Framework for project preparation and appraisal

Framework for project preparation and appraisal tài liệu, giáo án, bài giảng , luận văn, luận án, đồ án, bài tập lớn về...

Saeed Ahmed Rana

ADFD/WB Project Preparation and Appraisal Workshop Abu Dhabi, April 2010

Overall Framework

for Project Preparation and

Appraisal

 This is an instrument to provide assistance to the billions in the developing world, who need to

overcome poverty and raise their standards of

living

socio-economic development of member countries.

use of their resources – natural, financial and

human – to alleviate poverty, protect the

environment and enhance effectiveness of public and private sectors.

Why A Project?

Why project preparation and appraisal?

 Project preparation and appraisal processes play an

important role in enhancing the developmental impact

of investments and building government capacity in national planning and investment

 These processes are not intended to be document

driven but to bring together multiple perspectives on a project and various tools of analysis needed to assess,

monitor and improve on the different activities and

expenditure components involved in the project

 A strong foundation of preparation and appraisal can

ensure better performance and disbursement during the life of the project and is the primary framework for

conducting project supervision and monitoring

3

A Framework for Project Preparation

and Appraisal

I Project Cycle

II Project Rationale and Preparation

III Borrower Roles

IV Donor Roles

V Project Appraisal

Costing Analysis

Environmental and Social Assessments

VI Assessing Project Quality

VII Early Signs of Project Failure

The Bank Project Cycle

Project Cycle - The project cycle starts with a development strategy based on selectivity and comparative advantage

It is targeted to country’s development objectives It is

followed by:

 Identification

 Preparation

 Appraisal

 Negotiations and Approval

 Implementation and Supervision

 Completion and

 Evaluation

5

Stages of the Bank’s Project Cycle (I)

 Country Assistance Strategy-the Bank proposes lending and advisory services to help countries identify their

priorities and reach their main development goals.

 Identification-Projects are identified that support country strategies and that are financially, economically, socially and environmentally sound

 Preparation-The Bank provides policy and project advice along with financial assistance Clients conduct studies and prepare final project documentation.

 Appraisal-The Bank appraises the economic, technical, institutional, financial, environmental and social aspects of the project The project appraisal document and draft

legal agreements are prepared.

Stages of the Bank’s Project Cycle (II)

 Negotiation and Board Approval-The Bank and Borrower agree on loan or credit agreement and the project is

presented to the Board for approval.

 Implementation and Supervision-The Borrower

implements the project The Bank ensures that the loan proceeds are used for the loan purposes with due regard for economy, efficiency and effectiveness.

 Implementation and Completion-The Bank team evaluates the performance of both the Bank and Borrower.

 Evaluation-The Bank’s Independent Operations Evaluation Department prepares an audit report and evaluates the

project Analysis is used for future project design.

7

Project/Lending Types

 Development Projects can be original projects, pilot projects or repeater

projects

 Pilot projects test the design criteria and implementation strategy of new

technologies before embarking upon a full scale investment

 Repeater projects adopt the design and practices of a successful project for the

same Project Development Objective (PDO) under similar implementation

conditions and environments

 A SWAp is a sectorwide approach that supports locally owned programs for a particular sector in a comprehensive and coordinated manner

SWAps promote increasing reliance on country systems and procedures and use a common framework for planning, implementation, expenditure, and monitoring and evaluation

 Project Lending is primarily the Specific Investment type Loan (SIL) Lending is

also extended for sector investment, maintenance, financial-intermediary and technical assistance projects

Project Identification

Birth of a Project

 Country Development Plans

 Borrower Specific Request

 Unforeseen Conditions (e.g natural calamities)

Set Project Development Objectives

Project Development Objective Guidelines

 What group is targeted directly by the project as the key recipient of project

 The PDO should not merely restate the project’s components or outputs

Efficient use of inputs or delivery of outputs must be translated into outcomes or results for the primary target group

 KISS Your PDO (Keep – It – Short - and - Simple), concise and meaningful

 Don’t try to reach the sky in one go

 PDO should not encompass higher level objectives that depend on other efforts beyond the scope of the project

