidates. Proposals would be assigned on a competitive basis, according to the quarterly allocations of funds defined in the budget cycle. A decentralized system of Province-managed preparation, assessment, approval and supervision would be developed for projects which came under an annual expenditure ceiling ( $ 20,000). The details of how this system would operate are specified in the Operations Manual (to be finalized by Grant effectiveness). The system described above would be tested in pilot projects in two provinces using funds from the IDA PPF facility over the next few months. Subsequent versions of the Operations Manual would be adjusted to reflect the lessons learned from the above mentioned pilot projects. Secondly, the project would fund the activities of the larger NGOs, many of them intemational organizations, engaged in expanding health services, and providing guidance on care and treatment to families. Under this type of arrangement, contracts could be entered into with NGOs, selected under a transparent bidding and evaluation process, which could provide funding for activities on a province by province basis. A contribution towards NGO overheads would be provided (up to 20% of the Subproject cost). While funding would be provided by the Secretariat from the community initiatives fund, the Ministry of Health would be party to the contract and would provide support, physical facilities and monitoring of implementation. The methods to be used for selection, contracting, reporting, and evaluation will be developed under a consultancy funded under the PPF, and be recorded in the Operations Manual. 4.2 Project management: The project would be managed by the Executive Secretariat to the National AIDS Council. Policy guidance and accountability would be provided by the National AIDS Council, a multi-stakeholder body chaired by the Prime Minister. The Bank project is being designed to support, and be an integral part of, the national AIDS program. As the Executive Secretariat has to be small, flexible and proactive, and has to become very effective in a short period of time, the Government has authorized extraordinary administrative and financial measures in its design. Personnel are contracted in at market salaries. The Government has been using donor funds to design an institution-specific accounting and financial management system, which will be capable of reporting under Government's new financial management framework, as well as respond to the fiduciary needs of the donors and the Bank. Similarly, program specific monitoring and evaluation systems are being designed, and a national database of AIDS related activities built up to enable the constant monitoring of the program (as described above in Section 4.1). The Executive Secretariat has a presence in each province, and is committed to the idea of building a decentralized decision-making apparatus for program implementation. The details of how this will function in the review, approval and supervision of sub-project funding proposals, has been specified in the Operations Manual, and will be adjusted as necessary following implementation of the pilot projects. - 31 -  As mentionedaviously, management of the Health component would be delegated to the Ministry of Health - whicn nas developed the ability to manage donor programs on a national scale. Its project management unit, GACOPI, would be brought in to facilitate financial management, procurement and disbursement not only for Health, but also for any large-scale intemational procurement needed in the other components of the Bank project. Operations Manual and Proiect Implementation Manual The CNCS and the Bank have collaborated in the preparation of a draft of the Operations Manual for the program. It will be reviewed, following the conclusion of the pilot projects to be funded under the PPF, to incorporate the lessons learned under those experiences. The manual has three sections. The first section sets out the overall institutional, regulatory and financial framework for the program, and clarifies the roles and procedures of the different actors. The second section, discussed and negotiated with all stakeholders and donors, provides guidelines on the overall fiduciary and operational procedures to be used by all stakeholders under implementation. Thus, it covers general implementation features which will be applicable to all programs, on issues related to financial management, accounting and auditing standards, procurement guidelines, and monitoring and reporting requirements. The implementation of the Community and Civil Society Initiatives component -- which should be common across all donors -- is detailed in this section. This second section of the manual also includes guidelines on implementation, covering the description of processes and procedures for management of program activities under each of the components. The third section of the manual describes in detail the fiduciary, financial, procurement and monitoring obligations which apply to the funds to be used from each source. A section here is devoted to those which apply in particular to the World Bank, detailing the Bank's involvement in the HIV/AIDS program, setting out financial and procurement plans, and the processes and procedures to be followed in the administration of Bank project funds. A Project Implementation Plan has been completed, which sets out the propose implementation sequence, and provides a procurement and disbursement plan. It is the intention of the Government and the donor community to negotiate only one set of financial, procurement and monitoring procedures, which would be used in responding to the reporting requirements of all donors -- as has been accomplished under the Agriculture and Education SWAPs. Negotiations with other donors are underway in an attempt to reach agreement on a set of procedures and financing principles common to all financial sources (including Government). These discussions are likely to extend into the first year of implementation of the Bank funded project. Such agreements have been reached in the Agriculture Sector Expenditure Program in Mozambique (Proagri) which is being used as a model in an attempt to reach consensus on HIV/AIDS. In the cases where the multiparty negotiations yield an outcome where Bank procedures are not adequately covered, it will be necessary for the Bank to ask for separate fiduciary considerations. At the Mid Term review, to be completed by June 30, 2005, proposals for creating a common financing facility for donor funding of Civil Society Initiatives should be assessed, and if found to be desireable and feasible, measures will be taken to include such a facility in the project. Monitoring and Evaluation and Mid Term Review Monitoring and evaluation under the project comprises the following components: (i) overall M&E system; (ii) surveillance; (iii) essential research; (iv) financial management; and (v) program activity monitoring. - 32 -  The overall M&E system consists of a guiding flowchart and data base, to ensure that all M&E information flows logically to a single, national repository. Mozambique's nascent Country Response Information System (CRIS) provides an excellent basis for the development of an overall M&E system. Surveillance consists of biological and behavioural surveillance. Mozambique has rapidly expanding biological surveillance and is committed to increasing behavioural surveillance, to ensure full second generation surveillance. MAP will support biological and behavioural surveillance as required and agreed with stakeholders. Essential research is required to track FIIV and STI trends and to evaluate STVHIV/AIDS prevention and care interventions among priority groups. The CNCS is currently developing financial management systems, with technical support from major accounting firms. It is recommended that CNCS delegate program activity monitoring to a consulting firm. The program activity monitoring data generated may be captured as a sub-section of Mozambique's nascent Country Response Information System (CRIS). CNCS will coordinate the above monitoring and evaluation components as follows. Biological surveillance will be managed by the MoH, drawing upon the STI/AIDS Unit and the Epidemiology Unit. Behavioural surveillance will also be managed by the MoH, assisted by a university or research agency. The second generation surveillance constituted by the biological and behavioural surveillance will enable CNCS and partners to identify and interpret major epideniological trends. Essential research may be coordinated by the MoH, assisted by universities and research institutions. As noted, CNCS is developing financial management systems with technical support from accounting firms. It is suggested that program activity monitoring be delegated to a consulting firm. Structured reporting and assessment forms and procedures will be developed to ensure sound program activity monitoring. Financial and program monitoring will generate verified primary data to inform internal and external supervision and to promote results-based decision making. The CNCS Secretariat will be responsible for establishing the framework for the monitoring and evaluation activities. A draft monitoring manual and set of indicators of acceptable quality has already been prepared, and is under discussion within Government and the Donor and NGO community. During project implementation, each agency receiving support from the CNCS would sign a contract or memorandum of understanding, which would specify its monitoring and reporting responsibilities. Financial support would be contingent on receipt of progress reports and monitoring information. A database which is to track implementation of all AIDS programs in the country has been established in the CNCS with support from UNAIDS and the Centers for Disease Control, funded by the USAID. Provincial CNCS offices will play a key role in receiving and verifying progress reports, and monitoring implementation on the ground. By June 30, 2005, the CNCS Secretariat should make use of the information gathered and the lessons learned under the monitoring and evaluation activity to prepare a Mid Term review for consideration by the Bank and the other donors supporting the AIDS campaign. The mid term review should be based on a broad assessment of the outreach and impact on target beneficiaries of program activities, and include, inter alia, suggestions on measures for improving the efficiency and effectiveness of project implementation, simplification of processes and procedures where appropriate, and creating mechanisms for wholesaling the outreach of HIV/AIDS programs around the country. Recommendations should be made on ways in which the Bank, and its instruments, could be modified to improve the speed and effectiveness of project implementation. 4.3 Procurement issues: The CNCS Secretariat would be charged with overseeing the procurement procedures used for the program, and would hire a Procurement Officer for this task. Larger procurement packages, and any ICB, - 33 -  which would originate from the need to purchase drugs and equipment under the Health component, would be handled by the Project Management Unit (GACOPI) in the Ministry of Health. The GACOPI already has significant experience in handling procurement according to Bank guidelines, as it handled Bank-related financial management and procurement under the Bank funded Health Sector Recovery Project Cr 27880. A significant portion of the grant will be used under the Community and Civil Society Initiatives component, where procurement will be carried out by a broad set of NGOs and qualifying civil society associations, using procedures approved by the Bank for use in such circumstances. Detailed procurement thresholds are set out in Annex 6. 4.4 Financial management issues: The development of the financial management systems for the project, and the need for their assessment by the Bank at appraisal, have been described in Section C4. The CFAA for Mozambique classifies the country as high risk. For this reason, particular attention will be paid to these aspects under this project. However, the extraordinary measures in place for the Executive Secretariat will minimize the financial risk faced in new Government institutions. The freedom to hire staff at market salaries has meant that it has been able to attract high level talent to its management and financial positions. The freedom to design its own financial system, tailored to its own institutional structure and activities, means it will be more efficient and effective in managing and reporting on expenditure. This design of the new system has been completed, and hardware and software installed. Staff have been hired, training has been completed and the new system is now operational. The system will have the flexibility to report according to the requirements of the Government, of the Bank, and indeed of any donor. The procedures to be used in approving expenditure, particularly under the Community and Civil Society Initiatives, have still to be tested. It has been designed and set out in the Operations Manual, and will be tested under pilot projects funded under the PPF. Forms and procedures are included in the Operations Manual. There will eventually be three Special Accounts, one managed by the Secretariat to cover components II, HI and V, and one in the Ministry of Health (which has already managed a Special Account in the context of the Bank funded Health Sector Recovery Project) to cover component IV, and a second one in the Secretariat to finance component I, the Community and Civil Society Initiatives. Systems and procedures for the management of Special Accounts for this project have been designed, and will be tested under the PPF funding program. In addition, the Secretariat has invested considerable effort in the formulation of a pooling mechanism for donor funding titled the Common Fund. Government proposes using this pooling mechanism to consolidate all financial inflows, into one pool. A similar mechanism has been set up for the Agriculture Sector program in Mozambique, and there is a desire to achieve the same level of consensus for the HIV/AIDS program. Negotiations on design, and procedures are underway and are likely to extend into 2003. The Government and many donors feel that it would be appropriate if the Bank joined the HIV/AIDS pooling mechanism, as it has under Proagri (the Agriculture Sector Expenditure Program - Cr 31710). The Bank will review the proposed pooling mechanism, and its fit with the requirements set out in OP 10.02 and will put in place the steps necessary to enable it to eventually join the pooling facility. Until that time, Bank funds will enter the Secretariat's financial system in separate, parallel flows, with mechanisms set up to accommodate Bank procedures, designed to minimize disruption and to make use of the Secretariat's standard accounting, reporting and auditing procedures. The desireability of entering the pooling facility, and measures to enable the Civil Society Initiatives Facility to be managed in this fashion should be addressed and decided on at the Mid Term review, to be completed by June 2005. A key issue which has dogged the implementation of Bank projects in Mozambique has been the timely - 34 -  availability of Counterpart Funds. To date, the Secretariat has not had any trouble in receiving its allocation, on time, from the Ministry of Planning and Finance. However, the adjustment in the financing percentages for foreign consultants (reduced to 86% for new Bank projects) will require a special management effort on this front. This issue will receive close attention from supervision missions. It is important that special attention be paid to this aspect of project implementation, and flagged as soon as it becomes a problem. Further details on the financial management system can be found in Annex 6. 5. Environmental: Environmental Category: B (Partial Assessment) 5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including consultation and disclosure) and the significant issues and their treatment emerging from this analysis. The Assessment The most important environmental issue arising from this project relates to the management of medical waste -- which may contaminate health workers, and others who may come in contact with it such as municipal workers who handle collection and disposal, poor families whose income is derived from collection and recycling of waste products, and the general public who may be exposed to contaminated products if they are not safely contained and protected. An international consultant was employed in June 2002 to work with stakeholders in the assessment of the situation, and the preparation of a health care waste management plan. The assessment and the draft plan cover all waste products from the Mozambican public health care system -- estimated at 2.2 tons per day -- and includes syringes, needles, empty bottles for injection liquid, plastic objects (gloves, blood pockets, urine pots, tubes), cotton, compresses, empty bags, and other human waste. The focus of the report is on the public health care system, which provides all health care in rural areas, and the large majority of service in urban areas, except for the small proportion of high income families able to afford private clinics. Issues Issues involved include: (i) the lack of efficient selection of health care waste; (ii) the carelessness of the medical staff and their lack of training in management of health care waste; (iii) the staff dealing with health care waste, including nurse's helpers, lack any type of qualification; (iv) the mingling of health care waste with normal household litter; (v) there are insufficient quantities of pre collection baskets (for needles, cotton, etc); (vi) there are insufficient containers for provisional litter stocks; (vii) their is a lack of security equipment for staff responsible for cleaning of the hospitals, and for the collectors of waste; (viii) there is no efficient treatment system in general use -- 90% of the hospitals dispose of their wastes inside the hospital, 7% transport their wastes to a municipal landfill and 15% use incineration. Stakeholders Stakeholders include: Regulatorv Agents: Ministry of P'ublic Health and Ministry of Environment, responsible for enviromnental and healthcare policy -- they generally have at their disposal competent human resources, and master the management techniques, but their scope of action is a bit limited because of lack of material and financial means to carry out their mission; Health care facilities : are the principal HCW generators, but the healing staff has little concern for the daily management of the HCW, which is considered a second priority besides the huge medical emergencies; Litter eatherers: Municipalities are responsible for the gathering of household litter, but their landfills often receives health care waste. Their help in the handling and cleaning is somewhat weak. The private sector intervenes in the gathering of litter from some institutions, and even some healthcare facilities; but is not yet motivated enough to get involved in the management of health care waste; NGOs: Many of whom - 35-  intervene in the environmental and health field. They constitute an opportunity to be seized by the project for partnership; Community Oraanizations: have the advantage of residing in the locality, and enjoy the trust of local populations. Many of them are active in the environment and sanitary field; The scavengers : the level of poverty (70% of the population overpassed the margin of monetary poverty) and the lack of economic alternatives push the populations towards survival strategies, mainly in urban zones. In this framework, informal scavenging or recycling activities at the level of littering disposals, are opportunities for the poor to earn a living. With the health care waste, the sector of pre-collection is too lucrative, to justify much interest; The Donors: most of them intervene in the field of health. Even if all of them recognize the importance and the interest linked with HCW, and the necessity to lead actions in this way; very few of them have specific programs for health care waste. 