investment project financing implementation support guidance...

1

OPSPQ

December 3, 2013

2013

Investment Project Financing Implementation Support

Guidance Note

This guidance notes are intended for internal use by Bank staff. The notes will be updated and complemented from time to time.

Implementation Support Guidance Note 2013

Contents

Section I. Introduction ............................................................................................................................... 1

Section II. Implementation Support Tasks throughout the Project Cycle ........................................... 3

A. Design of an effective Implementation Support Plan ........................................................................ 3 B. Implementation – Effective management for results ......................................................................... 5 C. Project completion and evaluation ................................................................................................... 8

Section III. Conducting Official Reviews .................................................................................................. 9

A. Preparatory activities ..................................................................................................................... 10 B. Conducting the review .................................................................................................................... 10 C. The mid-term review ....................................................................................................................... 12

Section IV. Addressing Implementation Issues ...................................................................................... 13

A. Project restructuring ....................................................................................................................... 14 B. Additional financing ........................................................................................................................ 15 C. Remedies and sanctions .................................................................................................................. 16

Section V. Reporting and Filing............................................................................................................... 16

A. Communication and reporting tools ............................................................................................... 17 B. Access to information policy and the project file ............................................................................ 19

Section VI. Roles and Responsibilities of Key Actors ............................................................................ 19

A. Borrowers ....................................................................................................................................... 19 B. Task team and team leader ............................................................................................................. 20 C. Regional, country, and sector management .................................................................................... 20

Section VII. Project Handover ................................................................................................................. 21

Annex A. Implementation Support Approaches for Different Type of Projects ................................ 23

Annex B. Additional Guidance on the Mid-Term Review Processes ................................................... 36

Annex C. Additional Guidance on Preparing Aide-Memoires ............................................................. 40

Annex D. ISR Quality Checklist .............................................................................................................. 45

Annex E. Additional Guidance on Project Handover............................................................................ 47


Abbreviations and Acronyms

AAA Analytic and advisory assistance BP Bank Procedure CAS Country Assistance Strategy CBO Community-based organization CDD Community-driven development CMU Country management unit CPPR Country Portfolio Performance Review DO Development objective (rating) GAC Governance and anti-corruption GPS Geographical Positioning System IBRD International Bank for Reconstruction and Development ICR Implementation Completion and Results (Report) ICT Information and communications technology IEG Independent Evaluation Group IDA International Development Association IPF Investment Project Financing IP Implementation progress (rating) IPF Investment Project Financing ISP Implementation Support Plan ISR Implementation Status and Results (Report) M&E Monitoring and evaluation NGO Nongovernmental organization OP Operational Policy Statement ORAF Operational Risk Assessment Framework PAD Project Appraisal Document PDO Project development objective RVP Regional Vice President


Section I. Introduction 1. Borrowers are the owners of World Bank-financed projects; and as such, the borrowers are responsible for ensuring that these projects achieve their development objectives. As a development agency, the World Bank has an invested interest to assist borrowers in achieving those objectives on a sustainable basis and ensuring that loan proceeds assigned to a Bank-financed project are used solely for the purposes under which the loan was granted, with due regard to economy and efficiency.1 For this reason, the Bank allocates resources to support the implementation of investment project financing (IPF) operations. 2. Under the current institutional vision, the focus of this implementation function has shifted away from a culture of supervision to a culture of implementation support. This entails moving in the following direction:

• From due diligence as the primary objective — to one that emphasizes building client

capacity and institutions; • From reporting and evaluation based mainly on procurement and disbursements — to

one that monitors and reports on the achievement of results; • From one-size-fits-all approach — to one that is more flexible and context relevant

and that adjusts to needs of the operations; • From budget allocations based on norms — to risk-based allocations of resources;

and • From focus on project approvals and volume of lending — to an emphasis on

implementation, results, and learning.

3. This guidance note is intended to assist staff who provide implementation support to IPF operations, in a manner consistent with Operational Policy/Bank Procedure (OP/BP) 10.00, Investment Project Financing.

4. Purpose of providing implementation support to IPF operations. The overall objective of implementation support is to help World Bank clients increase the development impact of IPF operations through (a) improved results, (b) better implementation and risk management, and (c) increased institutional development, while ensuring compliance with the Legal Agreements of the operation. As such, implementation support revolves around two main dimensions:

• Technical advice by which the Bank brings added value to the borrower, providing

technical assistance and policy advice on capacity-building activities that could lead to improved results at the project level or in the sector(s) supported by the project; and

• Compliance oversight by which the Bank monitors and provides advice as necessary to the borrower, to implement the project with due diligence to achieve its development objectives in conformity with the project’s Legal Agreements.

1 IBRD Articles of Agreement, Article III, Section 5(b).


5. In its aim to address implementation issues efficiently and timely, resolve problems quickly, and build capacity adequately, this support function takes on the following characteristics:

• Driven by results and risks. As a development partner, the World Bank’s attention during project implementation focuses on assessing the progress toward achievement of its development objectives and assessing and addressing the main issues (or risks) that may hinder such objectives. Since operations supported by the IPF instrument are transaction-based by nature, the implementation support function follows the transactions and expenditures incurred under the project to assess how such expenditures contribute to the achievement of the expected results, identify potential issues/constraints to the achievement of the project development objectives (PDO), and propose actions to enable the achievement of the expected results. Two fundamental tools to guide these efforts are the project results and the risk assessment frameworks.

• Collaborative and productive partnership. To develop an environment in which

problems and their causes are identified and addressed promptly, Bank task teams strive to cultivate strong and frank partnerships with staff of the borrower and relevant stakeholders. Implementation support is not limited to official review meetings and visits but rather becomes a continuous and flexible process taking advantage of the Bank’s increased decentralization if possible.

• Different approaches for different needs. There is no single implementation support

model that fits all projects. The implementation support requirements will vary depending on several factors, including those that define the projects’ key features and its risk profile..

• Flexible and proactive response to a changing environment. With risks being re-

evaluated regularly and mitigation measures adjusted as needed, good implementation support will change over the life of the project because project priorities, risks, and circumstances can change. On the Bank’s side, flexibility to adjust operations is therefore a key element for successful implementation of IPF operations.


Section II. Implementation Support Tasks throughout the Project Cycle

A. Design of an effective Implementation Support Plan

6. Setting the stage during project preparation. Planning for implementation support begins during project preparation. An overall plan that summarizes the key areas on which World Bank support will focus during project implementation is developed and agreed upon with the borrower, with focus on the critical risks to achieving the project results and how those risks can be managed (monitored or addressed) during project implementation. 7. Results framework and risk assessment are key building blocks in the design of the Implementation Support Plan. Bearing in mind that not all projects have the same implementation support needs, task teams articulate the plan while taking into account the following notions:

• The main driver of the Implementation Support Plan is to help the borrower achieve the expected project results. The results framework is an integral tool for monitoring and assessing whether or not the project is on the right track in meeting expected results, detecting early signs of trouble, and taking corrective measures if necessary. As such, the results framework is a key instrument to support project implementation.

• The Implementation Support Plan helps task teams to manage the risks that the

project will face during its implementation phase. Different factors that shape a project’s risk profile play a key role in determining the implementation support requirements for a given type of operation and how those requirements may evolve over time.2 The degree of support required will relate to the possible impacts of the risks faced by the project, with higher-risk projects requiring greater implementation support. In addition, the project’s risk profile is likely to drive decisions regarding the balance between compliance oversight and opportunities to generate value added through technical advice. Task teams should consider this dynamic in defining actions, looking particularly for risk management opportunities that could help increase the likelihood of achieving the project development objectives. Annex A presents some illustrative examples on different implementation support approaches under different project circumstances.

8. Preparing the Implementation Support Plan. The Implementation Support Plan articulates the Bank’s approach to help borrowers achieve the expected project results based on the project’s nature and risk profile. Its purpose is to put more attention on the inputs and actions

2 Specific factors that can affect project implementation to be taken into consideration when designing the implementation

support approach include (a) stakeholder risk factors (state of Bank’s relations with borrowers, donors, and other key stakeholders that can affect the achievement of project development objectives); (b) operating environment factors (risks posed by a country’s politics, governance, societal, security, economic or fiscal issues, etc. or ownership, commitments, and governance issues at the sector level); (c) implementing agency factors (project management capacity, adequacy of arrangements to monitor and evaluate progress); and (d) project-design factors (nature and size of project activities, project’s technical, policy, and/or institutional complexity, degree of innovation, degree of project decentralization).


required to facilitate better risk management, better results, and increased institutional development, while ensuring compliance with the Legal Agreements to meet the Bank’s fiduciary obligations. The Implementation Support Plan puts particular emphasis on (a) monitoring and evaluating results on the ground; (b) facilitating the timely implementation of the risk management measures identified in the project’s Operational Risk Assessment Framework (ORAF), and (c) providing the necessary technical advice to the implementing agencies to build capacity. 9. The starting point for preparing the Implementation Support Plan is the analysis of the key project risks, derived from the project’s ORAF and specific features and nature of the project. These considerations will shape the implementation support requirements for each operation. For instance, if the task team has identified key inadequacies in the borrower’s arrangements for implementation that could constrain the project’s ability to reach its development objectives, the team works with the borrower to develop an action plan — as part of the project design — to remedy the deficiencies and adjust the timeframe for their implementation.3 The Implementation Support Plan would incorporate key follow-up actions or inputs that are needed during implementation to maintain and validate the adequacy of said arrangements.4

10. Based on the above considerations, the Implementation Support Plan elaborates on the following items5:

• Location of implementation support responsibility; • Skills mix of the task teams required to carry out the project’s due diligence and provide

technical advice to the client; • Availability of qualified staff within the Bank (and/or need to rely on consultants); • Demand and work load for each task team member; • How technical and fiduciary reviews are to be carried out and minimum integration

requirements (e.g., joint visits and assessments to cross-reference physical progress, payments to contractors/consultants, disbursements);

• Number of site visits and task teams members needed in each visit; • Specific actions/inputs needed to monitor implementation of mitigation measures

identified through the risk assessment process; • Role of country office staff to keep close communication with the borrower and/or

expedite decision-making processes, capitalizing on comparative advantages when possible;

• Inputs needed to monitor project performance and evaluate results; • Role of other development partners/stakeholders in supporting project implementation (if

applicable) and coordination efforts needed; 3 Such actions may include, for example, (a) establishing appropriate organizational arrangements, including adequate financial

management systems; (b) appointment of key staff and consultants; and (c) arrangements for counterpart funding. 4 For this particular example, this could include (a) closely monitoring performance of actions implemented by the borrower to

strengthen the financial management system and providing technical advice based on relevant international experiences on ways to carry out needed improvements; (b) organizing training events on relevant topics for key staff; and (c) supporting analytical work that could lead to better institutional performance in the long-run.

5 Guidelines for the preparation of the Implementation Support Plan have been included in the overall guidelines for the PAD template, Preparing the Project Appraisal Document (PAD).

http://intresources.worldbank.org/INTOPCS/Resources/380831-1360104418611/9037846-1365040468216/Preparing_the_PAD_Templates.pdf


• Opportunities and inputs to interact with project beneficiaries or involve third parties in project monitoring and oversight.

11. Risk-based resource distribution and finding opportunities to leverage the implementation support efforts. The task team leader estimates the resources that will be required to support the implementation of the project. In doing so, the team leader is mindful of budgetary constraints and prioritizes the implementation support efforts based on the nature and magnitude of the identified implementation risks, assigning resources to those key areas that pose higher risks to the PDO achievement. The team leader candidly and timely points out to Bank Management when high-risk projects require additional resources for implementation support. This estimate serves as an input to sector and country managers in the budget allocation process.

12. Maximizing resources. Planning ahead and making efficient use of existing resources and taking advantage of strategic alliances could help task teams to leverage opportunities for its implementation support efforts, pursuing for instance any of the following:

• Involving project beneficiaries in verifying projects outputs; • Establishing transparent, accessible complaint and dispute resolution mechanisms; • Involving other development partners, for instance, to organize more site visits,

collaborate on project reporting, or share the provision of technical assistance; • Integrating Bank’s progress reporting requirements with the borrowers’ existing

monitoring and evaluation (M&E) systems to the extent possible; • Making good use of technology, for example, by encouraging clients and beneficiaries to

use GPS technology to track project progress, cell phones with their camera capability and, when possible, use video- or audio-conferencing to increase the communication with clients;

• Sharing Bank specialists (such as a procurement specialist) across projects with the same borrower, saving costs and ensuring that related issues are handled consistently.

13. Other preparation steps to facilitate implementation support. The following activities are fundamental to the implementation support function but pertain to the preparation stage and as such are discussed in further detail in the Preparation Guidance Note: (a) establishing an adequate M&E system and project reporting requirements to effectively focus on results during project implementation; (b) identifying the minimum information requirements to be covered in the periodic project progress reports to be submitted by the borrower during the implementation period; (c) assisting clients to finalize preparatory activities and documents that constitute key implementation support tools and which will facilitate a quick start of project implementation; (d) supporting clients’ efforts to prepare documentation that could jumpstart project implementation; and (e) checking for readiness for project implementation.6

B. Implementation – Effective management for results

6 Refer to Project Preparation Guidance Note.

http://intresources.worldbank.org/INTOPCS/Resources/380831-1360104418611/Guidance_Note_Project_Prepration.pdf


14. Approval to effectiveness. The task team closely follows the procedures leading to the signature of the Legal Agreement and those related to completing conditions of effectiveness.7 The task team advises the borrower on the desirability for expeditiously completing any remaining actions required before effectiveness in order that, once the agreement is signed, the project can be declared effective and implementation can start. 15. Fully informed staff. Early in the start-up phase or before, all task team members should be fully informed of the project’s development objectives, expected project results and benefits, risks and risk management measures, commitments entered into, assumptions underlying the project, and actions to be taken. The team leader confirms that borrower staff responsible for implementation have copies of the Project Appraisal Document (PAD), the project Legal Agreements (including supplemental letters), and the minutes of negotiation agreements.

