Document of The World Bank Report No: 23065-MAG PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 15.70 MILLION (US$20.0 MILLION EQUIVALENT) TO THE REPUBLIC OF MADAGASCAR FOR A MULTISECTORAL STI/HIV/AIDS PREVENTI()N PROJECT NOVEMBER 26, 2001 AFTH4 Africa Regional Office CURRENCY EQUIVALENTS (Exchange Rate Effective October 31, 2001) Currency Unit = Malagasy Franc 1000 FMG = US$0.158 US$1.0 = FMG6328 FISCAL YEAR January I -- December 31 ABBREVIATIONS AND ACRONYMS AC'Tafrica AIDS Camnpaign Team for Africa KAP studies Knowledge Attitude and Practice studies AIDS Acquired Immuno Deficiency Syndrome LACI Loan Administration Change Initiative BCN Bureau de Coordination National pour la Lutte M&E Monitoring and Evaluation Contre le SIDA CAS Country Assistance Strategy MAP Multi-country HIlV/AIDS Program __ ___ Ce. ._ _ _ _ _ __ _ _ _ __ _ _ _ _ _ _ _ CB) Community-based Organization MCTC Mother to Child Transmission Control -CN Cellule de Coordination Nationale MIS Management Information System C ' Center for Disease Control MOH Ministry of Health cIS Intersectoral Committee MSPP Multisectoral STI/HI V/AIDSPrevention I CMS Commercial Marketing Strategies NGO Non-governmental Organization CNLS Conseil National de Lutte contre le SIDA NSP National Strategic Plan CPAR Country Procurement Assessment Report PFMA Provincial Financial Management Agen , CS Sector Committees PHRD Japanese Grant for Human Resources Development i CSW Commercial Sex Workers PLCS Programme de Lutte Contre le SIDA DIHS Demographic and Health Survey PPF Project Preparation Facility EA Environmental Assessment PRSP Poverty Reduction Strategy Paper EMP Environmental Management Project PSI Population Services International Ell European Union STI Sexually Transmitted Infection FAO Food and Agriculture Organization TA Technical Assistance FMA Financial Management Agency B Tuberculosis FMit Financial Management Report = _1 GOM Government of Madagascar GP Unite Gestion du Projet GPN General Procurement Notice UNAIDS United Nations Aids Organization HIPC Heavily Indebted Poor Countries UNDP United Nations Development Program _ HIV Human Immunodeficiency Virus IAPSO Inter-Agency Procurement Services Office UNFPA United Nations Fund for Population Act vities IDA International Development Agency USAID United States Agency for International De)velopment; IEC _ Infornation, Education, and Communication VCT Voluntary Counseling and Testing ILO International Labor Organization WFP World Food Programme_ IN STAT National Institute of Statistics WHO World Health Organization Vice President: Callisto E. Madavo Country Director: Hafez Ghanem Sector Manager: Arvil Van Adams L___ Task Team Leader: Claudia Rokx MADAGASCAR MULTISECTORAL STI/HIV/AIDS PREVENTION 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 2 2. Main sector issues and Government strategy 3 3. Sector issues to be addressed by the project and strategic choices 6 C. Project Description Summary 1. Project components 8 2. Key policy and institutional reforms supported by the project 8 3. Benefits and target population 9 4. Institutional and implementation arrangements 9 D. Project Rationale 1. Project alternatives considered and reasons for rejection 12 2. Major related projects financed by the Bank and other development agencies 13 3. Lessons learned and reflected in the project design 13 4. Indications of borrower commitment and ownership 15 5. Value added of Bank support in this project 15 E. Summary Project Analysis 1. Economic 16 2. Financial 16 3. Technical 16 4. Institutional 17 5. Environmental 18 6. Social 19 7. Safeguard Policies 20 F. Sustainability and Risks 1. Sustainability 20 2. Critical risks 21 3. Possible controversial aspects 22 G. Main Conditions 1. Effectiveness Condition 23 2. Other 23 H. Readiness for Implementation 23 I. Compliance with Bank Policies 23 Annexes Annex 1: Project Design Summary 25 Annex 2: Detailed Project Description 28 Annex 3: Estimated Project Costs 32 Annex 4: Cost Benefit Analysis Summary 33 Annex 5: Financial Summary 34 Annex 6: Procurement and Disbursement Arrangements 35 Annex 7: Project Processing Schedule 55 Annex 8: Documents in the Project File 57 Annex 9: Statement of Loans and Credits 60 Annex 10: Country at a Glance 62 Annex 11: Supervision Plan 64 Annex 12: Gap Analysis Part 1: summary of ongoing interventions 66 Annex 13: Lessons Learned from International Experience 80 Annex 14: Detailed Monitoring and Evaluation Arrangements 82 Annex 15: Summary of the National Strategic Plan 86 Annex 16: Coordination Mechanisms 90 MAP(S) IBRD 20035R1 MADAGASCAR Multisectoral STI/HIV/AIDS Prevention Project Project Appraisal Document Afiica Regional Office AFTH4 Date: November 21, 2001 Team Leader: Claudia Rokx Country Manager/Director: Hafez Ghanem Sector Manager/Director: Arvil Van Adams Project ID: P072987 Sector(s): HA - HIV/AIDS Lending Instrument: Specific Investment Loan (SIL) Theme(s): Health/Nutrition/Population Poverty Targeted Intervention: Y Program Financing Data [ ] Loan [X] Credit [ ]Grant [ Guarantee l Other: For LoanslCredits/Others: Amount (US$m): 20.00 Proposed Terms (IDA): Standard Credit Grace period (years): 10 Years to maturity: 40 Commitment fee: 0.5% Service charge: 0.75% Financing Plan (US$m): Source Local Foreign Total BORROWER 1.00 0.00 1.00 IDA 16.00 4.00 20.00 Total: 17.00 4.00 21.00 Borrower: GOVERNMENT OF MADAGASCAR Responsible agency: MSPP UNITE DE GESTION (UGP) Address: B.P. 248, Antananarivo, Madagascar Contact Person: Mr. Alain Randriamnaherisoa Tel: 261 20 22 65449 Fax: Email: ugp@dts.mg Estimated disbursements ( Bank FYIUS$m): FY 2003 2004 2005 2006 2007 Annual 2.50 3.60 5.00 5.75 3.15 Cumulative 2.50 6.10 11.10 16.85 20.00 Project implementation period: 4 years Expected effectiveness date: 06/30/2002 Expected closing date: 12/31/2006 OC PA F:- -U 1. ZOO A. Project Development Objective 1. Project development objective: (see Annex 1) The development objective of the Multisectoral STI/HIV/AIDS Prevention Project (MSPP) is to suppoit the Government of Madagascar (GOM) efforts to promote a multisectoral response to the HIV/AIDS cnisis and contain the spread of HIV/AIDS on its territory. To do so, the project will build capacity and scale Up the national response to HIV/AIDS and sexually transmitted infections (STIs), a key risk factor and contributor to the spread of HIV/AIDS. 2. Key performance indicators: (see Annex 1) The achievement of the development objective will be measured by the following indicators: * An increase of condom use during last sex with non-regular partners among men from 2.3 % to 15%!,i and among women from 0.3% to 7% by the end of the project in Antananarivo and Tamatave; * Reduction of the proportion of people aged 15-49, having at least one sex partner, other than a regular partner in the last twelve months; * Decrease in prevalence of gonorrhea among CSW from 25% to below 15% by the end of the project; and * Increase proportion of people knowing at least three ways to prevent getting infected with HIV (wornen from 57% to 80% and men from 44% to 90%). B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: Report No. 16249-MAG Date of latest CAS discussion: 02/18/97 In the context of the HIPC decision point, the Government's interim Poverty Reduction Strategy Paper (PRSP) was presented to, and approved by, the Board in December 2000. The Board highlighted areas important for poverty reduction, including HIV/AIDS, and encouraged the government to address these areas during the fall PRSP process. A full PRSP and a new CAS are expected to be completed in late FY02. A workshop on PRSP and HIVI/AIDS was held in March 2001 in Antsiranana, attracting over a hundred participants from all sectors, including the local authorities, civil society, non-governmental organizations (NGOs) and associations as well as donor representatives. One of the working groups during the workshop focused on mitigating WHV/AIDS impact. The work of this group culminated in a set of recommendations to be included in the PRSP. This project is a Multi-Country HIV/AIDS Program I (MAP I) project. Madagascar has satisfied the four eligibility criteria of the MAP I as follows: (a) Satisfactory evidence of a strategic approach to HIV/AIDS. In 2000, the GOM prepared a draft National Strategic Plan (NSP) for the fight against HIV/AIDS in collaboration with UNAIDS, bilateral donors, NGOs, and other civil society entities and developing sector strategies and priorities. At present. the government is actively refining this plan through an intensive participatory process at the regional and community levels. The final NSP will be approved before Board presentation. Despite its low prevalence, HIV/AIDS has been mainstreamed into the government's development policy. This is repeatedly evidenced by speeches made by government officials within Parliament and to external audiences as well as by active government participation in national and international HIV/AIDS conferences and events. - 2 - (b) Creation of a high-level HIV/AIDS coordinating body. The Conseil National de Lutte Contre le SIDA (CNLS) was initially created in 1990 under the Ministry of Health (MOH) to lead the national Programme de Lutte Contre le SIDA (PLCS). While successful in dealing with health sector-related HIV/AIDS activities, the CNLS failed to expand these to other sectors, largely because of its lack of leverage over other sector ministries. Thus, in January 2001, the Prime Minister created a Cellule de Coordination Nationale des Actions de Lutte Contre le VIHISIDA (CCN) -- which is the equivalent of a National AIDS Council - to lead the development of the NSP and the coordination of multisectoral HIV/AIDS effort. The CCN is chaired by the Directeur du Cabinet of the Office of the Prime Minister and is made up of representatives of the public and private sectors and civil society organizations. (c) Government agreement to use extraordinary implementation arrangements. The GOM recognizes the importance of using existing structures to respond quickly and efficiently to HIV/AIDS problems. Therefore, it was agreed with the GOM that the project will contract out financial management, monitoring and evaluation, training, facilitation and other appropriate activities. The GOM will use simplified and streamlined administrative procedures and fiscal measures for all HIV/AIDS material, equipment and medication. (d) Government agreement to use and fund multiple implementation agencies. Multiple agencies, including a large number of NGOs, are currently very active in HIV/AIDS prevention in Madagascar. Under the Project Preparation Facility (PPF), the GOM has already begun to scale up existing STI/HIV/AIDS prevention activities of a broad range of implementers, including ministry departments, civil society, NGOs, community-based organizations (CBOs) and the private sector. 2. Main sector issues and Government strategy: 2.1 Main sector issues: Although the prevalence rate of HIV/AIDS in Madagascar is currently estimated to be less than one percent, current estimates are based on unreliable information. Nevertheless, a low prevalence situation can easily explode if no proactive steps are taken. The risk of a rapid increase in Madagascar is very real given the alarmingly high rates of STIs, one of the most important risk factors. 