5.2 What are the main features of the EMP and are they adequate? An Environmental Management Plan has been developed in response to the assessment. The proposed plan is costed at $ 2.5 million and consists of two components. The first, with a cost of about US$ 1.2 million, would strengthen the regulatory framework, increase capacity amongst health care and waste workers, and increase public awareness about the dangers of this type of waste. The second component, costed at $ 1.3 million, would provide improved equipment for collection and sorting of health care waste in public health care facilities, as well as put in place modem incinerators for central and provincial hospitals, as well as artisanal incinerators in rural hospitals, health centers and health posts At issue here is the effectiveness of the incinerators, and their potentially harmful production of the carcinogenic dioxin. This reconmmendation is under review, and the possibilities of alternate means of disposing of waste are under consideration. 5.3 For Category A and B projects, timeline and status of EA: Date of receipt of final draft: September 13, 2002 A draft Environmental Assessment is available, and has been reviewed by the Government and the project team. It was released for public perusal in Washington and Mozambique on September 30, 2002. A summary of the assessment of knowledge, behavior and practices regarding health care waste treatment, by stakeholder, is provided below: Assessment of Knowledge, Beha ior and Practices Categories of actors Knowledge Behavior Practices Health facilities Medical staff Fairly good Fairly correct Fairly good staff Paramedical staff Inadequate medium mediurm Help-nurses Little acceptable acceptable Cleaners None acceptable acceptable Collection services Privates responsible for household Not enough acceptable acceptable staff litter good Collectors None Wrong Bad Population Informal scavengers None Wrong Bad The neighboring populations, None Wrong Bad I__ __ _ __ _ _ children _ _ The assessment also assessed the danger caused by exposure to risk of infection (with HIV/AIDS, Viral Hepatitis or other maladies) from exposure to contaminated materials. This is summarized below: - 36-  Risk of infection by the HIV/AIDS in the process of HCW production Persons exposed and Situation Risks of Category of actors contamnination by risk EIIV/AIDS Production Medical staff Carelessness Wounds with sharp Major Ignorance of risks and cutting objects Mingling with littering Selection at the Medical staff Absence of selection Accidents Major source (rmixing of all Contamination of all HCW) sharp objects Storage Helpers and cleaners Non protected Wounds by sharp Major wastes objects Collection Municipalities and Mixing with Wounds with sharp or Major transportation and private societies littering scavenging cutting objects evacuation collectors Means of collection Wounds with sharp Major hardly adequate objects scavenging I _I Elimination Helpers and cleaners No protection Wounds Major Children populations scavenging nearby scavengers The persons mainly exposed in the process of health care waste are: (i) the medical and paramedical staff; (ii) the helpers and other cleaners, in charged of waste collection or incineration in the health facilities; (iii) the waste collection agents of private clinics; (iv) the informal scavengers; and (v) the general population living by the side of the landfills (mainly the children) or using recycled objects from wastes. The risk linked with bad management of health care wastes is includes dangers from: (i) accidental wounds, for health staffs; children playing (or satisfying natural needs on the littering disposals) and unaware scavengers; and (ii) serious intoxication and infections, affecting the health staff and collectors: (iii) noxious odors due to lack of equipment for protection. 5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b) draft EA report on the environmental impacts and proposed environment management plan? Describe mechanisms of consultation that were used and which groups were consulted? The final Environmental Assessment and proposed Environmental Management Plan have been placed in the Infoshop in Washington DC and in the Country Office in Mozambique for review by the public. The health care waste management question goes beyond the purview of the proposed HIV/AIDS Response project -- and commitments will be sought from other sources to cofinance this activity. 5.5 What mechanisms have been established to monitor and evaluate the impact of the project on the enviromnent? Do the indicators reflect the objectives and results of the EMP? The Environmental Management Plan includes a logical framework and a set of indicators. 6. Social: 6.1 Summarize key social issues relevant to the project objectives, and specify the project's social development outcomes. Mozambique has little original research on the social impact of HIV/AIDS. However, Mozambique's - 37 -  northern neighbour, Tanzania, has a region which was affected by HIV/AIDS early in the pandemic. Studies of the social and economic impact of HIV/AIDS in Kagera, as documented in "Confronting AIDS" -- a World Bank Publication - indicate that infection rates are no different across high and low income households. However, low income households can be expected to suffer more from an AIDs related death of an adult in prime income-earning age. Covin Studies in Kagera show that "... households use a variety of informal mechanisms to cope with misfortunes like an adult death in the household... although these coping mechanisms cushion the impact of the shock, households are not entirely successful in protecting their well-being. In general, the poorer the household, the greater and more persistent the impact of a prime-age adult death from AIDS and similar shocks. The study goes on to indicate that " ... To varying degrees, however, three coping mechanisms observed in Africa-altering household composition, drawing down savings or selling assets, and utilizing assistance from other households-are all likely to be attempted whenever households confront the tragedy of a prime-age adult death... " Experience in Kagera indicates that households are surprisingly resilient, in economic terms, in cushioning the impact of the death of one of the parents. Food for the children However, as could be expected, poor families suffered more -- particularly with regard to food consumption: " .... for the poorest 50 percent of the households: food expenditure, which was already lower in these households than in the others, dropped by nearly a third. The resulting drop in per capita food consumption was cushioned by an increase in the consumption of home-produced food (not shown). Even so, per capita consumption in the poorer households fell by 15 percent. Even if these households eventually return almost to the pre-death level of per capita food consumption, as did the Ivoirian households, lack of adequate nutrition for a year or more can have a profound effect on the development of children." The data show that orphans were indeed suffering more from stunting than those children whose parents were alive -- but surprisingly -- the rate of stunting amongst orphans did not vary with the income level of the household. Schoolin2 One would also expect the death of a parent to have an impact on child schooling, due to the potential effect of (i) reducing the ability of families to pay for schooling; (ii) raising the demand for children's labor; or (iii) reducing the expected return to adults of investments in children's schooling. The data however shows that ".... children in the poorer households are less likely to be enrolled than children in the less-poor households, regardless of orphanhood. Also, the difference in orphan and nonorphan enrollment rates is significant only among the poorer households. Most striking, however, are the low enrollment rates of children ages 7 to 10 regardless of the level of household assets." Poliey These broad findings can be further distilled into three general recommendations for policymakers: (i) not all households experiencing an AIDS death need assistance; (ii) if survivor assistance is to be offered, it should be targeted to all very poor households that suffer a prime-age adult death, regardless of whether the death was due to AIDS; (iii) assistance will do the most good immediately before and after the adult death, during the period when per capita food consumption has fallen but not yet recovered. It need not be permanent. The results of these studies suggest that antipoverty programs and mitigation programs be integrated. When an antipoverty program is designed for a community with low living standards, consideration should be given to including components that specifically address the needs of the poorest households hit by AIDS deaths." - 38 -  The Project The Bank funded project incorporates these findings into its design. The approach is multi dimensional and multisectoral. About half of the resources will be used to fund information, education and communication programs to be carried out by a broad variety of large anid small NGOs and CBOs and channeled directly to poor communities, both urban and rural, with priority to the high prevalence areas. Experience in Uganda indicates that a society wide campaign, if well designed, sustained, and accompanied by consistent messages and effective leadership from the elite, can have an effect on sexual behavior, postponing sexual debut, reducing the number of partners, increasing fidelity, increasing condom use, and hence reducing infection rates. This has strong positive social consequences. Programs to be sponsored will also enable communities to develop a sense of "AIDS competence" and build local institutions and mechanisms to de-stigmatize people living with HIV/AIDS, and to assist families whose members are living with HIV, or have AIDS, or have to cope with the death of a parent. Programs will also reach out to the private sector so that companies will begin to take measures to reduce infection, particularly for vulnerable groups such as truckers and construction workers, and to care for those who are sero-prevalent. The other half of the project's resources will be devoted to making the public sector "AIDS competent" -- enabling it to carry out its coordination and allocation role -- bringing to bear the educational capacity of the large public networks such as the public education system itself, the public health system, the agricultural extension system -- reducing the vulnerability, and the infection power, of high priority groups such as soldiers and policemen and teachers -- making more effective use of the health care system to operate voluntary counselling and testing centres, treat STDs, opportunistic diseases other physical consequences of the disease, and, where public policy permits, oversee the administration of anti-retrovirals. 6.2 Participatory Approach: How are key stakeholders participating in the project? The preparation of the National Strategic Plan in 1999 brought in a wide variety of people and institutions from all walks of life, and all areas of the country. This has created broadbased acceptance and agreement with the approach and goals of the Plan. There have been a large number of small, somewhat disjointed initiatives, from a large number of separate institutions willing to try an approach, or to develop a message, but unable to increase to scale for lack of resources. The project follows the strategy as outlined in the plan. During the preparation of the project, the team participated in the annual National consultation and assessment of the HIV/AIDS campaign, and there is broad awareness of the Bank's involvement. The Bank's resources will enable this broad based involvement to be scaled up. In the design of the project, the Government/Bank team has engaged formally with the National AIDS Council, the NGOs (both international and local), the associations of People Living With HIV/AIDS, the donors, the private sector, the media and social communication, and many of the Ministries. By following the design and priorities in the National Strategic Plan, the project can complement and support the momentum which is already being created. All players are aware of the opportunity which the presence of the Bank offers, and appear willing to work with the CNCS to take advantage of it. The key piece, which is still missing and is necessary for the campaign to really take off, (and which the Bank project is unable to affect) is the presence of a dynamic and committed public figure of high stature, to take on the Campaign, and give it the fire necessary to break down the cultural and social barriers it still faces. 6.3 How does the project involve consultations or collaboration with NGOs or other civil society organizations? Project preparation has been a collaborative and consultative process, that builds on the process of - 39 -  consultation which the Secretariat to the CNCS has been carrying out since its inception two years ago. Within each Province, at the instigation of the Secretariat Coordinators, a Provincial Steering Committee to Combat HIV/AIDS has been formed, headed by the Govemor, and including lead public, NGO and private institutions in the Province. These committees are used as umbrellas to enable consultations to take place on policy and strategy, and to carry out various programs. The NGOs themselves have created an umbrella organization for HIV/AIDS activities called MONASO, which is on the National AIDS Council and is party to all design meetings regarding NGOs. 6.4 What institutional arrangements have been provided to ensure the project achieves its social development outcomes? The CNCS Secretariat has designed a comprehensive monitoring system to track the implementation and impact of the various activities to be funded. In addition, there are constant feedback mechanisms in place via the provincial steering committees, the National AIDS council and political mechanisms which enable NGOS and community representatives to have access to policy makers, and to the Secretariat. 6.5 How will the project monitor performance in terms of social development outcomes? Recent household surveys (in particular TIA the Integrated Agricultural Survey) have included a series of questions which, while not asking whether the subject is sero-prevalent, do provide insights into whether households have been affected by AIDS, and how they are coping with it. In addition, the National Statistical Office has started to carry out less expensive, and hence more frequent, QUIBB and CWIQ surveys of household welfare which will enable more frequent tracking of social indicators in the country. 7. Safeguard Policies: 7 1 Are anv of the following safeguard policies triggered by the pro ect9 b -. - ........Policy,, . ,, ........ ' -..,tTriggeeod- *-; Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) 0 Yes U No Natural Habitats (OP 4.04, BP 4.04, GP 4.04) U Yes * No Forestry (OP 4.36, GP 436) () Yes *_ No Pest Management (OP 4.09) U Yes * No Cultural Property (OPN 11.03) U Yes * No Indigenous Peoples (OD 4.20) U Yes * No Involuntary Resettlement (OP/BP 4.12) U Yes * No Safety of Dams (OP 4.37, BP 437) ( Yes * No Projects in International Waters (OP 7.50, BP 7.50, GP 7.50) U Yes * No Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60)* U Yes * No 7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies. An Environmental Assessment (for hazardous medical waste) has been completed and an Environmental Action Plan has been formulated. Both have been released to the public, and discussed with Government. An effort will be made to contribute to the fulfillment of the Action Plan from the resources from this project, as well as from resources mobilized from other donors. - 40 -  F. Sustainability and Risks 1. Sustainability: In order to be sustainable and effective the following conditions should hold: (i) the social and cultural environment will have to change in order to: (i) reduce the social stigma associated with HIV/AIDS, (ii) increase the openness and freedom to talk freely about sexual behavior -- and the risks of promiscuity, and unprotected sex; and (iii) increase the power of women to deterrnine their sexual choices and behaviour; (ii) the legal and regulatory environment will have to be maintained, or improve, to avoid discrimination against those who are HIV positive; (iii) the management of the project (and the National BIV/AIDS program) will have to maintain and continue to demonstrate its financial accountability and programatic integrity -- so that additional resources can be mobilized from local and international sources in support of a centrally directed campaign; (iv) capacity building for local NGOs, CBOs and Private business will have to be successful -- as the program will only be sustainable, and have an impact, if those few institutions receiving strengthening and capacity building programs are in fact made more effective and aggressive -- and capable of mobilizing resources on their own account. They in turn will then be able to go out to create management capacity and implementation capability in community institutions -- which can then mobilize resources from the communities themselves to sustain their activities; (v) Government should sharply increase the local resources devoted to the campaign. Its reliance on donor funding for upscaling seems to indicate that it is leaving the funding for this very high priority battle to international financial agencies and donors; and (vi) The expansion of health services and the training and skills enhancement of healthcare workers will have to be in place. 