Preparing Projects under Situations of Urgent Need or Capacity Constraints. Enrique Pantoja & Ammar Oumalek, OPCS November 2018
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1 Preparing Projects under Situations of Urgent Need or Capacity Constraints Enrique Pantoja & Ammar Oumalek, OPCS November 2018
2 Content Boundaries of Bank Mandate Feedback from Select Project Teams Key Bank Policy Framework Operational and Policy Flexibilities Resources 2
3 I) Boundaries of Bank Mandate The Bank is a Development Institution and not a Humanitarian Organization No Peacemaking or Peacekeeping No Disarmament No Humanitarian Relief No Political Interference Member Country s Approval Necessary Dealings with De-facto Governments Engagement at International Community s Request At the same time Ongoing effort to mainstream Disaster Risk Management (DRM) Increased focus on supporting prevention and early response to address the drivers of conflict.
4 II) Feedback from focus groups with Project teams The most consistently reported issue was inconsistent application of the existing policies and procedures amongst country teams due to lack of awareness of existing flexibilities Positive feedback on flexibilities introduced in the new procurement framework (Hands-on Implementation Support, Alternative Procurement Arrangements) Flexibility during preparation is useful to reduce preparation time & respond quickly to clients Several existing flexibilities are useful but under-utilized due to risk considerations (such as retroactive financing / deferral of safeguard completion) Already existing capacity constraints affected by crisis / emergency and fragility (safeguards compliance in particular challenging) Increased flexibility & adaptability during implementation is key to fit the circumstances
5 Question 1 Can the Bank provide support on an emergency basis for an imminent disaster? 1) True 2) False
6 III) Key Bank Policy Framework OP and BP 2.30: Cooperation and Conflict Applicable in countries that the Bank determines are vulnerable to conflict or in conflict. OP 8.00: Rapid Response Framework The Bank may provide a rapid response to a member country s request for urgent assistance in respect of an event that has caused, or is likely to imminently cause, a major adverse economic and/or social impact associated with natural or man-made crises or disasters. Such events include a disease outbreak. (*) Directive: Country Engagement (SCD and CPF) considers disaster risks in vulnerable countries.
7 Key Bank Policy Framework IPF Policy Paragraph 12 Paragraph 12 Urgent Need Capacity Constraints Disasters Conflict Fragility Specific Vulnerabilities (applies only to small Natural Manmade Ongoing Post-Conflict Fragile Country Fragility within Non- Fragile Country states) And under IPF Directive Paragraph 56: The Borrower or member country may request the use of exceptional arrangements for an IPF as set out in Paragraph 12
8 IV) Operational Options and Policy Flexiblities
9 Operational Options Instruments Under IPF, Paragraph 12 can be applied for Preparing a New Project Adding Funds to an Existing Project (for projects under ESF) Restructuring a Project to Reallocate Funds Activating Contingent Emergency Response Components (CERCs) Under Development Policy Financing Program for Results (PforR) Providing Supplemental Financing Disbursing from a CAT-DDO (Deferred Drawdown Option) Still does not have option for responding to emergencies or crises
10 Operational Options Paragraph 12 applies to New Projects Procedures for Preparation of Projects under Situations of Crisis or Capacity Constraints apply Regular Project Appraisal Document (PAD) Restructuring Procedures for IPF Implementation Support to Project Completion Apply Restructuring Paper: Basis for Exceptions + Justification Additional Financing (only for new projects under ESF) Bank Procedures on Additional Financing Apply Well Performing Project & Under implementation for 12 months
11 Operational Options First Step for Teams For Restructuring or new Operation TTL prepares and circulates a memorandum seeking approval to apply paragraph 12 Indicating which specific aspect applies (disaster, conflict, etc.) CD level approval except for Fragility within non Fragile Country Proposed processing path (regular vs condensed procedures) For Additional Financing Concept Memorandum should include request for approval to apply paragraph 12
12 Policy Flexibilities Increased Limits Preparation Advances/Retroactive Financing Bank Execution of Startup Activities Condensed Procedures [Deferral of Safeguards Requirements ] Alternative Implementation Arrangements FM Special Considerations Simplified Procurement Process Important -- The Bank provides support under IPF policy requirements but with some exceptions (providing flexibilities) with
13 Questions 2 For Emergency operations, the PPA may be increased up to: 1) US$ 8 m 2) US$ 10 m 3) US$ 15 m
14 Policy Flexibilities Efficiencies Increased Limits for Upfront Financing Project Preparation Advance of up to US$10 million Retroactive Financing of up to 40% of total financing amount (more through a waiver if well justified) Alternative legal and operational Project implementation arrangements* The Bank may enter into arrangements with relevant agencies (UN agencies, national agencies, private entities, other third parties) The Bank may execute start-up activities financed under a grant from the Project Preparation Facility or a trust fund (corporate Bank procurement applies) [requires CEO Decision] (*) Alternative implementation arrangements above are limited to the time need to establish / restore the Government s capacity and, in all cases, are adopted in Projects that include capacity-building measures to enable a timely transfer of implementation responsibilities to the Government.