2.1.1. Current dimensions of the HIV/AIDS epidemic in Madagascar HIV was first diagnosed in Madagascar in 1984. In 1998, out of 13.9 million people, 37 AIDS cases and 233 HIV positive cases were reported to the World Health Organization (WHO) in that year. Epidemiological studies confin that 96 percent of HIV infections were acquired through sexual transmission. The Ministry of Health has reported that HIV has more than doubled in three years, from 0.07 percent in 1996 to 0.15 percent in 1999. Despite these periodic studies, however, the sentinel surveillance system has not been fully operational since 1996, creating doubts about the real prevalence of HIV/AIDS infection, particularly since different sources report conflicting results. Although a rapid increase in HIV/AIDS prevalence is associated with an increase in tuberculosis (TB), the National Tuberculosis Program in Madagascar has not noticed an abnormal increase in the number of new TB cases, but is monitoring the situation. Thus, with the exception of a few surveys in urban areas, available data on HIV prevalence is unreliable, preventing any real conclusions about the status of the HIV epidemic. A comprehensive MOH-led epidemiological study is being launched and partly financed under the MSPP's PHRD grant. -3 - 2.1.2. Risk and Vulnerability Factors Extremely High STI rates rhe country's STI rates - the most important risk factor along with unprotected sex - are extremely high. Studies indicate that in some areas, over 45 percent of the population have an active STI at any given time Syphilis and gonorrhea rates, in particular, are among the highest in the world. In 1998, active syphilis in pregnant women was as high as 14.8 percent and over 35 percent among sex workers in some regions. In a May 2000 study of around 1000 sex workers in Antananarivo and Tamatave, 82 percent had at least one STI. Prevention of STIs through condom use is critical in the fight against HIV/AIDS because ulcerative STIs, such as herpes genitalis and syphilis, increase the risk of HI-V transmission by 50 to 300 times (male to female). High risk sexual behavior and misconceptions Women begin child bearing at a very early age. By the age of 18, half of all women have had one child or are pregnant with their first. Lack of knowledge of effective prevention methods constitutes a major determinant. Almost two in every five young girls who knew about HIV/AIDS and were sexually active, did not know what a condom was and only 7 percent among them had ever used a condom (DHS 1997). Madagascar ranks last in the overall percentage of women who know about H1V/AIDS (MICS 2000). Misconceptions regarding STI/HIV/AIDS are consistently reported among youth (15-19 years of age) including the belief that HlV/AIDS can be transmitted by insect bites, kissing, sharing dishes and touching someone with AIDS. Cultural barriers and misconceptions about transmission, may help to explain why condom use remains very low. Poverty (a vulnerability factor) Poverty is more likely to be associated with: (i) commercial sex; (ii) failure to use condoms; (iii) poor treatment of STIs; and (iv) lack of awareness of effective preventive measures. Poverty is rampant in Madagascar, where almost 70 percent of the population lives on less than US$1 a day. HIV/AIDS exacerbates poverty because of its negative impact on all aspects of development. Several studies by the Food and Agriculture Organization (FAO) have shown that HIV/AIDS can drive households into poverty by forcing sale of assets (e.g. livestock) to cover medical costs or by reducing household labor available for agricultural activities. This is particularly relevant for Madagascar where 78 percent of the national population lives in rural areas and 83 percent depend on agriculture. The high prevalence of STIs, combined with the high percentage of the poor who cannot afford to pay for STI treatment, is a strong argument for subsidizing STI treatments or making them available at no cost. Illiteracy associated with poverty, prevents the poor from access to relevant IEC messages. A high HI-V/AIDS prevalence rate is also increasingly a factor considered by private sector investors when making strategic investment decisions, particularly in labor-intensive industries, such as mining, tourism and textiles. Stigma, fear and denial Since the Malagasy population has not yet seen the devastating impact that HIV/AIDS can have, the level of awareness and concern over the disease is low. Persons living with AIDS are feared and shunned by society. The government has begun to become more vocal but it will need to take a different approach to generate awareness and behavior change than in countries where the prevalence is high. 2.1.3 Low implementation capacity of actors in a complex and challenging environment The capacity to respond to the threat of STI/HIV/AIDS infection is insufficient in Madagascar. Financial, material and human resources are lacking. The institutions, other than the MOH, responsible for the - 4 - response to curb the spread of HIV/AIDS have only been recently established and have weak management capacity. The sentinel surveillance system has not functioned properly for the last five years and needs to be strengthened. The large number of small initiatives have not been implemented in a coordinated effort. Organizational and management capacity also needs strengthening. Financial resources and materials are required to enhance and expand ongoing successful, critical programs. Implementation capacity is uneven across line ministries, and the majority of these ministries have not worked on HIV/AIDS issues in the past. With the exception of some religious groups, many civil society entities and NGOs are relatively young and inexperienced. The results of the institutional and organizational capacity assessment, carried out under the PHRD grant, indicate that sharing of information and lack of communication are major bottlenecks to implementation. 2.2. Government strategy The CNLS, initially established as an inter-ministerial body, was created in 1990 under the MOH to manage the PNLS. Although the CNLS was later opened up to include religious groups, NGOs and other partners, it never managed to lead a multisectoral approach to HIV/AIDS. In 2001, the CCN, under the Office of the Prime Minister, and its executive secretariat -- the Bureau de Coordination National (BCN) - - headed by the national focal point were created to develop a multisectoral response to the fight against STI/HIV/AIDS. Despite the lack of a clear strategy over the past few years, the Government has been engaged in numerous activities mostly from a health perspective. These include: * Health workers at district level were trained to systematically screen blood for HIV/AIDS and all were sensitized on blood safety issues. In addition, health workers in all health facilities were trained to diagnose and treat STIs according to the syndromic approach. * The syndromic approach to STI management is available but not used consistently. Prepackaged STI treatment in different kits is expected to facilitate the approach in both the public and private sectors in the near future. * A USAID funded project (the Commercial Marketing Strategies project - CMS) was put into place in 1998 and is managed by a consortium of NGOs and private sector. The project began a national social marketing program for condoms with more than 25,000 selling points and 700 wholesalers, selling over five million condoms last year. CMS has reached hundreds of thousands of Malagasy using both innovative mass media (radio, television, special events) and interpersonal communication techniques, including its mobile video unit (cinemobile) and peer educators. It has worked with specific target groups (such as CSW and truckers) and conducts workplace initiatives to guarantee condom distribution and basic STI/HIV/AIDS knowledge. This program needs to be scaled up to a level required to modify behavior and prevent further spreading of the infection. Staff of the BCN conducted field visits to seek active participation from civil society and the decentralized levels of government for the development and finalization of the NSP and the preparation of this project. The NSP is multisectoral and identifies a broader set of priorities for the future (see table below). - 5- Summary of the priorities identified in the NSP Areas Strategy - advocacy among religious and traditional leaders Policies and strategies - development of a national HIV policy - application and monitoring of existing laws - participatory strategic planning - strengthening of the monitoring system - establishment of a multisectoral structure at all Multisectoral mobilization levels - appointment of focal points for each sector - inclusion of HIV/AIDS activities in all development projects - adoption of an appropriate methodology in a low Monitoring of the epidemic prevalence country - operational research - expansion of the surveillance system - establishment of a multisectoral system of information sharing and dissemination. - integration of IEC messages in traditional IEC ceremonies - research on behavior change and the Malagasy context and culture - strengthening and scaling up of existing activities - development of a national communication strategy - development of a national STI treatment program Health Interventions - development of MCTC prevention program - strengthening of health personnel in VCT - program for home treatment of prostitutes - promotion of professional ethics and confidentiality UNAIDS Theme Group Strategy A UNAIDS theme group, made up of up representatives of most of the donors and development agencies, including the World Bank, has been created to provide support and advice to the Government on HIV/AIDS. The group has prepared an Inter-Agency Program to support the Government's NSP, in whicE, all donors specify the form of their participation. 3. Sector issues to be addressed by the project and strategic choices: MAP and MSPP in the Malagasy context: Madagascar is a low level prevalence country where rates have grown rapidly over the last few years. (,iven this stage, the MAP guidelines suggest the MSPP should focus on creating an enabling environment by increasing government commitment, expanding prevention efforts, scaling up care activities, rnitigating the impact on other sectors, and supporting the health system in particular (MAP, report no. 20727 AFR). Much emphasis in this project is therefore placed on reducing risk factors, in particular with respect to -6- STIs. The MSPP preparation team conducted a gap-analysis (see Annex 12) during pre-appraisal to determine more precisely what the MSPP could support and, in particular, what capacity building needs should be addressed. Following the MAP principles, the NSP and the UNAIDS theme group Program, the MSPP proposes the following focus: (A) A multisectoral broad-based response. The BCN, as the executive office of the CCN is responsible for the effective coordination of this multisectoral response. The BCN, in collaboration with the MSPP's project implementation unit (UGP), and the sector ministries are initiating the development of sector plans. Sector committees (CS) have been established for this purpose, grouping civil society, NGOs, public and private sector together. A solid and balanced multisectoral response also requires a stronger and more focused response from the health and education sectors to ensure the generation of the necessary synergy. In particular, health sector support is critical. IDA will continue to support the efforts of the Ministries of Health and Education to improve the overall efficiency of its initiatives. (B) Active participation of grassroots organizations, NGOs, and civi society at all levels. The GOM, through the BCN, is using a participatory process, involving the establishment of regional fora to permit active participation of communities in preparing the NSP and the MSPP. This is an ongoing process and will continue during implementation. The NGOs and CBOs working on HlV/AIDS are not only actively involved in the UNAIDS theme group and the refinement of the national strategy but will actually be involved in mobilizing the communities and implementing the interventions. (C) Strengthening the implementation capacity of executing agencies (public and private sector). The MSPP supports the institutional capacity building, technical assistance and training on project management and HIV/AIDS for all entities involved (public, private and NGOs). It will also strengthen the communication strategy of the NSP and develop techniques to improve IEC effectiveness (mass media as well as targeted interventions to vulnerable groups). Umbrella organizations and large civil society entities, including NGOs, with solid implementation skills will work with groups of small NGOs, CBOs and regions with lower capacity which will, in the process of sub-project execution, gradually strengthen their capacity. (D) Scaling up of ongoing preventive and care activities to address risk factors. The MSPP supports the assessment of success factors and operational research to learn best practices that could be expanded. Pilot projects and testing scaling up of existing interventions, are presently being financed under the PPF and the PHRD grant. Since the country is at the very beginning of the epidemic, only a few AIDS cases have become symptomatic and require care. While immediate future efforts focus on prevention, the health system will be progressively confronted with the problems associated with the