II. Project description.

A. Lending instrument

36. The proposed project lending instrument is a Sector Investment Loan (SIL) and the proposed terms involve a Variable Spread Loan (VSL). The project implementation period for this US$50 million IBRD loan is five years (Annex 5).

B. Project development objective and key indicators

37. The project development objective is to assist the Government of Botswana to increase the coverage, efficiency, and sustainability of targeted and evidence-based HIV/AIDS interventions through: (a) strengthening NACA's institutional management and coordination capacity; and (b) financing strategic and innovative HTV/AIDS-related prevention and mitigation activities. It is envisioned that this project development objective would be measured by utilizing indicators addressing the longer-term planning, implementation, and effectiveness of national and decentralized coordination efforts.

38. The Botswana HTV/AIDS Response Information Management System (BHRIMS) is the national multi-sectoral response monitoring and evaluation (M&E) system. The BNAPS Project's support to M&E would be guided by the following criteria: (a) support for the NSF and the development of a single national M&E system, under the rubric of the "Three Ones"; (b) support for an M&E system, that enables districts to monitor and improve their performance, as well as allowing for monitoring of community, district and national activities at the national level; (c) support for institutional, human resource and systems development; (d) support for activities which are not being financed by other development partners; and (e) support to the NACA in its function as the lead coordinating agency for M&E activities between all agencies and donors.

39. While data collection and reporting at national, aggregate level is already well advanced in Botswana, monitoring of activities and results at local level is, as in most countries, less well established. However, changes at local and community level are critical to significantly change the course of the epidemic. The Project, through a results-based design of the civil society and private sector component, has built in the measuring and reporting of baseline, progress and project completion data. This design also permits assessing the effectiveness of specific Calls for Proposals to bring about change through social mobilization of civil society and private sector organizations. These changes at community level are captured through the same indicators as those used in the BAIS (Annex 3).

40. Key indicators used to monitor the project, with a special focus on the institutional capacity of NACA and on the performance of the civil society and private sector component, include the following:

* Performance of NACA assessed by NACA's beneficiaries and of the Technical Advisors within NACA twice during the project (year 2 and 4);

* Proportion of sexually active males and females who report having had sex with more than one partner in the past 12 months by age group: (a) 15 to 19 years; (b) 20 to 24 years; and (c) 25 to 49 years;

* Proportion of youths aged 15 to 19 years and 20 to 24 years who both correctly identify ways of preventing the sexual transmission of HIV and who reject major misconceptions about HIV transmission;

* Proportion of youth aged 15 to 19 years and 20 to 24 years reporting either (a) no sexual activity; or (b) condom use during the last sexual encounter with a non-regular partner in the past 12 months; and

* Proportion of people 15 to 19 years and 20 to 24 years who report a sexual partner with more than 10 years age difference during the last 12 months.

C. Project components

41. Given that the national HIV/AIDS program has emphasized treatment-related issues to date, the proposed Project is designed to enhance overall program efficiency while reemphasizing prevention and the balanced response envisaged in the National Strategic Framework. The Government of Botswana requested the Bank's support in anticipation that these additional resources would play a strategically significant role in supporting a more efficient and evidence-based response to the epidemic. The Bank's comparative advantage is particularly in the areas of strategic planning, knowledge-sharing, implementation support, and the leveraging of financial and technical resources.

42. With respect to the project's geographic focus, activities for the first two years would focus intensively on the eastern border of the country, between Gaborone and Francistown. This decision was based on the fact that the vast majority of the national population (about 80 percent) resides along this corridor, which also includes the country's highest prevalence districts. This phased-approach would enable the rapid expansion and coverage of high-impact interventions among vulnerable and high-risk populations in Botswana. It is planned that the final three years of the project would be nationwide in scope, following an intensive evidence-based learning and capacity development over the first two years of the project. The locations selected by Government for the first phase of the project include South East District, Kweneng East District, Francistown District, Selebi-Phikwe Districts and Goodhope Sub-District.

43. The framework for the project design is comprehensive and seeks to achieve prioritized and phased implementation. The proposed project components include: (a) support to the National AIDS Coordinating Agency (15 percent of project financing); (b) support to public sector ministries (40 percent of project financing); and (c) and support to civil society and private sector (45 percent of project financing). These components follow from the key program coordination and implementation areas and are based on the analysis of identified key challenges in the national response presented earlier. It should be emphasized that these financing figures are indicative allocations (excluding contingencies) and that re-allocation of resources between components is expected during project implementation, based on implementation performance, regular assessments, and on changing circumstances. The project components are summarized in Annex 4, and further detailed in the Operations Manual. Estimated project costs are presented in Annex 5.

