1. 1 Risk Based Project Management VPC/PDP Fiduciary Forum 29 de Abril – 3 de Mayo 2008 1300 New York Avenue, Washington, DC 20577 Teléfono (202) 623-2874 Fax (202) 623-157901 Inter American Development Bank VPC/PDP

2. 2 Index 1)Bank ’ s background on risk management 2)VPC/PDP ’ s Mandate 3)Risk based project management 4)Procedures and standard guides characteristics 5)Next Steps

3. 3 1. Bank’s background on risk management Bank ’ s background on risk management

4. 4 2. VPC/PDP’s mandate Date for proposal presentation: May 30, 2008 Objetive Scope

5. 5 3. What is risk based management? Provides the background and discipline to make decisions

6. 6 3. Risk based management There will be a cultural change in management: How will risk management help my project? Crisis management. More uncertainty Proactive decisions To avoid problems before they are materialized. Less uncertainty Anticipating risk scenarios will become part of day to day risk management.

7. 7 3. Risk based management Stages IdentificationEvaluation Planning the responses Supervision and control

8. 8  Probability and impact matrix using votes or group surveys,  Probability and impact matrix that uses judgment of one or more evaluators,  Information technology for tabulation, simulation and generation of indicators. 3. Risk based management Tools Qualitative Analysis Involves:  Evaluate the probability and impact of risk events,  Determine their magnitude and priority.

9. 9 Decision tree analysis, Simulation techniques, sensibility analysis, etc. 3. Risk based management Tools Quantitative Analysis Requires:  Collection of data,  Quantitative and modeling techniques

10. 10 3. Risk based management Prioritizing Risks Qualitative Analysis

11. 11 3. Risk based management

12. 12 4. Procedure and standard guide characteristics Will be designed to:  Focus on achievement of objectives and results,  Assign responsibilities,  Risk based supervision,  Reduce transaction costs,  Harmonize with other Multilateral Development Banks, and  Involve principal Stakeholders.

13. 13 5. Next Steps Simplified Guide design, Presentation of draft and inclusion of suggestions Training and pilots, Pilots result report, Procedure approval, Training, application with guidance, Autonomous application.