16. Project launch workshop. During the start-up phase, it is often useful for the task team and the implementing agency to carry out a project launch workshop, which might include representative beneficiaries, nongovernmental organizations (NGOs), and other stakeholders. Such a workshop would normally take place as soon as possible after loan approval to inform all relevant parties, especially those who will have a role during project implementation about the project objectives and implementation arrangements and processes. As appropriate, the workshop would focus on (a) interagency coordination arrangements; (b) M&E arrangements, including reporting to the Bank; (c) the Bank’s social and environmental safeguard policies, and arrangements for information disclosure, public consultation, and participation during implementation; (d) fiduciary issues, including procurement, financial management, disbursement, flow of funds, and audit procedures; and (e) details regarding the activities to be carried out in the project, with special emphasis on the first year’s work program and the immediate implementation actions required.

17. Effectiveness to completion. For most investment projects, the implementation phase between effectiveness and completion spans a period of four to five years. Implementation support during the implementation phase is a continuous process that usually comprises a combination of (a) periodic official reviews/visits (see more details in Section III); (b) interactions between the task team and the implementing agencies (and other development partners, if applicable) in between official reviews/visits; and (c) internal Bank interactions and processes.

18. Ongoing communication. Task teams are encouraged to use all available means of communication to dialogue with borrowers and deal with project implementation issues on a continuous basis, expediting the decision-making process instead of waiting for official reviews/visits to handle timely matters.

19. Tasks during implementation stage. Given that operations supported by the IPF instrument are transaction based by nature, implementation support efforts during this stage would normally revolve around the following:

7 For information on the implementation process, refer to Implementation Support Instructions.

http://intresources.worldbank.org/INTOPCS/Resources/380831-1360104418611/Instructions_IS_to_Completion.pdf


• Facilitating project implementation activities. The task team reviews documents to

validate the eligibility of proposed financing activities (verifying among other things that said activities remain economically justified), reviews terms of reference and specifications for contracts as agreed under the Procurement Plan, issue no objections to procurement activities, review borrower reports and other project-related documents, and provide technical inputs when required.

• Identifying opportunities to bring added value to the borrower. Throughout the project’s implementation stage, and depending on the nature of the project, there are different opportunities for the task team to bring value added to the borrower, for instance (a) engaging in sector dialogues that could lead to further improvement of the capacity and efficiency of the sector(s) supported by the project; (b) providing technical assistance/policy advice on capacity-building activities; (c) identifying relevant experts that could provide cutting-edge technical advice on a particular topic; and (d) creating opportunities for knowledge-sharing based on international experiences (including helping borrowers organize study tours or similar exchanges as needed).

• Providing technical support to the borrower to strengthen the capacity to manage and deliver project activities following agreed technical specifications and quality standards and to address technical issues that may arise during implementation.

• Providing fiduciary support and oversight. The task team closely monitors the borrower’s fiduciary arrangements (including procurement, financial management, and disbursements) to attest to its continued capacity to (a) implement the project procurement plan; (b) follow the use of funds and expenditures and provide reasonable assurance that loan proceeds are being used for the purposes intended; (c) record correctly all transactions and balances; and (d) prepare reliable financial statements. The task team is attentive to monitoring procurement implementation and disbursement and recommending ways to ensure that procurement activities and loan disbursements proceed smoothly in line with the planned schedule and equally alert to observing the timeliness of the receipt of annual audited financial statements, unaudited interim financial reports, and audit reports; and reviewing their content and quality. Through their interaction during the course of implementation, the task team has an opportunity to bring value-added support to the borrower with technical advice based on relevant international experiences and good practice for strengthening existing institutional capacity to achieve greater efficiency in managing procurement and financial management.

• Providing environmental and social safeguards support and oversight. The task team (a) provides technical advice to strengthen the borrower’s environmental and social management capacity based on good practices and cutting-edge experience relevant to specific country/sector circumstances; and (b) closely monitors the borrower’s safeguards arrangements and reports to attest to its continued capacity to implement the project in line with the project’s social and environmental provisions as set out in the Legal Agreement.8

• Assessing the quality of the borrower’s reports. The task team supports borrower’s efforts to provide reliable, objective, timely, and useful information that can be used as an early warning tool, a monitoring tool, and mitigation impact evaluation tool.

8 For additional information on environmental and social management, refer to http://go.worldbank.org/185CVIZKK0.

http://go.worldbank.org/185CVIZKK0


Inexperienced borrowers may need technical assistance in developing their reporting system and preparing the first reports.

• Monitoring and assessing progress and result and addressing implementation issues. In monitoring and assessing progress and results under the project’s results framework and addressing implementation issues, the task team assesses whether the transactions incurred under the project are on track with the procurement plan and disbursement schedules. The team considers whether the activities financed under said transactions adequately reflect the expected results as defined in the results framework. To follow up, the task team discusses with the borrower the reasons for any observed delays/deviations (whether they are due to external factors or not) and the implications down the road in terms of the project’s ability to meet the development objectives (see more details in Section III).

• Managing risks for the successful implementation, operation, and sustainability of the project. The task team updates the risk assessment by reassessing the stakeholder risks, country risks, capacity and governance risks at the implementing agency level, and project-specific risks. In line with the risk assessment, the task team reviews the continued relevance of the risk management measures; monitors implementation and impact of risk mitigation measures; identifies needs for additional measures; and assesses the emergence of new risks, possible impacts, and new risk management measures. The team leader updates the risk assessment in the ISR report.9

• Monitoring compliance. The task team monitors compliance of borrower’s actions with the Legal Agreement.

• Evaluating project implementation status and performance. The task team makes an assessment of the overall project performance, including performance of the implementing agency/agencies, with particular attention to whether implementation arrangements remain adequate.

• Planning and carrying out official reviews and site visits. Refer to Section III. • Assessing and processing project adjustment needs based on project performance and

evolving circumstances, if required. Refer to Section IV. • Informing Bank Management of project performance results and risks. The team

reports on results and risks to achieving the project development objectives and any adjustments or action plans deemed necessary. The key tool used for internal reporting on the implementation performance and prospective outcomes of projects is the Implementation Status and Results (ISR) Report. Refer to Section V.

• Updating the Implementation Support Plan as required. The Implementation Support Plan is revised as needed to take into account any evolving circumstances. If adjustments are needed, those could be reflected in the ISR report under issues for Management attention.

C. Project completion and evaluation

9 Additional guidance on how to assess risks can be found on Operational Risk Assessment Framework Guidance Note. For

further guidance on dealing with governance risks, refer to https://www.governanceknowledge.org/pro/default.aspx.

http://intresources.worldbank.org/INTOPCS/Resources/380831-1360104418611/Guidance_Note_Risk_Assesment.pdf


20. World Bank implementation support usually ends with project completion and the preparation of the Implementation Completion and Results (ICR) Report10 to (a) assess the extent to which the project achieved its objectives, as well as the overall performance for both the borrower and the Bank; and (b) draw lessons from this experience to improve the design of future projects, sector and country strategies, and policies. 21. Pre-closing actions. Task teams usually start discussing plans with the borrower for closing the project and preparing for the ICR drafting one year before the closing date to anticipate actions that need to take place before project closing. Among other things, the team discusses (a) the status of all contracts or activities under implementation and the timing for their completion so as to align those dates with the project closing date and enable timely payment to all contractors, consultants, and vendors; (b) project data collection processes to facilitate the evaluation of project achievements; (c) organization of any impact evaluations (if necessary); (d) the need to inform other co-financiers, stakeholders, and development partners of the project closing date and ultimate arrangements for closing activities required; (e) the borrower’s obligation to prepare inputs for the ICR and its timing; (f) organization of a final official review/visit to gather relevant data that will serve as input to the ICR; and (g) arrangements and timing for the final audit report. 22. Continuing support beyond closing. Any subsequent project implementation support, in cases when the project continues operations, usually occurs during work on similar or follow-up projects, or in the course of providing analytic and advisory assistance (AAA) to the borrower. However, the country director and sector manager may decide to continue implementation support beyond project completion in special cases if, for example, (a) important undertakings of the borrower such as agreed policy and institutional reforms remain in force but are as yet incomplete, (b) there are concerns about the implementation of plans to mitigate environmental or social impacts, or (c) new circumstances arise that threaten the sustainability of the project or the delivery of its expected benefits. Providing support to implementation of guarantees may be required as long as they remain in force. In such cases, Bank Management needs to decide on the additional resources needed to fulfill this function.

Section III. Conducting Official Reviews

23. Evolution of implementation support. The process by which implementation support is delivered has evolved over the past few years. The traditional notion that World Bank oversight is exercised through official missions is no longer the norm. The Bank’s increased decentralization and better use of communications technology allow task teams to provide more continuous and customized implementation support to the client, becoming an almost daily activity (carried out by phone, e-mails, Skype, videoconferencing) and does not depend on Washington-based staff traveling to project sites. 24. Continued collaborative reviews. Official, periodic reviews of project performance however continue to play an important role in assessing a project’s overall progress and

10 Additional guidance on preparing for closing a project and preparing ICRs are currently under preparation


documenting certain milestones. These reviews are collaborative efforts between representatives of the Bank and the borrower (and of other development partners if applicable). The number of official reviews will depend on the specific project needs and circumstances in which it evolves, but usually they take place at least twice a year during the implementation period. Some reviews may require site visits and/or formal meetings with higher-level government officials outside the implementing agency, and others may not. In either case, official reviews require proper planning, reporting, and follow-up, as well as effective interactions and communication between the task team and their sector managers and country directors. A. Preparatory activities

25. Prepping for project review. In anticipation of a scheduled official review, the task team examines the files, correspondence, and other relevant project documents, and encourages the borrower to suggest issues to be addressed during the project review. Particular attention is devoted to identifying issues on which to seek Bank Management’s guidance. When needed, the team leader prepares a note for Management that sets out the issues and recommends possible solutions. 26. Preparing statement of mission objectives. The statement of mission objectives lists the main purpose of the review, the issues to be addressed, the expected results, and the names of the task team members who will participate in such review. The team leader discusses the objectives with the sector manager and the CMU/country director. Special consideration is given to the required skills and special expertise of team members, taking into account the particular needs/problems facing the project, and to the use of international and local consultants, as appropriate. The task team includes specialists with adequate background and experience to deal with relevant complex technical issues. 27. Timing of the review. The timing of official reviews is agreed upon well in advance with the representatives of the borrower and project implementing agencies. A formal notification should be sent at least three weeks before the start of the review, stating the schedule (including any planned field visits), purpose, and the issues to be addressed.11 It is good practice to collaborate with implementing agencies on preparing the agenda of meetings and topics to be addressed during the review. It is also useful to ask the implementing agency to send a progress report to the task team in advance of the review mission so issues for attention are flagged before the discussions take place. B. Conducting the review 28. Introductory formalities. The task team carries out appropriate introductory formalities (which vary widely among countries and cultures) with the implementing agencies and local representatives of development partners that may be supporting the project. When the project is managed from Washington, the visiting task team also follows appropriate formalities with the country office.

11 Each Region has different protocols regarding official communications with the borrower. The team leader needs to consult

with the sector manager and country management unit on who should be signing this notification.


29. The agenda. The review is conducted primarily to assess progress toward the expected results, provide advice, meet with project beneficiaries and stakeholders, perform sample reviews of the documentation supporting disbursement, review interim financial reporting, carry out ex post reviews of procurement, follow-up with safeguard-related matters, and obtain additional information on project implementation performance.