2. Critical Risks (reflecting the failure of critical assumptions found in the fourth column of Annex 1): The success of the campaign depends crucially on the quality of its national leadership, and on its financial and administrative effectiveness. While the project can and does address issues related to the second topic, action on the first question depends on the evolution of political and social committment to the campaign at the highest levels of the leadership elite in the country. There is a gradual strengthening of resolve, but the 'airtime' given to the issue at the highest political and social levels can and probably will increase as the crisis deepens. Risk. Risk Rating Risk Mitigation Measure From Outputs to Objective Quality and commnitment of political M There is strong political leadership of the leadership, including the National CNCS with strong commitment from President Council, declines. and Cabinet. AIDS assuming more importance in public consciousness, which will raise CNCS profile and induce continued responsiveness. Funding of Government contribution to M Minister of Finance sits on CNCS, aware of - 41 -  the campaign does not increase, and or issues, and committed to funding an expanded declines. program. Invitation for Bank involvement from Minister of Finance reflects concern with financing. Funding to date reliable, if limited. Issue to be reviewed in PRSP. Decline in support for broad HIV/AIDS M NGOs and civil society actively participating in program by civil society and NGOs, and program, many with funding outside of CNCS, reduction in participation in health, care, and interest is increasing from both local and prevention and other initiatives. international organizations. Civil society participation in Steering Committees at provincial and national level should maintain engagement. Donor interest and financing declines. M Donors currently engaged in support of program, albeit through a variety of vehicles in addition to Government. Improved international visibility and awareness of HIV/AIDS crisis in Africa will work against possible donor fatigue. Breakdown in Government fiduciary M Significant effort and resources are dedicated functions leads to misuse of funds, and to improving financial management, accounting decline in financial support from local and auditing systems and procedures, and and international donors. obtaining high level commnitment to following such procedures. From Components to Outputs The Secretariat's management and M Institutional assessment carried out. Project implementation capacity proves supporting training, systems development, inadequate for task. sharing of tasks, decentralization and contracting out in order to build Government capacity and reduce implementation burden. Operations Manual defined and agreed before project effectiveness. Insufficient community based S The weakness of civil society institutions organizations and NGOs found in outside of Maputo and the main cities is a provinces to carry forwards broad concern. Project will build capacity of select program. NGO program intermediaries in each province, and work with and through them to identify, strengthen, register and invigorate local institutions at the community level. Activities under project will build on and partner with substantial work being carried out by NGOs with local and foreign funding. Initial efforts will focus on the center of the country. -42 -  |Overall Risk Rating M Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk) 3. Possible Controversial Aspects: None. The project follows a model already used for more than a dozen operations in the Africa Region. G. Main Grant Conditions 1. Effectiveness Conditions 1. An Operational Manual and Project Implementation Plan satisfactory to the Bank have been approved by the Government. 2. An independent auditor has been contracted by CNCS Secretariat to audit project accounts. 3 The Government has appointed the following staff to the CNCS Secretariat: a deputy executive secretary, a coordinator for planning and coordination, a financial manager, a procurement specialist, and a monitoring and evaluation specialist, with experience and qualifications satisfactory to the Bank. 4. A satisfactory financial management system in place in the CNCS Secretariat, capable of producing the necessary financial monitoring reports in a timely and accurate fashion. 5. A procurement plan covering all components for the project period has been produced, satisfactory to the Bank. 6. The Project Account managed by the CNCS Secretariat has been opened. 2. Other [classify according to covenant types used in the Legal Agreements.] 1. Mid term review report to be completed by June 2005. Mid term review would assess project efficiency and effectiveness and propose adjustments in implementation arrangements as needed to improve both. It would "inter-alia" consider possible Bank participation in the pooled funding mechanism for community and social society initiatives. 2. The Bank to be consulted prior to any change in the approved Operational Manual. 3. A national HIV/AIDS communications strategy to have been prepared by December 31, 2003. 4. Interim institutional assessments of the CNCS Secretariat to have been carried out by June 30, 2004 and June 30, 2006. 5. It is a condition of disbursement for Component IV, the Scaling Up of Health Services for HIV/AIDS, that the Government provide evidence of strengthened financial management and procurement capacity and practice in the Ministry of Health for the implementation of the project in form and substance satisfactory to the Bank. - 43 -  H. Readiness for Implementation D 1. a) The engineering design documents for the first year's activities are complete and ready for the start of project implementation. 2 1. b) Not applicable. L 2. The procurement documents for the first year's activities are complete and ready for the start of project implementation. D 3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactory quality. 4. The following items are lacking and are discussed under loan conditions (Section G): Filling key positions in the CNCS Secretariat. Producing a procurement plan. Completing installation of the financial system to meet Bank reporting requirements. Completing a satisfactory Operations Manual and Project Implementation Plan. 1. Compliance with Bank Policies Z 1. This project complies with all applicable Bank policies. D 2. The following exceptions to Bank policies are recommended for approval. The project complies with all other applicable Bank policies. James H. Coates Karen Brooks Dariu(Mans Team Leader Sector Manager/Director Country Manager/Director - 44 -  Annex 1: Project Design Summary MOZAMBIQUE: HIV/AIDS Response Project , t CnOca;i ,; ~~ ~ ~ ~ Diita~'M3WCbllectio,n',Stra"te-g'yi, j. Sector-related CAS Goal: Sector Indicators: Sector/ country reports: (from Goal to Bank Mission) Imcreasing Human Health Status Indicators Demographic and Health Assumes the other elements of Capabilities by preventing and (particularly life expectancy), Survey, National Institute of the broad poverty reduction reducing the impact of Educational Status Indicators Statistics Surveys, Ministry of program envisioned in the HIV/AIDS Health Surveys, WHO, PRSP are carried out, UNTICEF, UNFPA, Ministry of increasing impact and Education Surveys, UNESCO effectiveness of health and education services, irnproving the efficiency of Government, enabling the private sector to grow, raising incomes and increasing mcome earning opportunities. -45-  ^''g .-} F .'P.' Key'Performance.: - ;DataCollectionStratei gy . * Hie arc h i40f,06je'ct!ves~ - < '-indicators' nst Project Development Outcome I Impact Project reports: (from Objective to Purpose) Objective: Indicators: To slow the spread of By 2008 HIV prevalence MOH/WHO Sentinel surveys Strong leadership by the HIV/AIDS in Mozambique amongst pregnant women in CNCS, including the and mitigate the effects of the the 15-24 age group has been Secretariat, the Ministry of epidemic, through prevention reduced by 25% from 2000 Health and Cabinet and care activities levels. By 2008 the age of sexual MOH Epidemiology Dpt Clear defimtion of effective debut has increased by on year reports and DHS Surveys communications and IEC over 2002 age. program on HIV, and rapid engagement by NGOs in support of program By 2008 the number of sexual CNCS Secretariat Reports Strong donor response in partners outside of primary funding program requirements union in last 12 months for persons 15-49 has declmed by 25% from 2002 level. By 2008 the rate of condom Strong interministerial use in sexual encounters response, educational effort outside of primary relationship and cooperation, at center, in last 12 months by persons province and district levels. 15-19 has declined 25% from 2002 levels. Effective strengthening of CNCS Secretariat fiduciary and administrative capabilities, and strengthening of trust with donors and implementing agencies. - 46 -  - , Ke Performancde` IP - Daifg':C61lec66o nStra't'ggy' ? ~ ' zi} Indlcators~ ' 2' ;' ' J -.; . i ' , Critical: rAu ptl,on s~ Output from each Output Indicators: Project reports: (from Outputs to Objective) Component: A variety of projects By 2008, there are at least 600 Reports on Community and Effectivenss and speed of underway led by civil society, HIV/AIDS civil society Civil Society fund use to the microproject review and communities and private initiatives funded in each National Council approval process and funding sector covering HIV/AIDS province each year. mechanisms. related prevention, advocacy, public awareness creation and By 2008 at least 450 Availability of NGOs or care for orphans and PLWHA initiatives with the private Government services to sector have been funded. support community based operation. By 2008 there are 500,000 clients reached annually by all of the key HIV/AIDS related activities delivered by civil society. By 2008 at least US$ 7 million per year are channeled to communities and implementing agencies. Capacity developed in civil By 2008 at least 2 facilitating CNCS Secretariat reports to Strong lead agent (NGO, firm) society, amongst conmmunities, agents per province trained in the National Council. found to carry out training. private sector and leaders, to HIV/AIDS issues implement HIV/AIDS related Availability of large and programs. By 2008 at least 500 national comnmitted NGOs willing to leaders and 5000 provincial scale up in each province. leaders trained in HIV/AIDS issues. Govemment at all levels and Every funded Ministry have Ministry reports to CNCS Cormmitment by Ministers, in all line ministries, are met 75% of the funding and Secretariat and Council Governors and District executing programs outreach targets for HIV/AIDS Administrators to putting advocating prevention and set in 2002 plans. H[V/AIDS support programs supporting cure and care in place in their institutions, activities for own staff and By 2008, 75% of all civil and modifying programs to put commnunities servants have been reached by HIV/AIDS content in curricula HIV/AIDS IEC. and service delivery. Every District have a plan under implementation HIV/AIDS related prevention By 2008, 50 Voluntary MISAU reports to CNCS Ability of MISAU to generate and care services in the public Counselling and Testing Secretariat and Council. broad support behind its health sector have been scaled Centers in place. integrated network, bringing in up and strengthened. local NGOs and civil society By 2008, the number of in the response peopled tested for HIV is 500% of the 2002 number. Ability of MISAU to manage a process of contracting out By 2008, 100% of all blood immediate increase in capacity -47 -  transfusions are screened. for service delivery, then fit this into long term process of By 2008, 100% of public sustainable civil service health center facilities have reform. adequate drugs and trained personmel to treat sexually transmitted infections. By 2008, 10 million condoms are distributed through the public sector. CNCS institutional capacity to By 2008, an updated National CNCS Secretariat reports to Strong commitment to mobilize and coordinate Strategic Plan has been the National Council HIV/AIDS campaign by response has been approved. Ministry of Finance and strengthened. continued funding of Communications strategy in overheads. place, and significant quantities of new IEC Successful design and materials produced by June implementation of program 2004. monitoring system. Unqualified annual audit, or Successful leadership of civil satisfactory management society response, and response to qualifications. Government involvement. All recipients of funding for HIV/AIDS activities report to CNCS under the monitoring system and project database. Budget execution for CNCS funded program is at least 50% in year 1, and 90% in year 4. National legislation adjusted to be responsive to HIV/AIDS issues. - 48 -  ,;*~ ,, : P---.Key Perforn'arcice ;., DataCol ectionStlategy -- Hierarchy.of Obje tives'. , ., ..Critical Assumptions Project Components / Inputs: (budget for each Project reports: (from Components to Sub-components: component) Outputs) Community and Civil US$ 27.8 million Reports from the Civil Society Sufficient agents are found to Society Initiatives Initiatives Facility to CNCS engage in mobilization of communities Community based activities on prevention and care sponsored Effective mobilization and from a variety of sources support to NGOs and civil society. Canacity Buildiniz for Civil US$ 5.5 million Reports from CNCS to the Effective contractee identified Society Bank. to carry out training Training of facilitating Receptiveness by civil society institutions for community leaders and enterprises mobilization, awareness seminars for high profile leaders, enterprise awareness and response seminars Government Multi-sector US$ 7.2 million Ministry reports to CNCS as Ministers appoint and support Response compiled for the Bank HIV/AIDS focal points at center and provinces in their Each Ministry, and institutions. Government at Province and District level to carry out prevention and care projects District Government is indeed educating staff, reaching out to convinced and activated in the communities, integrating HIV struggle. in regular programs Scaline UD lHealth Services US$ 17.5 million MISAU reports to the CNCS, Capacity building in MISAU as compiled for the Bank is successful. 50 Health Centers in target zones, offering counselling, Contracting out of services HIV testing, guidance and care and support is successful, and for PLWHA programs, the strategy for sustainability including home based care, works. and treatment. Procedure and systems in place providing for safe blood supply Diagnosis and treatment of STDs and Opportunistic Diseases is provided Institutional DeveloDment US$ 6.0 million Project supervision and Intensive support by CNCS for Proeram Manaeement activity reports and Donor Working Group. Complete update of National CNCS Secretariat Annual Supervision missions by - 49 -  Strategy and Action Plan. reports on progress, funding agencies, including monitoring and evaluation Bank Strengthen program coordination and administration Strengthen program monitoring and evaluation capability Strengthen funds tracking and reporting capability Effective project review and funding mechanism in place - 50 -  Annex 2: Detailed Project Description MOZAMBIQUE: HIV/AIDS Response Project By Component: Project Component I - US$28.00 million Community and Civil Societv Initiatives Background With an estimated adult HIV prevalence rate of just over 12% in a population of 17.3 million, Mozambique has one of the fastest growing epidemics in sub-Saharan Africa. Multiple factors have converged to create an environment that is conducive to a rapid spread of HIV/AIDS. These factors include: a long and protracted civil war that displaced the population (both internally and externally), the proximnity to high prevalence countries which hosted refugees from the internal conflict in Zambia, Zimbabwe, Malawi, Swaziland, South Africa and Botswana, and devastation of social and econornic institutions and infrastructure, which hampered the provision of critical basic services in health and education. The spread of HIV/AIDS in Mozambique is associated with commercial activity, and specifically inter-country transportation routes and migrant labor. Thus, the country's highest prevalence levels are found in three provinces located in the middle portion of the country which serves as the transport highway or corridor to Zimbabwe, Zambia and Malawi. These provinces are: Manica (21.1%), Tete (19.8%) and Sofala (18.7%), followed by Gaza to the south with 16%, where a number of men work as miners in South Africa. Poverty is rife, especially in rural areas, and women and children are disproportionately affected. The inter-play between poverty, HIV/AIDS and gender is well-known, and available statistics for Mozambique indicate that women in the poorest quintile are less likely than men in the same quintile to have knowledge of how HIV is transmitted - 26.8% compared to 40.8%. whereas in the richest quintile, over 41% of the women and 71% of the men know how HIV is transmitted ( from Socio-Economic Differences in Health, Nutrition and Population in Mozambigue by Davidson R. Gwatkin; Shea Rustein, Kiersten Johnson, Rohini Pande, and Adam Wagstaff. World Bank HNP/Poverty Thematic Group, May 2000). What this reveals is that the poor, and poor women in particular have less access not only to knowledge about HIV/AIDS but also by implication, less or no access to education and other services. Women are not only at higher risk of HIV/AIDS, but they also bear the highest burden related to care and support of PLWHA in the family and community. The gender dimensions of the epidemic will be addressed by this component through the establishment of mechanisms to: (a) ensure that the preparatory process for community sub-projects includes comprehensive analysis of gender (and other social issues) that leads to selection of appropriate responses (e.g. income generating activities), (b) ensure female participation and representation on decision-making committees and, (c) collect gender-disaggregated data for all activities funded under the CCSI facility. Community and civil societv organizations working on HI V/AIDS in Mozambique. The Government of Mozambique recognizes the important role of communities and non-governmental organizations in efforts to stem the HIV/AIDS pandemic. Consequently, the 2002 National Strategic Plan to Combat STDs and HIV/AIDS aims to support multiple sectors and actors to slow the spread of HIV/AIDS. This, the largest component of the project, will support the activities of civil society organizations in the battle against AIDS. - 51 -  There are more than 50 local and international organizations(CBOs, NGOs, FBOs) working on HIV/AIDS in Mozambique. The majority of their activities are concentrated in the high prevalence provinces, mainly in the urban and peri-urban areas. In the last five years there has been an increase in the number of organizations focusing solely on HIV/AIDS, with many of them coming into existence in the last 2 to 3 years. Many of these NGOs are members of the umbrella organization, MONASO, whose main role is to facilitate networking amongst its members and provide support in the form of technical assistance for financial and program management and coordination. Financial and technical support for MONASO is provided by donors and international NGOs. Organizations of PLWHA have also been created but to date only two are formally registered. Due mainly to limited resources and capacity, activities for the majority of NGOs and CBOs have tended to focus mainly on information dissemination (IEC) and awareness raising. Emerging areas that will require support from this component are home-based care and home visits, orphan support, mitigation of impact on families, health-related services such as day hospitals and VCT, and stigma-reduction strategies. Component Obiectives The overall goal of this component is to empower communities and civil society organizations to effectively respond to the HIV/AIDS epidemic. This component responds to the need for interventions to slow the spread of HIV/AIDS, provide care and treatment for PLWHA, support both the infected and those affected by HIV/AIDS such as families, orphans and widows. The component will address many of the constraints facing communities and NGOs and CBOs in their efforts to scale up their work by focusing primarily on the following: (i) Community Mobilization through awareness raising activities (using IEC, facilitating agents, and various