Component One: Support to NACA (US$7.2 million)

44. The discussion above noted weaknesses in NACA's coordination of the national response in Botswana. Similar weaknesses are found in many sub-Saharan African countries' national HIV/AIDS coordinating bodies. But the solutions need to be tailored to the circumstances of each country. For Botswana, with NACA as the institutional home of the Project, the NACA component will provide focused inputs to build internal capacity to coordinate HrVVAIDS activities effectively, both for the Project and the program more generally. Based on recommendations from institutional assessments carried out, especially by the Government in its NACA joint planning report (Operations and Management Report), and the NACA Mid-Term Review, and also by the World Bank team, the Government at very senior levels has reviewed the organization of NACA. Some decisions remain pending, but the revised structure of NACA is approved. This will permit the recruitment of a significant number of staff including the filling of some long-standing vacancies. This recruitment process has already begun. Thus, for the first time for some years, within the next 6-9 months, NACA will have a clear organizational structure which is reasonably staffed. The focus of the Project inputs will therefore be on capacity building within NACA in key areas that are not being supported by other partners--combined with systems building--to ultimately ensure that NACA is a viable, credible and efficient organization.

45. The role of NACA as primarily a program coordinator would continue to be emphasized. This includes the decentralized program, which would continue to be implemented through the Ministry of Local Government, the district administrations, NGOs, etc. Importantly, this component would also provide support complementing other inputs for the improved design and strengthening of the National M&E Framework both centrally and in the districts. This includes technical assistance, and support for database development and surveys.

46. A central part of the Project is long-term technical support for NACA. These would be senior experienced consultants working in NACA Headquarters. Terms of reference (TORs) for all positions are agreed. These TORs focus on achieving results in capacitating NACA combined with strict progress reviews, rather than simply providing technical inputs. There are eight positions, which are planned to phase out over the Project, as follows: (a) a Senior Management and Implementation Specialist; (b) two Senior Financial Management Specialists; (c) two Senior Procurement Specialists; (d) a Senior Monitoring and Evaluation specialist; (e) a Senior Capacity Building Specialist; and (f) a Senior Strategic Planning and Partnerships Specialist.

47. Recruitment for these positions has started and the Government has agreed, if necessary, to finance these positions initially from its own resources. Upon effectiveness, Government would seek reimbursement under the retroactive financing provision of the Loan. Technical assistance at the district level will be available through a variety of arrangements including volunteers from the UN, JICA and the US Peace Corps. The above assumes that financing will continue to be from the Ministry of Finance and Development Planning to NACA and then on. Both NACA and the Bank team would prefer not to have NACA as an intermediary, but this remains under discussion within the Government and the status quo prevails (see Annex 4 below for more details).

48. As an important part of NACA's systems strengthening, both the external and internal coordinating structures were reviewed by the Government and partners. The resulting revised arrangements, and particularly the coordinating committee structures, have been implemented including their use for Project implementation. Training, particularly long-term training, and development for NACA's own staff is already well planned and financed through existing Government programs. But the Project will finance capacity training, to be implemented by NACA, for CSOs at the national and district levels and associated annual CSO capacity assessments. NACA will also contract an important series of studies focusing on the social aspects of the HIV/AIDS epidemic.

Component Two: Public Sector Ministries (US$19.2 million)

49. This component will support public sector line ministries focusing on initiatives supporting the three priority areas of the National Strategic Framework (NSF). In consultation with partners, and as indicated in the NSF, the Project will commence with the following ministries: (a) Health; (b) Works and Transport; (c) Labour and Home Affairs; (d) Education; (e) Local Government; and (f) Youth, Sports and Culture. Annual work plans for funding under the project will be submitted for the Project Steering Committee as well as the HIV/AIDS Technical Sub-Committee's review. Upon approval, funding will be channeled through NACA for further disbursement to ministries. However, as mentioned above, the financial disbursement architecture is under review. Monitoring and evaluation of activities will be coordinated by NACA. Public sector support will emphasize external and internal mainstreaming and indicative activities under this component include the following:

a) Ministry of Education (MOE): Priority areas include enabling comprehensive in-school and teacher training, in addition to strengthening IEC/BCC activities to better reach children and youth in and out of school, address guidance and counseling procedures for HIV infected and affected children, and conduct special studies to identify the needs and possible behavioral change strategies for HIV positive children and teachers.

