ANNUAL IXEPQRT ON PORTFOLIO PEIEEIFOMANCE · 2016. 7. 15. · Annual Reuort on Portfolio...

ANNUAL IXEPQRT ON PORTFOLIO PEIEEIFOMANCE

FISCAL YEAR 2006

FEBRUARY 13, 2007 (MAIN REPORT)

QUALITY ASSURANCE GROUP

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ACRONYMS AND ABBREVIATIONS

AAA AFR APL ARD ARPP CAS CAAA CFAA CEM CMU CODE CPAR CPIA CPPR CSR DO DPL EAP ECA ED EMT ENV EP ERL ESSD

ESW FSE FY GEF GRAAA HDN HNP HR IBRD ICR ICRR IDA IEG IG INF INV

Analyt ic and Advisory Activities Africa Region Adaptable Program Loan Agriculture and Rural Development Sector Board Annual Report on Portfolio Performance Country Assistance Strategy Country Analytic and Advisory Activities Country Financial Accountability Assessment Country Economic Memorandum Country Management Unit Committee on Development Effectiveness Country Procurement Assessment Review Country Policy and Institutional Assessment Country Portfolio Performance Review Controller’s, Strategy and Resource Management Development Objectives Development Policy Lending East Asia and Pacific Region Europe and Central Asia Region Education Sector Board Energy and Mining Sector Board Environment Sector Board Economic Policy Sector Board Emergency Recovery Loan Environmentally and Socially Sustainable Development Network Economic and Sector Work Finance Network Fiscal Year Global Environment Facility Global and Regional Analytic and Advisory Activities Human Development Network Health, Nutrition and Population Human Resources International Bank for Reconstruction and Development Implementation Completion Report ICR Review International Development Association Independent Evaluation Group (formerly OED) Investment Grade Infrastructure Network Investment Operations

IP ISR KPI LCR LICUS MDGs M&E MIC MNA MP NLTA OESW OPCS PCR PER PIP PN PPAR PREM PRSC PSG PSDN QAG QEA QER

QSA RTA SAP S A R SDV SF SFR SP TA TF TR TTL UD VPU ws

Implementation Progress Implementation Status and Results Report Key Performance Indicators Latin America and the Caribbean Region Low-Income Countries Under Stress Millennium Development Goals Monitoring and Evaluation Middle-Income Countries Middle East and North Africa Region Montreal Protocol Non-Lending Technical Assistance Other Economic and Sector Work Operations Policy and Country Services Network Project Completion Report Public Expenditure Review Portfolio Improvement Program Policy Notes Project Performance Assessment Report Poverty Reduction and Economic Management Network Poverty Reduction Support Credit Public Sector Governance Board Private Sector Development Network Quality Assurance Group Quality-at-Entry Assessment Quality Enhancement Review

Quality o f Supervision Assessment Reimbursable Technical Assistance Systems, Applications, and Products South Asia Region Social Development Sector Board Special Financing Strategy, Finance and Risk Management Social Protection Sector Board Technical Assistance Trust Fund Transport Sector Board Task Team Leader Urban Development Sector Board Vice Presidential Unit Water Supply and Sanitation Sector Board (formerly WSS)

ANNUAL REPORT ON PORTFOLIO PERFORMANCE FISCAL YEAR 2006

CONTENTS

EXECUTIVE SUMMARY .............................................................................................. i-iv

I . Introduction ...................................................................................................................... 1 I1 . Portfolio Size and Composition ....................................................................................... 2 I11 . Portfolio Performance .................................................................................................... 17 IV . V . Recommendations .......................................................................................................... 45

Analytic and Advisory Activities ................................................................................... 32

BOXES

Box 2.1 : Box 2.2: Box 2.3:

Box 2.4:

Box 2.5: Box 3.1: Box 3.2 Box 3.3: Box 3.4: Box 4.1: Box . 4.2:

Box 4.3:

FIGURES

Figure 2.1:

The Portfolio Dynamics .......................................................................................... 3

Implementing the Infrastructure Action Plan: Supporting the Energy Community of South Eastern Europe (ECSEE) ..................................................... 8 Programmatic Support for Long-term Change: Civil Service Reform in Tanzania .............................................................................................................. 9 Customized Country Partnership: The Case o f Kazakhstan ................................. 10 Rating Scale .......................................................................................................... 17

Evolution o f PPAR Coverage by IEG ................................................................... 23 Strengthening Supervision o f Problem Projects: The Africa Approach ............... 29 Selected Country AAA Programs with High Likely Impacts ............................... 39 Shocks and Social Protection in Central America: Lessons from the Coffee Crisis ......................................................................................................... 41 Costs o f compliance with International Agro-Food Standards: A Global Perspective ....................................................................................... 42