30. Assessing required due diligence. The task team assesses whether the implementing agency has the support necessary to implement the project with due diligence to achieve its agreed objectives and conform to its legal obligations. If necessary the task team discusses with the borrower specific actions/measures to overcome identified constraints, gaps, or weaknesses. Thus, the task teams and their counterparts will spend the majority of time examining issues related to the achievement of development objectives and the risks to the achievement of those objectives; reviewing problems related to physical progress and financial status; assessing the implementation quality; and interacting with the staff of implementing agencies, beneficiaries, NGOs, and other stakeholders to obtain a broad understanding of project implementation progress, results, and benefits to date. 31. Planning site visits. Site visits of project activities or representative samples of subprojects under implementation should be carried out periodically during project implementation. Frequency of site visits depends on the specific project needs. These needs are based, for instance, on the number of contracts under execution at any given moment of time; the relevance, scope, and technical complexity of the contracts under execution; or whether a specific issue has been detected that would need attention and prompt action to be solved. However, it is good practice to have site visits at least once a year. To enhance the effective and efficient use of implementation support resources, it is often possible to combine project visits on a cluster of related projects, combine reviews with visits dealing with other Bank activities, or organize thematic discussions. 32. Decentralized teams. When team leaders or other task team members are based in the country office, an agreement can be reached in consultation with the implementing agency to carry out site visits whenever it is most appropriate (a more informal approach) without waiting for scheduled official reviews to take place. The more informal approach, particularly when the project is not being handled from Washington, could facilitate more frequent site visits or meetings (daily) with staff of nearby implementation units to help resolve particular issues. However, any visitation should still follow appropriate protocol (for instance, reasonable preparation and communication) to ensure smooth relations with project partners and participants. 33. Identifying and solving problems. When problems are identified, such as failure to comply with legal covenants or safeguard policies, the task team (a) helps the implementing agencies to develop realistic and workable solutions and (b) reaches agreement with the project authorities on who should take the corrective actions and when. This approach helps win the borrower’s confidence and enhances its commitment. 34. Reporting at end of review. Towards the end of the review, the task team prepares a concise aide-memoire detailing their findings, recommendations, and key actions agreed with the


borrower (see Section V for more information related to aide-memoires and other mission reporting tools). A wrap-up meeting is conducted with the main borrower counterpart to discuss the main findings and conclusions from the review, leaving with them a draft of the aide-memoire. It is good practice for the team leader to brief the country manager or country director of the findings of the review. 35. Follow-up. After the official review is concluded, task teams and, as appropriate, country office staff follow up with the borrower on progress made in implementing the actions agreed to in the aide-memoire (and any subsequent correspondence). The borrower/implementing agency is encouraged to reply to the aide-memoire, specifically addressing the issues raised and actions required, and to refer to this document in subsequent quarterly/semiannual reports.

C. The mid-term review 36. Scheduling a mid-term review. Usually, the decision to schedule a mid-term review is made during project preparation. The decision process takes into account specific characteristics and needs of the project reflected both in the Implementation Support Plan and the financing agreement. If such a review was originally deemed unnecessary or not planned but during project implementation was thought could benefit a project, the team leader should discuss with Management and the borrower about the need of doing so and plan accordingly.

37. Timing of the mid-term review. In general, more than the other reviews, mid-term reviews usually draw more attention from both the borrower and Bank Management in conveying key messages and obtaining additional support when required. The mid-term reviews follow similar principles, processes, and reporting as the regular semiannual/annual project reviews and in general cover the same aspects as a regular review. A key distinction is that often the mid-term review’s timing provides task teams with enough information and a good platform to take stock of project performance and make relevant decisions regarding the future of the operation. The optimum timing of the mid-term review would fall not too early in the implementation stage — such that not enough information regarding the project track record or its likelihood of success is available (for instance, at least 24 months after effectiveness) — but not too late so that any decision made is no longer implementable or relevant (for instance, before disbursements reach 40 percent or not later than 3 years after effectiveness).

38. Opportunity for adjustments. The mid-term review is an opportunity for the borrower and the Bank to reconsider the efficacy and effectiveness of the project design and implementation approach and make adjustments as necessary. An in-depth review at a project’s mid-way point of implementation normally provides the borrower and the Bank with a good opportunity to assess the overall project performance and take appropriate actions regarding the future of the operation, including significant project restructuring if needed. In particular, during a mid-term review, the borrower and the Bank assess operational aspects, such as project management and implementation performance, and discuss the extent to which project objectives are being fulfilled and remain achievable within the project timeframe and/or continue to be relevant.


39. Outcomes from mid-term review. The mid-term review is a tool for task teams to attract attention and support (from both Bank Management and the borrower) to resolve problems and adjust the project design if needed. Although the assessment and diagnostic aspects of the mid-term review are very relevant, concrete actions need to be agreed on between the borrower and the Bank as a result of said assessments. As such, the outcome of mid-term reviews will focus either on corrective measures needed for the project to achieve its expected project development objectives, decisions regarding the need to restructure the project to adjust to new circumstances, and/or possibly a decision on whether the project should continue being implemented.

40. Participants in mid-term review. The mid-term review process could be entrusted to an expanded team involving staff who would bring new perspectives to the issues at stake and develop alternative scenarios (before the review and/or during the review). Usually if the task team needs additional support before the actual review takes place, it is a good idea to organize meetings with the sector manager and experienced sector/network staff and the country team to prepare for the mid-term review and to enhance the quality of implementation support. An agenda for such meeting would focus on the key issues faced by the project and would lead to the discussion of the Bank’s views on how to address those issues. The results from such a preparatory meeting would form the basis for the preparation of the statement of mission objectives, including identification of key staff who will participate during the mid-term review.

41. If the current team leader was not involved in the preparation stage of the project, inviting the former team leader to the mid-term review discussions could also prove useful. The mid-term review also constitutes a good opportunity for inviting relevant stakeholders to comment on the impact of the project and have a broader consultation process on its continued relevance. Annex B provides further details on specific activities to be carried out during official reviews and in particular during the mid-term review; it also gives examples of expected outcomes from a mid-term review process as well as lessons learned from good practice.

Section IV. Addressing Implementation Issues

42. Monitoring projects. One key function of the task team during project implementation is to support the borrower’s efforts to address implementation issues that may affect the likelihood of achieving the program development objectives. If during project implementation the task team observes that there are issues affecting the project’s performance or significant deviations from the PAD, these issues should be brought to the attention of the borrower and Bank Management so that proactive measures can be taken. Some “risk flags” that could indicate potential or actual implementation problems include delays in procurement of agreed activities, frequent staff changes in the implementing agency, slow disbursements, and lack of compliance with covenants/safeguards.

43. In such cases, the task team normally needs to provide more intensive implementation support, working with the borrower to monitor the risk factors and/or design specific corrective action plans to address the issues to get the project back on track. However, this intensified


implementation support normally implies the need for additional resources; for this reason, Management involvement and approval is essential.

44. Reporting problems. Candidness in reporting to Management is of paramount relevance. The information provided by task teams on project performance and risks (along with other considerations that vary across Regions) supports the identification of problematic projects or potentially problematic projects and Management’s decision-making to allocate resources and efforts where they are most needed.

45. Project rating system. The Bank's project rating system will normally classify a “potentially problematic project” when it has risk factors historically associated with unsatisfactory outcomes12 even if it has satisfactory ratings both for implementation progress (IP) and development objectives (DO) in the ISR report. A project actually becomes problematic in the Bank’s rating system when either its IP or DO ratings are less than “moderately satisfactory”. When a project has been identified as problematic or even potentially problematic, proactivity is essential to help the borrowers restore the implementation performance and the likelihood of achieving the development objectives. In such situations, the task team closely monitors compliance of agreed actions and is prepared to assist the borrower to address any additional concerns. 46. Discussing problematic projects with the Borrower. When implementation problems persists, or cross-cutting implementation issues are identified for several projects in the same country or sector, it could be useful to supplement project implementation support reviews by participating in either the periodic Country Portfolio Performance Review (CPPR) carried by the CMU or the sector implementation review meetings with the relevant country officials. These meetings review the active portfolio, paying particular attention to sector and cross-sector issues and to problematic projects. They provide opportunities to exchange views on insights and potential innovations, including those raised in the course of thematic reviews underway in the Bank and other international institutions.

A. Project restructuring

47. During the implementation stage, the borrower may need to adjust the project in response to changes in the original priorities or circumstances in order to further the original project results or to address issues that put at risk the project’s capacity to reach its objectives. These adjustments might include changes to the project objectives, expected results, safeguards categories, outcome indicators or targets, project scope or design, addition or cancellation of project components, reallocation of loan proceeds, changes in executing agencies, implementation plans or schedules, currency denominations, reporting requirements, and closing

12 Specifically, potential problematic projects are identified as projects exhibiting three or more of a series of risk flags that

include (a) critical legal covenants rated “not complied with” in the last ISR; (b) ratings of “moderately unsatisfactory,” “unsatisfactory”, or “highly unsatisfactory”, on either the Safeguards, Counterpart Funding, Monitoring and Evaluation, Financial Management, Procurement, or Project Management categories in the last ISR; (c) projects with IP or DO rated “moderately unsatisfactory,” “unsatisfactory”, or “highly unsatisfactory” for any 24 months cumulative during the life of the project (long-term risk); (d) effectiveness delays; (e) disbursements delays; (f) country environment; and (g) country record (measured by the percentage of net disconnects or net commitments associated with unsatisfactory projects).


dates. For these purposes, restructuring is the tool available to borrowers during implementation support. 48. When it becomes evident that an adjustment is required, the task team discusses with the borrower the rationale, the magnitude and impact of the proposed changes, the benefits and risks of moving ahead with said changes, the steps to be followed, and the expected timeframe. At this point the task team would take into consideration the level of restructuring that would be required (Level 1 or Level 2). The task team consults with the Bank lawyer assigned to the project to determine how to effect the change, including any required modifications to the Legal Agreements.13 If the change involves Bank policies such as those on disbursement, financial management, procurement, or environmental and social safeguards, the task team leader consults with the responsible specialists in the Region.

49. In some cases, a project or a component within a project may no longer be viable (for a whole host of reasons, including changes in circumstances in the country/sector, priorities of the borrower). In such circumstances, the borrower or the Bank may decide to cancel an amount of the investment project financing. The cancellation will constitute a restructuring and will be processed as such. If an IDA-eligible country, the borrower may consider recommitting the undisbursed balance to another project in the same country either to supplement ongoing successful operations or for new activities that are consistent with the Country Assistance Strategy (CAS). 50. Task teams are encouraged to take advantage of the restructuring tool to increase the project’s development effectiveness and likelihood of success, recognizing that project circumstances are dynamic by nature. Restructurings are considered a measure of proactivity on the task team’s side when carried out in an appropriate and timely manner since it provides flexibility to adjust an operation if unforeseen circumstances, weaknesses, or risks arise during implementation. All approved changes are institutionally recognized restructurings of record for use by IEG in evaluating projects at completion.14 B. Additional financing 51. In certain circumstances the World Bank may provide additional financing to well-performing projects under implementation. Task teams need to be aware of this option available to borrowers. The need for additional financing for investment projects is normally identified during project implementation. The additional financing might be required to (a) complete the original project activities in the event of an unanticipated financing gap or cost overrun; (b) carry out activities that scale up a project’s impact and development effectiveness; and/or (c) finance modified project activities included as part of a project restructuring when the original loan amount is insufficient to cover such activities.15

13 The lawyer will determine the format of the amended agreement. 14 For information on how to process a restructuring, refer to Implementation Support Instructions. 15 Additional guidance is provided in the Additional Financing Guidance Note. For information on how to process an additional

financing, refer to Additional Financing Instructions.

http://intresources.worldbank.org/INTOPCS/Resources/380831-1360104418611/Instructions_IS_to_Completion.pdf

http://intresources.worldbank.org/INTOPCS/Resources/380831-1360104418611/Guidance_Note_Additional_Financing.pdf

http://intresources.worldbank.org/INTOPCS/Resources/380831-1360104418611/Instructions_Additional_Financing.pdf


52. A good opportunity to assess the need for project changes, including additional financing needs, arises at the mid-point of project implementation period although they can happen at any time (see Section III, Mid-Term Review). C. Remedies and sanctions 53. Under exceptional circumstances task teams may be faced with situations where a project cannot move forward because of failure by the borrower to comply with its legal undertakings or other events specified in the Legal Agreements that do not involve legal undertakings. Upon occurrence of any of these events, the task team will utilize any available resources to obtain timely and appropriate corrective measures (through dialogue led by the team leader, which may be supplemented by letters from Regional Management prepared in consultation with the lawyer and other concerned staff. After exhausting these measures without corrections, the Bank may exercise its contractual remedies, which are specified in the Legal Agreement and include suspension of disbursements and cancellation. The lawyer should be consulted on the availability of remedies in each particular case and on the wording of any proposed notices of the Bank’s intention to exercise its remedies. Statements of intention or decision to exercise a remedy should not be made unless approved by Senior Management.

Section V. Reporting and Filing

54. Reporting during the implementation phase of a project normally focuses around the following aspects:

• Progress under the project’s results framework—assessing progress in achieving intermediary and PDO-level indicators;

• Project risks—evaluating the implementation and impact of agreed mitigation measures; identifying the need for added measures or emergence of new risks, their possible impacts, and proposed mitigation measures;

• Implementation progress—assessing progress in procurement of project goods, works and/or services, and execution of contracts, disbursements and commitments of loan/credit proceeds, quality of project inputs and outputs, implementing agency performance;

• Compliance with requirements of the Legal Agreements; and • Pending issues and actions—assessing progress regarding issues highlighted in the

past, agreements reached with the borrower on actions to resolve pending, and new issues.

55. Informing decision-making and lessons learned. Reporting during project implementation helps task team and the borrower to identify and resolve potential issues that may endanger the project’s capacity to achieve its development objectives. Reporting helps Bank Management and the borrower to make informed decisions, provides valuable information for project evaluation, and provides lessons for future projects. Transparent and effective communication on the project is key in that respect. Problems should be reported with candor,


and action plans should be developed early enough to address all issues keeping in mind the overall objectives of the project and its sustainability. A. Communication and reporting tools 56. Reporting, in various forms and formats, happens on a continuous basis during project implementation. Communication and reporting tools include (a) aide-memoire; (b) Management letters; (c) ISR report; and (d) minutes of discussions with clients and memos of internal exchanges within the Bank.

• Aide-memoire. The aide-memoire is the Bank’s main instrument for written communication with the borrower following an official project review (including mid-term-reviews) to record progress toward achieving PDOs, establish implementation progress, identify key risks and implementation issues that may jeopardize achievement of the development objectives and results, and record agreements for resolving any pending issues (through an action plan).