local actors); (ii) Promotion of local initiatives and accountability through funding support mechanisms for HIV/AIDS related activities, including training and capacity building for community leaders and institutions. Activities Activities to be supported under this component will fall in the areas of: Prevention (interventions designed to raise awareness in the general populace, and to promote condoms, voluntary counselling and testing, workplace interventions, and infornation, education and communication on how to avoid infection, to vulnerable groups), Care and Support (interventions designed to help those who are living with HIV and their families, orphans and other vulnerable children), Treatment (of opportunistic infections, STIs, TB, and HAART for health care staff and pregnant and recent mothers and their children), Mitigation of Impact (social and economic - through creation of income generating activities for families who lose their main source of support, and monetary support for orphans). Beneficiaries and benefits Communities around the country, but especially the ones situated in provinces with the highest prevalence rates, would benefit from support provided by this component. Benefits include enlightenment through IEC activities regarding HIV/AIDS, empowerment from focused capacity building and transfer of responsibilities for initiatives, increased sense of ownership for sub-projects through active participation in identification, planning and design of sub-proj ects. With respect to vulnerable and at-risk groups, the following groups in particular will greatly benefit from activities funded under this component: - 52 -  PLWHA - their inclusion in decision-making regarding HIV/AIDS related matters and the selection of sub-projects will give them more visibility, empower them to voice their needs when necessary and enhance their capacity to champion and defend the rights of PLWHA and other disenfranchised groups. Stigma reduction will to a large extent depend on the visible inclusion of PLWHA all HIV/AIDS related activities. Lastly, care, support and treatment will be expanded and become more accessible for PLWHA. Affected Families - When individuals contract HIV/AIDS, their families are also affected and have to deal with the psychological, financial and social (stigma especially) consequences. It is envisaged that the community mobilization and empowerment efforts using IEC, advocacy, and capacity building will lead to HIV/AIDS competent communilies where resources and support can be made readily available to affected families. Orphans: Already, affected communities are providing limited services to orphans Other vulnerable aroups: such as in-school and out-of-school youth especially girls, CSW, migrant workers, truck drivers, street and homeless children), households headed by young children and women, and women working in businesses that put them at risk such as in bars, hotels, and truck stops. A large portion of the support for the latter will come from funds set aside for the private sector sub-component. Widows: Invariably, women whose husbands have died of AIDS find themselves at risk of plunging into abject poverty because family resources have been depleted during the care-giving phase. Poverty increases their vulnerability to sexual exploitation (this can be in the form of money or gifts for sexual favors from 'serial' boyfriends, or prostitution), violence and H1V/AIDS. Furthermore, in many African societies women have no rights to their husband's (or father's) inheritance and may find themselves without property or material support. If implemented successfully, society would accrue enormous benefits including the reduction in numbers infected with HIV (and STIs), improved health care services, reduced medical costs, fewer orphans, and an enhanced sense of well-being. Implementation Eight principles underpin the design and implementation of the Community and Civil Society Initiatives (CCSI): I. The project is operating in a dynamic and changing environment, therefore, the CNCS's operation systems must be flexible and open to revision as the situation on the ground.; 2. The CNCS will act as a coordinating and facilitating body and will not implement any activities; 3. The CNCS's administration should be decentralized and have a community focus; 4. The CCSI should tie into existing systems and structures of CNCS; be coordinated and integrated at the provincial level; 5. The project review, monitoring and accounting process must be open and transparent; 6. The systems must operate quickly without sacrificing accountability; 7. The CCSI should emphasize community and stakeholder participation; and 8. The administrative procedures should not adversely affect the existing relationships among NGOs, or between NGOs/CBOs and the communities with which they work. Elieible Aoplicants - 53 -  Civil Society Organizations (CSOs) represent a wide range of actors, including non-government organizations (NGOs), faith-based organizations (FBOs), professional associations, trade unions, and community-based organizations (CBOs). Private Sector entities are a special category of CSO. Civil Society Organizations, Private Sector entities and communities are all eligible to receive funds for Community and Civil Society Initiatives. Different roles are defined for eligible entities. These roles include Facilitating Agent, Implementer, Partner, and Specialist. Civil Society Organizations are classified as follows. See Annex 10 of the Operational Manual (OM) for more detailed chart of the categories and description of the responsibilities and activities of organizations in each category. Categorv A: Large international and national organizations with a presence in more than one province of Mozambique, having managed at least US$ 20,000 under a reputable fiduciary system. * Cateaorv B: Middle-level organizations with a presence in at least one province in Mozambique, having managed at least US$ 5,000 under a reputable fiduciary system. * CatenorY C: Small organizations or associations who operate in at least one province or locality, having managed at least US$ 1,000 but requiring capacity building in financial and project management * Categorv D: Local groups and associations that participate in subproject implementation but do not have the capacity to manage funds. These groups cannot manage funds independently and must partner with Category A or Category B organizations to apply for fluds. Private sector entities are classified as follows * Large International Companies: International owned companies which employ more than 100 people. There are approximately 200 large international companies in Mozambique. * Larae National Comnianies: Nationally owned and operated companies which employ more than 100 people. There are approximately 10 large national companies in Mozarnbique. * Small and Medium size companies: Companies which employ more than 20 but less than 100 people. There are approximately 1100 small and medium size companies in Mozambique. * Micro-Enterprises: Enterprises which employ less than 20 people. Micro-enterprises compromise approximately 80% of the economy. There may be as many as several million micro-enterprises in Mozambique * Trade Unions, Chambers of Commerce and Business Associations of Companies. Institutional Arranzements for CCSI (i) CNCS CNCS is a coordinating body which facilitates but does not participate in the implementation of HIV/AIDS activities. The operative structure at the central level is the CNCS Executive Secretariat. At the provincial level, it is the Provincial Nucleus. Responsibilities of the CNCS with respect to CCSI include * Development of IEC strategy and community mobilization tactics * Selection of Facilitating Agent (at the provincial level) * Sign contract with Facilitating Agent * Training of Facilitating Agent (may be contracted out to a Specialist) * Supervision of Facilitating Agent - 54 -  * Regular convening of national and provincial review comnittees * Notification of Applicants * Sign contract with the Client or Partner * Consolidation of M&E, financial, and project management information for all projects At both the central and provincial levels, there are key CNCS staff members working on CCSI. At the central level, these staff members include: CCSI Implementation Coordinator: Tasked with the coordination of the implementation of subprojects both at the central and provincial levels. The CCSI Implementation coordinator is also responsible for convening monthly meetings with the Civil Society and Private Sector working groups Project Officer for Capacity Building: This position is associated with the UNDP HIV/AIDS Institutional Capacity Building Project (MOZ/00/010) and is to be funded and filled by UNDP at least for the duration of the project (5 years).: tasked with the technical support and coordination of the Civil Society liaisons (IlNVs) working at the provincial level. At the provincial level, these staff members include Civil Society Liaison: This position is also associated with the UTNDP project and will be filled by Mozambican UN Volunteers: tasked with coordination and communication between civil society organizations and the Provincial Nuclei. The TORs for these CNCS staff members are included in the Operational Manual, Arnex 1. (ii) Facilitating Agent A Facilitating Agent is an intermediary organization that is contracted by CNCS to provide capacity building and training activities for imnplementers (especially those in Categories C and D). This role should be played by an NGO in Category A. Responsibilities of the Facilitating Agent under the contract (MOU) with CNCS are as follows (TORs and Forms for assessment are available in the OM): * Assess the capacity of NGOs and CBOs operating in the assigned region using the NGO Capacity Assessment form (Annex 12). * Visit districts and carry out community mobilization * Distribute subproject proposal fonns and guidelines * Help interested applicants to prepare subprojects and complete required forms * Assist small organizations and CBOs to register legally * Assist CBO to submit subproject proposal to CNCS for approval process * Train applicants on subproject management, financial management, and procurement according to guidelines * Assist small organizations and CBOs to find implementing partners * Monitor subproject implementation through site visits * Assist implementers in resolving subproject implementation bottlenecks * Suggest the interruption of the execution of any subprojects activities in case of anomalies or deviations from the planned project and approved procedures * Support monitoring and evaluation activities * Other tasks as assigned by the CNCS Provincial Coordinator * Working with District Administrations in the development of District HIV/A IDS Plans - 55 -  (iii) Implementer An implementer is a successful applicant. The implementer may be an NGO, FBO, CBO, private sector entity, local group, or association that implements an approved subproject. Specific responsibilities of the implementer include * Prepare subproject proposal form * Sign contract with CNCS * Receive funds * Prepare a subproject implementation plan * Implement subproject as planned *. Submit required reporting forms for monitoring purposes * Document financial transactions * Submit required financial reports If a small organization or CBO does not have legal standing or technical capacity to perform these responsibilities alone, they are encouraged to build partnerships with larger organizations and NGOs. International NGOs are required to partner with at least one local Mozambican organization for subproject implementation. The goals of this partnership are to strengthen and build the capacity of local organizations and to ensure that projects are integrated with the needs of local communities. Eligible Activities The PEN supports HIV/AIDS-related interventions that seek to prevent transmission or mitigate the impact of the disease. The CNCS organizes eligible activities into Activities and Initiatives. The main categories of eligible activities include 1. information, education, and communication (IEC), 2. health care, 3. care and support for the community, 4. institutional development, 5. reduction of the economic and social impact of HIV/AIDS, 6. politics and advocacy, 7. evaluation and surveys, 8. reduction of stigma. The full list of these activities is given in the OM, Annex 8 Allocation of resources Approval decisions for Community and Civil Society Initiatives are taken against a budget ceiling at both the provincial and national levels. These ceilings are determined by the CNCS Planning and Budgeting Process. Allocations for the central level and for each of the provinces and Maputo city are based on the following criteria: 1. Population 2. HIV prevalence 3. Performance indicators -56 -  Prolect (ycle The project cycle includes six main steps. A schedule for carrying out the project cycle is set out below. _ Planning 1 Evaluation of previous cycle and Last Quarter of the CNCS central level strategy planning year 2 re-Allocation of Funds Last Quarter of the CNCS central level year Preparation 3 Comimunity mobilization and Continuous Facilitating Agent Civil Society information dissemination Liaison Distribution of application forms and Continuous Facilitating Agent Civil Society training in project preparation Liaison 4 Writing/preparation of project Continuous Applicant Facilitating 8 - IV proposal Agent 5 Subrnission of written project By the I st day of Applicant Facilitating proposal and supporting the month Agent documentation and registration Appraisal 6 Certification of project eligibility and By the I 0th day of Civil Society 8 - VI verification of criteria the month Liaison *An ineligible application must be returned within 5 working days of appraisal Approval 7 Decision making meeting where Between the 15th provincial review Provincial subprojects are evaluated according and the 30th days committee Coordinator to the Subproject Proposal Review of the month Guidelines 8 If proposed subproject is above $20 Quarterly - national review Executive 000, the proposal must be between the 15th committee Secretary recommended by the provincial and 30th days of review committee and sent to the the month national review commitee for Iapproval Written notification to Applicant By the 30th day of Provincial *Acceptance/rejection decision the month in which Coordinator or accompanied by detailed comments. the decision is Executive taken Secretary 9 Submission of signed MOU to the By the 15th day of Implementer 8 - VII Provincial Coordinator or Executive the following ISecretary month Implementation 10 Preparation and submission of Quarterly - Implementer 8 - VI financial and procurement planning according to and reporting forms guidelines in the Financial Manuals Periodic reporting on the progress of Quarterly Implementer - VIII - 57 -  project implementation Supervision 11 Supervisory visits to implementers At least twice a year Facilitating Agent Civil Society 8 - VIII for each Liaison implementer Implementation Review and Armually, during the Civil Society Provincial Knowledge Sharing Workshop at the month of June Liaison Coordinator provincial level 12 Payment of next fund's installment After reviewing and Facilitating Agent Provincial 8 - VIII accepting progress Coordinator report 13 Provisional and Final Handover At the end of the Civil Society I ___________ ____________ ___________ project Liaison 14 Project Finalization At the end of the Civil Society Provincial project Liaison Coordinator Appraisal Criteria Upon receipt of a subproject proposal, the Civil Society Liaison should ensure that the proposal meets the appropriate eligibility criteria. These criteria are different for each category of NGO, CBO, and for the Private Sector. Key criteria are ennumerated below. Details are available in the Operational Manual. In appraising and evaluating the subproject applications, the following budget restrictions and financial guidelines will apply for Community and Civil Society Initiatives: * No project budget and supported activities should exceed 24 months duration. If the project is funded through the Special Account for the World Bank, then the duration of the project cannot exceed the five-year mandate of the Mozambique HIV/AIDS Response Project (MAP). * A maximum funding limit of US$100,000 per project with preference given to smaller projects; * At any given time, the CNCS will not provide funding to an organization in excess of 75% of the organization's previous year's annual budget; * Only eligible activities (as defined by the CNCS Initiatives and Activities) will be considered for financing; * No counterpart funds are required of implementing partners; however, conmmunity in-kind contributions will be encouraged; and * Up to a maximum of 20% of the total proposed project budget will be allowed for NGO or CBO "organizational" costs including administrative costs, overheads, general equipment which would not directly benefit the community. The Civil Society Liaison must confirm the Basic Criteria listed in Part A of the Subproject Proposal Review Guidelines. If basic eligibility criteria are unmet or if any of these budget and financial restrictions are violated in the subproject proposal, the Civil Society Liaison must return the proposal to the applicant for revision. An ineligible proposal must be returned to the applicant within 5 working days of appraisal and the ineligible proposal must be accompanied by the Eligibility Criteria and the Subproject Proposal Review Guidelines or Scorecard and Guidelines for Private Sector entities. Approval Once the subproject proposal has been appraised and deemed eligible for funds, the proposal enters the approval stage. Subprojects are considered for approval by the provincial and national review - 58 -  committees. If the applicant is requesting less than US$ 20,000, the proposal is considered by the provincial review committee at the provincial level. If the applicant is requesting more than US$ 20,000, the proposal is considered by the national review committee at the central level. More detailed descriptions of the implementation criteria and guidelines can be found in the Operational Manual. Monitoring indicators to measure success in the implementation of this component can be found in the Annex 1. Project Component 2 - US$5.50 million Capacity Building for the Civil Society HIV/AIDS Resvonse This component will support efforts to create AIDS competent communities by strengthening the implementers, supporters, and target groups active under the Community and Civil Society Initiatives. Activites would include (i) hiring and training of 'facilitating agents' in community mobilization and capacity creation for local organizations, as well as (ii) awareness development and capacity building for leadership in the public sector, civil society and the private sector, (iii) and the formulation of training modules in HIV/AIDS awareness for use in public and private sector enterprises. Specialized packages of Information, Education and Communications (IEC) materials would be developed and distributed through this effort. Capacitv Buildine for Facilitating Agents NGOs selected to be Facilitating Agents would be provided with a course which would impart essential features of the CCSI component, the procedures to be followed in preparing, appraising, and supervising implementation of community activities. The course would also provide for an assessment of the NGO's