increase in the number of persons living with HIV as well as the symptomatic AIDS cases. These needs will be re-assessed during supervision missions to provide timely reallocation possibilities. (E) Research and focus on social-cultural and gender issues and poverty reduction. The project supports in-depth studies on the factors that contribute to the low prevalence despite the existence of HIV/AIDS in the country since 1984 and significant risk factors. Following the MAP principles, special attention is being given to interventions that benefit women, since women are found to bear a higher burden of the HIV/AIDS impact. Emphasis will be on providing women with improved economic, social, and educational opportunities, changing attitudes about men's and women's traditional gender roles, strengthening of women's organizations, and supporting technologies to enable women to protect themselves. A study on gender is being financed under the PHRD grant. - 7 - (F) Immediate actions in 'hotspot areas (PPF). HIV/AIDS cases have been reported in the following hotspot areas: Antananarivo, Tamatave, Sainte Marie, Diego, Tulear, and Morondava. The GOM requested the Bank during the identification mission to provide immnediate funds to deal with the needs in these areas. A PPF became effective in May 2001 to respond to this need. Activities under the PPF target CSWs, truckers, youth and STI patients. Lessons learned from high prevalence countries suggest that HI V spreads rapidly not only along truck routes, but also from informal mining areas, both of which are groups who engage CSW regularly. To this end, the PPF also targets emerging "hot spots", such as the sapphir, mining areas of Ilakaka and Sakaraha, with focused interventions for miners and CSWs, and along prirr-ary truck routes such as the Tamatave-Moramanga-Antananarivo corridor. C. Project Description Summary 1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): This project contributes to financing the NSP to curtail the spread of STI/HIV/AIDS. It consists of four components: 1) financing of development of key sector strategies and action plans; 2) a Fund to finance existing and new STI/HIV/AIDS prevention activities; 3) a monitoring and evaluation system; and 4) project management and strengthening of organizational and institutional capacity building. The project builds on activities already underway, creates synergies with ongoing interventions and projects, and utilizes existing structures to implement its interventions. This credit is but one of many sources of technical and financial assistance with other donors contributing to the fight against HIV/AIDS with both new and on-going projects. The details of the project components are described in Annex 2. Indicative Bank- % of Component Sector Costs % of financing Bank- (US$M) Total (US$M) financing I.Financial Assistance to develop 2.20 10.5 2.12 10.7 Sector Plans and Pilots 2. Fund for STIHIV/AIDS prevention 15.00 71.4 14.30 72.1 activities 3. Monitoring and evaluation 1.80 8.6 1.50 7.6 4. Project management and 2.00 9.5 1.90 9.6 strengthening of organizational and institutional capacity building __ Total Project Costs 21.00 100.0 19.82 100.0 Total Financing Required 21.00 100.0 19.82 100.0 2. Key policy and institutional reforms supported by the project: This project is a multisectoral operation that is intended to support institutional refonns across several sectors working on H1V/A1DS. These include: * strengthening the institutional capacity of the CCN, the BCN, the Conseil du PMPS; the UGP and the various implementing agencies; * supporting the creation of sector committees (CS) which include public and private representatives; - 8 - * empowering communities to play a stronger advocacy role; * improving inter-ministerial coordination; and * strengthening the sentinel surveillance system and establishing a strong M&E system, with donor and beneficiary participation. 3. Benefits and target population: The project contributes to reducing new HIV/AIDS infections in Madagascar by increasing awareness, emphasizing safe-sex practices and improving access to STI treatment. Although intended to reach all Malagasy and prevent development of an epidemic, the project will target most vulnerable groups and support community ability to prevent the spread of infection. 4. Institutional and implementation arrangements: Institutional Set-Up National Strategic Operational Arrangements Arraneements Of fice of the Prime Minister t Cellule de Coordination (C Conseil du PMPS Audit Committee Bureau de Unite de Gestion du Coordination Projet (UGP) (BCN) a) Strategic Institutional Arrangements for National HIV/AIDS Program The mandate of the CCN (the National AIDS Council) is to define national priorities and guide the strategic orientation of all HLV/AIDS activities. To ensure the coherence of the HIV/AIDS prevention activities of the different partners in the implementation of the National HIV/AIDS Strategic Plan, an executive bureau (BCN) has been established to coordinate all national lIV/AIDS prevention activities.The BCN should ensure that the output of all projects are consistent with the national priorities. Among its specific functions are: (i) the collection, analysis and dissemination of data and information on HIV/AIDS activities in Madagascar; (ii) the distillation and dissemination of good practices; and (iii) assuming the role of secretariat of the CCN. To drive the development of the various national sector strategies, the BCN is establishing sectoral -9- committees (CS) at the central and regional levels for each sector made up of representatives of public, private and civil society organizations. Specifically, the CS are responsible for facilitating the development of sector strategies and action plans and for identifying key pilot projects for each sector to be financed under Component 2. The results of the pilot projects will be disseminated by the CS and will enable the refinement of each sector strategy. b) Project Operational Arrangements Following the MAP principles of ensuring that the national AIDS entity has a 'coordinating role rather than a 'control' function, the MSPP will have a council -- the Conseil du PMPS, which reports directly to the Office of the Prime Minister. The Conseil is made up of fifteen permanent members including the Directeur du Cabinet of the Office of the Prime Minister, and one representative each from the BCN, the eight key sectors, the Ministry of Finance, the Ordre des Experts Comptables de Madagascar, the NGO sector, the private sector, and beneficiaries associations (such as people living with AIDS or high risk groups). The Conseil is responsible for: (i) approving the UGP's annual work program and budget; (ii) approving requests to the Fund over $100,000; (iii) ensuring that the project-financed activities achieve the project development objective; (iv) approving annual technical and financial audits; (v) adopting and approving the Manuel de Procedures of the Fund and the Implementation Manual, and approving modifications to them; (vi) evaluating the performance of the UGP based on performance indicators, in consultation with IDA; and (vii) approving the recruitment of the Financial Management Agency (FMA). The UGP is responsible for the day-to-day management of the project. It will share key data and analysis with the CCN through the BCN. The UGPs responsibilities include: (i) development of the annual work program and budget; (ii) financial management oversight of project components and the FMA; (iii) procurement and disbursement activities; (iv) oversight of the monitoring and evaluation (contracted out locally) of the project; (v) assuming the role of secretariat of the Conseil; and (vi) consolidation of production of periodic reports of the project. Personnel of the UGP include (i) National Director; (ii) an Operational Manager; (iii) financial Management specialist; (iv) a procurement specialist; (v) a training coordinator; (vi) a monitoring specialist; (vii) an evaluation officer; and (viii) administrative support. In addition, the project will finance periodic intemational technical assistance. Civil society organizations (including NGOs, religious organizations, women's and farmers associations, unions, and private enterprises) as well as private sector bodies will be contracted to implement project activities. The financial management of the Fund will be contracted out by the UGP to a FMA in line with MAP best practice experience of contracting out project administration and coordination activities to established experts (see Annex 2). Since certain HIV/AIDS prevention activities are the health sector's responsibility directly and fall within the mandate of the MOH; specific attention must be given the role of the MOH within this framework. - 10 - b) Flow of Funds The flow of funds from IDA credit is presented as follows: World Bank FMA Central level: UGP: Special Account A Special Account B: (Components 1,3,4) Funds(Component 2) Grants to recipients (NGOs, CBOs, private sector entities Part of etc..) for provision of goods Component 1 and services Suppliers of goods and services To ensure timely and reliable flow of funds, two special accounts will be opened in a commercial bank acceptable to IDA as follows: * The Special Account A will be managed by the UGP and will cover transactions related to components 1, 3 and 4; The Special Account B (for Fund under component 1) will be managed by the FMA and will cover transactions related to component 2; The replenishment of the Special Account B should be based on periodic expenditure reports submitted by FMA at the central level, justifying the use of funds, and accompanied by reconciled bank statements while supporting documents are kept by executing agencies (NGOs, CBOs, private entities etc.) where expenses are incurred and paid for examination by extemal/intemal auditors and bank staff. The initial advance to contractors (NGOs, CBOs, civil society, other organizations) will be made in conformity with the terms of contract signed between the FMA and the contractors. Subsequent payments will be based on review of periodic progress reports (financial and physical) submitted to PFMAs (Provincial Financial Management Agencies) by the contractors and forwarded to FMA at the central level. The project implementation and accounting manuals will describe in details all procedural aspects - 11 - regarding financial management (payments, replenishment, reporting, intemal control) and reference to the procedures outlined in these manuals will be indicated in the DCA. Funds deposited in Special account A will be used by the UGP to pay: i) the amount of grants allocated to the executing agencies of the component 1; ii) suppliers of goods and services under the components 3 andl 4. c) Audit Arrangements To obtain reasonable assurance that funds are used efficiently and for the intended purpose, the following audit arrangements will be in place. The project accounts and financial statements (for all components) will be audited in accordance with international audit standards by independent and experienced auditors under terms of reference that have been approved by IDA. The auditors will provide opinions on the project financial statements, the special accounts and statements of expenditures. The auditors will be also required to carry out a comprehensive review of the internal control procedures and provide a management report outlining any recommendations for their improvement. The auditors report will be submitted to IDA not later than 6 months after the end of each fiscal year. A financial and technical audit of sub-projects shouLd be also carried out by auditors on a selective basis to ensure the efficient use of funds for intended purpose. An audit committee will be formed as a sub-committee to the Conseil. Members of this audit committee will be the representative of the Ordre des Experts Comptables de Madagascar, the Ministry of Finance, and beneficiary association member of the Conseil. The role of the audit committee is to facilitate the external auditor's work, review and ensure the implementation of the recommendations of the auditors, an,d act on their findings. D. Project Rationale 1. Project alternatives considered and reasons for rejection: See Multi-Country HIV/AIDS Program (MAP) for Africa Region Project Appraisal Document (report no.20727 AFR), paragraphs 67-69 as to the reasons for selecting