Preparing Projects under Situations of Urgent ... - World Bank Ops Under Situations... · Question 1 The Bank can provide support on an emergency basis for an imminent disaster or

Preparing Projects under Situations of

Urgent Need of Assistance or Capacity

Constraints

Presenters:

Enrique Pantoja / Ammar Oumalek

OPCS

May 2019

Content

• Boundaries of Bank Mandate

• Feedback from Teams

• Key Bank Policy Framework

• Operational and Policy Flexibilities

• Challenges and Lessons Learned

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I) Boundaries of Bank Mandate

• No Peacemaking or Peacekeeping

• No Disarmament

• No Humanitarian Relief

• No Political Interference

The Bank as a Development

Institution

• Member Country’s Approval Necessary

• Dealings with De-facto Governments (OP/ BP 7.30)

• Engagement at International Community’s Request (e.g. UN Agencies) (OP 2.30)

With Clients

• Ongoing effort to mainstream Disaster Risk Management (DRM)

• Increased focus on supporting prevention and early response to address the drivers of conflict

• Attention to health emergencies / pandemics

At the Same Time

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CERCs

Medium Term DRM / Health Surveillance and systems (DPFs, IPFs, P4R)

Cat DDOs

New Operation / Supplemental DPF or additional financing for IPF

Applying a Strategic Approach to Bank Support

(Resilience/ Building Back Better)

In FY16/17, the Bank supported the response to 23 major disasters through US$ 1.82 billion of financing

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II) Feedback from Project Teams

Increased flexibility & adaptability during implementation is key to fit emergencies and fragile contexts

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 (retroactive financing / deferral of safeguard completion). But application constrained by Risk averse environment

Inconsistent application of the existing policies and proceduresamongst country teams due to lack of knowledge

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Question 1

➢ The Bank can provide support on an

emergency basis for an imminent disaster or

health emergency

1) True

2) False

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Question 1

➢ The Bank can provide support on an

emergency basis for an imminent disaster or

health emergency

1) True

2) False

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III) Key Bank Policy Framework

• Applicable in countries that the Bank determines are vulnerable to conflict or in conflict.

OP and BP 2.30: Cooperation and

Conflict

• 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.

OP 8.00: Rapid Response Framework

(*) Directive: Country Engagement (SCD and CPF) considers disaster risks in vulnerable countries.

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III) Key Bank Policy Framework

• Rebuilding / restoring / preserving physical assets, production and economic activities, and essential services

• Establishing and/or preserving human, institutional, and/or social capital (including economic reintegration of vulnerable groups such as refugees, ex-combatants, and internally displaced people)

• Assisting with the crucial initial stages of building capacity for longer-term reconstruction and DRM

• Supporting measures to mitigate or avert potential effects of imminent emergencies or future emergencies or crises

• Facilitating peace building

As Per

OP 8.00 / OP 2.30 the Bank

may Specifically

support:

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Operational Options… Instruments

• Preparing a New Project

• Additional Financing to an Existing Project

• Restructuring a Project to Reallocate Funds

• Activating Contingent Emergency Response Components (CERCs)

Under IPF, Paragraph 12 which can be

applied for

• Providing Supplemental Financing (for countries implementing a DPF)

• Disbursing from a CAT-DDO (Deferred Drawdown Option)

Under Development

Policy Financing

• Given the nature of the instrument, difficult to consider emergency procedures, or introducing options to support emergencies/ crises

Program for Results (PforR)

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Paragraph 12

Urgent Need

Disasters

Natural Manmade

Conflict

Ongoing Post-Conflict

Capacity Constraints

Fragility

Fragile CountryFragility within

Non- Fragile Country

Specific Vulnerabilities

III) Key Bank Policy Framework for IPF

IPF Policy

(applies only to small

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

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Operational Options Paragraph 12 Applies to:

• Procedures for Preparation of Projects under Situations of Crisis or Capacity Constraints apply

• Regular Project Appraisal Document (PAD)New Projects

• Bank Procedures on Additional Financing apply

• “Well Performing” Project & Under implementation for 12 months (if not, exception required)

• Can Include Restructuring (as with regular AF)

Additional Financing

• Procedures for IPF Implementation Support to Project Completion Apply

• Restructuring Paper: Basis for Exceptions + Justification

Restructuring

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• Increased Limits –Preparation Advances/Retroactive Financing

• Bank Execution of Start-up Activities

• [Deferral of Safeguards Requirements ]

• Alternative Implementation Arrangements

• FM Special Considerations

Simplified Procurement Process

Condensed Procedures

IV Operational Options and Policy Flexibilities

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• 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)

Increased Limits for Upfront Financing

• 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 Legal and Operational

Project implementation Arrangements*

(*) 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 includecapacity-building measures to enable a timely transfer of implementation responsibilities to theGovernment.