capabilities, and would strengthen its capacity in community mobilization, financial management, monitoring, or other key function essential to carrying out the task. Capacitv Buildine! for Civil Society Actors Capacity building activities for civil society are the responsibility of the Facilitating Agent. This component supports the work of the Facilitating Agent to train implementers and build the capacity of local communities to respond to the HIV/AIDS epidemic. Local level capacitv building: Community mobilization, dissemination of information at the local level, and on-the-job training of implementing actors. These activities should take place at the district or community level, in the area assigned to the Facilitating agent, and would incorporate local leadership and community participation. Provincial level capacitv buildine: Training of trainers, and extra help (outside of daily activities) in order build capacity for financial management and project management. This could include training of small NGOs, CBOs, local organizations, and associations on development of subproject proposals, management, accounting, reporting, and other skills necessary for the preparation and implementation of a successful proposal. - 59-  National level capacity building: Capacity building activities for large national and international NGOs, umbrella organizations, and other major actors at the national level. This could also include national conferences for training of Facilitating Agents and other events for the sharing of best practices and coordination of the Civil Society response. Facilitating Agents are encouraged to collaborate at both the provincial and national levels to ensure the exchange of ideas and flow of information. Leadership training Leadership and advocacy training will be important at all levels. World Bank funds can be used to support such efforts. Leadership training must include all major stakeholder groups, including CSOs, FBOs, NGOs, CBOs, Private Sector, local governments, civil servants, national leaders, cultural leaders, etc. NGO Capacitv assessment As a first step to implementation of this component, a rapid assessment of NGO and CBO capacity will be undertaken in the provinces, using a rapid assessment tool. This exercise should build on the many NGO assessments already carried out. The exercise will include a capacity and needs assessment of large NGOs, both Mozambican and International including umbrella NGOs such as MONASO (provincial level). The assessment will enable the creation of a database with information on NGO/CBO areas of expertise, geographical coverage, clients/beneficiaries and staff capacity. The database will be used to guide the selection of NGOs to be contracted either as Facilitating Agents (see OM for description of roles and responsibilities) or Intermediary organizations. A capacity assessment and training of a select number of larger NGOs (mostly in the Maputo area) has already been undertaken by a local (national) 'Intermediary' NGO funded by a bilateral agency. The assessment would be carried out by a contractor to the CNCS. TORs are provided in the Operational Manual. Project Component 3 - US$ 7.00 million Government Multisector Response Component Description Ministries and subordinate institutions will be supported under this component in their development and implementation of programs directed toward their personnel and their clients. Under this component, ministries are encouraged to expand their activities in the area of HIV/AIDS, according to the National Strategic Plan and their Ministry Plans. General Context of the Ministerial Response to HIV/AIDS There will be a Focal Point in each Ministry that will be in charge of expediting the coordination of the day-to-day execution of the respective sectoral component of the plan. No new departments will be created and no new personnel hired. The sub-project or sectoral plan of action will be implemented within the existing sectoral program. Ministries should also set up HIV/AIDS Committees, composed of the personnel already available to them, to handle sectoral implementation of the project within each Ministry. A memorandum of understanding will govern relations between the CNCS and the Ministries. This memorandum will include specific details as to flow and management of the financing, anticipated results, accounting rules, and other obligations and benefits pertaining to the executing Ministry. - 60 -  Institutional Arrangements in the Ministerial Response Ministerial HI V/AIDS Committee Each Ministry must have in place a Ministerial Committee (Team) that is responsible for the fight against AIDS within that Ministry. Its mission is to coordinate the program and perform the follow-up and evaluation of that program within the ministry. The Ministerial Committee must meet in regular session at least once every two months, more often if necessary and appropriate. Each Ministerial Committee is allowed to organize itself as it sees fit, provided it makes certain that it will be headed, at a high level, by a senior official (Vice Minister, Permanent Secretary, or National Director). The leadership at this level will have general responsibility for implementing the sectoral component of the fight against HIV/AIDS. The top-level leadership mentioned above must designate a Focal Point, which may be one person or a group of persons (unit) that will expedite the coordination of the ministry's response in terms of efforts to combat AIDS. The top leadership will be responsible for scheduling the bimonthly meetings or other meetings at the ministerial level, and the Focal Point will be responsible for organizing those gatherings. New departments should not be created to manage and mainstream the HIV/AIDS effort within the ministries. On the contrary, ministries should take advantage of the departments and divisions already in place to implement their anti-AIDS programs. Focal Point Each ministry should identify its Focal Point (person or Unit) at the national or provincial level. That Focal Point will be the special contact point for all questions related to anti-AIDS efforts conducted within the ministries, provincial directorates, and subordinate institutions. The Focal Point is a full-time position that needs to be flexibly structured in order to facilitate quick and effective intervention. Its job is to coordinate the drafting of ministry plans, implementation, monitoring, and supervision of anti-AIDS activities in its sector. It also prepares and compiles quarterly reports on the course of the activities in its sector for submission to the Ministerial HIV/AIDS Committee and the CNCS. The Focal Point must also attend the monthly rneeting of Focal Points to be scheduled by the Ministry Response Coordinator who is based at the Executive Secretariat of the CNCS. If there are Focal Points at the provincial and district levels, they are coordinated by the Focal Point at the central level and concentrate their actions on coordination of the activities of their sector at the provincial and district levels. The Focal Point at the provincial level must always coordinate with the Provincial AIDS Nucleus (CNCS). Under the institutional training component, Focal Points at all levels will receive support and training to develop their abilities to design and operate action plans at the central, provincial, district and community levels; as well as training in data gathering, monitoring, reports production, proposal submission procedures, sensitivity training for approaches to the comnmunity, establishment of partnerships, etc. At the central level, the Focal Point will have support in the form of information technology and office supplies. Ministry Response Coordinator at the CNCS Executive Secretariat One person in the CNCS Executive Secretariat will be designated as Response Coordinator of the activities to be carried out in the ministerial component of the national response to AIDS. This - 61 -  individual's main task will be to guide and assist the ministries to carry out their activities, working in close cooperation with the ministries' Focal Points. The Ministry Response Coordinator's job is to provide methodological and technical support for the development and management of ministry plans and activities, including explanation of procedures and M&A criteria. The Ministerial Response Coordinator must also hold at least one monthly meeting with all the Focal Points of the various ministries to discuss such topics as questions pertaining to the progress of the preparation, implementation, monitoring and evaluation of projects and activities. The Terms of Reference for the Ministerial Response Coordinator are included in Annex 1 of the Operations Manual. National and provincial review committees Coordination of the sectoral activities and strategies for combating AIDS, as well as coordination with the programs and strategies of other sectors, provinces, and communities, is to be handled by the National and provincial review committees. The representatives of the various government sectors and of civil society on those councils, including donors, meet to review programs and make certain that there is no program overlap and that the responsible institutions are furnishing the needed support to the provinces, districts, and communities. The details on the functioning of the national review committee are presented in the Operations Manual. The Ministerial Operating Plans (Central and Provincial Levels) Each ministry and its subordinate institutions must develop sectoral plans to address HIVIAIDS, oriented toward its employees and clients/users. The activities to be covered in the ministry plans should include the following target groups: Internal Target Group. One part of the plan must designate as target group the personnel of ministries and subordinate institutions, and their families, and will include activities oriented toward the prevention of HIV/AIDS and STDs through education, training, distribution and availability of condoms, and dissemination of information. Also to be included are treatment of opportunistic infections and provision of health care to infected and affected personnel, including their families. Changes in behavior and the de-stigmatization of the disease in the workplace and at home are to be encouraged. External Target Group. The other part of the plan must be designed to reach clients and/or users of the services provided by the ministry and its subordinate institutions, such as young people-whether or not in school-and their associations, athletic clubs, and cultural groups, as well as farmers, migrant workers and their families, children and orphans, school councils and other groups considered to be within the jurisdiction or under the protection of specific ministries. This part of the plan should focus on provision of services and information that result in effective preventive actions and access to health care for the clients and/or users of the services provided by the ministries and their respective institutions. These activities can be carried out by developing methodologies for reaching those groups and for establishing partnerships. They would include training for staff, rural extension workers, community workers, and activists. In drafting the sectoral plan, the Ministerial Committees and, particularly, the Focal Point in each sector, must ensure that: - 62 -  * The various actors working in the sector are involved in the preparation of the plan; * The heads of the various government agencies, private organizations, and elements of civil society in the sector are sufficiently well informed about the sectoral strategy and the modes of execution, as well as the results expected from the program. * The translation of the sectoral strategic plan into a plan of action must explain the actions to be taken by the public and private organizations and by civil society. * Efforts must be made to mainstream the plan for combating AIDS into the overall ministry plan, so as to ensure better use of the human and technical resources available in the institution. * Activities and budgets for the plans are to be broken down by province and, possible, by district. * The Ministries and their respective Provincial Directorates should try to ensure that their activities are in harmony with those of the other interministerial partners and entities in civil society in order to avoid overlap and maximize comparative advantage. The Ministry Planning Cycle Efforts should be made, in planning activities aimed at combating HIV/AIDS at the ministry level, to adapt to the normal planning cycle applicable to public sector institution activities. The plan that the ministry submits for review and approval by the Technical Council should be the ministry's plan for fighting AIDS and must include activities to be carried out at both the central and provincial levels by the Ministry, the Provincial Directorates, and the subordinate institutions. Preparation _ Identification of Ministerial Minister Ministry HIV/AIDS Committee and Response designation of Focal Point Coordinator Preparation of Ministry Plans, Ministerial bearing in mind the aspects outlined HIV/AIDS below Committee Submission of proposed Ministry Focal Point Ministerial Plan for Pre-Approval Review HIV/AIDS Committee Review = Written acknowledgement of Within 3 Ministry receipt of proposed Ministry Plan working days of Response submission Coordinator Verification of eligibility, review Within 7 Ministry of proposed Ministry Plan working day s of Response submission Coordinator Written notification of criteria met Within 7 Ministry - if criteria not met, include working days of Response explanation of steps to be taken to review Coordinator meet the criteria Intemal review of proposed Focal Point Ministerial Ministry Plan and submission of HIV/AIDS - 63 -  final draft Comrnittee Approval Decision making meeting where Quarterly - national review Executive proposed Ministry Plan is between the committee Secretary evaluated 15th and 30th days of the month Written notification of the results By the 30th day Ministry of the Approval process (includes of the month in Response minutes from meeting) hich a decision Coordinator is taken _ _ _ _ _ _ _ _ _ _ Signing of the Memorandum of By the 15th day Minister Understanding of the following month Implementation and Financial =____ Management month = Preparation of Ministry plans The first step in the preparation of Ministry Plans is the identification of a Ministerial HIV/AIDS Committee and Focal Point. Once this core team has been selected, development of the Ministry Plan can begin. Aspects to be Considered in the Ministry plans * Ministry plans must be consistent with the ministry's own mandate, and give priority to decentralization in their implementation and execution; * Establishment of partnerships with other government institutions and with civil society to implement the plans in cases where doing so offers competitive advantages; * Identification of other sources of financing, as well as ways to join with other ministries in implementing the plan; * Demonstration of a clear vision of the size of the Ministry (number of employees); * Verification of the extent of the Ministry's geographical presence (territorial implantation); * Indication of the degree of coverage (number of clients/users covered by the Ministry's activities and/or services); * Description of the capabilities and quality of the available human resources; * Use of the funds received from the project for the intended purpose in accordance with the regulations in the Operations Manual and the ministry planning standards to be furnished by the CNCS: * Implementation of the work prograrns via efficient and effective strategies; * Establishment of accountability for funds via regular submission to the CNCS of activities and financial reports. Submission, Review and Approval The annual plans developed by the ministries concerning the HIV/AIDS components, properly budgeted, are to be sent to the Executive Secretariat of the CNCS one month prior to the end of the fiscal year. Within the Executive Secretariat of the CNCS, the Ministry Response Coordinator should conduct an initial review of the plans to verify that they satisfy the basic requirements. If these have been satisfied, - 64 -  the plans are to be sent to the national review committee within seven business days. If the Plan does not meet minimum requirements, the Ministry Response Coordinator must send a letter to the ministry that submitted the plan, describing the deficiencies found-again, within seven business days. The Technical Council should also be notified of this circumstance, in writing. Eligibility Criteria In general, in order to be eligible for financing by the national anti-AIDS system, projects must conform to the national strategy to combat AIDS. Ministries that submit their proposed plans for approval must have: * Staff personnel available for the purpose * An established Ministerial AIDS Committee with an active executive corps. * A designated full-time Focal Point * Consistency with the PEN * Focus on vulnerable groups * Activities directed to Ministry personnel and to their clients/users List of Ineligible Products/Services The following products and services are not eligible for financing within the context of anti-AIDS initiatives and the national anti-AIDS institutional framework: * Construction or rehabilitation of buildings * Drugs and similar products prohibited by law * War materiel and/or weapons Approval Procedure The national review committee meets quarterly (at least once every three months) or more often as necessary and/or appropriate, as called by the CNCS Executive Secretariat. The Technical Committee must consider for review all ministry plans that were submitted at least 15 days prior to the date of the meeting. The CNCS Executive Secretariat, acting through the Ministry Response Coordinator, will inform the proposing Ministry as to the discussions and decisions of the Technical Council within seven business days of receipt of the decisions from the Technical Council. Implementation, Financial Management Financial management procedures will follow the description as approved in the Project Operations Manual. The first disbursement of funds must not exceed 25% of total plan funds. Subsequent disbursements require receipt of ajustification of the use of the funds initially disbursed and submission of revisions and/or quarterly updates of the plans, expressing positive results in terms of performance. The activities to be carried out at the central level must be financed through the CNCS Executive Secretariat at the central level. The activities to be carried out in the provinces are to be financed through the Provincial Nuclei of the CNCS, as illustrated in the following organizational chart: - 65 -  IT*.hnk.I --. Fnndlng Flow central Level _ i ) ~~~~~~~Funding Flow > _ 1~~~~~~~~~~~~~~~~ ProvincilDrcoa l Within the approved ministry plans, items that are not provided by the ministry, such as materials and equipment, will need to be furnished by the CNCS Executive Secretariat after a transparent competitive bidding process to be conducted in accordance with the requirements outlined in Chapter 5 of this Operations Manual. The procurement officer will be responsible for this process. Supervision: Obligations of the Ministries, Provincial Directorates and Subordinate Institutions The ministries, provincial directorates and their subordinate institutions shall be responsible for the funds channeled to them, including those intended for use in management and implementation of activities for their clients/users and/or partners or those funds used for services obtained through subcontracting. The funds made available must be used for the purposes agreed on in the plans and the memorandum of understanding. The Ministerial AIDS Committee and its top leadership will be responsible for managing the funds, assisted by staff of its Department of Planning and Finance. Ministries Included While the following ministries will receive particular attention given the role they play in the fight against HIV/AIDS, assistance could be provided to other ministries and Government agencies which submit HIV/AIDS action plans, and meet the conditions for support set forth above. The CNCS and Ministry Response Coordinator will focus on assisting these ministries in developing their Ministry Plans as soon as possible. Other Ministries and Agencies will also be assisted to draft the respective HIV/AIDS action plans. 