Quality-at-Entry o f IBRD/IDA Guarantees ............................................................ 5

Africa Region HIV/AIDS Portfolio ...................................................................... 21

Key Trends .............................................................................................................. 4 . Figure 2.2A: Investment Approvals ............................................................................................. 6 Figure 2.2B: Development Policy Lending Approvals ................................................................ 7 Figure 3.1 : Development Outcomes ....................................................................................... 18 Figure 3.2: FY05-06 Outcomes for Some Selected Clients ................................................... 20 Figure 3.3A: Quality of Supervision by Dimension, QSA6 and QSA7 ..................................... 25 Figure 3.3B: Quality of Supervision by Dimension, QSA7 ....................................................... 25 Figure 3.4: Net Disconnect between IEG Outcomes and ISR Ratings during FY04-06 ......... 28

Annual Report on Portfolio Performance FY06 i

EXECUTIVE SUMMARY

1. The Annual Report on Portfolio Performance provides the Board and Senior Management with a strategic overview o f the size, composition and quality o f the Bank’s lending portfolio and the Analytic and Advisory Activities (AAA) program. It also provides Senior Management real time information to assess what i s working well, or less well, together with recommendations on measures to sustain or improve the quality and effectiveness o f the lending portfolio and o f the AAA program -- two key vehicles for delivering results to our clients.

LENDING PORTFOLIO SIZE AND COMPOSITION

2. The Bank’s FY06 portfolio (1,468 operations with $95.2 b i l l ion o f net commitments) shows relative stability by comparison with FY05, along with continued strength in IDA and INF approvals and improved resource transfer. However, net commitments remain about 12 percent lower than at the end o f FYO1. Notwithstanding the shrinkage in net commitments, disbursements in FY06 were 21 percent higher than the FYOl level due to the shift towards quick-disbursing DPLs (Development Policy Lending) as well as the improved disbursement performance for investment operations. IBRD net commitments account for 56 percent of the total (as against 64 percent in FYO1) with IDA’S share increasing to 42 percent from about one- third five years ago.

3. Annual approvals in FY06 reached $23.9 billion, continuing the upward movement o f the previous two years. The significantly higher level o f IBRD investment approvals achieved in FY05 was increased further in FY06. For IDA, the FY06 approvals were the highest level ever, and consistent with the agreed Bank priorities; one-half o f them were in the Africa Region. Overall, however, the increased approvals in FY06 were offset by increased exits-mostly due to unusual bunching in closure o f several large DPLs in LCR.

4. At a more disaggregated level, over the past f ive years, there have been several noteworthy shifts among Regions and Networks. AFR’s share o f total net commitments grew from 13 percent to 20 percent while both L C R and EAP shrank significantly-reflecting a general shift towards the poorer clients and in the case o f LCR, greater use o f fast-disbursing, single-tranche operations. Among the Networks, net commitments over the last f ive years declined for HDN and ESSD. However, with some investments in rural and social infrastructure now being financed as part o f multi-sectoral projects managed by other Networks, the actual reductions in net commitments are not quite as large as they may appear. Finally, data for the past two years show positive results from the Middle-Income Countries (MIC) and Infrastructure initiatives, as wel l as from recent measures to modernize, streamline, and simplify Bank processes. These efforts have helped stem the decline in IBRD net commitments while increasing the relevance o f Bank support and providing a stronger basis for increased investment lending and faster disbursements.

LENDING PORTFOLIO PERFORMANCE

5. Project-level IEG evaluations continued the positive trend o f the past decade and the share o f satisfactory outcomes now hovers around 80 percent. Development outcomes for IDA

Annual Report on Portfolio Performance FY06 11

projects achieved a 77 percent satisfactory rating, which, although s t i l l below the 85 percent outcome for IBRD operations, are an improvement over previous years. Bank management has recently taken active measures to enhance the Bank’s performance and organizational response to Fragile states whose 56 percent satisfactory outcome level remains o f concern.

6. Considerable variations exist in development outcomes between Regions and Sectors. Two regions, AFR and MNA, continue to trail the Bank’s average based on number o f projects, though the difference i s smaller in terms o f net commitments. Among the Sectors, Transport with over 90 percent satisfactory outcomes i s the best performer overall. Finance, Social Protection and Water Supply and Sanitation also show significantly above-average performance. At the other end, the outcomes for the Environment, Public Sector Governance, Health and Private Sector Development remain a matter o f concern, especially because progress in these areas i s at the heart o f the MDG agenda. Among lending instruments, Development Policy Lending (DPLs) at 83 percent satisfactory performed better than Investment operations (INV) which were at 77 percent in terms o f numbers but the two are virtually identical in terms of lending volumes.