As a good practice, Bank staff draft aide-memoires before concluding the official project reviews. Since they are prepared usually under a very tight schedule and with little or no time for consultation with Bank Management, some aide-memoires may need to include a disclaimer indicating that it represents the task team’s views and does not necessarily convey the official position of the Bank. Such a disclaimer is particularly relevant whenever controversial issues are posed or when future Bank actions are still undecided, or when allegations are made that could have potential legal implications (for example, concerns over corruption, procurement decisions requiring approval by procurement advisory staff, or matters of Bank policy that were not anticipated in previous discussions). This disclaimer is not included if aid-memoire content has been agreed upon with Bank Management. When there are unresolved matters that need to be resolved before concluding the official review, the team leader sends a summary of the main conclusions and recommendations (or, if feasible, the draft aide-memoire) to Bank Management for review and action as the review approaches conclusion. The advice received from Bank Management should then be incorporated in the final version of the aide-memoire to be discussed with relevant government officials at the wrap-up meeting. As a team-generated document, the aide-memoire is discussed with the borrower’s representatives. Although the content of the aide-memoire is not to be negotiated, the team should be diplomatic and sensitive to the borrower’s concerns on information, judgments, and language used. Annex C provides further guidance on the preparation of aide-memoires.

• Management letter. Addressed to the borrower, the Management letter is drafted by the team leader and signed by the sector manager or country director.16 The letter confirms or modifies the main messages in the aide-memoire and highlights key issues for the follow-

16 Each region has different protocols regarding official communications with the borrower. The team leader needs to consult

with the sector manager and country management unit on who should sign this letter.


up of the corresponding authorities to ensure the project can meet its development objectives. The Management letter is usually mandated when Bank Management needs to convey key messages to the borrower, although some Regions require the preparation of a Management letter following each official review. The aide-memoire is usually included as an annex to the Management letter.

• Implementation status and results report. The ISR report is the Bank’s main tool for internal and external reporting on the implementation performance and prospective outcomes of investment projects. Through this tool, the team leader submits for Bank Management review the team evaluation of the project’s implementation status and performance, progress toward reaching its development objective, and evolution of risks. Safeguard, financial management, and procurement specialists advise the team leader on evaluation of project’s performance from a fiduciary and safeguards perspective. The sector manager provides comments and makes the decision whether to approve or reject the ISR report while the country director provides advice to the team on the ISR.

Candidness and realism in preparing the ISR report and proposing ratings for project implementation is crucial to communicate effectively the project’s status and any issues that could potentially derail the achievement of the project development objectives. The ISR report contains non-disclosable sections for the task team to communicate sensitive matters to Bank Management. This becomes particularly relevant when implementation support is decentralized and the task team requires imminent attention from Bank Management. However, teams also need to be mindful about how the disclosable sections of the ISR report are worded. The narrative should be based on facts, avoiding judgments, and use positive constructive language and avoid commenting on the performance of the borrower.

The initial ISR report is due 3 months after Board approval of the project. The team leader receives a notification to create the initial ISR report in the Operations Portal (if it has not been created already). When the team leader initiates creation of the initial ISR report, the system displays a draft report that has been partially completed with all available information from the Bank’s databases. The team leader is required to verify the displayed information and fill in any blanks.

While the Bank-wide minimum standard is semi-annual reporting, the frequency of updating individual ISR reports will be determined on a project-specific basis. Regions and individual managers can set their own requirements for the frequency of updating the reports for each project on the basis of what makes sense for that project.

The ISR reports are updated (i.e., a new ISR is completed and archived) following official implementation support reviews/missions, but are sometimes updated even if an official review has not recently taken place. For example, the team leader and/or the sector manager may also decide to update an ISR report following an important event or change that they feel should be documented and brought to the attention of Bank Management. Annex D provides a checklist to assess quality of ISRs.


• Minutes of interactions with borrowers between official reviews/meetings. Implementation support is not limited to official review-related activities but is rather an almost daily interaction between the task team and the borrower. Given this routine, task teams may find it useful to summarize these interactions in writing through free-standing documents or minutes. Task team use the minutes (comparable in scope to the traditional aide-memoires) to capture and keep in the project files the results of these interactions whenever key decisions or evaluations are made. Task team may also consider keeping records of relevant internal memos following exchanges on implementation support issues within the Bank that lead to key decisions for project implementation.

B. Access to information policy and the project file 57. The Access to Information Policy that applies to IBRD and IDA17 establishes the World Bank as a leader in transparency among multilateral organizations. This policy allows access to information about projects under implementation enabling the public to track a project through the course of the project lifecycle. Under this policy some of the reporting tools used during implementation support may be disclosed to the general public. 58. The ISR report is the Bank’s primary tool to promote transparency and accountability on projects’ implementation performance and progress toward achieving results. The ISR report avails basic information on implementation status of Bank projects to the public. In addition, project aide-memoires may be disclosed if the Bank and the corresponding Government agree to do so through a written authorization. Other tools such as Management letters, internal memoranda, or communications with the borrower that are considered deliberative would not be considered public documents and would not be disclosed. 59. Filing documents. All relevant project documents that record project implementation are kept in the project file to ensure that a detailed history of the project is available. These include mission aide-memoires, Management letters, free-standing minutes of interactions with borrowers, consultants’ reports, key internal memos, no-objections, and audit reports. The team leader is responsible for maintaining the updated project files. Filing is done in electronic form through the use of WBdocs. If documents are too bulky to be scanned, hard copies should be sent to the Bank’s archival facilities. Whether the document is available or nondisclosable to the public will depend on the disclosure status given to each document filed.

Section VI. Roles and Responsibilities of Key Actors

A. Borrowers 60. The borrower is the owner of a Bank-financed project and as such is responsible for its implementation with due consideration to the Legal Agreements ruling the relationship with the Bank. 17 Refer to Access to Information Policy (effective July 1, 2010).

http://intresources.worldbank.org/KIOSK/Resources/AI_Policy_Statement_Final.pdf


B. Task team and team leader

61. The task team, which is assigned to a project, provides implementation support on behalf of the World Bank. The team is accountable for making sure that all policies and procedures are followed. The team includes a variety of specialists relevant to the nature of the operation, as well as a lawyer and finance officer. The specialists will be drawn from technical, procurement, financial management, environmental and social safeguards, monitoring and evaluation, institutional, and other expert fields. 62. The team leader manages multiple functions: (a) serves as the Bank’s principal point of contact for the borrower; (b) manages the project, which includes coordinating the Bank budget and other funds allocated to the project, reporting to Management on progress and issues, coordinating the work plan, and coordinating the filing of relevant project information; (c) coordinates the task team; (d) brings technical expertise; and (e) provides and coordinates substantial input for the preparation of multiple documents throughout the life of the project.

63. The task team works in an integrated manner to deliver better services to the client under a common vision of client responsiveness and effective implementation support. The team leader plays a key role in setting up the conducive environment, by involving all team members early in the project, establishing open and continuous communication spaces, and providing a clear definition of task roles and responsibilities among the team members. The team leader can delegate tasks so that each task team member is responsible for specific project inputs, but the team leader is accountable for ensuring the integrity of the project as a whole. Even if functions are delegated, the team leaders need to be knowledgeable about all applicable Bank policies and practices to monitor compliance. C. Regional, country, and sector management

64. The Regional vice president is responsible for the performance of the Regional portfolio of projects. The country director is responsible for the performance of the country portfolio. The sector manager oversees the implementation support process for individual projects and is responsible for ensuring the overall quality of the task team’s work on implementation support.18 The country director and sector manager also ensure that the task team has adequate resources and the correct skills mix to support the project effectively. 65. Each Region has an Operations Services Department that provides support and guidance to Regional staff and advice to Regional Management on enhancing development effectiveness and meeting the quality and fiduciary expectations of Bank standards during the project cycle. Task teams are encouraged to contact the Regional Operations Services Department to obtain guidance on the corporate processing steps and documentation, as well as on how to ensure quality project preparation and implementation.

18 The country director typically assumes responsibility for aspects bearing upon country conditions and the Bank’s assistance

program, while the sector manager typically assumes responsibility for technical and operational policy issues.


66. Sector Boards/Networks are available through sector staff to assist the task team. Where and when needed, task teams could request support from the Boards or Networks in dealing with special technical issues and risks.

Section VII. Project Handover

67. During the project cycle of an operation, which may span over a period of six or more years from preparation to completion, changes are common within the task team members in charge of the project. A team change should be done with consideration for minimizing disruptions to the project, maintain close communications with the borrower, and ensure a smooth transference of responsibilities. Changes in team leadership are particularly critical given their role as principal contact for the borrower and as the central player having the overall view of the project details. 68. In such cases of change in team leadership, the team leader needs to be proactive. They should adequately plan, document, communicate, and handover the responsibility of an IPF operation. Ideally, there would be a transition process when the outgoing team leaders briefs and guides the incoming team leader on all project details. During this transition period, the outgoing team leader would normally (a) design a project handover strategy, (b) communicate the project handover strategy to the borrower and relevant staff, (c) keep the incoming team leaders properly informed and engaged, (d) resolve pending issues, (e) update the project file, (f) prepare a project handover note, and (g) organize and participate in a handover mission.

69. The outgoing team leader prepares a handover note to inform the incoming team leaders of all relevant project issues. The handover note should include, at a minimum, names and contact information for the task team members, including consultants; contact information for the counterpart; a brief summary of the project objectives, components, status, and overall performance to date; date of the last mission and when next mission is expected; highlights of main forthcoming tasks; and any pending or controversial issues. The handover note is an internal document, and as such should be prepared with candor and should be filed in the project files for future reference of the incoming team leader. 70. The outgoing team leader informs the task team of the change in project leadership. Task teams often have a core set of members that work on the project on a continuous basis as well as members who are involved on a periodic basis. While the change of team leader would be well known to the core team, it is good practice for the outgoing team leader to send an email introducing the new team leader to the entire task team to ensure that all relevant staff are informed. 71. The outgoing team leader prepares a letter for Management’s signature to inform the main counterpart in writing of the imminent change in project leadership. It would normally include the name and contact detail of the incoming team leaders. In addition, it is good practice to conduct a handover mission to introduce the incoming team leader in person, and to review


any pending issues with the borrower. Annex E provides additional guidance on project handover.

Implementation Support Guidance Note Annexes 2013

Annex A. Implementation Support Approaches for Different Type of Projects

1. Acknowledging the wide variety of activities that the World Bank supports through its investment project financing (IPF) operations, Annex A presents instructive examples of different approaches to provide implementation support to clients. 2. Linking the Implementation Support Plan to the Project’s Risk Assessment. The idea behind this Annex, complementing the Guidance Note, is to point out how different factors that shape a project’s risk profile, play a key role in determining the implementation support requirements for a given type of operation and how those requirements may evolve as the project implementation risks evolve.

• The Implementation Support Plan is one of the main tools available to task teams to help manage some of the risks that the project will face during its implementation phase. Task teams need to have in mind the risks faced by the project to design and adjust the project’s Implementation Support Plan, paying particular attention to risk management measures to be put in place during implementation that could help increase the likelihood of achieving the project development objectives (PDOs).

• The project’s risk profile is likely to drive decisions regarding the balance between

compliance oversight and opportunities to generate value added through technical advice in the implementation support strategy. Task teams need to consider this dynamic in designing implementation support that is most suitable to a given project within its own context.

• During project implementation, task teams need to update the risk assessment

periodically that encompasses monitoring the implementation and impact of agreed risk management measures; identifying needs for additional measures; and assessing the emergence of new risks, possible impacts, and new risk management measures.

3. Figure A1 provides an illustrative example of the connections between (a) the risk assessment carried out with the Operational Risk Assessment Framework (ORAF) and the degree of implementation support required, depending on a range of possible impacts between higher risk situations to lower ones under each risk category; and (b) risk management opportunities that could be considered in the Implementation Support Plan (higher-risk projects requiring higher implementation support efforts either in terms of compliance oversight or technical support).


Figure A1. Link between ORAF and the ISP

4. Flexibility of the implementation support function based on different project typologies. To further illustrate this notion, Annex A presents examples of the flexibility of the implementation support approach under different project circumstances. This exercise starts with the discussion of a large infrastructure project being implemented in a fairly stable country and sector environments by a strong implementing agency. Changes to the original project circumstances are then introduced to highlight the impact on different elements of the implementation support. To simplify matters since this is intended to be a descriptive example, the exercise focuses on a few key elements of implementation support: (a) the balance between compliance oversight and opportunities to bring value added through technical support in different relevant areas (procurement, FM, safeguards, technical); (b) opportunities to leverage the implementation support effort; (c) Monitoring and evaluation (M&E) arrangements; and (d)

State/history of relations between the country and the BankStrong/long-

standing Fragile/recent

Coordination/all ignment with relevant development partners Strong Weak

Possibil ity of strong stakeholder resistance Likely Unlikely

Country’s overall political, economic, and financial situation Stable Unstable, fragile

Commitment of the country and relevant agencies to the project’s DO Strong Weak

Changes in government policies/laws or regulations that may affect project objectives or implementation Unlikely Likely

Institutional capacity Strong Weak

Ownership, appropriate decision making, accountabil ity High Low

Prevalence of mismanagement, malpractice that leads to F&C Low High

Adequacy and transparency of fraud and corruption controls Strong Weak

Nature and size of project activities Few large Many small

Technical, policy, and/or institutional arrangement complexity Low High

Project management capacity Strong Weak

Degree of project management decentralization Low High

Degree of difficulty in meeting the Bank’s safeguard policies Low High

Program dependencies, extent/nature of co-financing agreements Low/None High

Arrangements to monitor and evaluate progress Simple Complex

Risk Category Examples of Risk Factors during Project Implementation

Spectrum of possibilities for each Risk Factor

(from best case scenario to worst)

These factors usual ly can not be mitigated through the project. However TT should be

aware of them, monitor s i tuation, mainta in flow of

information/communication and concensus bui lding efforts with relevant

s takeholders , engage in relevant pol icy/sector dia logues , sector work, etc.