1. Ministry of State Administration 2. Ministry of Agriculture and Rural Development 3. Ministry of Culture 4. Ministry of Defense 5. Ministry of Education 6. Ministry of Interior 7. Ministry of Transport and Communications 8. Ministry of Women and Coordination of Social Action 9. Ministry of Labor 10. Ministry of Youth and Sports 11. Ministry of Environment - 66 -  12. Ministry of Planning and Finance 13. Ministry of Public Works and Housing 14. Ministry of Tourism 15. Ministry of Higher Education Science and Technology Project Component 4 - US$17.50 million Strenftheninn and Scalinn UD Health Sector Services for HIV/AIDS Description Ministry of Health (MISAU) is the implementing agency for the component to strengthen the national health services. Within the context of the overall HIV/AIDS program, and as outlined in the National HIV/AIDS Strategic Framework (PEN) 2000-2002, Ministry of Health has the mandate of scaling up response of the health sector to the HIV/AIDS epidemic and to provide technical leadership on treatment and care for people living with HIV/AIDS. At the core of the Ministry's strategy for responding to the burden placed on it by the HIV/AIDS epidemic is a vision for providing comprehensive care to those affected by HIV/AIDS through its integrated health networks. g ARV drulp for Eme or tubsidisd.) aXUX OF BENEFICIARIES WITHIN AN I4TEGRRATED NETWORK TO COMBAT HIVIAIDS IMPOMRUON. EOSCArON AD COIdIjlCTmO (MC) Rkd I * E -_ * -w VCI .... * I8M " C t , - =g.ua * ne i- -S r* ft4*a0"5 I __ __ _ CR.9 D Dwy Cli-kt ., IAD l TNATAL CAAM I| tsec ~~~~~~~ ~* I~S aIc (Mb|sm&,A. _O . NAAR r tDla -.-a) _E WASOS D"". __ b.V,> ^, a CT C 4 wwlwl t_O Sab h~ ~OI9~d~ * Cdu t _ _ '* cD.-T IIOASDCAAK cm~ The IDA Grant will support the Ministry by financing priority elements needed to scale up existing HIV/AIDS-related activities in the sector as a means of reaching the goal of providing comprehensive package of care to people living with HIV/AIDS. The following activities are planned for financing under this component: Provision of Drues. Test Kits and Condoms: -67 -  A critical piece in the vision of creating integrated health networks is access to voluntary counseling and testing facilities. Such facilities need both test kits and trained manpower to properly provide the needed pre- and post-test counseling. The project will finance the provision of HIV test kits for use at the VCT centers. In addition, test kits for both HIV and syphilis will be provided for screening of blood for transfusion in health facilities and for the testing of pregnant women at antenatal clinics. The project will finance drugs for the prevention of opportunistic infections through prophylaxis as well as their treatment and for syndromic management of sexually transmitted infections. Anti-retroviral drugs will be financed specifically for the prevention of parent to child transmission according to the policy outlined by the Government of Mozambique. Post-exposure prophylaxis for health workers who are occupationally exposed to HIV will also be supported with the anti-retroviral drugs. The continued provision of condoms both through the public system and the social marketing approaches are important pre-requisites for HIV prevention. It is acknowledged that condoms alone are not enough, but the supply of the condoms is expected to go hand in hand with other efforts to promote behavior change among the target population. The project will finance the supply of condoms and distribution through the existing MISAU structure. Stren,thenini Clinical Laboratory Capacity: Under this category of activities, the training of laboratory personnel and the provision of laboratory equipments for the diagnosis and monitoring of HIV therapy will be provided. Such equipments will include those for CD4 monitoring and others whose specifications will be determined prior to project effectiveness. Additional equipments will include those for the diagnosis of opportunistic infections. Ensurinz Blood Safety The project will support the strengthening of the blood banks to prevent HIV transmission through blood transfusion. The areas of initial focus will be the four central provinces where HIV prevalence are highest ( Sofala, Tete, Manica and Zambezia Provinces). In addition to the laboratory equipments specific to the blood banks and the test kits provided, this category will support the provision of reagents and consumables to ensure proper screening of blood for transfusion. Increasin-a Bio-Security The project will support the protection of health workers from occupational exposure to HIV/AIDS. Equipments and consumables for dis-infection and health worker protection from occupational risks will be provided. These provisions will be complemented by specific training on preventive behaviors for reducing occupational exposure to HIV. Sensitization of Health Sector Staff Under this category of activities, the project will support the development of information, education and communication strategies and materials targeted at the health sector staff on the prevention of HIV transmission for themselves and their families. Capacity Building - 68 -  The project will support the training of health workers in the appropriate management and care of HIV infected persons. Training will be provided to all new staff employed during implementation. The initial focus of the training activities will be the four central provinces. These training activities will be conducted through the Ministry's Institutes in the provinces. The training activities in this category will be complementary to other training modules on HIV/AIDS supported by other donors such as UNDP. Research on Traditional Medicine The Ministry considers traditional medical practitioners as partners in the fight against HIV/AIDS. The project will support the systematic research study of traditional remedies which may be useful for the care of HIV infected persons. Traditional herbs will be analyzed, and a database of existing remedies created and codified. The results from research studies supported under this category will be submitted to peer reviewed journals for publication. Health Waste Mana-aement The project will support the health care waste management related to HIV/AIDS activities in the Ministry of Health. The health wastes related to HIV/AIDS are mostly of infectious nature and will need to be properly disposed in order to protect both health workers and the general public . Health sector staff will be trained on proper handling of infectious wastes and segregation of different categories of waste. Equipments for disposal and sterilization of medical wastes will also be provided at the provincial level health facilities. Incineration will be kept to the minimum level necessary in light of the potential environmental impact of its widespread use ( carcinogenic dioxin production). Management and Implementation of the Health Sector Component The Minister of Health has the overall responsibility for implementation of the health sector component of the project. He will be assisted in this task by the Ministry's Advisory Council (Conselho Consultivo do Ministro -- CCM), the Directorate of Planning and Cooperation (DPC) and the National Directorate of Health (DNS). The DPC will coordinate the implementation of the component. A project coordinator will be designated from DNS to manage the project. He will report directly to DNS and will coordinate with all implementing Directorates. The project coordinator will be responsible for preparation of annual work plans in consultation with I)NS, DPC and all relevant technical and administrative departments. The plan will be submitted to the CCM by the DPC. These plans will be prepared as part of annual planning cycle of the Ministry of Health. The work plans will be approved by the Minister and shared with the CNCS. Upon initiation of program implementation, the project coordinator will present a quarterly progress update to the Minister of Health and the CCM. This schedule will be used for the first year and evaluated thereafter. These reports will be submitted to both DNS and DPC and to the quarterly meetings of the CC M. A copy of this report will be provided to the CNCS for its regular reporting on the overall progress of the project -69 -  Technical Implementation - Coordination by DNS Component Management Functional Units of the Ministry of Health Ministry of Health (MISAU) Directorate of Planning and Cooperation (DPC) National Directorate of Health (DNS) Directorate of Human Resources (DRH) Directorate of Administration and Management (DAG) Cabinet for the Coordination of Projects and Investment (GACOPI) Agency for Drugs and Medical Supplied (CMAM) Directorate of Plannine and Cooperation (DPC). Overall coordination will be managed by the DPC which will report to the Minister and the CCM. Primary responsibilities of the DPC include: I . Overall coordination of program management 2. Supervision of financial management, procurement management and logistics for the health component of the World Bank project 3. Management of monitoring and evaluation 4. DPC will work closely with the National Directorate of Health (DNS) which is responsible for technical coordination and implementation of health programs in review of annual workplans. DPC will submit the annual workplan to the CCM and the Minister for approval. GACOPI GACOPI is a project implementation unit under the DPC. It will be funded by a group of external agencies and the World Bank HIV/AIDS Response Project. For the HIV/AIDS Response Project, GACOPI will provide support to the MOH on procurement and management of external funds. Counterpart funds will be managed by DAG. Each participating agency will determine its needs for procurement and funding and submitting them to GACOPI through the project coordinator. GACOPI will work closely with the different departments in assessing requirements and planning for procurement and disbursement of funds. GACOPI will procure additional services to assist in specific functions of procurement, accounting and auditing. GACOPI will report on a monthly basis to the project coordinator on the status of procurement and disbursements. - 70 -  The National Directorate of Health (DNS). The DNS is responsible for providing technical guidance, supervision and implementation of the health sector component. Its primary responsibilities in. the Ministry of Health's response to HIV/AIDS are: 1. Technical orientation and organization of prevention and clinical support to the Health Units of the DNS 2. Coordination of technical implementation of M OH activities 3. Coordination of technical support to NGOs and private sector partners 4. Technical monitoring and evaluation, including epidemiological surveillance 5. Identification of priorities for funding in the annual workplans Within the DNS, the STD/HIV/AIDS Program has the following responsibilities: 1. Supervision of VCT centers and home-based care. 2. Supervision of the care of the sick, keeping in mind the rules for the prevention of vertical transmission of HIV and the treatment of opportunistic infections in PLWHA. 3. Supervision of the care of people with STDs 4. Overseeing the distribution of IEC materials 5. Evaluation of behavior studies undertaken at the sentinel posts 6. Sensitization training and IEC for the Ministry's own staff 7. Coordination with DPC in order to use the information obtained, including this information in MOH's action plans to combat HIVAIDS Directorate of Human Resources (DRH) The Director of Human Resources is responsible for the implementation of training activities of the Ministry. These training programs will build capacity among health care workers to improve services for prevention as well as treatment of HIV/AIDS related illnesses. The DRH will report to the DNS on the technical aspects of program impl ementation. The DRH will present quarterly reports to the DNS through the project coordinator. The DRH will report to the DPC on any programmatic or managerial problems encountered during implementation. The Directorate for Administration and ManaRement (DAG) DAG is responsible for management of state budget funds and will provide and manage counterpart funds for the project. It will provide reports on the status of counterpart fund allocations and quarterly releases of funds for the project activities. DAG will also provides support in logistics management and procurement of supplies. They will be responsible for providing reports on the status of medical supplies and distribution. These reports are due in the last week of each month following the initiation of quarterly program implementation. These Quarterly reports will be submitted to the DPC for use in program progress meetings with the Minister and the Minister's Advisory Board. Primary responsibilities include logistics management and supplies management (including distribution of supplies); support GACOPI in procurement. Drugs and condoms will be procured by GACOPI with assistance from CMAM. DAG is also responsible for maintenance of medical equipment. The Agency for Drues and Medical SunDlies (CMAM) - 71 -  CMAM is part of the DNS, it will provide support to GACOPI in the procurement of drugs, condoms, and medical supplies. CMAM also handles the logistics management of the drugs. It will be responsible for reports on the status of drug supplies and distribution. It will submit quarterly reports to the DNS, DPC, the Minister and the CCM. Primary responsibilities include: a) planning and coordination for the procurement of drugs, condoms, and medical supplies; b) supplies management and distribution for drugs. NGOs and Private Sector. Civil society agencies, such as NGOs and private sector actors, will be involved in the execution of health related interventions. They will either be contracted by the Ministry of Health to implement specific activities or they may apply for funding under the civil society facility. These specialized health services related activities include: 1. Voluntary Counseling and Testing (VCT) 2. Home-based care 3. Day hospitals (including nutrition care) 4. Treatment of Sexually Transmitted Infections 5. Preventing Mother to Child Transmission (MTCT) MOH contracting of NGOs and private sector firrns and consultants to execute health related interventions. The MOH may contract NGOs, private sector firms or individual consultants to carry out specific activities. Such contracts will be govemed by IDA guidelines for consultants. NGOs executing health service related subprojects through the Community and Civil Society Initiatives. NGOs may apply for funding from the Community and Civil Society Initiatives component of the project for health service related activities. These services will include those listed above under NGOs and Private Sector: treatment of sexually transmitted infections (STIs), tuberculosis, HAART for health care staff and for prevention of mother-to-child-transmission; and, voluntary, testing and counseling. All proposals under US$ 20,000 will be reviewed and approved at the province in accordance with the procedures outlined for appraisal of Civil Society applications by CNCS Civil Society Liaison Officer, and approval by the provincial technicalreview committeecouncil as per the CCSI component guidelines. The Provincial Director of Health is a member of the provincial technical council. In addition, The provincial technical council review committee will ensure that such proposals are in compliance with Government policy on health and HIV/AIDS. Standards and treatment guidelines of the Government will be applied for all health service related activities. The contract for these activities will included an annex that specifies they technical supervision required and the relevant MOH office responsible for the supervision. The Provincial Coordinator will liaise with the Provincial Director of Medical Services to ensure that the technical supervision is carried out on a regular basis. All proposals above the level of US$ 20,000 will be reviewed by the CNCS Civil Society Liaison Officer in the nucleo and sent to the CNCS national Civil Society Coordinator, with copies to the provincial technical council. The Civil Society Coordinator will identify whether the proposal includes a specific health service as set out above, and indicate this on the evaluation form provided for each application to the national technical council. Should the national technical council member responsible for Health determine this application should be forwarded to the MOH provincial review committee and - 72 -  recommended to the national review committee for approval. These proposals will be forwarded to the MOH for technical review. The application will be sent to the MOH for technical review with a copy sent to the national technical council. The MOH should conduct the technical review within a period of 30 days. Once the application is cleared by the MOH, the MOH will inform the national technical council which will review the application and approve funding. These health services specific proposals will be required to comply with Government policy on health and HIV/AIDS. Standards and treatment guidelines of the Government will be applied for all such related activities. Following approval by the national technical council for funding, the proposals will be forwarded to the national review committee for approval of funding. A tripartitate contract will be signed between the NGO, the Ministry of Health and the CNCS for execution of the activity. The contract will specify technical supervision required and the relevant MOH office responsible for the supervision. Where the MOH does not approve the proposal on technical grounds, detailed reasons for rejection must be sent in writing by the MOH to the applicant within one week of the decision, copying the CNCS national technical council. Component Monitoring and Evaluation The Ministry of Health plays a key role, not ordy in the epidemiological surveillance of the disease, but also overall monitoring and evaluation DPC The DPC has overall responsibility for the coordination of monitoring and evaluation activities and the management of information generated thorough monitoring and evaluation activities. The DPC will consolidate this information with the epidemiological surveillance data provided by the Epidemiological Unit (Gabinete de Epidemiologia) of DNS. A consolidated monitoring and evaluation report should be produced quarterly following initiation of program implementation. These reports will be used in