the MAP approach. Two alternatives to the proposed MSPP were considered. The first was to supplement the work done on HIV/AIDS under the ongoing Second Health Sector Support project. This was not felt to be the most effective solution, given the multidimensional nature of the HIV/AIDS problem. Earlier experience demonstrated the difficulties of one line-ministry being responsible for a project with a multisectoral mandate. The second alternative considered was simply adding the HIV/AIDS interventions to the Community Development Fund Project, which provides funds to communities in a flexible and rapid manner. This option was rejected because of the already high demands placed on the CDF project and it, coordination unit. - 12 - 2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing and planned). Latest Supervision Sector Issue Project (PSR) Ratings (Bank-financed projects only) Implementation Development Bank-financed Progress (IP) Objective (DO) Second Health Sector Support S S Project Second Community Nutrition S S Project Third Social Fund Project S S Transport Sector Project S S Education Sector Development U S Mining Sector Project S S Community Development Fund S S Other development agencies UNAIDS Coordination and TA USAID Support to PNLS and TA UNICEF Support to PNLS and TA WHO TA UNFPA TA UNDP TA Cooperation Francaise Support to PNLS and TA EU TA ILO TA GTZ TA African Development Bank TA Japan PHRD financing and TA IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory) 3. Lessons learned and reflected in the project design: A number of lessons have already been culled from the implementation of on-going MAP projects. In particular, lessons were taken from the US$500 million Multi-Country Program for Africa Progress Review Mission Report for FYO1 and were shared with the Government and partners. The following key lessons from MAP 1 were reflected in the project design: a) Despite strong government and partner commitment, MAP projects tended to lose momentum after Board approval. In Madagascar, the PPF has been used to begin financing pilot HIV/AIDS activities which has served to encourage NGOs and local associations to begin to prepare proposals for financing under the Fund. In addition, the operational manuals have been drafted and are expected to be finalized before effectiveness to prevent any bottleneck in implementation once the project becomes effective. b) MAP implementation is more successful in countries where the National BHIV/AIDS body has a - 13 - "coordinating" role rather than "control". The CCN in Madagascar is responsible for developing and refining the National Strategic Plan and setting national priorities. Thus it guides the strategic orientation of all HIV/AIDS partner prevention projects but does not directly approve the work plans of such projects. The CCN has been established by Decree and is advised by a consultative group, which includes representatives of donors, NGOs, private sector, and beneficiary associations. However, its roles and responsibilities still need to be defined legally. c) Lessons from the MAP highlights the importance of contracting out financial management of project activities to ensure: (i) rapid disbursement and handling of a large volume of transactions by an experienced agency; (ii) enhanced transparency; (iii) minimal establishment of new structures to avoid duplication; (iv) clear contractual obligations and performance monitoring; (v) knowledge transfer from FMA to the implementing agency during the contract period; and (vi) cost efficiency in the FMA undertaking mandated functions, such as audits. Criteria have been developed (and are included in the Procedures Manual of the Fund) for the selection and evaluation of a financial management agency. The UGP will use performance-based contracting to ensure maximum efficiency. d) The MAP approach requires close partnership in supervision of projects. The gap analysis (Annex 12) shows the active involvement of donors and other partners in HIV/AIDS prevention activities. A supervision plan (see Annex 11) has been prepared to ensure that these partners continue to be actively involved and responsible for certain areas of supervision on a regular basis. In addition, partners will undertake a technical review of proposals submitted to the Fund over $25,000. In addition to the MAP experience, other lessons have been incorporated from intemational experience (see also Annex 13 for experience in low prevalence countries): 1. Stakeholder and donor collaboration. The project was prepared in close consultation with the UNAIDS theme group and bilateral donor agencies as well as civil society. In addition, the UNAIDS theme group is spearheading the production of an Inter-Agency Program to support the government in its fight against HIV/AIDS, of which this project forms part. The development of this document was undertaken by a diverse working group that meets regularly and includes representatives from NGOs and civil society. A successful collaboration has begun between public, private and NGO sector in the promotion and distribution of condoms, within the larger framework of behavioral change. SOMARKT and CMS in Madagascar are private/commercial actors and the main distributors of condoms. 2. Need for multisectoral approach. Experience around the world and in Madagascar shows that there is a need for a multisectoral approach to the prevention of the spread of HIV/AIDS, since this epidemic is not just a health problem but also a development challenge. Key ministries as well as representatives in the private sector and civil society of all sectors have been involved in the development of the NSP and continue to be involved through the MSPP. The first component of this project targets specifically these partners in developing sector strategies and operational plans that will lead to the financing of activities as part of a larger country strategy. At the same time, the role of the Ministry of Health is recognized as key particularly in the reduction of risk factors. For example, early appropriate STI treatment can reduce HIV transmission by over 40 percent; therefore consideration will need to be given to providing universal free or highly subsidized access to the syndromic approach based STI treatment. 3. Importance of Socio-Cultural Context. Madagascar is unique in its socio-cultural environment blending traditional beliefs from Africa and Asia (specifically Indonesia). Evaluation of various IEC efforts in Madagascar indicates that efforts have generally been made in developing 'information' rather than - 14 - 'action-based' messages. The clear link between information and specific behavioral change has not been evident nor pursued. The project will therefore emphasize the adaptation of the IEC messages to the Malagasy socio-cultural context. An analysis of the behaviors, attitudes and practices of individuals, high-risk groups and communities toward sex, use of condoms, and incidence of STIs, by specific characteristics of each province (KAP studies), is being undertaken under the PHRD grant. This analysis facilitates the more defined identification of high-risk groups (CSWs, truckers and taxi-brousse drivers) and high risk communities (urban slums, people living next to tourist resorts, mining communities, etc.) for which special targeted sectoral interventions will be developed. 4. Importance of Monitoring and Evaluation for Project Success: M&E is critical to assess project progress and the extent to which it is achieving its stated objectives. M&E information allows a project to assess the degree to which it is targeting the right populations and financing the appropriate activities, helping management to redirect the project when necessary. Moreover, a good evaluation system will permit the testing of specific strategies, the formulation of lessons and the fine-tuning of approaches. This entails the establishment of a systematic monitoring system and well-designed evaluation studies, using both quantitative and qualitative methodologies. A reliable STI/HIV/AIDS sentinel surveillance system is essential for tracking the evolution of the epidemic. The project has M&E as a separate component to ensure that project activities are adequately monitored and impact carefully evaluated, and that pilots tested receive the necessary follow-up. 5. Assessment of NGO capacity. Since NGOs and local associations will act as implementing agencies, an assessment of their capacity was undertaken under the PHRD to determine what types of capacity building would be required for these entities, whether organizational, administrative, financial or technical. This assessment is the basis for the types of capacity building activities that will be financed under Component 4 of the project. 4. Indications of borrower commitment and ownership: The Government of Madagascar has repeatedly demonstrated its strong commitment - at the highest levels - to preventing the spread of STI/HIV/AIDS. The GOM is pressing to accelerate the MSPP and has urged the World Bank to provide financing for the immediate scaling up of interventions in the hot spot areas. The GOM has agreed to use three percent of the HIPC proceeds for HIV/AIDS with a possible increase over the coming years. 5. Value added of Bank support in this project: IDA's leveragedfunding. Under the umbrella of UNAIDS, many donors are supporting the government's efforts to step up efforts to combat HIV/AIDS. However, no donor alone is able to mobilize the amount of resources necessary to finance the government's National HIV/AIDS Strategic Plan. IDA's support to the NSP is leveraged by the ongoing portfolio, including the Second Health Sector Support project, the Education Sector Development project, the Transport project and the Mining project, the approved PHRD Grant for this project (in the amount of US$452,400), the Poverty Reduction Strategy process, and the allocation of HIPC resources. Cross country experience: The Bank is the largest financier of HIV/AIDS and STI control projects and contributes its experience in the design, implementation and evaluation of these programs. Through its regional AIDS Campaign Team for Africa (ACTafrica), the Bank is well-positioned to provide Madagascar with regional and international experiences and lessons learned. Moreover, through its involvement in various sectors in Madagascar and its experience with supporting decentralized, community-based projects, such as the social fund projects and the two community nutrition projects, IDA - 15- is well placed to assist the Government in undertaking the national effort to fight HIV/AIDS in a truly multisectoral and community-oriented manner. E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8) 1. Economic (see Annex 4): O Cost benefit NPV=US$ million; ERR = % (see Annex 4) O Cost effectiveness * Other (specify) The 'Economic Analysis of HIV/AIDS' contained in the Project Appraisal Document for the Multi-Country HIV/AIDS Program (MAP) for the Africa Region (Report No. 20727 AFR) provides the overall econorric justification for the MSPP. 2. Financial (see Annex 4 and Annex 5): NPV=US$ million; FRR = % (see Annex 4) Fiscal Impact: The fiscal impact of the project is expected to be relatively small with counterpart funds not constituting Et heavy burden on the government budget. 