SUB-MODULE 6.

RISKS AND MITIGATION MEASURES

RESULTS BASED LOGICAL FRAMEWORK TRAININGQuality Assurance and Results Department (ORQR.2)

I. Introduction to the RLF

II. Participatory Approach for RLF development

III. The results chain

IV. Performance indicators

V. Means of verification

VI.Risks and mitigation measures

6 Sub-Modules

TRAINING CONTENT

2RESULTS BASED LOGICAL FRAMEWORK TRAINING

Evaluation

I. Examen a la fin de la formationII. Questions de choix multiple, questions

ouvertes et etudes de cas

CONTENT: SUB-MODULE 6

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I. Risks and mitigation measures in the RLF.II. Definition.III. Risks and assumptions.IV. Identifying project risksV. How to analyze risksVI. Country effectiveness and sustainability risks.VII. Project effectiveness risks.VIII. Project implementation risks.IX. Practical tips.

RESULTS BASED LOGICAL FRAMEWORK TRAINING

4

OBJECTIVE: SUB-MODULE 6

At the of this sub-module, Bank staff should be able to:

Identify and analyze potential constraints to project implementation and achievement of the project objective.

RESULTS BASED LOGICAL FRAMEWORK TRAINING

I. Risks and mitigation measures in the RLF

5

Country and Project name:Project objective:

Results chain

Performance IndicatorsMeans of

verification

Risks and mitigation measuresIndicator Baseline Target

Impact Country effectiveness

and sustainability

risks

OutcomesOutcome 1Outcome 2 … etc.

Project effectiveness

risks

OutputsComponent 1Output 1.1 Output 1.2 … etc.Component 2Output 2.1Output 2.2 … etc.

Project implementation

riks

Key activityComponent 1:Component 2:

InputsComponent 1:Component 2:

RESULTS BASED LOGICAL FRAMEWORK TRAINING

II. Definition

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Risks are conditions or uncertain factors which may occur or not, and have a negative impact on the achievement of project results.

Risks may be political, social, financial, environmental, institutional, and related to climate change.

RESULTS BASED LOGICAL FRAMEWORK TRAINING

III. Risks and Assumptions

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Risks that are under the control of the project and may be mitigated Mitigation measures apply Risks are taken into

account in the RLF

Risks that are associated with uncontrollable circumstances. No mitigation measures envisaged

Assumptions are factors that are not really known or not yet determined, low probability of occurrence. The RLF does not refer to assumptions, it focuses on

the risks of high incidence and likelihood of occurrence

RESULTS BASED LOGICAL FRAMEWORK TRAINING

IV. Identifying Project Risks (1/3)

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List risks typically encountered in past operations.

Stakeholders analysis – brainstorming and interviews (during planning and implementation).

Problems and objectives analysis.

Detailed analysis of the Results Chain.

Detailed analysis of the work program/project schedule

RESULTS BASED LOGICAL FRAMEWORK TRAINING

9

Identify problems without adequate solution according to the problems and objective trees.

Problem(effect)

Low yields in farming area

Problem(cause 1)

Poor quality seeds

Problem(cause 2)Improper

Crop husbanding

Problem(cause 3)variable rainfall

End(Solution)

Improved yields in farming areaMeans(solution

to problem

1)Use of quality seeds

Means(solution

to problem

2)Use of proper crop

husbanding

No direct solution

Problem tree Objective tree

RESULTS BASED LOGICAL FRAMEWORK TRAINING

IV. Identifying Project Risks (2/3)

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Conduct a stakeholder analysis to identify the support or resistance of stakeholders groups to achieve the project objective.

Risks identified and

assumptionsRESULTS BASED LOGICAL FRAMEWORK TRAINING

IV. Identifying Project Risks (3/3)

Initial Design Phase Final Design Phase

Stakeholder Interests Problems Perceived

Resources Mandates Interest in the Project Strategy

Force-Field Analysis

1. Maximize profits

2. Want access to clean water

Fishing families 1. River water quality is deteriorating

2. Pollution is affecting volume and quality of catch

3. Family health is suffering, particularly children and Mothers

1. Appear willing to pay for improved waste management services

2. Potential to lobby government bodies more effectively

New government legislation in preparation onEnvironmental Protection – largely focused onmaking polluters pay

1. Improved family health, particularly children and mothers

2. Improved river water quality

1. Strong support in case of conservation or pollution control measures

2. Resistance in case rights to catch fish are limited

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V. How to Analyze Risks?

Proposed risks analysis

methodology

LIKELIHOOD that risk materializes

Very high High Low Very low

Magnitude of

impact

Very high

High

Low

Very low

Analyze the impact of risks on the project’s objective and the likelihood they will occur.

Risks falling in the red, orange, and yellow areas are then candidates to be included in the project RLF, with the corresponding mitigation measures.

RESULTS BASED LOGICAL FRAMEWORK TRAINING

VI. Country effectiveness and sustainability risks

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Types of country effectiveness and sustainability risks: Alignement with national development strategies and CSP Financial sustainability Institutional sustainability

RLF - If the proposed outcomes are achieved and the country risks are properly managed, the project will contribute significantly to the desired impact.

Examples of risks Mitigation measures

Deterioration of the business environment

Provide Technical Assistance to Government to reform the PFM

Government is not interested in improving the public financial management policies

Dialogue with Government to streamline the monetary & trade policies

RESULTS BASED LOGICAL FRAMEWORK TRAINING

13

Types of project effectiveness risks Development objective – link to a priority goal of the Bank´s

sector strategy Reputation – support from beneficiaries. Stakeholder acceptance/support of outcomes.

RLF - If the proposed outputs are achieved and the project effectiveness risks are properly managed, the project will contribute significantly to the desired outcomes.

Examples of risks Mitigation measures

Climate variability in the project area

Set the project intervention on the basis of new data on climate change

Inadequate Donor coordinationRevise the Donor coordination framework

RESULTS BASED LOGICAL FRAMEWORK TRAINING

VII. Project effectiveness risks

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Types of project implementation risks Justification and relevance – commitment of authorities. Fiduciary performance. Environmental and Social safeguards. Stakeholder support. Project integrity (Fraud/corruption in implementation).

RLF - If the proposed activities are undertaken and the project implementation risks are properly managed, the project will deliver the expected outputs.

Examples of risks Mitigation measures

Communities can not properly maintain the facilities provided

Make sure that the provision of infrastructure is demand-driven and that communities are fully sensitized and mobilized

Input prices fluctuate beyond the 10% estimated

Funds reallocated between the loan categories and project target revisited

RESULTS BASED LOGICAL FRAMEWORK TRAINING

VIII. Project implementation risks

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IX. Practical tips

Incorporate risk management into the project design. Follow up risks during the design and implementation of

the project. Risks change over time. Effectively communicate and discuss the potential risks,

and the appointment of staff responsible to implement the mitigation measures (through the Implementation Progress and Results Report - IPR).

Clearly specify the actions of risk management. (Do they have a cost?).

Consider the threats and opportunities that risks can bring.

Analyze the impact of risks on the project objectives and the likelihood of their occurrence, plan accordingly the mitigation measures to be implemented.

Record risks for future operations.RESULTS BASED LOGICAL FRAMEWORK TRAINING

16

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