Policy Flexibilities… Efficiencies

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Question 2

➢ For operations supporting emergencies and

crisis, the Government does not need to

complete all E&S safeguards requirements

before appraisal

1) True

2) False

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Question 2

➢ For operations supporting emergencies and

crisis, the Government does not need to

complete all E&S safeguards requirements

before appraisal

1) True

2) False

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Policy Flexibilities… Under Safeguard Policies

• A deferral may be approved by RVP of environmental and social requirement completion

If Preparing an Additional Financing

• An “Action Plan” providing time-bound steps and the sequential planning and coordination for project activities and the preparation of the relevant safeguards instruments

• The safeguards action plan is included in the Project Paper and referenced in the ISDS

• For Category A projects, this exception is only available for Natural or Man-made Disaster or Conflict

Requirements

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Policy Flexibilities… For New Projects: ESF

• A deferral of environmental and social requirements is not needed

• Important to discuss scope of E&S due diligence work with specialists and ESSA Advisor as early as possible

Environmental and Social Framework

• An Appraisal stage E&S Review Summary (ESRS) [replaces ISDS]

• Environmental and Social Commitment Plan (ESCP) agreed with Government (including actions/instruments required)

• Stakeholder Engagement Plan (SEP) prepared by the Government

• ESCP and SEP are disclosed as early as possible, but at the latest by the consolidated Review

Requirements

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• Identification, Preparation, Appraisal stages in one stage

Consolidation of Preparation Stages

• Decision to authorize negotiations may be taken after a single consolidated review of a complete negotiations package.

• Management may decide to have the Decision Review prior to Appraisal. [The Review can authorize the team to proceed with appraisal and negotiations in principle]

Fewer Decision Points

• Decision Review: 3 business days to providecomments (normally 5)

• Matrix of responses is not mandatory

• Board submission: lead time reduced to ten(10) business days (normally 18)

+ Shorter Turnaround Time reflecting

accelerated business standards such as

Policy Flexibilities… Condensed Procedures

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4.4

3.4

3.0

2.8

All Projects That Trigger Paragraph 12

All Projects That Use Condensed Procedures

Disaster Recovery Projects That Trigger Paragraph 12

Disaster Recovery Projects That Use Condensed Procedures

*In Months: Initiation to Approval

REFLECTING THESE FLEXIBILITES:AVERAGE TIME OF PROJECTPREPARATION

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Fit for PurposeProvides more

choices and options

that reflect different

situations and

contexts

Focuses on fit for

purpose and

streamlined

procurement to suit

situation on the

ground

Allows use of

Alternative

Procurement

Arrangements (APA)

expands use of UN

Agencies as

providers of

GWNCS &CS

Allows Bank Staff to

provide procurement

Hands-on Expanded

Implementation

Support (HEIS) to

the Borrower

Permits dialogue

with suppliers to

solve problems

working together

More Choices

HEIS

APA

Market

Engagement

Procurement Framework -- options

Policy Flexibilities… Procurement

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Sudden onset

• Unforeseen natural or man made disaster

• Magnitude of disaster greater than pre-planning anticipated

• Implies

• Reactive Procurement

• Need for streamlined procedures including Bank review

Gradual onset

• Possibility of event is anticipated and planned for

• Enables

• Standard Procurement

• Pre-procurement, Framework Agreements in place

Continuous crisis

• 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

Adapting procurement to the situation

Policy Flexibilities… Procurement

• More delegation and higher levels of risk tolerance, by tailoring risk-mitigating measures to Borrower’s capacity; limiting FM conditions to most critical and measurable ones

• Increasing reliance on ex post controls, for example by deferring fiduciary requirements to the implementation phase and expanding implementation support

• Rapid Assessment – information, analysis and assessments needed for the project conducted efficiently and in shorter periods of time

Streamlined ex ante FM

requirements

• To quickly build adequate, reliable FM arrangements and internal controls, alternative implementation options can be considered (such as use of UN Agencies, international NGOs, etc.)

