3 IL Simplification—Why? Respond to Borrowers’ demands for simpler, faster, more responsive IL Make life easier for Borrower & Bank staff Cut costs and time Restore IL as an important product line
4 Faster project processing and better documentation Issue: IL processing too slow; reviews and documents not strategic Actions: February 2003: Faster processes for simple and repeater projects July 2003: New Project Concept Note, streamlined Project Appraisal Document, and associated new procedures (QER) October 2003: Guidance on streamlined procedures for fiduciary and safeguard reviews and clearances December 2004: PCN/PAD Review to assess how it works
5 More effective, adaptable, and results-oriented project supervision Issue: Lack of agility to adapt to changed circumstances; insufficient focus on outcomes in implementation Actions: FY04/05: Reform of project supervision report (ISR) FY05: Package of initiatives for easier project restructuring and rework FY05: New policy on additional financing to allow for faster scaling up FY05: OED Harmonization ISR-ICR-OED exit
6 Ability to finance wider range of expenditures Issue: Disconnect between expenditures that borrowers need to incur and those eligible for Bank financing Action: FY04: New policies and procedures approved for expanded eligibility of expenditures and country/sector treatment of cost sharing Fiduciary and Safeguard policies applied with capacity-building focus Issue: Application of Bank’s fiduciary and safeguard policies doesn’t build sufficient Borrower capacity Action: FY05/07: Pilot operations to use and strengthen borrowers’ fiduciary and safeguard systems
7 Efficient, user-friendly policy framework for IL Issue: Policy framework for IL is outdated, overly complex,fragmented, and too rigid Actions: FY05: Revise policy on emergency lending to better align with borrowers’ emergency needs and facilitate more efficient implementation FY05/07: Create a consolidated IL policy framework and procedures for IL that would be: limited to core policy principles and requirements for project appraisal and supervision eliminate redundant and outdated requirements and prescriptive details
8 Modernized investment lending instrument Issue: Current array of IL instruments is confusing, rigid, and not well adapted to today’s needs Actions: Nov. 2002: Fiduciary guidelines for pooled funding FY05: Proposal for consolidated IL instrument
9 Closing Remarks: To help investment lending further, three parallel tracks of reform need to be followed during the FY05-FY07 period: Completion of IL Simplification Agenda Serious reduction in Bank-internal “churning” during preparation and supervision of IL operations Overcoming lack of investment lending incentives and slots in country/regions’ programs
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