programn progress meetings with the Minister and the CCM. An annual monitoring and evaluation report will be produced by DNS and DPC in partnership with the CNCS. This report will be produced annually in the month of May. The DPC will be responsible for dissemination of this annual report among relevant actors. This report should be distributed by DPC to all implementing agents and managers associated with MOH activities within the following month. Primary responsibilities include: 1. M&E on macro indicators, general program M&E 2. Receive reports from the Epidemiological Unit of DNS on epidemiological surveillance 3. Consolidation of technical infonmation with general indicators and reporting 4. Dissemination of M&E information to implermenters, supervisors and other stakeholders DNS The DNS is responsible for technical monitoring and evaluation of implementation. The Epidemiological Unit of the DNS is responsible for the epidemiological surveillance of the disease. The DNS should prepare quarterly reports and submit them to DPC. Reports produced by this unit will also be shared with the DPC and with CNCS. Primary responsibilities of the Epidemiological Unit include: - 73 -  1. Collection, processing, and feedback of information from the sentinel posts for STDs on a quarterly basis and for HIV/AIDS on an annual basis 2. Analysis of the results of the supervisory activities undertaken by the STD/HIV/AIDS Program 3. Annual publishing of the Epidemiological Bulletin Coordination with CNCS. In order to ensure the most successful outcomes, it is important that the CNCS and MOH coordinate closely. The Ministry has designated the Project Manager from DNS as the focal point for the coordination. The focal Point will meet on a quarterly basis with the CNCS for updates on the status of the project and the overall national response. Primary areas of coordination include: 1. Review of the planned activities and their relationship to the overall plans of MOH and CNCS; 2. Coordination of prevention activities and messages at the different levels of HIV/AIDS programming; 3. Review, analysis and evaluation of the work of NGOs (especially those NGOs involved in health-related activities); 4. Coordination of the procurement of goods and materials; and, 5. Supervision, monitoring and evaluation of health related activities of public and civil society groups. Partnering and or cofinancing with other donors The IDA funded project support to the health sector will complement existing and future Government and donor commitments in the fight against the HIV/AIDS epidemic. The strategic selection of the four central provinces for the institutional strengthening under the Ministry of Health is complementary to what the other donors are doing in the Northern and Southern Provinces. Project Component 5 - US$6.00 million Institutional Develooment for Program Manaeement Component Objective The CNCS is one of two Implementing Agencies for the IDA funded project, the other being the Ministry of Health. Project Management for the Health Component is dealt with under Component 4. Under Component 5, the expected outcome is that the Secretariat to the CNCS (CNCS) has the capacity to carry out project management. This includes overall coordination of the National Aids Program and fiduciary oversight responsibilities for Components 1,2,3 and 5 of the Mozambique HIV/AIDS Response Project financed by IDA. The impact of CNCS management of the Program is reduction of the spread and mitigation of the impact of HIV/AIDS in Mozambique. Component Outputs * Prepare the consolidated annual work programs and budgets for the MAP project * Produce the required FMR reports that evidence appropriate financial management, procurement and technical monitoring of the program. - 74 -  * Ensure the program is carried out according to the CNCS Operations Manual * Regularly supervise, monitor, evaluate and report on project activities to the relevant government institutions and to the World Bank as stipulated in the Grant Agreement * Ensure that project financed activities are carried out in accordance with high professional standards and in accordance with the agreed objectives * Coordinate project activities with other public sector ministries and civil society implementing agencies and project beneficiaries * Liaise with external donors to ensure coordination of activities * Develop and implement CNCS operating procedures * Supervise CNCS staff and evaluate staff performamce on a regular basis, at least once a year * Identify and procure training needs for CNCS staff * Liaise with the World Bank on a regular basis on all project related activities, including the planning and preparation of Bank Missions * Coordinate the supervision requirements of the government Component Inputs * Assessments required to identify functional responsibilities of the CNCS, assess staffing and training needs and conduct perfornance evaluations throughout implementation. * CNCS Contract Staff necessary to produce the outputs at provincial and national level. * * Training of CNCS Staff and Implementing Agencies to ensure the functions are carried out effectively. * Development of systems and procedures necessary to carry out the functions specified. * Goods and equipment necessary to carry out the functions specified. * Consultants to provide technical assistance to CNCS to support the effective coordination and fiduciary management of the program. * Procurement of contracts required to fulfill fiduciary responsibilities such as external audit and others to be determined. Implementation Mechanisms or Systems These mechanisms that will enable funds to flow and be reported on will be developed in the operations manual and accompanying manuals. These include the financial management manuals, CNCS Administrative manual and Monitoring and Evaluation manual. Implementation Arrangements The CNCS Secretariat (CNCS) is the executing arm of the Conselho Nacional do Combate a Sida. Its responsibilities are to coordinate the national program in all its aspects. The specific mandate of the CNCS is set out in decree 10/2000. In addition to a national headquarters in Maputo, it is a decentralized structure with 10 subnational offices (nucleos), one in each province and one for the city of Maputo. The Secretariat itself is funded directly by the national budget from GOM resources, according to the initial decree. However, it is clear that additional resources are necessary for the CNCS to carry out its mandate. The CNCS is one of two implementing agencies for the [DA Grant, the other being the Ministry of Health. Project management for the health component is dealt with under Component 4. Under Component 5, the expected outcome is that the CNCS has significantly improved its capacity to coordinate the National HIV/AIDS Program and carry out project management. This includes overall - 75-  planning, budgeting and coordination of the National Aids Program, catalyzing greater involvement by society in the HIV/AIDS response, channeling of funds to implementing agents and monitoring of program execution to ensure compliance with Program objectives and fiduciary responsibilities. A major objective of the project is to build the capacity of the CNCS provincial nucleos to undertake responsibility for planning, mobilizing and channeling resources, coordinating and monitoring of HIV/AIDS activities in a particular province. Capacity building efforts to strengthen CNCS are being carried out in partnership with other donors, particularly USAID and UNDP. Donors are supporting CNCS in various ways, including (i) design and implementation of a financial system for the program (USAID financing an international management consulting firm as a contracted-in financial management service), (ii) establishment of a common pooling mechanism for channeling donor funds to civil society and communities (IDA may consider joining this pool for component I at the MTR once procedures can be appropriately harmonized), (iii) design of a database to capture information on all HIV/AIDS activities country-wide, (iv) establishment of a monitoring and evaluation system design to track implementation and enable leaming from the program and (v) support for additional staffing and training (UNDP program of training and financing of UN Volunteers). However, it is clear that institutional capacity to channel large amounts of funds to multiple agencies is a complex and demanding task. CNCS already had systems in place and was improving these in order to cope with the challenge. However, the CNCS and World Bank will review the workload, disbursement rates and other potential problems on an ongoing basis and discuss alternatives such as contracting out at mid-term review or sooner as deemed necessary. The component has five subcomponents as follows: Subcomponent (i): Strengthening organizational arrangements andfinancial management ($3.7 million) This subcomponent seeks to build the institutional capacity of the CNCS in respect of adequate and appropriate staffing and operations to fulfill its legally mandated program and project specific fiduciary responsibilities effectively and efficiently. Key output indicators here are: * No. implementing agents participating in program * Value of funds channeled to implementing agencies * No. programs funded * Unqualified financial audit of CNCS or appropriate follow up action taken These are supported by the following activities and inputs: * Support for additional program staff in the following areas (i) Program officer (ii) Procurement Officer (iii) Accountant (iv) M&E Officer (long term consultants/contract staff) * Support for relevant technical assistance to build institutional capacity (consultants) * Support for revision of institutional structure (consultants) * Support for development of operations manual (consultants) * Support for incremental operating costs incurred by the project (operating costs) * Support for incremental goods and equipment required to manage the program (goods and equipment) * Support for short term expert consultancies to address specific issues during the project lifetime (short term consultancies) An institutional assessment along with an associated implementation and training plan is key to the success of the program and this component in particular. As a result, there may need to be various iterations of the assessment in order to provide the necessary quality of recommendations and their implementation before effectiveness. - 76 -  Subcomponent (ii): Strengthening M&E ($0.4 7 million) This subcomponent will support the further development of an effective M&E system. The CNCS itself will be responsible for financial monitoring and program monitoring but will coordinate with the Ministry of Health and other specialists in respect of information flows, analysis and use of epidemiological, behavioral and research data. CNCS and the nucleos in particular will be responsible for collecting and disseminating the minimum set of useful indicators in order to learn from experience and adjust strategies and fund flows accordingly. Key output indicators here are: * All recipients submit reports according to the M&E system or receive follow up action * learning workshops held in each province per annum * fiduciary reports presented to funding agencies on a timely and accurate basis These are supported by the following activities and inputs: * Support to the design and establishment of the M&E system (consultants, goods and equipment) * Support for the implementation of financial and program monitoring (training, consultants, goods and equipment) * Support for learning from M&E (workshops, training) Subcomponent (iii): Formulation of a national communications strategy($ 0.96 million) Mozambique has a number of IEC activities underway but these have not been coordinated in a strategic, consistent or coherent manner. The project will support existing processes to develop a national communications strategy and to provide resources for the consolidation of existing materials and development of new IEC materials and media-based advocacy. The national communications strategy should include information regarding the national program objectives and resources available as well as define a strategic approach to IEC. The subcomponent will also provide support for the development of IEC materials and media that can be used by implementing agencies for reaching out to key target groups. Key output indicators here are: * A national communications strategy developed and in place * Database of existing materials in place * At least 10 new IEC materials developed for target groups * At least 10 new media programs developed and disseminated These are supported by the following activities and inputs: * Support to the process of development and testing of a national communications strategy (workshops, consultants, pilot subprojects, training) * Support for the design of specific IEC materials aimed at target groups (consultants, goods and equipment) * Support for the implementation of advocacy-related media programs (consultants) Subcomponent (iv) Capacity buildingfor the CNCS Secretariat ($0.5 7 million) The CNCS will require initial and ongoing training in order to ensure its staff have the skills and competences to undertake their responsibilities and be up to date in respect of knowledge on HIV/AIDS. Key output indicators here are: * Detailed training plan developed for CNCS staff * All staff receive training on the Operations and Administrative Manuals * All financial management staff receive training on the Financial Management system * A minimum of two weeks of training received per staff member per year * Key staff attend relevant regional or international courses - 77 -  These are supported by the following activities and inputs: * Support for the development of a training plan (consultants) * Training activities conducted on an annual basis for all staff (training) * Support for study tours, workshops and seminars (training) Subcomponent (v) Creation of a Supportive Regulatory Environment ($ 0.2 million) A number of laws and regulations in existence in Mozambique will require adaptation in order to support the reduction of discrimination and reduction of stigma of people living or affected by HIV/AIDS. A number of new laws or regulations may also need to be researched and prepared for submission to law-making authorities. In both cases, advocacy will be required as well as mechanisms to ensure that once in place, these instruments will be disseminated effectively. Key output indicators here are: * key relevant legislation adjusted or prepared to respond to HIV/AIDS issues * key relevant legislation disseminated to target groups These are supported by the following activities and inputs: * Research into relevant laws or regulations to amend (consultants) * Research and preparation of potential new legal or regulatory instruments (consultants) * Support for dissemination of new legal or regulatory instruments (consultants, training, goods) * Support activities related to advocacy of new or arnended laws and regulations (consultants, training, other services) Partnering and/or Co-financing with Other Donors for Program Management The CNCS is responsible for coordinating the national aids program for which the World Bank project will provide one source of funds. The World Bank project will support the strengthening of institutional capacity required to carry out coordination activities under the National AIDS Program as a whole as well as specific fiduciary responsibilities for the World Bank funds management. As far as possible, procedures and reporting requirements will be harmonized across sources of finance in order to minimize the management burden on the CNCS. In particular, the World Bank will seek to work with other donors to harmonize procedures related to civil society activities. At some time in the future, it is envisaged that procedures will be sufficiently developed and tested that many donors will agree to merge funds for these activities into a pooling mechanism. However, until such time funds for World Bank funded civil society activities will be channeled and reported upon separately. Efforts will be made with CNCS Secretariat and other donors to have Supervision missions to review implementation of the program take place concurrently, to enable all issues to be jointly addressed and resolved to the satisfaction of all stakeholders. - 78-  Annex 3: Estimated Project Costs MOZAMBIQUE: HIVAiDS Response Project 7. 2; ~~ ~ "IL-ca-1 U .EFofeign (TtI * , '. i;? By! ProjectZCos i Component; . .1 :'US '1.US i |io is | Community and Civil Society Initiatives 20.80 6.80 27.60 Capacity Building for Civil Society 1.30 3.90 5.20 Government Multisectoral Response 3.00 3.70 6.70 Scaling Up Health Sector Services 4.90 11.10 16.00 Institutional Development for Program Management 1.70 3.90 5.60 Total Baseline Cost 31.70 29.40 61.10 Physical Contingencies 0.20 0.50 0.70 Price Contingencies 0.70 1.50 2.20 Total Project Costsl 32.60 31.40 64.00 Total Financing Required 32.60 31.40 64.00 41 i0i _r . . ,, 1 .4 -.1. ~ ~ ~ a-i.. ~ 4 -- .u9fAL7 | #>t 1al e r>M;t t9 ,.t .+; tR q 1 1 -oca --Tota iY'-'-) ; ' iS ~ ~P'rojectzc:otB e . , US'.