BANK PERFORMANCE

7. Evaluation data suggest that while country factors are the strongest predictors o f project outcomes, Bank performance i s also a major contributory factor. Satisfactory Bank performance during preparation and appraisal leads to better project designs, adapting global knowledge to country circumstances. Timely risk identification and mitigation during project supervision also contributes to better outcomes.

8. Results from the latest Quality-at-Entry and Quality o f Supervision assessments indicate continued solid performance with major deficiencies l imited to no more than five to ten percent o f the total samples. However, in about a third o f the cases the Bank’s performance i s only Moderately Satisfactory, suggesting significant missed opportunities. Areas for improvement vis-&vis Quality-at-Entry include: (i) lowering project complexity to match it better with the country’s institutional capacity; (ii) better risk assessment and mitigation; (iii) introducing a workable results framework; and (iv) ensuring readiness for implementation at entry. For improving supervision performance, the focus needs to be on: (a) t imely identification and assessment o f threats to the development outcomes; (b) paying more attention to institutional capacity building; (c) making effective use o f performance indicators; (d) having managers devote more time to guiding staff on supervision issues; and (e) greater candor in rating the quality o f project implementation.

MANAGING PORTFOLIO PERFORMANCE

9. Effective management o f the portfolio performance depends critically on a sound system for tracking portfolio status and for timely identification o f risks. Despite long-standing efforts to improve the quality o f portfolio reporting (most recently through the reform o f the ISR system in early 2005), under-reporting o f risks remains a problem. Findings from the recently completed assessment o f Supervision Quality suggest that in FY06, less than hal f o f the problematic projects were so identified by staff and managers in the ISRs. QSA findings also point to

Annual Reuort on Portfolio Performance FY06 iii

frequent failures in the ISRs to trigger risk flags (e.g., Project Management problems, Financial Management problems or weak M&E systems) to facilitate early resolution o f these problems.

10. Extrapolating the findings from the latest Supervision Assessment, a more realistic estimate o f the current Project-at-Risk i s likely to be about 25 percent, significantly higher than the 14 percent level reported in the ISRs. One major consequence i s that portfolio performance indicators derived from the ISR database--Projects-at-Risk, the Realism Index, and the Proactivity Index--have now become less reliable and meaningful concepts for tracking and managing the portfolio performance. They do not provide “early warning” o f risks that threaten the achievement o f project development objectives thereby undermining the Bank’s ability to adopt appropriate corrective measures. The most problematic in this respect i s the Realism Index.

1 1. Based on a specially commissioned review o f the experience with the current Project-at- Risk System as well as evaluation findings from the IEG, the ARPP recommends revising the current Realism Index to make it a more meaningful measure o f the quality o f portfolio reporting. The proposed change would link it directly to actual recent outcomes reported by IEG, lowering the end FY06 index from an 80 percent level under the current system to about 50 percent. EAP and MNA among Regions, and Environment and Urban Development among Sectors, would experience the greatest change. In contrast, the change for LCR, Transport and Social Protection i s likely to be quite minimal. The target for the Revised Realism Index would be retained at the 70+ percent level. Depending upon the impact o f this change, the other portfolio indicators may also need to be revisited in the coming year.

12. Beyond systems and measures, the main issue at the core o f project performance ratings i s the inadequate accountability o f those using and signing o f f on performance and risks in project implementation. Senior Management needs to ensure that the incentives to and accountabilities o f staff and managers are re-balanced to support a more robust risk management system during supervision.

ANALYTIC AND ADVISORY ACTIVITIES

13. Analytic and Advisory Activities (AAA) are a key component o f the Bank’s toolkit for promoting economic development and reducing poverty among i t s clients. They provide the basis for the Bank’s policy dialogue with clients, the development o f country assistance strategies and the design o f effective lending programs. They are also an important instrument for building institutional capacity and promoting aid coordination and harmonization among the donor community. During FY06, the Bank spent a total o f $222 mi l l ion on AAA--almost 30 percent o f the total expenditure on country services.

14. AAA expenditures have grown from $143 mi l l ion in FY02 to $222 mi l l ion in FY06, reflecting a Bank strategy to bolster i t s AAA program. This period was characterized by a sharp increase in expenditures and deliveries between FY02 and FY03 and a modest decline between FY05 and FY06. The increased focus on AAA resulted in a rise in the share o f country services allocated to AAA (Le., the “Country AAA intensity”) from 24 percent in FY02 to 29 percent in FY06. Consistent with the agreed L ICUS initiative, there has been a rapid increase in AAA expenditures in the L ICUS countries with the “AAA intensity” increasing from 18 percent in

Annual Report on Portfolio Performance FY06 iv

FY02 to 30 percent in FY06. With the progress made in reducing the backlog o f Core Diagnostic Reports, the AAA focus has been shifting towards demand-driven tasks in support o f the Infrastructure Initiative and the MDG agenda. Expenditures for Global and Regional tasks are also becoming a more important part o f the AAA program.