Risk Management opportunities though ISP

There i s the most scope to mitigate the ri sk level posed by these factors . TT

should monitor Borrower's implementation of agreed mitigaton

measures , adapt ski l l mix, team compos i tion and level of decentra l i zation

of the IS function based on project requirements , monitor evolution on

project progress and implementation performance, assess functional i ty of M&E system, provide relevant technica l advise, look for knowledge sharing opportunities ,

coordinate with relevant partners etc.

Implementation Risks and Degree of IS required

1. Stakeholder Risk

2. Operating Environment Risks

3. Implementing Agency (IA) Risks

4. Project Risks

There i s some scope to influence the ri sk level posed by these factors over the course of project implementation. TT

should monitor Borrower's implementation of agreed mitigation measures , fol low-up on action plans des igned to overcome weaknesses , monitor compl iance with fiduciary

mechanisms (including any Governance and accountabi l i ty framework in place)

and controvers ia l s i tuations , provide relevant advise when required, provide

tra ining opportunities when required, etc.

Availabil ity of adequate resources, processes, and/or systems High Low

Lower Higher


team composition/Integration. Other elements may play a key role under specific circumstances and should of course be considered by task team when designing the Implementation Support Plan. 5. It is important to note that the following are just some of the many types of IPF projects financed by the World Bank. This Annex will evolve and benefit in the future from the addition of other project typologies and good practice examples. Also, in some cases, some aspects described in one project type apply or may be combined into another project type; to avoid repetition, they are not repeatedly described.

6. This type of project generally relies on one (or a few) large-scale works contract to achieve its PDOs. Since works to be executed are known, a high degree of definition can be achieved during the preparation stage of this type of projects. 7. Most likely, all technical designs for the activities supported by the project are finalized during project preparation allowing relevant assessments (economic, social and environmental, fiduciary, etc.), specific plans (procurement, safeguards mitigation, etc.) as well as implementation arrangements (including M&E) to be fully developed at that stage. This enables task team to better identify the activities needed during the implementation stage and to focus the implementation support approach within certain specific areas, for specific events, and/or during specific periods.

8. Compliance oversight requirements are higher during earlier stages of project implementation with a special focus on procurement, safeguards, and technical aspects. In a best case scenario, where activities are to be implemented under a relatively strong country and sector environments by a strong implementing agency (knowledgeable of Bank’s processes and procedures, proficient in project management and in handling fiduciary and safeguards aspects, with solid audit capacity, etc.), the implementation support approach would normally require varying but relatively predictable levels of compliance oversight (and focus areas) between the early stages of implementation while the large works contracts are procured,1 and afterwards once the works are under execution. 9. During the first year of project implementation, the Implementation Support Plan concentrates efforts in supporting the implementing agency through the procurement process for the works and supervision contracts (reviewing documents to ensure eligibility of proposed financing activities from a technical, economic, and safeguards viewpoint; reviewing terms of reference and specifications; issuing no objections to procurement activities; reviewing borrower evaluating reports and other project-related documents that provide technical inputs when

1 Given the relative importance of the works contracts in this type of projects to the achievement of project development

objectives, preparatory activities for this type of projects may need to include analysis of the construction industry so as to ensure that once the bidding processes are launched, adequate firms are ready to present responsive bids and contracts are satisfactorily awarded to firms capable of delivering the works efficiently.

1. Large infrastructure projects with few high-value activities


required; etc.). In doing so, the technical, procurement, and safeguards specialists play an important role and their availability is essential in providing timely inputs so that the procurement processes run smoothly. 10. Once the contracts are awarded and works start being executed, the demand for task team inputs is more discrete, driven primarily by completion of project milestones and report deadlines. The Implementation Support Plan shifts toward monitoring the borrower’s capacity to ensure compliance so that said contracts are being implemented as expected and quality of works is being met (technical and safeguards specialists inputs are key to this end), and the funds are being used for the purposes they are intended (with relevant inputs from the FM specialist). This aspect of the Implementation Support Plan requires scheduling site visits to the projects, once or twice a year under normal circumstances. If major land acquisitions, resettlement plans, or environmental issues are involved, task teams may be required to make more frequent site visits and initiate proactive communications and consultations with project stakeholders during the first years of implementation. 11. Opportunities to bring value added through technical advice may arise due to project complexities, the need for inputs in cutting-edge areas, or in a low-capacity environment. If the project supports activities that are complex in nature (works with technical complexities, the introduction or streamlining of innovative aspects, etc.), the Implementation Support Plan could require specialized levels of technical advice, for instance:

(a) If the project supports activities that are of a complex nature, it would be desirable to have renowned experts within the task team to share international good practice with the client on how to address the project’s complexities and/or to have a more frequent presence onsite to deal with complex works contracts (technical experts and/or safeguard specialists).

(b) When innovative contractual procedures are being introduced (for example, performance-based contracts), carrying out independent technical audits may become essential.

(c) When dealing with governments that are highly capable, Bank’s value added may come from offering assistance on specialized or cutting-edge areas.

(d) If the works are linked to policy/regulatory sector reforms, the Bank’s value added may come in the form of advice on how to implement such reforms based on relevant international experiences

12. When the project is being implemented under a different environment from the one initially described and the uncertainties and risks to the project increase, the implementation support strategy priorities and focus may shift and become more demanding. Task teams would need to develop a more continuous relationship with the client and provide support when required so that necessary conditions for the successful implementation of the project are in place and/or help restore, when necessary, said conditions so as to minimize the impacts toward achieving the PDOs. For example, when the capacity of the implementing agency is not so strong, the Implementation Support Plan could envisage adequate measures to provide additional support to the borrower during all stages of project implementation. If implementation support function is not decentralized, building efficient communication systems with the client becomes more relevant as more involvement is required during the implementation period.


13. M&E systems. The M&E arrangements may be relatively simple since basic information should be easily obtained given the limited number of sites where activities are being carried out. The implementing agency should be able to provide most of the inputs needed as the contracts advance. The task team should be able to rely on such information (in cases where the institutional capacity is very weak, project design may contemplate M&E arrangements through supervisory consultants or other third-party observers).

14. Team composition. This type of project usually requires a skills mix covering procurement, financial management, environment and social safeguards, and technical areas of expertise. During the early stages of project implementation, the procurement, safeguards, and technical specialists may have a more prominent/concentrated work program. If projects are complex in nature, the Implementation Support Plan may cover the need for a more continuous approach to monitoring the execution of works and include relevant international experts (technical and safeguards specialists). In such case, decentralized staff with the required skills may facilitate this task.

15. In contrast to the type of project described above, projects financing many low-valued and scattered works activities usually involve a higher level of uncertainty since the extent of definition that is reached during the preparation stage, in terms of the specific activities to be financed throughout the project life, is normally lower 16. One example that falls into this category are rolling programs for which a multi-year intervention plan (targeting different geographical areas) is defined during project preparation. However, in this example, only some activities (usually those to be financed during the first year or so of project implementation) are well defined (known location and detailed studies available) and can be appraised. For such category of project, specific management plans will be prepared during preparation stage only for those activities that are well defined. For future activities, management frameworks are developed (safeguards, disbursements, etc.), and eligibility conditions are established. During the implementation stage, on a demand-driven basis, new specific activities are appraised for finance through the project. One dimension that could be very relevant for this project type arises when the implementation of activities is decentralized and task teams deal with several implementing units/agencies; this would add an extra layer of complexity to the project implementation arrangements that the task team should anticipate in its Implementation Support Plan. 17. Compliance oversight requirements are higher throughout project implementation. This type of project may require a more continuous implementation support effort throughout project implementation and tend to require more staff that are less centralized than in other project contexts. In particular, projects may require higher levels of compliance oversight, especially to (a) verify that the new activities meet the eligibility conditions (technical, economic, social, environmental, etc.); (b) review the procurement plan and processes for these

2. Projects financing many low-valued/scattered works activities


activities; (c) verify the delivery of these activities and their conformity to Bank policies (which implies more visits to projects sites); and (d) account for payments made and follow the flow of funds, etc. 18. Opportunities to bring value added through technical advice may arise due to the increased range and coverage of interventions, particularly in a low-capacity environment. Even though small works may comprise lower technical complexities and may follow simpler procurement procedures, which could indicate lower levels of technical support required, they may present higher risk from a safeguards point of view due to the increased range and coverage of possible interventions2 If the capacity of the implementing units/agencies is weak, the technical support requirements grow higher. In these cases, the task teams need to ensure that continuous dialogue mechanisms are well established, and adequate measures are included in the Implementation Support Plan to provide them with additional support during all stages of project implementation. 19. M&E systems. For a decentralized project covering many different locations, provisions for effective project M&E arrangements may be more complex. With different implementing units and activities widely spread, M&E arrangements require more coordinating efforts. These efforts may come directly from government through supervisory consultants or other third-party observers and/or by engaging civil society. The end results from the efforts are to ensure that progress is measured on an equal basis among sources, and the quality of the information received is similar independently of the source (some examples on how to address these issues follow in section 3, Community Driven Development Projects). 20. Team composition. While the skills mix is relatively the same as in large infrastructure projects, in this case, the role of Bank country office staff could become crucial to follow up more closely with progress at each project site. The use of available resources becomes more critical. The way the team leader optimizes the resources is an essential matter to consider in the Implementation Support Plan (for instance, consider hiring local consultants to supervise ongoing works instead of international experts for less complex projects, carrying out sample site visits focusing on those activities that have low-level disbursement or other signs of slow implementation, etc.). Under certain circumstances an M&E specialists may become essential.

21. Community-driven development (CDD) is an approach that supports participatory decision-making, local capacity building, and community control of resources. A CDD approach can create sustainable and wide-ranging impacts by mobilizing communities and giving them the tools to become agents of their own development.3 Usually, CDD approaches finance many small-value transactions scattered across rural areas, supporting initiatives from different

2 As a reference, on how to approach these issues, refer to Environmental and Social Management Framework (ESMF) for

World Bank Projects with Multiple Small-Scale Subprojects: A Toolkit. 3 See CDD site on the Social Development topics page:

.

3. Community-driven development projects

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community-based organizations (CBO) and/or local governments. Important considerations when preparing an Implementation Support Plan for CDD operations are presented below. 22. Given the participatory approach in the decision-making process and the fact that the activities to be financed are demand-driven, during project preparation a general program of activities is identified, but only a sample of specific activities may get to be appraised, as in the “low-value, scattered works” case. Again, this type of operations relies on management frameworks, eligibility criteria, and processes defined during the preparation phase that need to be followed during the implementation stage. The difference in this type of operations comes from having detailed designs, specific management plans, and other processes before project implementation starts (a very detailed operational manual tends to be an essential tool for this type of operations to describe in great detail but simple terms the processes, procedures and guidelines to be followed by each of the CBO or local governments handling the project). 23. Compliance oversight for CDD projects. When designing the Implementation Support Plan for CDD projects, some of the specific considerations apply: (a) the need for closer/continuous communication and support to the organizations implementing the project activities, favoring a decentralized implementation support model to accommodate the added requirements of site visits; (b) stronger compliance with oversight requirements given the higher amount of transactions; and (c) need to optimize limited implementation support resources by carrying out sampling visits to project sites and preference of local experts for projects with low technical complexity. 24. Opportunities to bring value added for capacity building and knowledge sharing could potentiate the development impact and long-term sustainability of the project. In CDD operations, capacity building usually is very relevant and the Bank can play a key role in this regard through technical advice. When local communities are responsible for identifying needs, reaching consensus on the community’s priorities, handling procurement, managing the funds channeled for their initiatives though special accounts or beneficiary accounts, an efficient process depends of capacity building. With learning by doing being one of the five key pillars underpinning CDD operations, the opportunities to bring value added through the implementation support strategy are high (training and knowledge sharing from relevant experiences on how to organize themselves more efficiently, improve participation, reach consensus to achieve common goals, ensure accountability and transparency in the use of funds, ensure sustainable actions). In some cases, for instance, communities may be unfamiliar with sound financial management and disbursement practices. Hence, CDD projects usually require specific procedures for financial management that maximize accountability and transparency, and the Implementation Support Plan could include related training on this topic.

25. Training. Usually, the first year of project implementation demands that all the conditions for the successful implementation of the project are in place. Training offered to CBOs and committees that will be in charge of different areas during project implementation is essential. Adequate training ensures that all processes and procedures are clear to all relevant agents and followed as described in the operational manual.