3. Technical: The project relies on existing knowledge and experiences gained in Madagascar and in other African and Asian countries. The preparation team relied heavily on the UNAIDS theme group in Madagascar for the project's technical content. The MSPP design follows the MAP principles and the National Strategic PlaIn which reflects a consensus among all stakeholders. During irnplementation, the UGP will continue to rely heavily on the partners for technical support. For example, before approval by the FMA, all sub-project proposals to the Fund above US$25,000 will be reviewed by a technical partner agency with comparative advantage in the type of activity proposed (Annex 16 provides details). Subprojects over US$ 1 00,000 will be reviewed by a sub-committee of technical partners. The terms of reference for the facilitation as well as the short list will be reviewed in collaboration with all partners. The UGP can at all times apply for technical support to the UTNAIDS theme group partners and the UNAIDS Secretariat. Yearly technical audits will be undertaken by independent consultants. - 16 - 4. Institutional: The institutional and implementation arrangements for the proposed operation are detailed in the Project Description Summary and in the implementation manual, which is currently being finalized. Much discussion was held on the institutional set-up with the objective of identifying a transparent and efficient implementation arrangement in a challenging enviromnent. The national strategic coordinating entities have all been recently established and have limited experience and weak capacity. A proposal to establish the project's implementation unit within the BCN of the CCN was rejected to avoid a control function of the CCN over the project, following lessons learned from MAP I. A decision was made to place the UGP outside the BCN and establish a management council for the UGP to ensure the necessary checks and balances. There will be close collaboration between CCNIBCN and the UGP during the development of the action plans to ensure that project activities fall within the context of the National Strategic Plan. Through the IJNAIDS Theme group, the project will continue to assist the CCN with the enhancement of the NSP to ensure a solid analytical basis for the definition of the priorities for the national response.It is also crucial for the success of the project that there is close collaboration with the MOH because the project will create demand for health services such as prevention of mother-to-child transmission, voluntary counseling and testing, and treatment for opportunistic infections. An institutional capacity assessment was financed under the PHRD (the full document is available in project files). The assessment evaluated the capacity of existing institutions, both formal and informal, that operate within the public, private, and NGO sectors. Particular attention was paid to inter-organizational relationships, communication, incentives, bottom-up accountability and management capacity. The implementation set-up was designed based on the recommendations of this report and of other stakeholders. The institutional capacity building component focuses on strengthening inter-organizational relations and communications, advocacy, planning, programming and management. 4.1 Executing agencies: The GOM will sub-contract implementation of project activities to existing structures, such as departments of line-ministries, NGOs, CBOs, and private sector entities. The implementation manual details the procedures and modalities for selection and contracting of these entities 4.2 Project management: Project management will be assured by the UGP. To ensure an early implementation of project activities, all key staff (the national director, the operational manager, the financial management specialist,the procurement officer, and Monitoring and Evaluation Specialist) have to be hired. All key members of the UGP will be recruited on a contractual basis in line with Bank Guidelines and contracts will be extended year by year based on performance. These recruitments are a condition for effectiveness. Financial management of funds allocated to the Component 2 will be contracted out to a FMA using a performance-based contract. The manual of procedures for the Fund spells out the specific criteria that will be used to select and evaluate the FMA. The recruitment of the FMA is a condition of effectiveness. The draft Terms of Reference will be reviewed by the Bank financial management specialist. 4.3 Procurement issues: A new Procurement Code was issued in 1998 and the Bank ascertained that deficient features identified in the 1995 CPAR have been properly addressed. Bank standard bidding documents (SBDs) are widely used and have helped ensure that any unacceptable features do not affect Bank-financed procurement. However, one area of concern is that the Government's approval process for contract signing is cumbersome and involves an excessive number of bureaucratic steps causing unnecessary delays. In addition, insufficient programming and procurement planning contribute to delays in project implementation resulting slow disbursement. To mitigate risks of delays for the proposed project, proper prerequisites for the use of Bank - 17 - standard bidding documents, including evaluation reports for National Competitive Bidding procedures (NCB) will be agreed on with the Government during negotiations. A Procurement Capacity Assessment of the UGP, including training needs and arrangements, was undertaken by an experienced procurement specialist as part of appraisal. On the basis of the assessment, an action plan was agreed upon to address areas where the UGP needs to be strengthened to meet good performance criteria for procurement. The action plan includes (i) the recruitment of a procurement officer; (ii) a specific section on procurement in the Project Implementation Manual to be finalized before effectiveness; (iii) the organization of the filing of procurement-related documents; (iv) procurement training sessions for project staff; and (v) the financing of independent procurement and technical audits to be carried out on a regular basis (see Annex 6 for details). Provision for procurement capacity strengthening was also included in the PPF to ensure that the UGP has the necessary skills and knowledge as early as possible -- as rapid disbursement will be critical for the success of this urgent operation. To ensure that procurement does not become a bottleneck for disbursement, a good procurement procedures manual must be designed and Credit funds should provide for implementation assistance and ex-post reviews. Simplified procurement procedures will be used for community activities with local NGO support to help with the bidding and consultant selection procedures as well as contract management. Since a large portion of the Credit funds will be used for technical assistance and consulting assignments, early attention will be given to advance planning of recruitment and timely search for expressions of interest through intemational advertising to obtain the best possible pool of candidates from which strong short lists can be compiled. 4.4 Financial management issues: The assessment carried out during appraisal by an IDA accredited specialist focused on the UGP's financial management system. The FMA, designed to manage the funds under the component 2 is not identified yet. It will be selected on a competitive basis and its capacity and systems will be assessed before credit effectiveness to determine whether they meet the requirements of sound financial management. The assessment of the UGP's financial management system determined that the arrangements in place meelt the Bank's minimum requirements with respect to basic accounting system and intemal controls but further strengthening is needed to improve its performance. In addition the system cannot produce yet quarterly Reports for Financial Monitoring required by the Bank. The following measures will be taken prior to credit effectiveness to strengthen the UGP's financial management system: i) review of the existing Chart of accounts to reflect activities outlined in the Project Appraisal Document (PAD) and satisfy reporting requirements; ii) recruitment of a second accountant to ensure adequate separation of duties between the accounting staff (recording of transactions, controls, supervision); iii) finalization of the accounting manual of procedures and organization of user's training to facilitate record-keeping and ensure consistent application of control procedures described in the manual; iii) recruitment of an audit firm acceptable to IDA to audit the project accounts; iv) recruitment of a FMA (Financial Management Agency) to handle funds financing activities under the component 2. An agreed action plan by the borrower has been also developed to build the UGP's capacity (implementation and use of computerized system) to produce quarterly FMRs even the project opted for traditional disbursement procedures. The computerized system (MIS) will be operational by November 2002. 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. Environmental category B rating. A medical waste plan will be prepared. The plan will include - 18 - specifications regarding the institutional arrangements for implementation of the plan and accountability, and will include a cost budget. 5.2 What are the main features of the EMP and are they adequate? These will be outlined in the consultant's report. 5.3 For Category A and B projects, timeline and status of EA: Date of receipt of final draft: A consultancy to carry out a study on Medical Waste is planned to take place in December 2001. The results of the study and the plan will be published and will be available in the project files. 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? Details in consultant report. 5.5 What mechanisms have been established to monitor and evaluate the impact of the project on the environment? Do the indicators reflect the objectives and results of the EMP? Details in consultant report. 6. Social: 6.1 Summarize key social issues relevant to the project objectives, and specify the project's social development outcomes. Madagascar is still at an early stage in the epidemic and therefore in the fortunate position to potentially be able to curb its spread. The project is designed to reach the population at large and specifically, vulnerable groups, such as youth, prostitutes and their clients, migratory workers, etc. It will empower these groups to undertake HIVIAIDS activities to prevent the severe socio-economic impact of HIV/AIDS that is seen in countries with high prevalence rates. In addition, the PHRD grant is financing studies on sexual and socio-cultural behavior to serve as input into the project. 6.2 Participatory Approach: How are key stakeholders participating in the project? The project was developed on the basis of the government's NSP and in close consultation with key government, NGO and elected representatives as well as intemational stakeholders. Different focus group discussions were conducted at the central level and local levels. In addition, several regional meetings were carried out with the participation of local development actors and potential beneficiaries to develop regional and sectoral HIV/AIDS strategies. Technical assistance was provided to assist the government in empowering the communities and NGOs to actively participate in designing and implementing the national HIV/AIDS program through the PRSP process. 6.3 How does the project involve consultations or collaboration with NGOs or other civil society organizations? NGOs and other civil society organizations are actively involved the development of the NSP and the project and continues to be involved in implementation. Many NGOs in Madagascar are already very active in HIV/AIDS prevention activities, but efforts have been sporadic and limited in scope. The project will help them to scale up their activities quantitatively and qualitatively as well as build the capacity of the local NGO and civil society sector. 6.4 What institutional arrangements have been provided to ensure the project achieves its social development outcomes? - 19 - At the central level, the CCN presided over by the Director of Cabinet has been created. This committee composed of government officials, private sector, NGOs and other civil society organizations, oversees the coordination of national multisectoral HIV/AIDS prevention efforts. At the regional and local levels, the project aims at empowering local communities through the fund to encourage demand-driven local initiatives (generally existing programs) and facilitate the development of the supply side through the use of NGOs and other entities as facilitators to assist fund applicants with the development of sustainable proposals for funding. 6.5 How will the project monitor performance in terms of social development outcomes? Project monitoring through the MIS and site visits will be complemented with community monitoring of subprojects. This will provide project management with user feedback on services delivered during implementation. In addition, brief beneficiary assessments will be conducted on services provided by large subprojects at the end of their contract. 