Strategic Areas of Focus for the Bank

 Country capacity building

 Measuring and reporting on results

Achieving Results

on the Ground

Measuring and Reporting on Results

Enabling Environment

Country Capacity

Building MfDR

Bank’s Communication/Messaging on Results

Harmonization with MDBs/Donors

• Senior Manageme

nt attention

• Recognition

• Tools, IT systems,

RX Platform, CPRT

• Training, KL

• Resources

Project Preparation - Borrower Role

 Review identification and results

 Initiate project preparation

 Identify/set institutional framework

 Determine need for TA

 Set up project preparation office

 Appoint project consultants

 Inter-agency/departmental coordination

 Prepare a Project Information Paper (PInfP)

 Approach donors 13

Project Preparation - Donor Role

Assign project preparation team

Review borrower progress in project identification/preparation

Identify shortcomings and suggest actions to complete

Review alternative designs and justification for the selected design

Prepare Interim Information document (PID) based on PinfP

Set up peer reviewers

Review consultant’s progress and propose strengthening, if needed

Discussions

Borrower

Stakeholders

Potential donors

Sustainability Considerations At Preparation

 Post project needs

 Follow-up to sustain benefits

 Are beneficiaries identified?

 Are they organized?

 Are they willing to participate in project activities?

[Participation is important to ensure ownership and

sustainability.]

 Any NGO participation?15

Project Preparation

 Update Project Information Document (PID)

 Field visit to assess preparation progress

 technical, economic, environment, social studies

 Completion of feasibility studies

 Discussions with probable/potential co-financiers

 Prepare Project Implementation Plan (PIP)

 Project components

 Implementation plan

 Monitoring and Evaluation (M&E) Arrangements

 Prepare Project Operation Plan (POP)

 Guidelines

 Arrangements for effective project operation

 Risk analysis and mitigation measures

 Performance Indicators PI ( see next slide )

Performance Indicators and Guidelines

17

 Fewer is better Identify a limited set of indicators for the Project Development Objective (PDO)– both qualitative and quantitative

 However, make sure that the selected indicators measure all PDO dimensions

 Indicators should be S-M-A-R-T

The Project Concept Note (PCN)

Draft and Circulate Project Concept Note [PCN] *hyperlink

 Three to four page document

 It focuses on project concept, not design

 It is prepared soon after project identification before project preparation costs become substantial

Functions

 Examine the strategic rationale for Bank involvement

 Promote consideration of alternative project concepts

 Seek a go/no-go decision from the Country Director

 Obtain early guidance/agreement on issues and approaches

 Flag risks and potential mitigation measures

 Seek early guidance on potential safeguard issues, consultation and

disclosure

 Agree on a resourced estimate, schedule and team [See PCN Template 1]

Sample PCN Cover Sheet

19

Preparation Completed

Quality Enhancement Review (QER)

 Consistency of design with approved project concept

 Quality assurance of the technical aspects of the project

 Establish fiduciary (Financial Management and Procurement) requirements that need to be met by appraisal

 Review safeguards needed and specify project’s environmental and safeguard classifications and the requirements to be met by appraisal.

 Review project feasibility and sustainability aspects

 Propose actions to update PCN

At Preparation stage all technical economic financial institutional social environmental M&E O&M aspects must be fully analyzed with viable options presented

PCN review

Discussion at management Level

Follow up on PCN review and finalize PCN

Obtain management’s authorization for project appraisal.

 Finalize appraisal arrangements

 Assign appraisal mission members

 Ensure all subject matter specialists are included

 Preferably Bank regular staff – consultants only in specialized areas

 Ensure staff continuity until mission accomplished

 Draft Project Appraisal Document

21

Pre-Mission Actions

Critical elements of PAD are:

 Country background

 Sector background

 Project Development Objectives (PDO) Project

Design (Tech Institutional, Financial, Social,

Environmental, Procurement, M&E)

 Project cost and financing

 Project analysis (economic, financial)

 Implementation arrangements (PIM, Institutional etc.)

 Sustainability consideration

PAD Cover Sheet (1)

23

PAD Cover Sheet (2)

Pre-Mission Actions (Contd.)

 Prepare issues paper

 Explain unresolved issues and proposed solutions

 Hold decision meeting

 Seek managerial guidance on unresolved issues

 [Note: Above two steps may be combined with

activities under PCN Review]

 Finalize appraisal arrangements with the

government, borrower and co-financiers, if any.