26. M&E systems. Establishing sound M&E systems in these cases of CDD operations is of particular relevance and may prove a challenge during project implementation if not properly integrated into the project arrangements. In highly decentralized projects operating over a wide geographic area, it cannot be assumed that Bank supervision will provide an adequate level of

oversight. It may be appropriate to introduce independent, third-party oversight, including the engagement of project beneficiaries and affected communities. In this case the task team may benefit from: (a) having the support of an M&E specialist during implementation (to help strengthen and build capacity within each implementing unit or community to monitor outputs and assess progress in each project-supported area, to assess how use of outputs translates into outcomes and toward achievement of PDOs); (b) having a greater involvement from local partners for innovative ways in which CBOs

could share monitoring roles and responsibilities (see example in Box A1);4 and/or (c) using information and communications technologies (ICT) to reach geographically dispersed areas. Social media and information sharing platforms, including Google Docs, Facebook, and others, can prove useful to overcoming these potential obstacles, where available (local access, acceptance, and interest in these tools can be limited in some areas).

27. It is important to bear in mind that in demand-driven projects, stakeholders’ priorities and objectives may change for very good reasons, requiring mid-course adjustments in project implementation. The implementation support strategy may need to take this into account to accommodate the indicators and monitoring tools based on this evolution. 28. Team composition. The skills mix and areas of technical expertise required within the task team will depend on the type of CDD-financed activities. In addition to the procurement,

4 ARD Note: Process Monitoring in Andhra Pradesh.

Box A1: Participatory Process Monitoring in the Andhra Pradesh Rural Poverty Reduction Project.

The Andhra Pradesh poverty reduction projects in India are well-known examples of CDD practice within the World Bank. The projects have involved over 600,000 female self-help groups, federated into some 29,000 community-based organizations across the state. Agriculture & Rural Development recognized the projects for good practice in project implementation support in 2006. Given the scattered nature of the project sites, the use of participatory process monitoring aimed to describe and use the causal relations that shape outputs and affect project effectiveness to capture and monitor qualitative information on processes. The Andhra Pradesh projects tracked, among several indicators, the organization and promotion of self-help groups, the development of bookkeeping and self-monitoring skills within the groups and village organizations, and the development of links between village and district organizations and bankers . The participatory process monitoring concept pushed the importance of identifying and training community activists, facilitators, and resource persons to be able to help expand the coverage of the state’s poverty reduction programs by creating new self-help groups and community organization where they were not yet in place. Creating groups of such grassroots professionals has been instrumental in scaling up project activities at a low cost and will contribute to sustainability, adding not just to the M&E aspects of the project but also its fiduciary, capacity building, knowledge sharing, and general impact.

http://siteresources.worldbank.org/EXTARD/Resources/Note22.pdf


financial management, safeguards, and M&E specialists, a communication specialist on the task team could prove beneficial to facilitate the flow of information internally between different stakeholders. Support to CDD projects is as much about facilitating the flow of information among all groups in a community as it is about facilitating the flow of funds. Well-designed information, education and communication strategies can help alleviate the information asymmetry among stakeholders. Lack of information is often the most significant limitation on a CBO’s capacity to play a part in the development enterprise. A decentralized implementation support model could be more efficient.

29. Projects supporting institutional reforms generally focus strongly on the ways that the operation can provide technical advice to the government and its reform agenda. The importance of technical competency and credibility is heightened by the advisory role that task teams take in projects of this type. The technical knowledge brought to a project is a significant aspect of added value on reform projects, taking on various forms throughout the project. The ability to help clients design initial reforms to take on identified problems and respond to challenges and new information throughout the institutional reform process constitute the most basic forms of support. Additional forms include locating highly qualified international experts to give guidance, training, and support on specific governance or technical issues, as well as crafting suitable and successful communication strategies that show the value of the planned reform and help build support for it. Task teams can also support efforts so that government officials and other key staff receive appropriate training to help solidify the reforms and process changes, and in some cases twinning arrangements may be considered to further develop local capacity by allowing two government agencies – either both from the client country or with one from another country – to share experiences in similar reforms and mutually reinforce skill sets. 30. Traditional compliance oversight has limited application in reform-oriented projects, given the focus on technical advice and capacity building, but such oversight could be relevant on large procurement contracts related to ICT systems, consultants, and other services, as applicable. Social safeguards may be triggered in the case of a service-related reform by limited access to government services for groups that face discrimination.

31. M&E systems. Institutional reform-focused M&E efforts attempt to find indicators that track reform measures, as well as monitor overall performance, while keeping indicators clear, concise, and reasonable. Indicators that gauge reform progress can look at changes in laws or policies early in the program, but should also ensure that other more implementation-driven indicators capture useful program data, such as contribution rates (for pension and health projects, for example), budget, and expenditure data. Such data should also be made useful, relevant, and available to policymakers and government officials. The M&E improvement from reform projects can also constitute a major source of technical advice. 32. Team composition. As noted, technical credibility can be a key component of project success. Choosing staff with the right technical knowledge and experience for the specific

4. Projects supporting institutional reforms


project will allow task teams to provide the most timely and accurate advice and guidance to clients. Team skills and experience should also be relevant to the institutional and country context of the project, with task teams carefully understanding the unique project circumstances and current bureaucratic and political constraints. The ICT staff can be of critical importance on reform-focused projects, as information and communication technologies can help facilitate changes in government processes or service delivery, while also promoting greater transparency and accountability. 33. An important consideration for staffing of reform-oriented projects is recognizing their potentially longer timeframes compared to other projects. Some projects may require heavier, early staffing while others may ramp up implementation support over the course of the project; but progress is likely to be fairly slow, and efforts will be clustered around discrete reform milestones, such as laws and process changes.

34. Another angle to consider is when the task team is implementing a project under some exceptional but challenging circumstances as the two described below. This section is not intended to be a comprehensive description of an implementation support approach to a specific project type but rather to bring together relevant lessons learned and reference material that could help guide the task team work when preparing the Implementation Support Plan for a project facing some of this challenges. Governance and anticorruption issues 35. Improving governance and fighting corruption are central to the World Bank’s mission of promoting sustainable growth and reducing poverty. The Bank’s interest in these topics arises from the effect that poor governance and corruption may have on the effectiveness of the development programs it supports. In an effort to mainstream a focus on sector and project-related governance and anticorruption (GAC) issues across operations, particularly investment operations, the Bank has developed a common conceptual framework for understanding and dealing with GAC issues at the sector and project levels.5 Under this framework key recommendations are presented on how to address implementation support of a project when dealing with GAC risks, an approach that relies heavily on compliance oversight but also requires some specialized technical advice that is necessary to (a) support and advice the borrower on implementing governance measures and managing risks; (b) target high-risk areas, monitor the effectiveness of risk mitigation measures, and maintain vigilance (red flags); and (c) consistently follow up on GAC issues during and between missions. Recommendations to task teams working under this environment, which are presented in said framework, are summarized in the following points:

5 The GAC website provides relevant discussions and materials. See in particular, “Dealing With Governance and Corruption

Risks in Project Lending Emerging Good Practices” (OPCS and GAC, February 2009);.

5. Projects facing challenging circumstances

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• One key recommendation to deal with a project under these circumstances is to have integrated reviews of procurement, financial management, and technical aspects. An integrated approach involves (i) following the paper trail on specific contracts from the bid specifications through the winning contract; (ii) tracing transactions under the contract from contract signing to whatever stage implementation is at when supervision occurs; and (iii) comparing the contract specifications and subsequent transactions with what exactly has been built or delivered to the project site.

• For projects that require more careful oversight, the framework recommends task teams

consider the following additional elements: (i) conducting an in-depth review of selected contracts; (ii) carrying out site visits corresponding to the selected contracts, without advance notice; (iii) referring suspicious transactions to the government, as well as to the Bank’s Department of Institutional Integrity; (iv) recording findings and required follow-up actions clearly in mission reports; (v) following up on previously identified issues during the next supervision missions; (vi) making timely decisions on misprocurement6 and/or suspension of disbursements, when appropriate (in consultation with the country management team); and (vii) publicizing both good practice and suspensions/misprocurement actions.

36. Opportunities to bring value added through technical advice for capacity building and knowledge sharing. Where the Bank has completed country-level diagnostics and has developed an active dialogue and work program on GAC issues, there is an enabling environment for progress at the sector level. In other cases, diagnostic work at the sector or project level—focused on concrete issues that are impeding development outcomes—may create entry points for engaging with the government on GAC issues. Working with GAC and other experts can provide such opportunities with government and civil society leaders, and may bolster the technical support aspect of implementation support. Task teams could consider (a) enhanced activities, such as joint Bank/government learning events that focus on the extent to which development outcomes are being achieved; and (b) opportunities to further improve governance in the sector through the design and implementation of governance tools (e.g., social accountability mechanisms, in country capacity to interpret data, institutional capacity building) in selected projects. 37. M&E systems. While M&E practices would be of particular importance in countries with higher risk for fraud and corruption, they also should be applied to cover GAC-related project issues.7 Some considerations in this regard might include building in effective project oversight, which may require involving third parties in supervision (social audits), and adopting other social accountability mechanisms (score cards, complaint mechanisms, etc.).

6 See “Most Common Red Flags of Fraud and Corruption in Procurement” for specific red flags of possible misprocurement: . 7 Specific recommendations in this regard include (a) taking a learning-by-doing approach that recognizes the experimental

nature of many of the activities that will be attempted; (b) defining clear objectives for GAC initiatives, and a limited number of monitorable indicators that will track progress toward those objectives; (c) establishing baseline numbers for those indicators, and setting up a monitoring system that will report regularly on the direction of progress; (d) monitoring and evaluating the results, and assessing the factors that aided or hindered the effectiveness of the activities; and (e) using the midterm review and the end-of-project impact assessment to evaluate all of the activities and extract the lessons learned for future reference.



38. Team composition. An integrated approach requires the right set of skills—procurement, financial management, and technical expertise—corresponding to the nature of the project. Team integration becomes a crucial matter; the need for the three areas to work together is essential. The procurement and financial management specialists as well as the technical expert should be experienced, knowledgeable professionals who are able to recognize when certain things do not seem to check out. Along with the safeguards specialists, other relevant staff in this environment will be specialists in communications, GAC, and M&E. These skills, as well as the staff time and costs, and timing of interventions should therefore be prominently detailed in the Implementation Support Plan. Fragile Countries and Conflict-Affected Situations

39. The World Bank provides state-building support to a large number of countries experiencing fragile and conflict-affected situations. This support involves all sectors ranging from public administration, community development, and infrastructure to demobilization, health, education, and social services. 40. The Bank recognizes that fragility is a long-term challenge rather than an episodic emergency, and that conflict is basically a result of the inability of a society’s institutions to resolve stress emanating from inside and outside the country. This recognition requires a longer-term commitment to support country institution-building efforts with different sets of instruments, measurements, and intermediate results than required in other low-income countries with less-challenging environments. 41. In a fragile and conflict environment, project implementation requires a differentiated approach and special considerations in terms of implementation support for both compliance oversight and technical advice. Some key considerations follow: (a) given that fragility could be a product of different factors that may affect project implementation in different ways,8 implementation support must be shaped for the exact project type and nature of fragility of the country; (b) crises (political, financial, environmental, etc.) have an impact on project implementation and, as a result, implementation support efforts need to be particularly flexible and adaptable; (c) the sense of urgency in some cases require expedited procedures, which increases the risks, thus appropriate oversight arrangements are essentials; and (d) the number of development partners is high and the implementation support in a specific country requires strong coordinating efforts. 42. M&E systems. The M&E arrangements in this context can be extremely difficult, but there are aspects in which capacity can be built and in which innovative practices can overcome some difficulties.

8 Geographic factors determine whether the source of fragility affects one specific area/region of a country or the whole country.

Institutional factors determine how fragility plays out (e.g., difference between Haiti, Chile, and Japan in wake of massive earthquakes). Timing of proximate triggers (i.e., bad timing of random exogenous shock on top of other endogenous factors), etc.


43. Involving beneficiaries and local communities in monitoring can offer multiple benefits (as mentioned in the previous CDD section). M&E methods should capture any impacts, direct or indirect, that might have a tendency to aggravate grievances, worsen exclusion, or perpetuate conflict. Regular context monitoring is required to assess the risks posed by the environment on project delivery, including security risks to implementers and beneficiaries. This enables the appropriateness of objectives, geographical coverage, partnerships, and modalities to be kept under constant review. In highly insecure environments, monitoring and data collection may require flexibility (“good enough” data). Innovative approaches using technology for M&E may help to improve governance and accountability in public sector service delivery and affect development outcomes (see an example in Box A2).9 44. Team composition. While team composition will be project/context dependent, it is crucial to have as many field-based staff as possible, subject to security/viability concerns. Having staff with extensive experience in fragile and conflict-affected areas is often crucial for project success as well as social scientists to help develop the dialogue with the communities.

9 See Staff Connections release “South Asia Team Successfully Pilots Remote Supervision” (May 6, 2010)

Box A2. Remote M&E through ICT with a focus on Compliance Oversight – Afghanistan Pilot

In 2010, the South Asia Region pioneered several remote compliance oversight-focused strategies to aid M&E, funded by a Governance Partnership Facility grant and using ICT solutions. In Afghanistan, one strategy was piloted to allow remote supervision and asset verification on the Afghanistan Emergency Irrigation Rehabilitation Project. GPS-enabled cameras were used to capture geo-referenced photos of irrigation project assets, conditions of canals, and other data that were able to be sent to the project coordination unit in the Ministry of Energy and Water in Kabul for inclusion in the project database. At the project coordination unit, the images can be viewed through web browsers and/or Google Earth, verifying the exact time and location of the image and the name of the observer. The same principles were applied in the health sector. To make sure project beneficiaries receive public services, teams have been developing beneficiary tracking and verification systems that use mobile phones, smart cards, and interactive voice response to gather data on service delivery for health and education projects. Data collected can be linked to performance indicators for systematic monitoring of project progress toward sectorwide goals. In addition, an external component accessible to the public, can improve transparency, accountability, and demand for good governance.