7. Safeguard Policies: 7.1 Do any of the following safeguard policies apply to the project? Policy Applicability Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) * Yes 0 No Natural Habitats (OP 4.04, BP 4.04, GP 4.04) 0 Yes 0 No Forestry (OP 4.36, GP 4.36) 0 Yes 0 No Pest Management (OP 4.09) 0 Yes 0 No Cultural Property (OPN 11.03) 0 Yes 0 No Indigenous Peoples (OD 4.20) 0 Yes 0 No Involuntary Resettlement (OD 4.30) 0 Yes * No Safety of Dams (OP 4.37, BP 4.37) 0 Yes 0 No Projects in International Waters (OP 7.50, BP 7.50, GP 7.50) 0 Yes 0 No Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60)* 0 Yes _ No 7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies. Details will be provided in consultant report (January 2002). F. Sustainability and Risks 1. Sustainability: The project is expected to become institutionally sustainable during implementation. It is built on strong government ownership and emphasizes the strengthening of the capacity of all players, including civil society and the private sector. The CCN, who will oversee the implementation of the NSP, will be strengthened in addition to the coordination and advocacy role of the BCN. The institutional capacity of the Conseil du PMPS will be built, including its modus operandi and membership, while the UGP will build capacity in management, financial management, procurement and monitoring and evaluation through transfer of knowledge from the various contractors. At present, 3 percent of the HIPC funds have been allocated to the fight against HIV/AIDS. However, given the rate of poverty, it is not expected that Madagascar will be able to finance these activities following the project; thus financing will be needed beyond 2006. - 20 - 2. Critical Risks (reflecting the failure of critical assumptions found in the fourth column of Annex 1): Risk Risk Rating Risk Mitigation Measure From Outputs to Objective Civil society organizations are not M The availability of the fund will be advertised informed about availability of the Fund, through the radio, facilitators and by UNAIDS and/or are not interested in participating. theme group partners. In addition, interest has been demonstrated already. Capacity among implementing entities is M Training and technical assistance for not sufficient to implement proposed implementing entities is available through the sub-projects. fund. In addition, supervision will be formative, giving constructive feedback on the spot. Target groups cannot be easily reached by M Experiences of other donors and other MAP NGOs and implementing entities. projects will be taken into account. The logistics of setting up sales outlets for M An intemational firm with ample experience will condoms and STI kits is too difficult. be contracted to manage the commercial marketing of condoms and STI kits. Demand for STI kits is insufficient to M IEC activities will focus on use of STI kits, interest physicians in promoting them. particularly among CSWs. Private sector physicians will be trained on their use. The project will coordinate closely with the MOH to ensure efforts are not being duplicated. Supervision of subproject activities is M Supervision missions will ensure quality insufficient to ensure to ensure quality supervisors are hired. Quality at entry will be execution. assured in large contracts through the review of proposals by extemal partners. Capacity of the UGP is insufficient to S Financial management of the fund and some adequately manage the project. monitoring and evaluation activities are being subcontracted out. UNAIDS theme group partners will be involved in reviewing proposals over US$25,000, and providing technical support in other aspects of the project. Facilitators and NGOs are unable to M Facilitators will be very carefully selected, and prepare realistic subprojects. closely supervised during the first year of implementation. The public sector will fail to work closely S Sector committees are being established and with the private and NGO sector to ensure workshops are being conducted to initiate the effective sector plans. process. Coordination will be ensured through the Conseil du PMPS. Data and infornation collected and M Data for annual progress reviews will be derived - 21 - analyzed from MIS system are not used to from the MIS and will be discussed with internal improve project implementation. and external partners. Annual implemenlation plans will be supported by data from the MIS. Discussions with partners will foster the use of data for decision making. From Components to Outputs Multi-sector coordination and M Sector committees are being established and collaboration is insufficient to produce workshops are being conducted to initiate the viable sector plans. process. Coordination will be ensured thlrough the Conseil du PMPS. The purpose of the project and the fund is M The purpose of the project and the fund, and not adequately disseminated. ways to access financing will be advertised through the media, through facilitators, and through partners. A sufficient number of capable M&E M The search for capable staff was initiated during specialists are unavailable in Madagascar. pre-appraisal and will continue with the help of other donors throughout pre-effectivenes s. Slow disbursement due to limited UGP S Financial management will be subcontracted implementation/management capacity. out, and procurement training will be provided to UGP staff, with close supervision durrng the first two years of implementation. 1Overall Risk Rating M Risk Rating - H (High isk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk) Risks Risk rating Risk Mitigation Measures Funds Flow Substantial FMA and M&E staffjoint review with auditors External Audit Substantial * Association of local auditors with international auditing firm; * Recruitment of auditors based on QCBS method; * Quarterly technical and financial audit performned Iby external auditors. 3. Possible Controversial Aspects: Experience in other MAP countries shows that the establishment of a national multisectoral HIV/AIDS program outside the Ministry of Health (reporting directly to the top levels of government) has caused resentment and confusion among health officials. There is thus a clear need for the CCN and its executive secretariat, the BCN, to recognize the importance of the health sector in the multisectoral fight against HIV/AIDS, have clear lines of communication with the Ministry of Health and come to agreement as early - 22 - on as possible on the roles and responsibilities in HIV/AIDS prevention. G. Main Loan Conditions 1. Effectiveness Condition * Recruitment of all key UGP staff, acceptable to IDA * Establishment of Conseil du PMPS and UGP by decree * Annual Project Implementation Plan for first year, acceptable to IDA * Legal creation of the Fund * Procedures and Implementation Manuals acceptable to IDA Financial Management Conditions * Establishment of a financial management system acceptable to IDA * Recruitment of external auditors acceptable to IDA * Project account opened and counterpart funds deposited * Recruitment of the Financial Management Agency, acceptable to IDA 2. Other [classify according to covenant types used in the Legal Agreements.] Financial Covenants * The UGP and FMA shall maintain or cause to be maintained records and accounts to reflect in accordance with sound accounting practices the operations, resources and expenditures; * Records, accounts, special accounts, SOEs and sub-projects shall be audited by independent auditors acceptable to IDA; * Production of FMRs H. Readiness for Implementation 0 1. a) The engineering design documents for the first year's activities are complete and ready for the start of project implementation. 0 1. b) Not applicable. O 2. The procurement documents for the first year's activities are complete and ready for the start of project implementation. 1 3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactory quality. C1 4. The following items are lacking and are discussed under loan conditions (Section G): 1. Compliance with Bank Policies OI 1. This project complies with all applicable Bank policies. O 2. The following exceptions to Bank policies are recommended for approval. The project complies with all other applicable Bank policies. The proposed project is not fully compliant with the Guidelines for Category B environmental - 23 - classification. The project was reclassified as a B just prior to appraisal to provide for Medical Waste facilities on the sub-project. A consultant will be recruited to undertake a medical waste plan, the results of which will be integrated into the Procedures Manual. The Procedures Manual will govern the approval of subprojects und the Fund. Claudia okx VHail V Team eader Sector Manager/Director Country Ma Director -24 - Annex 1: Project Design Summary MADAGASCAR: Multisectoral STI/HIV/AIDS Prevention Project Key Performance Data Collection Strategy Hierarchy of Objectives Indicators Critical Assumptions Sector-related CAS Goal: Sector Indicators: Sector/ country reports: (from Goal to Bank Mission) To mitigate the social and The Government prioritizes economic impact of STI/ HIV/AIDS prevention to HIV/AIDS in Madagascar. permit a sustainable coordinated response to the epidemic. Project Development Outcome I Impact Project reports: (from Objective to Goal) Objective: Indicators: To contain the spread of An increase of condom use DHS/Hhld Survey/ Multisectoral activities HIV/AIDs in Madagascar during last sex with Special Studies financed, including increased non-regular partners among knowledge of risks and men from 2.3% to 15%, and methods of prevention, will among women from 0.3% to lead to attitudinal and 7%, by the end of the project behavior change regarding in Antananarivo and prevention. Tamatave. Reduction of the proportion of people aged 15-49, having at Government commitment to least one sex partner, other prevent the spread of HIV is than a regular partner, in the DHS/Hhld Survey/Special sustained throughout the life last twelve months. Studies of the project. Decrease in prevalence of gonorrhea among CSW from Multisectoral coordination is 25% to below 15% by the end effective.The MOH of the project. collaborates closely with the Special Studies project and its activities to ensure demand for STI care will be met. STI kits are appropriately used. Increase proportion of people IEC activities financed by the knowing at least three ways to project will be effective, and prevent getting infected with will reach a sufficient number HIV (women from 57% to of people. 80%, and men from 44% to 90%). DHS Survey - 25 - Key Performance Data Collection Strategy Hierarchy of Objectives Indicators Critical Assumptions Output from each Output Indicators: Project reports: (from Outputs to Objective) Component: 1. Subprojects designed and Increase by 5% annually the Project Data. Civil society organizations are implemented to prevent the number of civil society informed about availability of spread of HIV/AIDS. organizations conducting fund, are interested in HIV/AIDS prevention participating. (promotion of safe sex, distribution of condoms) Supervision of subproject activities activities is sufficient to ensure quality execution. Increase the coverage of peer group IEC events (one-on-one Capacity among implementers or small groups) by 10% is sufficient to implement annually among high risk proposed subprojecis. groups: CSW Target groups can be easily Miners reached by NGOs arid High school students implementing entities. Uniformed men The logistics of setting up Increase the number of sales outlets are manageable. condoms distributed and sold The project generates the by private/NGO sector by 20 necessary demand. percent annually Physicians are interested in Number of private physicians receiving training and trained on the use of STI kits demand for STI kits increases. increases by 200 annually. The proportion of subprojects Facilitators and NGCls are implemented, meeting their able to prepare realistic stated objectives will increase subprojects. by 10% every year. 2. Sectoral strategies and By end of year 1, all sectors Project data. Public, private and NGO action plans developed and have developed sector studies. sectors work closely together pilot activities implemented as partners in each sector. with results incorporated back into sector strategies. By end of year 2, all 8 sectors have piloted at least 1 sub-project. By end of project, each sector will have mainstreamed at least I of the pilot projects. 