 Prepare mission TOR

25

Appraisal Mission Field Activities

 Field check design assumptions

 Ensure that all information in the draft PAD is correct – make changes

as necessary to make it a factual document

 Reach agreement with the government/borrower on all project aspects

 Agree on holding Medium Term Review (MTR) in due course

 Prepare an aide memoire summarizing main findings and

understanding reached by the mission, mainly on:

Field Mission Completed

 Confirm Aide Memoire (AM) findings and

agreements with the government/borrower

27

Inputs:

Outputs &

Strategy &

Country/ SectorLong termOutcomes

Eg:

MDGs etc

Managing for Results:

The Results Chain

Doing right things?

Doing them right?

GettingDesired Results?

Lasting Impact?

Time

Level

Learning loop: evaluation

Results Framework (RF)

 RF is the program logic that

explains how (PDO) is to be

achieved

 It links PDO, outputs,

outcomes to be delivered and

indicators used to verify

 during implementation for day

to day management and

evaluation of project progress

 near the end for overall project

evaluation and feedback.

29

Example of Results Framework

Post-Mission Activities

conditionality to the government/borrower

memoire

 Negotiations

 Board approval

 Loan agreement signing

 Project launch workshop

31

Assessing Project Quality

 A checklist of commonly found deficiencies

in project preparation is given in the next

 A second look at these issues would

determine, among others, if post-appraisal work is needed.

Checklist of General Deficiencies in Project

Preparation

33

 Overambitious and non achievable Project Development Objectives (PDO)

 Project design not fully relevant to PDO

 Project implementation period is not long enough

 Mismatch with country context

 Inflexibility in project design

 Complexity of project design compared to absorptive capacity of the

government, including project cost and post project activities

 Inadequate M&E arrangements

 Weak governmental institutions

 Poor risk analysis

 Lack of beneficiary participation

 Weak ownership by the government

 Weak sustainability analysis

Early Signs of Project Failure

and signing of the loan agreement, the appraisal team signs off with mission accomplished satisfaction and the ball bounces to the implementation court

equally important for the parties concerned

carefully monitored

Early Signs of Project Failure

35

legal requirements] An initial test of the recipient’s

commitment to the project objectives

implementation unit (PIU)

venue to straighten out financial, procurement and

startup issues

the conditionality package including funding

project objectives

Some Examples of Project Experience

Republic of Yemen (RoY) Case

General Background

US$1.7 billion and has provided substantial

technical and analytical support

presented in the following slides

Taiz: Municipal Development and

Flood Protection

PDO

 Protect city residents, businesses and infrastructure from seasonal flash flooding

 Capacity development of Taiz local government

 Support for Yemen Decentralization Program

 Original 4-year time frame was too ambitious; had to be extended

 However, in view of satisfactory implementation Bank approved additional financing for enlarged scope.

37

Third Public Works Project

PDO

 Provide needed infrastructure to improve services and environmental conditions

 Creation of short term employment

 Community involvement in project selection, preparation and implementation

 Development of local contracting and consulting business

Strength

 Well designed Repeater Project

 Clear objectives applying lessons from previous projects

 Strong government support

 PMU gained experience and responded to implementation issues (e.g unexpected events such as sharply increasing costs of construction materials)

Weakness

 No major weakness Presents a good model for Repeater Projects and Pilots.

Groundwater and Soil Conservation Project

PDO

 Improve groundwater conservation in farming areas and increasing surface water availability

 Improve water use efficiency

 Improve recharge and protection of watersheds

 Support groundwater management framework and institutions

Strength

 PDOs are strategically strong but not fully supported by project design

 Project pursued needed policy objectives (increasing fuel price and reducing

subsidy)

 Institutional strengthening e.g IAS Fed of WUAs, quality control and agreement with beneficiaries on water usage

Weakness

 M&E design – inappropriate indicators

 Weak project consultants (funded by other agency with no Bank control)

39

Second Rural Access Project

PDO

 Reduce isolation of poor rural people by giving them better access to markets and services

Strength

 Result framework is well designed

 PDO very relevant to government’s Poverty Reduction Strategy Paper (PRSP)

 Provides impetus to sound institutional framework

Weakness

 Beneficiary participation low

 Poor preparation – premature Board presentation - first year’s design not ready

 Weak risk analysis - particularly related to benefits to minorities who are the main beneficiaries - elite capture prospects