b) Ministry of Labour and Home Affairs (MLHA): Priorities for the Department of Prisons, which is a Department of the MLHA, focus on providing mobile antiretroviral clinics for the largest prisons to complement weekly VCT service availability, as well as in-service training for its staff on HIV prevention methods and training on knowledge and dissemination to Prisons staff.

c) Ministry of Local Government (MLG): Priority areas for the Department of Social Services include educational and rehabilitation efforts for orphans and other vulnerable children, the development of exit strategies social services, where appropriate, as well increasing the concentration of social workers in high prevalence school districts.

d) Ministry of Works and Transport (MWT): Priorities for this ministry focus on strengthening existing district programs that focus on mobile populations, including truck drivers and women involved in transactional sex.

e) Ministry of Youth, Sports, and Culture (MYSC): Priorities for the MYSC focus on strengthening existing ministerial programs that target youth, including outreach activities using sport facilities and sporting events as IEC platforms.

f) Ministry of Health (MOH): The health sector activities have been developed around an already strong national treatment and care program. It was agreed that, within the context of the proposed operation, efforts would be focused on providing technical assistance to the prevention activities of the civil society and non-health public components, as well as increasing the technical and financial efficiencies of the PMTCT and ART programs.

Component Three: Civil Society Organizations/Private Sector (US$21.6 million)

50. This component has been allocated the majority of the Project funds, reflecting the importance of the civil society organizations (CSOs) in the achievement of Project objectives. This component would make financial resources available to civil society, including the private sector, focusing on initiatives in line with the NSF. In terms of implementation of this component, the process will follow four interlinked processes: developing calls for proposals; receiving, evaluating, and awarding proposals; financial flows; and monitoring outputs.

51. The project design emphasized results-based support and targeted community level activities. This component will focus on proposals and activities that prioritize specific HIV/AIDS prevention results and target vulnerable populations. Vulnerable population groups eligible for BNAPS financing will be decided through the agreed processes involving both the HIV/AIDS Technical Sub-Committee and Project Steering Committee, as outlined in the Operations Manual. It is expected that this process will streamline funding procedures while focusing on specific thematic areas based on comparative strengths and regional needs.

D. Lessons learned and reflected in the project design

52. The findings of the October 2004 regional review of the Multi-Country HIV/AIDS Program (MAP) have been reflected in the project design. The major lessons were, first, greater strategic planning is needed in terms of supporting specific activities and interventions which have the greatest impact, based on analyses of current epidemiological and behavioral data. Second, there is need for an evidence-based approach that strikes a balance between broad-based general public intervention and the targeting of vulnerable groups. Third, more performance-based disbursement systems should be introduced to encourage strong performers. Fourth, civil society should be fully involved in the design of materials and procedures for grant making, application and reporting. Fifth, adequate resources should be set aside to develop operational M&E systems which can provide adequate biological, behavioral and routine program activity monitoring information. And sixth, that there is need for an intensified effort addressing prevention efforts in Southern Africa.

53. In recent years, the World Bank also has carried out several studies of its HIV/AIDS related lending and non-lending operations at the global-level. The following key lessons have emerged from these reviews: (a) the Bank, by its acts and its omissions, influences both developed and developing countries in their actions on HIV/AIDS; (b) country ownership, leadership, and capacity are crucial to successful action; (c) the Bank's policy advice and country-led approach are important assets to countries in pursuing their goals; (d) HIV/AIDS needs to be better integrated into development policy and planning, and the Bank is uniquely positioned to assist countries with this; (e) HIV/AIDS strategies, policies and programs should be evidence-based, with priorities based on local epidemic conditions; and (f) monitoring and evaluation are essential, and consistently neglected. To the extent possible and in so far as these lessons are directly relevant for Botswana, these lessons have been incorporated in the design and planned supervision strategy of the proposed project (Annex 11).

E. Alternatives considered and reasons for rejection

54. The major alternative design considered for this operation was a Sector Wide Approach (SWAp) framework. However, it was determined that the current donor and macroeconomic environment would not be conducive for an overall SWAp for the national HIV/AIDS response at this stage. As a result, although the BNAPS Project would support the comprehensive NSF, it would not function as a SWAp at its inception. Efforts would be made in the areas of planning, financing and budgeting, implementation and M&E to prepare a foundation on which future joint operations can be developed. The potential transition to a SWAp-like approach will be explored during the Project Mid-Term Review.