3. A monitoring and The MIS is fully operational Site visits. Data and information evaluation system provides by the end of year 1. collected and analyzed from information for improved MIS system is applied for project efficiency and Data on target groups covered policy development quality effectiveness. is used to define funding enhancement of project. - 26 - priorities for the subsequent year. 4. Project activities have been Bank procurenment processes Project reports, random Skills learned during training implemented in a timely and have been followed on all site-visits, supervision. are applied. effective manner. contracts by 2005. Capacity of the UGP is The UGP has been effective in Supervision missions. sufficient. coordinating with all key players (as measured by the Index contained in the Procedures Manual). Project Components I Inputs: (budget for each Project reports: (from Components to Sub-components: component) Outputs) 1. Financial Assistance to US$ 2.2 million Project information system Multi-sector coordination and Sector Plans Development collaboration is sufficient to and Pilots produce viable sector plans. 2. Fund for STI/HIV/AIDS US$ 15.0 million Project information system The purpose of the project and Prevention Activities the fund is adequately disseminated. 3. Monitoring and Evaluation US$ 1.8 million Project information system A sufficient number of capable M&E specialists are available in Madagascar. 4. Project Management and US$ 2.0 million Project information system The project is disbursing as Institutional and projected. Organizational Capacity Building - 27 - Annex 2: Detailed Project Description MADAGASCAR: Multisectoral STIIHIV/AIDS Prevention Project The activities of this project fall within the framework of the National Strategic Plan that has the objective of reducing the prevalence of STl/HIV/AIDS and ensuring the treatment of people living with HIV/AIDS,. By Component: Project Component I - US$2.20 million Financial Assistance to Sector Plans Development and Pilots The development of these sector plans for the prevention of HIV/AIDS is critical to the multisectoral approach as highlighted by the MAP. The objective of this component is to finance the development of sector strategies and operational plans for eight key sectors (as seen in the table below). This will be facilitated by the BCN, assisted by the UNAIDS theme group. The goal of these strategies is to ensure: (a) the preparation of action plans that are feasible and sustainable, at the regional and national levels; (b) th,- creation of a synergy and complementarity of activities of each sector and within the framework of a multisectoral approach; and (c) the involvement of all key sectoral partners in the development process, including private, public and NGO representatives. At present, the BCN is forming sectoral committees (CS ) made up of these sectoral partners. Once the action plans have been developed, activities to be financed as pilots will be identified. These pilot sub-projects should function as the comerstone of the sector strategy and guide development of sectoral best practices. Experiences, information and data collected during and following the implementation of the pilot sub-projects will serve to re-orient and strengthen the strategy. An unallocated amount of about US$ 800,000 is reserved for those activities that can be scaled up. Public sector activities can be financed under this component, but will be closely coordinated with the ongoing Bank-supported sectoral projects that allocate funds to HIV/AIDS activites such as: the Health Sector project CRESAN II (US$ 5 million), the Rural Transport project and the Education project (CRESED). This component will finance: (i) workshops; (ii) focus group discussions; (iii) pilot projects; (iv) unallocated amount of US$800,000 to finance scaling up activities in the sector action plans. Sector Partners Risk Groups Education * Ministries of Primary and Secondary Students, teachers, administrative Education; Higher Education; Vocational & personnel, trainees & trainers, Technical Training parents * Private schools and parent-teacher associations * Private sector, NGOs and associations working in education Health * Ministry of Health and other public institutions Medical and administrative * Private medical providers personnel, patients * Private sector, NGOs and associations working in health Information, Culture * Ministry of Information, Culture and Journalists, administrative and Communication Communication personnel, artists, the general . Private sector, NGOs and associations working population in information, culture and communication Infrastructure . Ministries of Public Works and Transport Construction workers, builders, - 28 - * Private sector, NGOs and associations working truck drivers, cargo workers, port on infrastructure personnel, technical and administrative personnel Labor * Ministry of Labor Workers, industrial employees, * Labor unions employers, economic operators, * Associations of industrial and economic administrative personnel, high risk operators labor groups, such as tourism * Private sector, NGOs and associations working workers, craftsmen, miners, small on labor issues commercial business people Population * Ministry of Population Youth, uneducated persons, * Associations such as youth and sport clubs, prostitutes, handicapped persons, religious groups, etc the elderly * Private sector and NGOs working on 'population issues Rural Development * Public and private sector, NGOs and Farmers, fishers, agricultural associations working in rural development, operators, researchers, students and including agriculture, fisheries, water and forests, trainees from the centers of environment, scientific research agricultural education, administrative personnel Security a Ministries of Justice and Armed Forces Prisoners, soldiers, officers, army * Armed forces, national police, gendarmes, and police personnel, security security agents, penal and justice officers agents, administrative personnel . Private sector, NGOs and associations working on security issues Project Component 2 - US$15.00 million STI/HIV/AIDS Prevention and non-medical Care-Taking Activities Fund The project will create a mechanism to provide financial incentives to correct market inefficiencies in the demand for, and provision, of prevention activities. On the demand side, there is a general lack of knowledge about the virus, protection methods, and risks. On the other hand, there is a lack of human and financial capacity to provide adequate services. The fund is expected to encourage greater private and NGO sector participation in HIV/AIDS prevention activities, resulting in an increase in prevention at all levels (national, regional and local) and across all high risk groups. In addition, capacity will be built and strengthened in these institutions to ensure sustainability. The Fund will finance: a) Sub-projects (mass media, workshops, peer group discussion, person to person events, counseling and non-medical care-taking); b) Social marketing of condoms and STI kits; c) Marketing of the Fund and facilitation of subprojects; d) Operational costs of the Fund; and e) Strengthening the capacity of implementing entities. There are two key groups of eligible beneficiaries: i) NGOs, CBOs and associations that already are implementing activities in one or more of the above categories, but need support to scale up qualitatively and quantitatively; and ii) existing entities that do not yet have the capacity to plan and implement - 29 - HIV/AIDS prevention activities. Given the weak capacity of implementing entities, facilitators will be contracted by the UGP to provide assistance to applicants to ensure that their proposal meets the project objectives and that they have the capacity to implement the proposed activities. NGOs and other institutions engaged as facilitators for a particular sub-project may not be involved in the implementation of that sub-project. Operation of the Fund The management of the Fund will be contracted out by the UGP to a Financial Management Agency (FMA) using a performance-based contract. The FMA will have representatives in each region and will be responsible for (i) processing requests for financing; (ii) approving requests under $100,000 using select on criteria; (iii) submitting requests above $100,000 to the Conseil for approval; (iv) notifying applicants of financing decisions; (v) disbursing approved financing; and (vi) providing necessary data and information to auditors for annual technical and financial reports, and to UGP on a regular basis. The FMA will recei ve training on HIV/AIDS. Proposals under US$100,000 will be automatically approved by the regional office of the FMA according to agreed upon criteria, as outlined in the Procedural Manual. Proposals over US$100,000 will be submitted by the regional office of the FMA to the Conseil for approval after technical review by the technical sub-committee of the UNAIDS theme group. In all cases, the regional office of the FMA is responsible for contracting the implementation of the approved project and disbursing approved financing. All proposals over $25,000 and a sub-set of proposals over $10,000 will be submitted for technical review to designated partners of the UNAIDS theme group "elargie'. A list of these partners will be finalized before effectiveness. At least 10% of the financing of the proposals must be provided by beneficiaries in cash or in kind. The facilitators and the FMA will provide information and data to regular technical and financial audits and conduct spot checks on project implementation. Project Component 3 - US$ 1.80 million Monitoring and Evaluation (M&E) This component will focus on three general areas: (a) monitoring of project progress (inputs and outputs); (b) evaluation of the impact of project activities; and (c) providing support to the studies to be conducted under Component 1. Monitoring and evaluation will follow-up activities financed through subprojects (including the implementation of sector plans) and assess their effects on beneficiaries, including both the targeted population and the implementing entities, and on the effectiveness and efficiency of the operation of the Fund and the project as a whole. Monitoring: The project will support the design and implementation of a computerized management information system (MIS) based in the UGP, containing key technical and financial input and process information for the project. Data to measure progress of Fund activities will be derived from sub-project proposals and progress reports. Community inputs will provide information on the quality of services provided and will give project activities greater transparency and accountability. Data from sectoral strategies will be derived from sectoral plans. Site visits by contracted supervisors will complement this - 30 - information. Field supervision will be formative, ensuring errors and omissions are corrected on the spot. Project monitoring will also assess the project implementation team's performance as well as the performance of the FMA and its regional offices. The MIS will contain information on number of contracts, types of activities financed, time taken to approve proposals and provide financing, amount of financing allocated to each target group/region, etc. In addition, financial audits of the FMA will be conducted twice a year and independent technical audits on project as a whole. Evaluation: Overall evaluation of the project will be focused on two levels: the general population, and specific target groups. Where possible, available data will be employed. In order to measure overall impact of all prevention activities (including those conducted by other projects) sentinel surveillance will be employed. Since efforts are ongoing to strengthen the weak surveillance system, the measurement of impact of the project will focus on more intermediate variables such as behavioral change. Efforts are being made to strengthen the surveillance system. Data from available surveys (DHS, MICS) will be used to measure behavioral change and knowledge. In addition, baseline and endline KAPB surveys will be conducted in restricted populations to measure more in-depth behavior change in specific target groups. Four target groups will be selected. Evaluation studies would be subcontracted out. The UGP would work closely with the contractor as counterpart to ensure adequate coordination. Support to Component 1 (sectoral pilot studies): Responding effectively also requires the