$miio n _ 'US_ o-i'_ ,. Sm''i_lio___ Civil Works 0.40 0.10 0.50 Goods and Equipment 1.50 11.80 13.30 Consultants Services 3.70 11.30 15.00 Training 1.80 1.20 3.00 Operating Costs 1.20 3.00 4.20 Subprojects 24.00 4.00 28.00 Total Project Costs 32.60 31.40 64.00 Total Financing Required 32.60 31.40 64.00 Identifiable taxes and duties are 5.3 (US$m) and the total project cost, net of taxes, is 58.7 (USSm). Therefore, the project cost sharing ratio is 0% of total project cost net of taxes. - 79 -  Annex 4 Economic Analysis MOZAMBIQUE: HIV/AIDS Response Project The "Economic Analysis of HIV/AIDS" contained in the Multi-Country HIV/AIDS Program for the Africa Region (MAP) Project Appraisal Document (Report No. 20727 AFR, Annex 5) and the Second Multi-Country HIV/AIDS Program (MAP2)(APL) for the Africa Region (Report No. P7497 AFR), provides the economic justification for the Mozambique HIV/AIDS Response Project. As it indicates, H1V/AIDS undermines the three major determinants of economic growth, namely physical, human and social capital. Due to its long incubation period ( 7-10) years, the impact of the HIV/AIDS epidemic is likely to be drawn out over time with the rate of growth of physical and human capital and the efficiency of social capital declining slowly in parallel with the maturing of the HIV/AIDS epidemic. Over time, the behaviour of GDP would reflect a similar gradual reduction of the rate of growth, rather than a sudden fall in the GDP per capita. An economic analysis of the impact of the H1V/AIDS epidemic in Mozambique is provided in Section E. 1 of this PAD. This analysis concludes that, due to the long time lags between infection and onset of AIDS, the AIDS case projections to 2010 are, barring rapid advance in medical technologies, essentially progranuned into the system, since nearly all of the people projected to die in this decade, including the latter parts, are already HIV positive. The analysis indicates that these impending AIDS cases and deaths could have large economic impacts. Projecting to 2010, per capita GDP growth rates are between 0.3 % and 1.0% lower than in a fictional no-AIDS scenario. GDP per capita has grown an average of 6.4 percent per annum between 1995 and 2002. With GDP per capita in 2002 estimated at about US$ 210, and some 17 million inhabitants, the average annual value of the economic loss is equivalent to between US $ 11 million and US$ 37 million in 2002, rising gradually as the population and GDP increase. The major sources of this slowdown in growth are (1) reduced productivity growth, (2) reduced population growth and human capital accumulation, and (3) reduced physical capital accumulation. All three of these effects are significant though the productivity effect is the strongest. In addition, impacts on school enrollments are potentially very large with implications for growth rates in the latter part of this decade and beyond. Due to a variety of knowledge gaps, a high degree of uncertainty must be associated with these results. However, if AIDS indeed reduces per capita economic growth for extended periods of time as the analysis suggests, then initiatives that effectively combat AIDS will pay handsomely in purely economic terms. Given the nearly decade long time lags between infection and death, policy actions can be divided into two categories: (1) reactive policies to face the ramifications of the pandemic in the current decade and (2) preventive policies designed to reduce HIV/AIDS prevalence in future decades. Under reactive policies, education policy was explicitly considered. The scenario which analyses the implications of taking extra efforts in education, looks at the impact on GDP which would result from a strong effort to maintain school enrollment rates, graduation rates, and educational quality. The effect of such policies results in a 0.6% increment to GDP growth by 2010, relative to the base scenario (with AIDS). This increment is due to the enhanced productivity of a more skilled workforce. This increment is likely to persist well into the future due to much larger school enrollments in 2010. Assuming this increment persists to 2020, net present value calculations justify very large incremental education expenditure focussed on those aspects noted above (more than 5% of GDP per year from 2002 to 2010) with linear phase out over the following three years. - 80 -  Similarly, prevention is a worthwhile investment, even though its economic effects are only seen eight years down the line. If successful preventive policies substantially reduce AIDS deaths in the next decade -- and have an incremental effect on growth of 0.3% per annum between 2010 and 2020, the lower end of the potential AIDS impact on per capita income, this outcome would justify large expenditures on prevention -- in the order of 3% of GI)P per annum between 2002 and 2007, with a linear phase out over the subsequent three years. - 81 -  Annex 5: Financial Summary MOZAMBIQUE: HIV/AIDS Response Project Years Ending June 2004- June 2008 To be filled in once project costing exercise finalized | Year 1| Year 2 | Year 3 | Year 4 | Year 5| Year 6 | Year 7 Total Financing Required Project Costs Investment Costs 4.6 10.0 15.1 16.0 14.5 0.0 Recurrent Costs 0.6 0.9 1.3 0.7 0.4 0.0 Total Project Costs 5.2 10.9 16.4 16.7 14.9 0.0 0.0 .Total Financing 5.2 10.9 16.4 16.7 14.9 0.0 0.0 Financing IBRD/IDA 4.4 9.3 14.2 14.7 13.2 0.0 0.0 Govemment 0.6 1.2 1.7 1.2 0.8 0.0 0.0 Central 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Provincial 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Co-financiers 0.0 0.0 0.0 0.0 0.0 0.0 0.0 User Fees/Beneficiaries 0.2 0.4 0.5 0.8 0.9 0.0 0.0 Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Project Financing 5.2 10.9 16.4 16.7 14.9 0.0 0.0 Main assumptions: - 82 -  Annex 6(A): Procurement Arrangements MOZAMBIQUE: HIVWAIDS Response Project Procurement Institutional Arrangements The overall implementation arrangements for the project include the following: At the national level the CNCS Executive Secretariat would coordinate implementation of all the activities fimded under the Bank project. Under this umbrella, there would be two implementation agencies: (i) the Ministry of Health, which would receive its funds directly from IDA via its own Special Account B, and would implement its agreed work plan for the Health Sector component; and (ii) the Executive Secretariat, which would manage the main Special Account A, to be used to fund implementation of the remaining components. Project implementation, financial management, procurement, monitoririg and evaluation would be operated through the institutional management and accounting systems of the Executive Secretariat and of the Ministry of Health. The Secretariat has defined positions and is hiring staff to carry out the procurement process to be used in each of the components, in a manner consistent with the appropriate Bank guidelines. The Secretariat intends to rely on the office of GACOPI in the Ministry of Health for any large procurement procedure, including any international competitive bidding. A Procurement Plan has been prepared as part of the draft Project Implementation Plan -- and procedures and thresholds for each item have been set out in the draft Operational Manual. A large share of the project will be used as grants in support of a large number of small community development subprojects, and will be subject to simplified procedures specified under the procurement guidelines for such activities. The implementation arrangements will be spelled out in the Project Operation Manual, which will clearly define the responsibilities of each entity and delineations with respect to the procurement processing. Basically, the recommended approach is that procurement resources, to be provided in each entity, will be an integral part of the existing fiduciary institutionad setting, and that CNCS will be considered as a beneficiary executing entity relying for certain type of procurement activities, including contracts execution, on GACOPI. The CNCS will then be able to concentrate on its main role of coordination and facilitation of the Programn. However, payments to the providers will be effected by the CNCS - the budget holder for the four components -- on demand of and after certification by GACOPI. The filing of the procurement documentation will be kept by and be in the custody of the entity where the processing took place, including basis of the payments to the providers of services, works or goods. Guidelines and Documents A CPAR has just been completed and handed over to the Government. The agreed upon action plan recommends to undertake an overhaul of the procurement system in terms of Institutional setting and capacity, as well as Legal and Regulatory frameworks. In the meantime, no special exceptions, permits or licenses need to be specified in the Grant documents for international competitive bidding since Mozambique procurement practices allow IDA procedures to take precedence over any contrary provisions of local regulations. Goods financed under IDA will be procured in accordance with Bank's Guidelines under IBRD Loans - 83 -  and IDA Credit (January 1995 revised in January and August 1996, September 1997, and January 1999), and Bank Standard Bidding Documents, and Standard Evaluation Report will be used for both ICB and NCB. National Competitive Bidding (NCB) advertised locally will be carried out in accordance with the Mozambique's procurement laws and regulations, acceptable to IDA provided that they assure economy, efficiency, transparency, and broad consistency with key objectives of the Bank Guidelines. For NCB procedures, the Government gave assurance during negotiations that the following principles would be adhered to: (i) all bids documentation would be in one envelope which would be opened in public; (ii) a point system is not used for bid evaluation for works and methods used in evaluation of bids and the award of contracts are made known to all bidders and not be applied arbitrarily; (iii) any bidder is given adequate response time (four weeks) for preparation and submission of bids; (iv) bid evaluation and bidder qualification criteria are clearly specified in bidding/pre-qualification documents and not be applied arbitrarily; (v) eligible firms are not precluded from participation; (vi) no preference margin is granted to domestic contractors and suppliers; (vii) award would be made to the lowest evaluated bidder in accordance with predetermined and transparent methods; (viii) bid evaluation reports would clearly state the reasons to reject any non-responsive bid and (ix) prior to issuing the first call for bids, draft standard bidding documents prepared as annexes to the Procedures Manual are submitted to IDA and found acceptable. The procedures followed, and total aggregate amount for all shopping methods under the project will be reviewed after six months of project operations. Depending on performance and the results of the review, the total aggregate amount may be adjusted where necessary. Standard request forms and establishment of guidelines for conduction the shopping methods (as per the June 9, 2000 Memorandum Guidance on Shopping) should be prepared and included in the project's Manual of Procedures. Consultant services contracts financed by IDA will be procured in accordance with the Bank Guidelines for the selection and Employment of Consultants by World Bank Borrower (January 1997, revised September 1997 and January 1999 and May 2002). The Standard Request for Proposals as developed by the Bank will be used for the selection of consulting firms. Simplified contracts will be used for short-term assignments, i.e. those not exceeding six months. The government, and the project staff were briefed during negotiations about the features of the Consultant Guidelines, in particular with respect to advertisement, bid opening and the various steps of IDA reviews. Community participation in procurement will be based on the Bank Simplified Procurement and Disbursement Procedures for Community-Based Investments. The Bank Guidelines for Simplified Procurement and Disbursement for Community-Based Investments will be used in the design of procurement under this aspect of the project. The CNCS/ES will be responsible for ensuring compliance with these guidelines, and ex-post reviews of random sub-projects will be conducted periodically by the Bank and independent consultants appointed by the CNCS/ES. Simplified procurement and disbursement procedures for community-based programs, including the positive list of items qualifying under this component will be developed and included in the project's Manual of Procedures. The manual of procedures will also include, procedures for IDA review thresholds for NGOs, private sector, and other community initiatives. The GACOPI will arrange to publish a General Procurement Notice (GPN) for the project in the United Nations Development Business (UNDB) and in local newspapers. The draft GPN will be submitted to the Bank for prior review and approval. The GPN will be updated every year and submitted to IDA. The update will show all outstanding ICB for goods and works contracts, as agreed with the Bank. All consultancy assignments estimated to cost the equivalent of US$200,000 or more will be advertised in the UNDB and in at least one national newspaper. A procurement plan has been prepared and agreed with the Bank. Three months prior to the start of each fiscal year the Borrower will submit an updated - 84 -  annual procurement plan. Procurement Thresholds and Prior Review Goods. The total cost of goods is estimated at US$13.5 million for the project. Procurement of goods will be bulked where feasible into packages valued at US$150,000 equivalent or more per contract and will be procured through International Competitive Bidding (ICB). Preference for domestically manufactured goods will apply in accordance with the World Bank Guidelines. Contracts for vehicles, bicycles, equipment and IEC materials locally available which cost more than US$50,000 but less than US$150,000 up to an aggregate amount of USD$0.5 million would be procured through National Competitive Bidding (NCB) procedures acceptable to IDA. Procurement of instructional materials, computers and accessories, office equipment, and off the shelf items IEC and other instructional materials, computers and accessories, costing less than US$50,000 up to an aggregate amount of US$250,000 equivalent will be procured through prudent Shopping and National Shopping in accordance with provisions of paragraph 3.5 and 3.6 of the Guidelines. Procurement of proprietary nature as described in para 3.7 of the Guidelines, up to an aggregate amount of US$100,000 equivalent, may be procured directly from manufacturers and authorized local distributors according to procedures specified in para 3.7 of the Guidelines. To facilitate speedy procurement of items required urgently for institutional strengthening, drugs, medical supplies, kits, and condoms may be procured fiom the United Nations Agencies (i.e. UJNFPA; UNICEF; WHO; WFP; IAPSO) in accordance with paragraph 3.9 of the Procurement Guidelines. The list of these items and their estimated value should be agreed upon with IDA as per approved Procurement Plan. Community and Civil Society Fund Subprojects. The project will finance HIV/AIDS-related activities, such as IEC, awareness creation, training, HIV/AIDS prevention promotion, capacity building, condoms and STI-kits distribution etc. Funding for these activities will be in the form of grants. Community beneficiaries will contribute 10% in cash or in kind. Work programs under the proposals will depend on applications received from communities, NGOs, line departments and private organizations against a positive list of activities. It is not possible to determine the exact mix of goods, small works, and services to be procured under these activities due to their demand driven nature. Therefore, the types of expenditures to be financed under these activities will be grouped under a unique category of expenditure (and disbursement): Subprojects. Their procurement will be carried out in accordance with procedures laid down in the Operation Manual depending on the needs identified by communities. Small Civil Works. No large Civil works are scheduled under the project's life. Small civil works related to the rehabilitation of and minor extensions to existing constructions could be part of proposals for the Fund's grant financing, or participating Ministries, but will not exceed a maximuni of US$ 15,000 per proposal, up to an aggregate not to exceed US$ 500,000. Since those small civil works are scattered throughout the country are unlikely to attract foreign contractors, they would be awarded on the basis of quotations obtained from three qualified domestic contractors invited to bid and awarded under lump sum, fixed-priced contracts. The invitation to bid will include a detailed description of the work including basic relevant drawings were applicable. The award would be made to the contractor who offers the lowest price quotation for the required works, provided he demonstrates he has the experience and resources to complete the contract successfully. Consultants Services. The consulting services required will be mostly in the areas of HIV/AIDS education, IEC/BCC, training, community development, procurement and financial management, - 85 -  monitoring and evaluation, information dissemination, auditing. The exact type of consultancy, budgets, and applicable procurement methods will be discussed and agreed annually during joint reviews. In general, consultants will be hired through competition based on: (i) Quality-and Cost-Based Selection (QCBS) among qualified short-listed firms, by evaluating the quality of the proposals before combining quality and cost evaluation, by weighting and adding the quality and cost scores; (ii) Least-Cost Selection (LSC) in accordance with paragraph 3.1 and 3.6 of the Consultant Guidelines, will be used for audit contracts costing less than US$100,000; the firm with the lowest price will be selected, provided its technical proposal received the minimum mark; (iii) Selection based on consultant's qualifications may be used for the selection of research institutes; training institutions, and for other assignments that meet criteria set out in para.3.7 of the guidelines; or Selection of Individual Consultants (which consist in comparing at least 3 qualified individuals) for assignments that meet criteria set out in paragraph 5.1, 5.2, and 5.3 of the Guidelines. To ensure that priority is given to the identification of suitable and qualified national consultants, short-list for contracts estimated to cost under US$ 150,000 or equivalent, may be comprised entirely of national consultants (in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines), provided that a sufficient number of qualified firms (at least 3) are available at competitive costs. However, if foreign firms have expressed the interest, they will not be excluded form consideration. The Standard Request for Proposals (RFP) as developed by the World Bank will be used for requesting proposals, and for selection and appointment of consulting firms. Simplified contracts may be used for short-term assignment (less than 6 months). Training, workshops, conference attendance and study tours will be carried out on the basis of annual programs that will identify the general framework of training or similar activities for the year, including the nature of training/study tours/workshops, the number of participants, and cost estimates. Training outside the country are subject to IDA approval. No "degree" training will be eligible for training. Post-reviews of in-country training will be conducted from time to time to review the selection of institutions/course contents/trainees and justification thereof, and cost incurred. IDA Reviews IDA-financed contracts for goods and works above the threshold value of US$150,000 equivalent will be subject to IDA's prior review procedures. Draft standard bidding document format for NCB will be reviewed and agreed upon with IDA. Prior IDA review will not apply to contracts for recruitment of consulting firms and individual consultants estimated to cost less than US$200,000 and US$50,000 equivalent, respectively. However, the exception to prior review will not apply to the Terms of Reference of such contracts regardless of value, to single-source hiring, to assignments of a critical nature, or to amendments of contracts rising the contract value above the prior review threshold. For consultants contracts estimated to cost more than US$200,000, opening the financial envelopes will not take place prior to receiving the Bank's no-objection to the technical evaluation. Procurement methods (Table A) Table A: Project Costs by Procurement Arrangements (US$ million equivalent) *' - ? , }. ' |' ;; ''' _Procurement,eth . d. l .':Ex idItur.eCategor i |- -; NCB Other2 N' 6tii Cdst|: -86 -  1. Works 0.00 0.00 0.20 0.00 0.20 (0.00) (0.00) (0.16) (0.00) (0.16) 2. Goods 12.30 0.50 0.60 0.00 13.40 (11.44) (0.40) (0.40) (0.00) (12.24) 3. Services 0.00 0.00 18.00 0.00 18.00 Consultants and Training (0.00) (0.00) (14.40) (0.00) (14.40) 4. Miscellaneous 0.00 0.00 5.50 0.00 5.50 Operating Costs (0.00) (0.00) (4.40) (0.00) (4.40) Grants to NGOs and 0.00 0.00 27.00 0.00 27.00 Communities for Subprojects (0.00) (0.00) (23.80) (0.00) (23.80) Total 12.30 0.50 51.30 0.00 64.10 (11.44) (0.40) (43.16) (0.00) (55.00) " Figures in parenthesis are the amounts to be financed by the Bank Grant. All costs include contingencies. 2'Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units. - 87 -  Table Al: Consultant Selection Arrangements (optional) (US$ million equivalent) ,, -i . , ' - Selection.'Method.~-;:; IConsu ltant S~erices 'qv- . .: