Bank Operations and the Role of Procurement

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1 Bank Operations and the Role of Procurement PSLO Retreat April 23, 2012 Fadia Saadah, OPCPQ

2 A Menu of Complementary Instruments Menu Investment Lending Development Policy Lending Program-for- Results Financing Client Countries are able to choose from a range of instruments to suit their objectives the results they desire the risks they face

3 A Menu of Complementary Instruments Menu Investment Lending Development Policy Lending Program-for- Results Financing Investment Lending Purpose: Supports investment operations. Disbursement mechanism. Disburses against specific expenditures that support the operation. Funds for specific expenditures. Implementation mechanisms. Bank IL rules and procedures (including procurement) apply. Country system efforts to date have sought procedural equivalency with the Bank s own process. On procurement, a limited number of countries /sectors are in a pilot phase.

4 A Menu of Complementary Instruments Menu Investment Lending Development Policy Lending Program-for- Results Financing Development Policy Lending Purpose: Supports policy and institutional actions. Disbursement mechanism. Disburses against policy and institutional actions. Funds go to the general budget and not earmarked to any specific activity or program. Implementation mechanisms. No specific implementation arrangements required. Depends on country policy processes. Procurement has no specific requirements, only that national system should have reasonable quality.

5 A Menu of Complementary Instruments Menu Investment Lending Development Policy Lending Program-for- Results Financing Program-for-Results Financing Purpose: Supports government programs or subprograms. Disbursement mechanism. Disburses upon achievement of results and performance indicators. No need to track expenditures for disbursements to occur. Simply verify that agreed results have been achieved. Funds disbursed for a specific expenditure program. Implementation mechanisms. Program systems. Bank assesses the performance program systems (technical, fiduciary E&S) and agrees with Client Country on systems performance improvements where necessary.

3: PREPARATION Stage 4: APPRAISAL Stage 5: NEGOTIATIONS & BOARD APPROVAL Around 5-6

6 6 The IL Project Cycle Timeline Usually 3-4 months About 6 months About 6 months 3-4 months IL Operation Processing Stages Stage 1: IDENTIFICATION Stage 2: CONCEPT Stage 3: PREPARATION Stage 4: APPRAISAL Stage 5: NEGOTIATIONS & BOARD APPROVAL Around 5-6 years Stage 6: IMPLEMENTATION SUPPORT (IS) 3-6 months Stage 7: COMPLETION & EVALUATION

7 Key activities during the IL Project Cycle IDENTIFICATION A project proposal can result from, among others: Discussions surrounding the definition or update of the Bank Country Assistance/ Partnership Strategy Follow-on project from a successful operation The occurrence of an unexpected emergency need (e.g. natural disaster, financial crisis) After the identification of the project the Bank agrees with the Client Country on the preliminary Project Development Objective

Key activities during the IL Project Cycle PREPARATION The Client Country is responsible for project preparation Depending on the objective and scope of the project assessments are conducted in

Assessment for the project is prepared by the Bank team Procurement Plan is drafted by the Client Country Project-specific bidding documents are prepared by the Client Country s implementing

8 Key activities during the IL Project Cycle PREPARATION The Client Country is responsible for project preparation Depending on the objective and scope of the project assessments are conducted in the following areas: Technical Assessment Environmental and Social Assessment Procurement Assessment Fiduciary Assessment Economic Assessment Special procurement tasks Procurement Risk/Capacity Assessment for the project is prepared by the Bank team Procurement Plan is drafted by the Client Country Project-specific bidding documents are prepared by the Client Country s implementing agency(ies) General Procurement Notice (GPN) is prepared by the Client Country. The GPN will have a summary of the program and all identified bidding opportunities that may attract international bidders

9 Key activities during the IL Project Cycle APPRAISAL Appraisal is the sole responsibility of Bank staff Studies and assessments conducted in previous stages are reviewed, including the Procurement Plan and any available bidding documents that are ready at this stage The World Bank ensures The project s consistency with the Bank s Articles of Agreement, Operational Policies, the current Country Assistance Strategy, and reflects lessons learned from Bank experience It is technically, financially and economically sound, and has appropriate safeguards in place The procurement plan is prepared with reasonable packaging, using agreed on procedures appropriately (International Competitive Bidding etc.) and schedules that are reasonable for bidders

Key activities during the IL Project Cycle NEGOTIATION & BOARD APPROVAL The Bank and the Client Country formalize the understandings discussed during project preparation and agree on all terms and

10 Key activities during the IL Project Cycle NEGOTIATION & BOARD APPROVAL The Bank and the Client Country formalize the understandings discussed during project preparation and agree on all terms and conditions of the loan Once an agreement is reached the Task team proceeds to submit the proposed project for Board approval Special procurement tasks For projects with procurable items, confirm agreement on the extent and scope of use of national procedures for non ICB contracts, Procurement Plan and content of General Procurement Notice (GPN) Publication of the Procurement Plan by the Client Country

11 Key activities during the IL Project Cycle IMPLEMENTATION SUPPORT The Client Country is responsible for implementing the project The Bank provides support to the Country to help them achieve expected project results while ensuring compliance with the Loan Agreement Special procurement tasks Capacity Building for Client Bank s Prior review of all procurement packages over a certain agreed threshold (depending on project risk and capacity) and yearly post review of a percentage of contracts below prior review (usually 10-20% depending on project risk) Client Country issues Specific Procurement Notices (SPNs) and Requests of Expressions of Interest (REIs) Independent Procurement Reviews (IPRs) may be conducted on a periodical basis as needed

12 Key activities during the IL Project Cycle EVALUATION After project completion the Bank prepares an Implementation Completion and Results Report (ICR) with the following objectives Accountability Learning Development Effectiveness Procurement and Financial Management staff contribute to the preparation and completion of the ICR

13 Thank you for your attention!

Program-for-Results Financing

Program-for-Results Financing D E C E M B E R 2 0 1 1 the world bank What is Program-for-Results? In today s world, development is about results. Everyone government officials, parliamentarians, civil