identification of effective approaches through carefully designed pilots and operations research studies, including both demonstration projects to fine-tune specific interventions, and quasi-experimental testing of 2 or 3 service delivery altematives. Approximately 12 small pilot and operations research projects would be designed and implemented to identify and fine-tune interventions to be scaled up through sectoral plans. Project Component 4 - US$2.00 million Program Management and Strengthening of Institutional and Organizational Capacity Program Management: The project will finance the UGP personnel, equipment, operational costs and periodic technical assistance. Capacity Building: The project supports the capacity building activities of the UNAIDS theme group's Inter-Agency Program for the CCN and its executive office, the BCN, in addition to the capacity building interventions for the UGP and the Conseil du PMPS and all implementing agencies. The project will (i) assist the CCN to enhance the analytical basis for the National Strategic Plan, (ii) promote the expansion of membership to include representatives from NGOs, the private sector, beneficiaries and academics, and (iii) provide technical assistance. The BCN's capacity will be strengthened by (i) key personnel for public relations and communications; (ii) office equipment; (iii) training and study tours; and (iv) technical assistance. The Conseil du PMPS institutional capacity will be built by: (i) clearly defining its modus operandi (decision-making processes, moderation skills, and consensus seeking); and (ii) establishing a core group of permanent delegates, including NGOs and beneficiaries, in order to create ownership, responsibility and decisive participation in the Conseil's decision-making process. The areas of capacity strengthening of the UGP include: (i) program management, coordination and administrative tasks; (ii) advocacy and awareness creation; (iii) training of trainers and technical support; and (iv) situation assessment, monitoring and evaluation. NGO capacity will be built under Component 2 (the Fund) and emphasizes learning, application, mentoring, and adjustment. The implementing agencies' overhead costs will be included in their contract with the FMA to give them the opportunity to hire additional personnel and acquire more equipment. - 31 - Annex 3: Estimated Project Costs MADAGASCAR: Multisectoral STIIHIVIAIDS Prevention Project Project Cost by Component Local Foreign Total US$ million US$ million US$ million 1. Financial Assistance to 2.00 0.00 2.00 Sector Development Plans and Pilots 2. Fund Financing Sub- 11.20 2.70 13.90 projects 3. Monitoring and Evaluation 0.90 0.60 1.50 4. Program Management and Institutional Capacity 1.30 0.50 1.80 Building Total Baseline Cost Physical Contingencies 15.40 3.80 19.20 Price Contingencies 0.50 0.10 0.60 1.10 0.10 1.20 Total Project Costs' 17.00 4.00 21.00 Total Financing Required 16.00 4.00 20.00 Project Cost by Component Local Foreign Total US$ million US$ million US$ million Goods 0.40 2.70 3.10 Works 0.00 0.00 0.00 Services 5.00 1.30 6.30 Training 0.60 0.00 0.60 Fund 10.70 0.00 10.70 Operational Costs 0.30 0.00 0.30 Total Project Costs' 17.00 4.00 21.00 Total Financing Required 16.00 4.00 20.00 This includes Government counterpart funds. ' Identifiable taxes and duties are 0 (US$m) and the total project cost, net of taxes, is 21 (US$m). Therefore, the project cost sharing ratio is 95.24% of total project cost net of taxes. - 32 - Annex 4 MADAGASCAR: Multisectoral STI/HIVIAIDS Prevention Project Benefit Analysis Summary An economic analysis of the impact of HIV/AIDS and a cost-benefit analysis of the Multi-sectoral HIV/AIDS project prepared under the Multi-Country AIDS Program was discussed in Annex 5 of the Project Appraisal Document of the Multi-Country HIV/AIDS Program for the Africa Region. There are no quantitative estimates of the potential impact of HIV/AIDS on economic growth, income distribution and poverty specifically for Madagascar. Nevertheless, regional experiences provide stark indications of the potential catastrophe that would result from the impact of HIV/AIDS, if it were to become a generalized epidemic with high prevalence rates common in Eastem and Southern Africa. A quick review of the relationship and potential impact of HIV/AIDS on the economy and poverty in Madagascar was carried by UNAIDS in April 2001. The report of the review identified the following potential impacts on economic growth (UNAIDS, mimeo April 2001): Health sector. The fiscal cost of HIV/AIDS is also significant, particularly in the health sector. Even with drastically reduced drug costs, one year of basic treatment for a person with HIV/AIDS costs far more than the estimated GDP per capita in Madagascar, which was US$240 in 1999. This is for medical costs alone. AIDS cases will crowd out most of the other needs as a percentage of health sector expenditures, resulting in even poorer access to essential health services. The health care system be stretched beyond its limit as it deals with a growing number of AIDS patients and the loss of health personnel to illness and death. A.iculture sector: Agriculture accounted for 30% of the GDP and 70% of export eamings of Madagascar in 1999. An unchecked epidemic of HIV/AIDS would, as in high-prevalence countries in Africa, result in reduced cultivation of cash crops and food products, with serious impact in a country that is not only dependent on agriculture for export earnings but also food insecure. Such negative effects have been documented in market gardening in the Burkina Faso and cotton, coffee and cocoa plantations in parts of Cote d'lvoire. Business and enterprises: Services accounted for 56.2% of Madagascar's economic output in 1999. Through its impact on the labor force, HIV/AIDS reduces productivity. If the prevalence of HIV became high in Madagascar, AIDS would exert its negative impact on the profit margin through increased absenteeism, lower productivity, and higher overtime costs for workers obliged to work longer hours to fill in for sick colleagues. The costs of social benefits related to I1V/AIDS would also tend to rise sharply, due to funerals and health care costs. Education sector: In high-prevalence countries, AIDS disrupts the educational system and so undermines the social capital of the country. In some countries with more advanced epidemics, more than 30 percent of teachers are affected. A faltering education system reduces human capital for the future in every sector. For Madagascar, it will mean an erosion of the supply of teachers, increase in class sizes and a likely reduction in the quality of education. Orphans: Studies in Uganda have shown that following the death of one or both parents, the chance of orphans going to school is reduced by 50 percent. Orphans also face an increased risk of stunting and malnutrition - a potentially serious threat to Madagascar, which already has a child malnutrition rate of about 40 percent. See also paragraphs 76-78 of the Project Appraisal Document for the Multi-Country HIV/AIDS Program for the Africa Region (Report no. 20727 AFR). - 33 - Annex 5: Financial Summary MADAGASCAR: Multisectoral STI/HIV/AIDS Prevention Project Year 2 | Year 2 | Year 3 | Year 4 | Year5 Y 6 | Year 7 Total Financing Required Project Costs Investment Costs 2.5 3.6 4.8 5.7 3.2 0.0 0.0 Recurrent Costs 0.1 0.2 0.4 0.3 0.2 0.0 0.0 Total Project Costs 2.6 3.8 5.2 6.0 3.4 0.0 0.0 Total Financing 2.63 3.78 5.25 6.03 3.31 0.0 0.0 Financing IBRDIIDA 2.50 3.60 5.00 5.75 3.15 0.0 0.0 Govemment 0.13 0.18 0.25 0.28 0.16 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 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Others 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Project Financing 2.63 3.78 5.25 6.03 3.31 0.0 0.0 Main assumptions: The project is largely investment costs with only minor recurrent cost. It is assumed the BCN will take over the UGPs role at the end of the project, which will then integrate the personnel needed for the continuation. The BCN is currently being financed by the HIPC funds and other donor contributions. The project will finance activities to be implemented by existing structures and will strengthen their capacity in order to ensure sustainability. - 34 - Annex 6: Procurement and Disbursement Arrangements MADAGASCAR: Multisectoral STI/HIV/AIDS Prevention Project Procurement 1. A new Procurement Code was issued in 1998 and the Bank ascertained that deficient features identified in the 1995 CPAR have been properly addressed. No special exceptions, permits or licences need to be specified in the Credit docurnents for international competitive bidding since Madagascar procurement practices allow IDA procedures to take precedence over any contrary provisions of local regulations. 2. Goods fmanced under IDA will be procured in accordance with Bank's Guidelines under IBRD Loans 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 Madagascar'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 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 3. The procedures followed, and total aggregate amount for all shopping methods under the project wvill 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. 4. 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). 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 assigments, i.e. those not exceeding six months. The government, and the project staff will be briefed about the features of the new consultant Guidelines, in particular with respect to advertisement, bid opening and the various steps of IDA reviews. 5. 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 UGP will be responsible for ensuring compliance with these guidelines, and ex-post reviews of random sub-projects will be conducted periodically by the Bank - 35 - and independent consultants appointed by the UGP. 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. 6. A General Procurement Notice (GPN) for the first year of operations will be prepared and issuec in the United Nations Development Business (UNDB), as well as in the local newspaper to advertise for any ICB for goods and for major consulting assignments to obtain expressions of interest. The detailed GPN for the subsequent years will be prepared for the project and published in the UNDB. It will be updated annually for all outstanding procurement. Specific Notices (SPN) and Expressions of Interest (EOI) will be prepared for the individual procurement actions where necessary. 7. The program elements by disbursement category, their estimated costs, and procurement methods are summarized in Table A below. Thresholds for procurement methods and prior review are summarized in Table B below. 8. Goods. The total cost of goods is estimated at US$3.1 million for the project. Procurement of goods will be bulked where feasible into packages valued at US$100,000 equivalent or more per contract and will be procured through Intemational Competitive Bidding (ICB) up to an aggregate of US$2,000,000. Preference for domestically manufactured goods will apply in accordance with the World Bank Guidelines. Contracts for vehicles, bicycles and IEC materials locally available which cost more than US$20,000 but less than US$100,000 up to an aggregate amount of USD$0.5 rnillion 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$20,000 up to an aggregate amount of US$400,000 equivalent will be procured through prudent Shopping and National Shopping in accordance with provisions of paragraph 3.5 and 3.6 of the Guidelines. Procurement of proprietary nature costing less than US$ 1,000 equivalent per contract, may be procured directly from manufacturers and authorized local distributors. 9. To facilitate speedy procurement of items required urgently for institutional strengthening, drugs, medical supplies, kits, and condoms costing less than US$30,000 up to an aggregate amount of US$200,000, may be procured from the United Nations Agencies (i.e. UNFPA; UNICEF; WHO; WFP; [APSO) in accordance with para. 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. The procurement arcd timely distribution of the goods will be the responsibility of the UGP. 10. Community Grants. 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. Beneficiaries will contribute 10
Groupe de la Banque mondiale · Project Appraisal Document
Madagascar - Multisectoral STI/HIV/AIDS Prevention Project
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