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Annex B. Additional Guidance on the Mid-Term Review Processes 1. Annex B provides additional guidance on conducting official reviews that are particularly relevant for the mid-term review and presents lessons learned from good practice examples of mid-term reviews,1 which task team can use to prepare for and to conduct a mid-term review. 2. Preparing for the review. Some key aspects to consider when preparing for a review, particularly a mid-term review, include:

• Assure both the World Bank and the borrower teams are aware of the upcoming review,

and plan ahead for such event (to make adequate arrangements such that relevant participants are available to participate, logistics are in place, additional resources if needed can be obtained);

• Discuss with the borrower what the mid-term review will address and what are the main issues that would need attention and decision-making;

• Discuss with the borrower the process for conducting the review, in terms of (i) level of participation; (ii) responsibilities for different activities such as data collection, analysis, reporting; and (iii) the methodology to be followed (workshops, seminars, interviews, visits to project sites, questionnaires, surveys, their sequence and timing);

• Request the borrower, well-in advance, to prepare a report that could be used as a basis for the discussions during the review, making any necessary assessments and consultations;

• Obtain specific advice and support from Management, the sector or network, to deal with any difficult implementation issues and to enhance the overall quality of the support given to the borrower;

• Meet with all teams participating in the review ahead of time (face to face or virtually) to make sure that everybody is familiar with the project and on the same page about the objectives of the review, the process to be followed, etc.

3. Carrying out the review. The methodology to conduct a mid-term review, its scope, and coverage will depend on many different factors (including but not limited to the nature of project activities being financed, the operating environment of the project, the level of involvement of different stakeholders, cofinancing arrangements in place). However some commonly found activities covered in a mid-term review are summarized in Table B1. 4. Results of assessment. Although the assessment and diagnostic aspects of the mid-term review are important, even more so are the agree actions as a result of said assessments. As such, the outcome of mid-term reviews should focus either on any corrective measures needed for the project to achieve its expected PDOs, a decision regarding the need to restructure the project to adjust to new circumstances, and/or even a decision on whether the project should continue being implemented. Table B2 presents expected outcomes from a mid-term review. 1 Taken from a review of several mid-term reviews carried out on the health sector.


Table B1. Examples of Areas/Activities to be Covered in a Mid-term Review Process

Area of review Possible activities Borrower’s commitment • Conduct meetings with higher-level authorities, implementing agency, and

other relevant stakeholders to discuss the borrower’s commitment to the project.

Relevance of PDO • Assess project’s overall results and impacts in terms of development outcomes (identify specific beneficiaries, directly related benefits for primary stakeholders, and potential benefits to be achieved during the remaining project implementation period).

• Discuss with borrower and project beneficiaries the continued relevance of the project development objectives and likelihood of achievement during the remaining implementation period (taking into account current sector/government priorities).

Adequacy of project design to achieve expected results and sustain the efforts during and after project implementation

• Review progress (physical or otherwise), efficiency and adequacy of each project component in terms of delivery of project inputs, activities, and outputs.

• Review quality of outputs and conformity with technical specifications (visit project sites)

• Analyze financial progress under each project component and assess whether the use of funds matches the progress, efficacy, quality, and timeliness of procurement and disbursement activities.

• Assess relevance and effectiveness of technical assistance in building client’s capacity and institutions, including training given to primary stakeholders and staff with regards to expected objectives.

• Discuss/assess whether current project design (components, scope, activities, timeframe) continues to be an adequate mechanism to achieve expected project results.

• Assess likelihood that achievements under project are sustainable and will continue to be so after project completion.

Adequacy of implementation plan

• Assess adequacy of project implementation plan in terms of the remaining timeframe and the implementation of remaining procurement activities and disbursement schedule.

• Review project costs and assess whether original cost estimates remain accurate. Assess project cost-effectiveness if possible.

Adequacy of implementation and management arrangements

• Review the adequacy of project implementation and management arrangements in terms of staff, effectiveness in use of existing systems (fiduciary, safeguards, M&E), contract management capacity, reporting, etc.

• Assess quality of cooperation with other relevant donors, partners, and institutions within the sector as well as the clarity of roles and responsibilities, effectiveness of decision-making, etc.

• Assess adequacy of implementation support arrangements (approach, resources), usefulness to anticipate problems, and effectiveness of follow-up recommendations

• Assess adequacy and timeliness of counterpart funds flowing into the project Compliance with fiduciary/safeguards aspects

• Assess the degree of compliance with the project’s fiduciary and safeguards aspects and with project legal covenants in financing agreement

Overall implementation risks • Based on the above, reassess project risks, identifying any new risks that need to be taken into consideration.


Table B2. Expected Results from a Mid-term Review Process Area of Review Expected result

Either Or Borrower’s commitment to the project

Demonstrated confirmation of the borrower’s commitment to the project.

Proposal for an exit strategy.

Relevance of PDO Confirmation of relevance of PDOs in current sector context and government priorities with appropriate indicators (baselines, targets and actual values).

Proposal to adjust PDO and revised and measurable indicators (with baselines and targets).

Adequacy of project design to achieve expected results

Confirmation of project components content, scope, etc. with description of progress to date compared to expected results.

Detailed description of proposed changes to project components (including coverage, target groups, etc) with redefined inputs and outputs.

Adequacy of implementation plan Confirmation that project implementation plan continues to be valid in terms of its content and timing (procurement plan, implementation timetable, disbursement schedule, etc.).

Updated proposal with updated project costs, procurement plan disbursements schedule, etc.

Adequacy of implementation and management arrangements

Confirmation that existing implementation/management arrangements and capacity are adequate and satisfactory.

Proposed modifications to the existing implementation/ management arrangements.

Compliance with fiduciary/safeguards aspects of the project

Confirmation that management of all fiduciary aspects are satisfactory.

Proposed action plan agreed to correct identified weaknesses.

Overall implementation Risks Confirmation that overall implementations risks continue to be manageable and risk management measures continue to be relevant.

Revised risks and risk management measures, including timing for their implementation and responsible party.

Other Lessons learned that can benefit the project in its remaining lifespan. Proposed modifications to the project documents and steps forward.

5. After the review. Once the mid-term review has been completed, both the Bank team and the borrower should proactively follow up with the implementation of agreed actions and steps. The borrower/implementing agency should be encouraged to reply to the Bank’s aide-memoire, specifically addressing the issues raised and actions required, and to refer to this document in subsequent quarterly/semiannual reports. The task team should inform Bank Management on key issues and actions that would require Management’s attention; and once agreement on the path to follow has been reached internally, the task team initiates any actions required from the Bank’s side (for instance, at the request of the borrower, preparing for project restructuring, or additional financing). 6. Good practice examples of mid-term review processes share some common characteristics:


• Shared understanding of the purpose and respective accountabilities in the mid-term

review process, with the borrower clearly owning the project and leading its implementation and assessment, and the Bank supporting the borrowers efforts and ensuring compliance with the Legal Agreements of the operation.

• Systematic and iterative approach to the process, relying on (i) in-depth assessments; (ii) candid analysis of issues; (iii) agreement on remedial actions; (iv) elaboration of, and agreement on, key detailed steps to implement the remedial actions; (v) systemic and proactive follow-up on both sides.

• Borrower-prepared, quality comprehensive mid-term review report, clearly comparing the initial project design with actual progress; using the original results framework; confronting the project activities with current sector priorities; identifying issues and bottlenecks as well as proposed remedial actions.

• Strong Bank/borrower relationship based on partnership and respect. • Informed team members knowledgeable of the original project design, scope, expected

results, and historical performance, with solid technical background in their relevant areas of expertise to provide guidance on the way forward to address any observed issues.


Annex C. Additional Guidance on Preparing Aide-Memoires 1. Annex C assists task teams in the preparation of aide-memoire to support the implementation of an investment project financing operation. In the course of the World Bank’s operational work, it has been standard practice to leave an aide-memoire with the borrower at the conclusion of an official review. More recently, aide-memoires have also been used to record discussions with borrowers and other counterparts whenever a relevant discussion has taken place, even if there is no an official review meeting per se.

2. Approach. While this guidance draws on good practice in organization and presentation of contents, it is not prescriptive. Task teams decide what ought to be included in an aide-memoire. The substance will largely depend on the purpose of the review meeting, the nature of the project, and the specifics of the problems faced. What ultimately matters most is the quality of the work that the task team carries out in country to support its implementation. In this regard, the guidance provided here must take a backseat to that provided by sector and country managers who are best placed to assess the specific issues faced by the task team and to decide what is expected from any review of the project that takes place.

3. Impact of decentralization. The past few years have witnessed an increase in decentralization in the World Bank, with country offices often assuming more substantial responsibilities, particularly for supervision and implementation support. In those cases, the traditional notion that Bank oversight is exercised through “missions” is no longer applicable. Increasingly implementation support becomes almost a daily activity, carried out through phone calls, e-mails and visits to the implementing agency by country office staff. In those cases, there are likely to be fewer missions and mission aide-memoires as traditionally envisaged.

4. Minutes. While this way of operation has a number of benefits and is expected to continue, the risk that it poses is that counterparts, donors, Bank colleagues, and Management may not be kept up to date on the progress and issues faced by projects. To address this challenge, and also to provide a documented record of interactions with the borrower over a period of time, it is recommended to summarize the findings and interactions between Bank staff and the client over a reasonable period of time (e.g., every four to six months depending on whether the project is low or high risk) in minutes, or something comparable in scope to the traditional aide-memoires, as a tool of communication and official records. The following discussion and recommendations apply both to the traditional aide-memoires as well as to minutes. Purpose, process, and use of aide-memoires 5. Purpose. At present aide-memoires summarize the key findings of a Bank official review or other interactions with clients and stakeholders, the issues they may have identified, the progress—or lack thereof—since its previous interaction, when applicable, and the status of the dialogue with the borrower in that regard. Finally, they identify the actions that the borrower and the Bank will need to take to enable the operation to continue moving forward as intended.


6. Basically, aide-memoires may be regarded as a stock-taking and record-keeping instrument, which shows what has been achieved and what remains to be done. The key here is to ensure that there is a focused discussion during the implementation stage that leads to a clear understanding on how progress and achievements toward results will be monitored. In that context, aide-memoires become an instrument to periodically convey the results of such monitoring.

7. Process and responsibilities. Generally, aide-memoires are drafted by Bank staff while in the field, typically under a tight schedule with little or no time for consultation with Bank headquarters. If based on official review findings, the aide-memoire is finalized within 10 working days of completion of said review and incorporates any comments received during wrap-up meetings. In some Regions, the team leader requires a Management letter to be drafted. Depending on regional guidelines, the Management letter is subsequently signed by the Sector Manager or Country Director/Country Manager. [Note: The letter, which may serve as an executive summary by highlighting critical issues, is addressed to the appropriate high-level official depending on regional/country practice and copied to the regular distribution lists as well as all development partners and government officials involved in the follow-up of the specific operation.] Key issues and actions should be summarized in an Implementation Status and Results (ISR) report.

8. The draft aide-memoire is normally shared before the wrap-up meeting. The discussion with the borrower/implementing agencies at the final wrap-up meeting should focus on the key points. The borrower may request to make inputs or changes to the aide-memoire, and the content may be subject to further discussion. If there are some open issues that cannot be resolved in the timeframe of the mission, they should be clearly communicated to the Government at the wrap-up meeting and spelled out in the aide-memoire as well as the Management letter. Clarifications or agreements on the open issues should be reached swiftly within a specific period of time — usually not more than 10 working days after the completion of mission.

Style, structure, and disclosure of aide-memoires 9. Length, annexes, executive summaries. In general, the objectives of aide-memoire are best achieved by a short and focused document. However, when a short document is not feasible because of the number of topics that need to be covered or the need to get into technical details to ensure that concerns of the task team are well understood, it is usually good practice to address specialized topics in annexes. It is normally recommended that the body of the report is kept at 5 to 8 pages and provide a comprehensive overview of the issues. Otherwise, it generally is good practice to provide an executive summary with the main findings of the review. 10. Use of numbering, section titles, and table of contents. A reader-friendly aide-memoire will assist readers to find specific topics quickly without having to navigate through the whole report. The task team can achieve this by numbering pages and paragraphs, using descriptive titles before the paragraphs(s) dealing with a specific topic, and providing a table of contents for lengthy reports with several annexes.


11. Language. Many aide-memoires are not only written in English; many are written in French, Spanish, or Portuguese. This is a sound practice since the primary audience of the aide-memoire is the country counterparts; every effort should be made to ensure that the aide-memoire reaches the officials who need to act upon it and that they fully understand its contents. While foreign-language aide-memories is a challenge to a basically English-speaking staff, it is to be hoped that in the future other languages may be added to this list and that Bank managers who need to review them become familiar with the relevant languages.

12. Signatures. While often aide-memoires are not signed, in some cases they are signed by the team leader and, in other cases, they are signed by both the team leader and by the country representatives. This variety of practice largely reflects the customs of the country.

