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April 2011

April 2011. Why a New Instrument?. Change in client demand: Clients want Bank support for government’s own programs and increased focus on results. This demand can’t be fully met with existing instruments Results: Focus incentives of borrower and lender squarely on development results

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April 2011

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  1. April 2011

  2. Why a New Instrument? • Change in client demand: Clients want Bank support for government’s own programs and increased focus on results. This demand can’t be fully met with existing instruments • Results: Focus incentives of borrower and lender squarely on development results • Institutions: Strengthen and work through the institutions and program systems that produce results • Partnerships: Many countries request support for their program(s) through medium-term partnerships with Bank and other development partners

  3. An Instrument for Incentives Toward Results Disbursements linked to results or performance indicators These can be outputs, outcomes, or other actions/results Definition of tangible, transparent, and verifiable disbursement-linked indicators Monitoring and evaluation

  4. Examples of Disbursement Linked Indicators • Percent of women receiving antenatal care or reduction in under-five mortality (Health) • Implementation of an improved system for managing procurement (Public Sector Management) • Time to start a business • (Private Sector Development) • Percent of municipalities with paved access (Transport) • Strengthening of school-based management system • (Education/ • Governance)

  5. An Instrument for Strengthening Institutions Results are sustainably produced by country institutions P4R is designed to help build institutions, capacities and country systems Supports incentives within government programs to enhance focus on and delivery of results

  6. An Instrument for Better Partnership Will allow WB to effectively support larger program Facilitates leveraging by financing a small part of large government program Facilitates co-financing in pooled funding arrangements Complements grant-funded TA programs

  7. Key Features of P4R

  8. Complementary Instruments Implementation Mechanism Funds for specific expenditures Project Lending (IL) Bank IL rules and procedures Funds for non-earmarked general budget support Policy Lending (DPL) Country policy processes Program Lending (P4R) Funds for specific expenditures program Program systems

  9. P4R Guided by a Single Operational Policy

  10. Use of P4R • P4R can be used by any country in support of a program(s) or sub-program(s). World Bank will appraise the program and assess if it is a good candidate for a P4R operation • We expect frequent use in social sectors and large national programs with decentralized implementation (community development programs, local government programs) • P4Rshould not support investments (within programs) with: • Potentially significant, irreversible impact on the environment and affected people (typically Category A) , and • Investments requiring high value and/ or complex procurement packages

  11. Appraisal of P4R Operations • Appraisal of P4R will focus on the assessment of: • Technical soundness (strategy, expenditures, and results) • System capacity and performance (fiduciary, social and environment) • Key risks of the program not to achieve its development objectives • As needed, assessments will identify actions to enhance capacity and systems performance • As part of appraisal, implementation support arrangements are defined, and agreement is reached on arrangements for audits

  12. Technical Assessment

  13. Systems Assessments • Focus on the program to be supported by P4R and the institutions managing the program • Coverage: Program systems dealing with • Fiduciary and anti-corruption • Social and environment • Key principles to guide the assessment include: • Transparency, accountability, performance to support achievement of program’s results • Funds are used appropriately under the program and environmental and social impacts and risks of the program are adequately addressed

  14. Implementation Support Program provides regular monitoring reports and annual program audits Implementation support includes: • Reviewing implementation progress and achievement of program results and DLIs • Providing support for implementation issues as well as institutional capacity building • Monitoring systems’ performance to ensure their continuing adequacy through program monitoring reports, audit reports, as well as field visits • Monitoring changes in risks to P4R operations and compliance with legal agreements and action plans

  15. We want to hear from you! • For more information and to provide feedback, please visit • http://www.worldbank.org/P4R • Follow P4R updates on the World Bank Facebook page

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