Capacity

• Options such as scalable FM arrangements, adaptable disbursement criteria, and variable project controls

Flexibility

Policy Flexibilities… FM Approach

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Policy Flexibilities But…

Approval of RVP required for Selected Expenditures, such as Food and Land expenditures

Compliance with other operational policies required, including economic analysis

Also, “legal” policies on International Waterways and Disputed Territories continue to apply

Plus, keep in mind that ongoing Mandatory Direct Payment Pilot (*) applies for IPF Projects under paragraph 12, when financed with IDA 18 funds (unless exception granted by OPCS)

(*) Direct Payment for contracts for goods, works, non-consulting services and consulting

services procured/selected through international competition or direct selection, unless the Special Commitment disbursement method is used

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Question 3

➢ Projects supporting emergency and crisis

situations are evaluated differently than regular

operations

1) True

2) False

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Question 3

➢ Projects supporting emergency and crisis

situations are evaluated differently than regular

operations

1) True

2) False

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Major Challenges

• Multisectoral nature of disasters

• 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

• Need to achieve results quickly on the ground

• Evolving conditions during implementation – need for intensive risk assessment and flexibility (through project design, legal agreements, and restructuring)

• Restricted access to areas and markets

Quality at Entry and

Readiness for Implementation

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Lessons Learned…

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• Actions taken during the first weeks and months after a disaster substantially impact the recovery process.

• Critical to develop “emergency support package” within a disaster recovery framework

• Need to approach situation programmatically

• Attention to social inclusion and pre-existing conditions (poverty, social tension…)

Strategic Attention

• Keep project design simple and focused on short-term activities directly related to the recovery which can be implemented rapidly -- Longer-term investments in institutions and infrastructure have tended to divert attention and resulted in a longer implementation periods

• While mainstreaming disaster mitigation in a socially and culturally responsive manner (building back better and fostering resilience)

• An “emergency operation” may not be the most adequate instrument for substantive institutional development objectives, or longer term development goals

Project Design

Lessons Learned…

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• Find a well performing and experienced implementing agency and keep Implementation arrangements as simple as possible

• Alternatively, address implementation capacity weaknesses pragmatically: short-term secondment of experienced staff from well-performing project implementation units / well-focused provision of specialized external expertise

Implementation Arrangements

• Monitoring and evaluation are key to ensure the achievement of results set in the recovery plan.

• Make an extra effort to consider socio-economic variables as part of outcome indicators, complementing the focus on reconstruction / rehabilitation output indicators typically used in emergency response

Evidence of Results and

Lessons Learned

• Provision of livelihood activities should have follow-on technical assistance to beneficiaries rather than disengaging once the activity is launched

• Consider future operation and maintenance

Sustainability

Resources

Procedure: Situations of Urgent Need or Capacity Constraints

Policy: Investment Project Financing

Directive: Investment Project Financing

OP 8.00 - Rapid Response to Crises and Emergencies

OP 2.30 - 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

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ANNEXES

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What is FCS and FCV?

• FCS country means a country that is in the Harmonized list of Fragile Countries.

• FCV currently refers to the challenge of fragility, conflict and violence regardless of

classification as FCS

• 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: includes both "conflict-affected" and "post-conflict" countries; this means

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..

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From Current Procedures

Fragile State: means a country that (1) currently has a harmonized average CPIA

rating of 3.2 or less; or (2) has the presence of a UN and/or regional peace-keeping

or peace-building mission (e.g., African Union, European Union, Organization of

American States), and has had such presence for at least the past three years (but

excluding such a presence whose sole purpose is for border monitoring operations).

Fragility within a Non-fragile Country: means areas subject to fragility in

otherwise non-fragile countries, consisting of those areas where development

actions are limited, due to very low capacity, unstable and rapidly changing

conditions and limited or no functional state presence.

These localized conditions negatively affect the borrower’s (or Bank’s) operational

ability to implement its responsibilities, including, but not limited to, conducting

adequate physical supervision of project activities, fully implementing all fiduciary

and environmental and social responsibilities, or freely interacting with target

beneficiary populations.

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Flexibility Measures Procurement…

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Flexibility Measures Procurement

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Operational Options…First Step for Teams

• Before AIS, TTL prepares and circulates a Memorandum seeking Approval to apply Paragraph 12

• Memo indicates which specific aspect applies (disaster, conflict, etc.)

• Proposed processing path (regular vs condensed procedures)

• CD level approval except for Fragility within non Fragile Country (RVP)

For Restructuring

or new Operation

• Concept Memorandum for AF should Include Request for Approval to Apply Paragraph 12

• Road Map for AF applies

For Additional Financing

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Processing – Operations Portal

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Select the correct Road Map at AIS stage

Processing – Operations Portal

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Operational Options… Systems

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Processing – Operations Portal

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Condensed Road Map: From Initiation to Decision

Thank you !

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