13. Disclaimer. Some aide-memoires include a disclaimer indicating that it reflects the views of the task team and does not necessarily convey the official position of the World Bank, which will come in a follow-up Management letter.1 In the past, this disclaimer was mandatory; in recent years the requirement was dropped in order to emphasize that task teams are empowered to speak for the institution. It is generally recommended to include such a disclaimer whenever controversial issues are posed or when the future actions of the Bank are still undecided, or when allegations (such as concerns over corruption) are made that could have potential legal implications.

14. Issues of noncompliance. Task team are reminded that they do not have the authority to threaten suspension of disbursements in cases of noncompliance with financial agreement covenants, regardless of the gravity of the noncompliance, and that they must limit themselves to point out that the issue will be brought to the attention of Bank Management.

15. Access to information. Under the Access to Information policy effective July 1, 2010, the aide-memoire that accompany implementation support reviews may be made publicly available if both the Bank and the borrower agree. When the borrower has agreed, then team leaders are required to make the aide-memoire public through the ISR report. Content and structure of aide-memoires 16. Aligning the overall structure and content of the aide-memoire to that of the ISR report to the extent possible can prove useful in avoiding duplication of reporting efforts (externally and internally).

• Implementation status overview. The aide-memoire should include a summary of implementation status. This can correspond to the same section that you will put into the disclosable section of the ISR report.

1 A possible wording may be as follows: “This aide-memoire reflects the views of the team mission and does not convey the

official position of the World Bank. Such position will be communicated by a letter soon after the mission returns to Washington and has had an opportunity to share its findings with Bank Management”.


• Results. Analyze the results achieved thus far and review the progress of issues

highlighted in the previous aide-memoire. Attaching a matrix on progress in comparison with key performance indicators in the results framework enhances evidence-based assessments on results. Identify any issues regarding results reporting. Sector managers can help to address this shortcoming by ensuring that task team includes staff with a mandate to work on these matters, and by requiring that aide-memoires report on this, when appropriate.

• Status by project component. Discuss in further details implementation performance of

each of the project components. Identify any issues that require attention.

• Review of compliance with safeguard policies. It is important to ensure that safeguard policies receive adequate attention during supervision. It is the job of sector managers to ensure that the mission terms of reference address this, in which case it would be expected that the aide-memoire will cover these matters appropriately.

• Review of compliance with fiduciary aspects. Discuss project performance in terms of management/compliance with procurement and FM aspects of the project. Identify any relevant issues that need to be addressed.

• Compliance with legal covenants. Official review meetings and aide-memoires are normally expected to review compliance with legal covenants, to discuss failure to meet covenant dates or targets, and to identify the remedial actions (as well as responsibility and timeframe for such actions). Good practice calls for a specific section on this aspect in every aide-memoire, even if only to record that all covenants are being met.

• Risks. As a result of all of the above, identify any changes in the risk assessment of the project that need to be addressed and discuss possible risk management measures.

• Pending issues and actions. It is important to ensure that all matters requiring action on

the part of country officials, the World Bank, or any other relevant party be well identified and summarized and that the responsibility and timeframe for action, in particular, be spelled out clearly. Identify opportunities for the Bank to bring value added to the client to address those issues.

Checklist for effective supervision and implementation support

17. Does the aide-memoire clearly address the following:

Issues listed in the Statement of Mission Objectives.

Other issues that arose during the mission visit.

Specific suggestions to the borrower for corrective actions to be taken, by whom, and by when. Is this program of actions user-


friendly; does it outline specific actions and provide adequate guidance for the borrower?

Time spent by task team on-site examining physical progress, assessing quality, and interacting with the beneficiaries, NGOs, and other stakeholders.

Do the project objectives remain valid and does government commitment and ownership to the project remain valid?


Annex D. ISR Quality Checklist Overall: A good ISR is:

• Timely • Limited to critical points for management’s knowledge and response • Complete • Candid • Internally consistent

Key Issues and Actions for Management Attention

• Focused on key points: Summarizes only the critical issues and actions that need to be brought to the attention of Bank management

• Specifies the follow-up action expected or proposed in response to each issue (by whom and when)

• Concise: Brief and to the point • Consistent and complete: Explains all Unsatisfactory performance ratings (MU, U, or

HU) Indicators for PDO and Intermediate Outcomes

• At least one indicator entered for PDO and Intermediate Outcome(s) • Baseline values entered for all indicators • Target values entered for all indicators • If project is two or more years into implementation, is any useful information entered

on indicators’ progress to date? • Explanation if quality of outcome information is rated poor or is unavailable

Project Development Objective and Outcomes

• PDO rating consistent with other information in ISR • PDO rating and explanation adequately justified taking into account: implementation performance major risks achievement of major outputs achievement of intermediate outcomes extent that PDO and project design remain relevant if circumstances change

• If PDO rating is unsatisfactory (MU, U, or HU), relevant issues and actions are presented

Implementation Performance Ratings

• IP rating consistent with other information in ISR • IP rating adequately justified taking into account: Issues and actions for management attention Ratings of project components Specific implementation ratings


Actual disbursements compared with estimates Compliance with audits, safeguards, and critical legal covenants

• If any performance ratings are unsatisfactory (MU, U or HU), relevant issues and actions are presented

• Adequacy of IP rating explanation if it has changed or is unsatisfactory (MU, U or HU) Critical Legal Covenants

• Lists only covenants critical for the achievement of the project’s objective or outcomes • If any are overdue, relevant issues and actions are presented

Bottom Line: Need to Know items for managers

• Project on track for outputs and outcomes? • Significant delays in any major activities • External risks that jeopardize implementation or outcomes • Issues behind: Any MU, U, or HU ratings (PDO, implementation,

components, safeguards) Missing baseline and/or progress data on indicators Any significant disbursement lag Any problems with key legal covenants or audit reports

• Significant issues with client or partner relations • Any critical actions to be taken by client that management should know • Any critical actions to be taken by Bank management


Annex E. Additional Guidance on Project Handover 1. During the project cycle of an investment project financing (IPF) operation, which usually spans over a period of six or more years between preparation and completion, some changes within the task team are not uncommon. However, to the extent possible, it is important to maintain certain continuity, particularly between project preparation and implementation, to ensure an efficient transition and project kick-off, and during implementation to ensure consistency and uphold the borrower’s expectations. 2. Ideally, the task team that prepares and appraises a project will remain unchanged, at least during the first year of project implementation, in order to (a) provide better support to the borrower in completing all preparatory activities required between Board approval and loan effectiveness for a smooth launch of project activities; (b) provide key elements of the project design to be adequately transferred and embedded into the implementation phase; and (c) test and fine-tune the implementation arrangements as required to meet the expectations from the preparation stage.

3. As the project moves forward throughout the implementation period, task teams play a key role in providing support to the borrower, putting in place necessary conditions for the successful implementation of the project. To do so, the task team strives to develop a strong collaborative relationship with the borrower. For this reason, when a change to the task team is required, it should minimize disruptions to the project, maintain close communications with the borrower, and ensure a smooth transference of responsibilities. This becomes particularly relevant when the team leader is the one to change, given the crucial role as the Bank’s principal point of contact for the borrower and the one having the overall view of the project details. Annex D focuses on the guidance to team leaders on how to plan, communicate, document, and handover the responsibility of an investment project financing operation.

4. Seeking continuity in leadership. When assigning a team leader to a project, Management not only takes into account the technical qualifications and relevant experience for the job, but also strives to select the candidate who will stay for sufficient time to maintain continuity. Ideally, Management considers that the candidate for a new operation would be able to remain involved in the project throughout project preparation and at least during the first year of project implementation.

5. Planning ahead for a smooth transition. Given the intrinsic dynamics within the operational units of the World Bank, with staff being expected to rotate from one Region to another within a five- to seven-year period, project leadership is likely to occur at any time during the project’s cycle. In order to minimize the impact that a change in project leadership may have upon the project and in the relationship with the borrower, some planning of project handover is required both at the managerial and staff levels to help smooth the transition. When a change in project leadership is anticipated, the departing team leader should be proactive to plan, communicate, document, and handover the responsibility of an IPF operation.


6. Transitioning. As soon as Management and the departing team leader are certain that the change is going to happen, plans to appoint a suitable replacement start to take place. Once a suitable candidate has been identified and confirmed by Management, the incumbent team leader starts briefing and guiding the incoming team leader on all the project details. Ideally there would be a transition period of about 3 months before the change is effective. During the transition period, the incumbent team leader would continue handling the day-to-day business and engaging the incoming team leader of any issues and decisions that will be of significance after transference of responsibility.

7. During this transition period, the departing team leader::

(a) Foresee a project handover strategy and announce it to all directly involved parties, making sure that the borrower in particular is informed about the existence of a transition period and the handover timing, and ease any worries regarding possible disruptions to the project that the handover may cause.

(b) Communicate the project handover officially, both internally and externally. The

departing team leader informs the task team of the change in project leadership. Task teams often have core members who work on a continuous basis as well as members who are involved on a periodic basis. While the change of team leader will be well known to the core team, it is good practice for the departing team leader to send an official email introducing the new team leader to the entire task team to ensure that all relevant staff is informed. To minimize the uncertainty to the borrower, the incoming team leader should be introduced as early as possible in order to start building up a working relationship and become familiar with established procedures. The change of project team leadership should be reported to the borrower by letter prepared by departing team leader to the country counterpart. It should include the name and contact details of the incoming team leader as well as the date in which the project handover will become effective.

(c) Keep the incoming team leader properly informed by sharing all relevant internal and/or external communications related to the project and inviting participation to any relevant meetings to gain familiarity with the project and get acquainted with the working relationship between the Bank and the borrower and within the task team.

(d) Resolve pending issues to the maximum extent possible. In preparation for the

transfer of responsibility, the departing team leader should strive to address all outstanding day-to-day tasks (e.g., answer letters from client, reply to no objection requests, update project reporting) so that the incoming team leaders can start with a relatively clean slate. For those tasks that require longer processing periods (for instance, a project restructuring underway), it is good practice for the departing


team leader to leave the main documentation ready (i.e., project paper) to facilitate required finalization by the new leader.

(e) Update the project file so that all relevant project documents (working documents,

project data bases, consultant reports, aide-memoires, etc) can be easily accessed; familiarize the incoming team leader on how the Project File (WBdocs) is organized and managed and how to find specific documents, etc.

(f) Prepare a project handover note that will serve as a quick reference guide

documenting all relevant project data and issues and discuss it with the incoming team leader. More details are described below on “Documenting the project handover”.

(g) Organize a handover mission. It is good practice to conduct a handover mission to

introduce the incoming team leader in person and to review any pending issues with the borrower. Ideally this mission would be carried out during the transition period on a mutually agreed date, taking into consideration the incoming team leaders may have prior commitments, particularly if coming from another unit.

8. Documenting the project handover. Given the great deal of information to absorb when undertaking responsibility for an ongoing operation, it is useful to have a quick reference note that will provide the incoming team leader with some basic project data. This quick reference note, or project handover note, is prepared by the departing team leader during the transition period. This note is an internal document, and as such should be prepared with candor and include, at a minimum, the following:

• Names and contact information for the members of the task team (including

consultants) as well as the name of other relevant Bank staff (sector leader, program coordinators, etc.). In the case of consultants, it would be useful to indicate their role in the task team.

• Names and contact information for the main borrower’s counterparts. • A brief paragraph with the project objectives and components. • A brief summary of the current project status and overall performance to date. • Date of the last mission and date of the next expected mission. • Highlights of main tasks ahead that could be expected during the next couple of

months. • Any pending or controversial issues with specific references to documentation

relevant to those issues and where can be found.

9. It is good practice for the departing team leader to prepare a package of relevant documents for easy reference, along with the handover note, including (a) the Project Appraisal Document and Legal Agreements; (b) the last two aide-memoires; (c) the last statement of mission objectives and letter to the Government announcing a mission; (d) the last two ISR reports; (e) any relevant documents dealing with any current issue on which the team is working


on, such as relevant reports prepared by consultants within the task team, project papers, memos; and (f) terms of reference for externals consultants working in the task team, etc. 10. The easiest and most convenient way to present all this information to the incoming team leader is through an e-mail, attaching the handover note and including electronic links to all relevant documents. All those documents should be properly filed in the system. The handover note should be filed in the project files (WBdocs) with copy sent to the sector manager to be kept informed of the process. Given the candor with which this handover note is expected to be written, the departing team leader needs to exercise judgment when determining the appropriate classification level to assign when filing it in the system (confidential/official use). The ongoing and incoming team leaders should go over this handover package jointly for a better transfer of knowledge and understanding of the project’s details. 11. Handing over the responsibility. Once the effective handover date arrives, the departing team leader should ensure that the change is reflected in the system. From that specific date onwards the responsibility is handed over. In addition, the departing team leader should send an e-mail to the relevant CMU requesting the incoming team leaders by added in all e-mail distribution lists. 12. Continuing advisory role. It is good practice, whenever possible, for the departing team leader to remain involved in an advisory role, particularly when difficult issues with a long-standing history remain to be addressed or when the project reaches some key milestones. A two-week, cross-support period could be considered for this purpose. Such an arrangement would need to be agreed upon with and between the respective unit managers. Other milestones that might benefit from previous leadership input are the project mid-term review and project completion. If possible, the team leaders that prepared the project should be invited to participate in the project’s mid-term review and comment on the ICR report.

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