15 Policy Flexibilities Environment and Social Environmental and Social Framework A deferral of environmental and social requirements is not needed for projects prepared in accordance with the ESF Important to discuss scope of E&S due diligence work with specialists and ESSA Advisor as early as possible Requirements An Appraisal stage ESRS Environmental and Social Commitment Plan (ESCP) agreed with Government (including actions/instruments required) Stakeholder Engagement Plan prepared by Government ESCP and SEP are disclosed as early as possible, but at the latest by the consolidated Review
16 Policy Flexibilities Procurement Procurement Framework -- options Fit for Purpose Focuses on fit for purpose and streamlined procurement to suit situation on the ground Provides more choices and options that reflect different situations and contexts More Choices HEIS Allows Bank Staff to provide procurement Hands-on Expanded Implementation Support (HEIS) to the Borrower Allows use of Alternative Procurement Arrangements (APA) expands use of UN Agencies as providers of GWNCS &CS APA Market Engagement Permits dialogue with suppliers to solve problems working together 16
17 Policy Flexibilities Procurement Adapting procurement to the situation Sudden onset Gradual onset Continuous crisis Unforeseen natural or man made disaster Magnitude of disaster greater than preplanning anticipated Implies Reactive Procurement Need for streamlined procedures including Bank review Possibility of event is anticipated and planned for Enables Standard Procurement Pre-procurement, Framework Agreements in place Prolonged wars and/or violence and fragility Security issues Consider community participation in procurement use of 3rd parties for needs assessments and implementation supervision Use of remote sensing/ geotagging/ Third Party Monitoring Agents 17
18 Policy Flexibilities FM Approach Agility The Bank streamlines and simplifies ex ante FM requirements by Delegating more and by applying higher levels of risk tolerance, by tailoring risk-mitigating measures to the borrower s capacity, and limiting FM conditions to those that are most critical and measurable Increasing reliance on ex post controls, for example by deferring fiduciary requirements to the implementation phase and expanding implementation support Rapid Assessment gathering of information, analysis and assessments needed to design the operation is conducted efficiently and in shorter periods of time (a Rapid Assessment method and relying on third party assessments) Capacity Flexibility If needed to quickly build adequate, reliable FM arrangements and internal controls, various alternative implementation options can be considered (such as use of UN Agencies, international NGOs, etc.) Considering options such as scalable FM arrangements, adaptable disbursement criteria, and variable project controls, while necessary actions and mitigation measures are put in place for components or activities with higher risks.
19 Policy Flexibilities Condensed Procedures Consolidation Preparations Stages Identification, Preparation, Appraisal stages in one set Fewer decision points the decision to authorize negotiation may be taken after a single consolidated review of a complete negotiations package. Note: management may decide to have the Decision Review prior to Appraisal, and the Review could confirm that the team may proceed with appraisal and negotiations in principle + Shorter Turnaround Time reflecting accelerated business standards such as Decision Review: 3 business days to provide comments (normally 5) Matrix of responses is not mandatory Board submission: lead time reduced to ten (10) business days (normally 18)
20 Policy Flexibilities But Applicability and Compliance of Other Operational Policies, including requirement of economic analysis Process for Select Expenditure Allowance: Food and Land (RVP decides) Policy on International Waterways Policy on Conflict and Development REMAIN THE SAME
21 REFLECTING THESE FLEXIBILITES: AVERAGE TIME OF PROJECT PREPARATION 4.4 All Projects That Trigger Paragraph 12 All Projects That Use Condensed Procedures Disaster Recovery Projects That Use Condensed Procedures Disaster Recovery Projects That Trigger Paragraph 12 *In Months: Initiation to Approval
22 Major Challenge Readiness for Implementation Rapid project preparation under uncertain conditions, which do not allow for in depth analysis / assessments Weak government, and often lack of implementation capacity Developing a sound Theory of Change for the Project and Results Framework + constraints and weaknesses on data collection which affect Project evaluation Need to show results quickly on the ground Evolving conditions during implementation need for intensive risk assessment and flexibility (through restructuring) Restricted access to areas and markets Most critical aspects Implementation Arrangements Keeping Project design simple, flexible and focused (managing expectations)
23 Resources Procedure: Situations of Urgent Need or Capacity Constraints Policy: Investment Project Financing Directive: Investment Project Financing OP Rapid Response to Crises and Emergencies OP Development Cooperation and Conflict Operational Policy Waivers and Waivers of Operational Requirements Project Preparation Facility Procedure United Nations Under World Bank-Financed Operations Bank Guidance on CERC Fragility, Conflict and Violence Portal FM Guidance: Rapid Response to Crisis and Emergencies
24 ANNEXES
25 What is FCV? Fragility, Conflict and Violence (FCV) Country means a country that is in the Harmonized list of Fragile Countries. Fragility within a non-fragile Country: The concept of fragility also includes fragile contexts outside the harmonized fragile states list. Not just fragile states but also fragility risks. FCV is associated with patterns of risks that need to be identified and managed so that we can be more effective at preventing negative outcomes such as violence, conflicts and instability. Conflict: means both "conflict-affected" and "post-conflict" countries. Countries affected by conflict may therefore include countries involved in or emerging from conflict as well as countries whose development is affected through their proximity to and/or relations with these countries (OP 2.30) Note: Fragile and Conflict-afflicted Situations (FCS) refers only to the countries included in the Harmonized List of Fragile Situations. For 2019 it includes 36 countries or territories, 29 of which are IDA-eligible countries. The acronym FCV refers to the challenge of fragility, conflict and violence regardless of classification as FCS.
26 Flexibility measures Procurement 1 Normally no prior review or prior review is expedited 2 3 Clearance thresholds for Procurement staff may be provisionally increased Borrowers eligible for HEIS 4 Direct selection may be used as appropriate 5 Leverage UN Agencies based on their capabilities
27 Flexibility measures Procurement Thresholds for national competition may be increased Standstill period does not apply for emergency procurement Bidding time may be shortened Bid securities may not be required consider bid securing declarations Thresholds for national competition may be increased 11 Performance securities may not be required depending on risk
28 Processing Operations Portal Select the correct Road Map at AIS stage 28
29 Processing Operations Portal 29
30 Processing Operations Portal Condensed Road Map: From Initiation to Decision 30
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