15. Various quality assessments suggest steady improvement in AAA relevance and likely impact with 90+ percent o f the AAA work now rated satisfactory. However, there i s scope for greater impact through more attention to dialogue and dissemination aspects.

16. Over the past few years, Q A G assessments have pointed to numerous errors in task coding and reporting in the Bank's information systems. This report has identified additional weaknesses that affect data reliability and diminish the value o f trend analysis. Despite major efforts over the past few years in strengthening the planning, tracking and management oversight o f the AAA program, these areas remain a cause for concern with potential for significant further gains.

RECOMMENDATIONS

17. A stocktaking o f the ARPP follow-up to the recommendations o f the last ARPP suggests only modest progress, reflecting in part the relatively long lead times needed for results in some o f the areas. In particular, the realism o f portfolio risk ratings and the management o f the AAA program continue to be problematic with significant scope for improvement. Most recommendations made last year s t i l l remain valid. Taking into account the carry over agenda from the last ARPP and the findings from this ARPP, the key recommendations' are as follows:

Address the areas o f weaknesses and missed opportunities during project appraisal and supervision focusing;

0 Strengthen accountabilities o f teams and managers and examine how to achieve greater realism in portfolio reporting;

Mod i fy the current Realism Index, basing it on recent IEG evaluations, to make it more robust and less susceptible to under-reporting o f risk; and

Strengthen managerial oversight to improve tracking and management o f the AAA program.

' The full l i s t o f recommendations can be found in Chapter V.


I. INTRODUCTION

OBJECTIVES AND APPROACH

1.1 The Annual Report on Portfolio Performance provides the Board and Senior Management with a strategic overview o f the size, composition and quality o f the Bank’s portfolio and the Analytic and Advisory Activities (AAA) program2. It also provides Senior Management real time information to assess what i s working well, or less well, together with recommendations on measures to sustain or improve the quality and effectiveness o f the lending portfolio and o f the AAA program-- two key vehicles for delivering results to our clients.

1.2 The FY06 ARPP draws on materials that are prepared as part o f regular portfolio monitoring functions carried out by the Regions and Networks, supplemented by project/portfolio data in the Bank’s management information systems. It also draws on assessments and data commissioned from several special studies. Consistent with past ARPPs, the report uses a five-year timeframe (FYO1- 06) to examine medium-term trends in the portfolio. In preparing the ARPP, extensive consultations were held with managers and staff from around the Bank.

STRUCTURE AND COVERAGE

1.3 The report i s organized into five Chapters. Chapter I1 reviews the recent trends in size and composition o f the lending portfolio. I t analyzes trends by source o f financing, instrument, Regions, grouping o f countries, Networks, Sectors and Themes. Chapter I11 assesses overall portfolio performance results as we l l as issues associated with measuring and reporting the risks o f the portfolio o f lending operations not achieving their development objectives. It discusses measurement o f reported outcomes and outlines some suggestions for improving the assessment o f development outcomes for the Bank portfolio. It also discusses changes in the Realism Index to make it a more meaninghl measure o f the quality o f portfolio reporting. Chapter IV takes stock o f the Analytic and Advisory Activities. It focuses particularly on trends in the program size, deliveries, and quality o f AAA, drawing on selected recent Q A G assessments. Chapter V examines progress in implementing recommendations o f the FY05 ARPP, and summarizes this year’s key recommendations. The Statistical Appendix contains a detailed set o f supporting statistical material. As agreed with CODE, and in order to avoid duplication, this ARPP does not address directly the Results agenda, which i s to be the subject o f a separate report by the Results Secretariat.

AAA product l ines discussed in this report are ESW and TA. ESW and TA include fee-based and reimbursable tasks. Other AAA product l ines not covered here include Donor and Aid Coordination, Research Services, World Development Report and Impact Evaluation.


11. PORTFOLIO SIZE AND COMPOSITION

2.1 The Bank’s portfolio remained relatively steady in FY06, arresting the declining trend o f several years until FY04. IBRD and IDA approvals in FY06 increased strongly but this was offset by exits o f a similar amount. The upward trend o f increased share o f the Afr ica Region in the total portfolio also continued. Amongst Networks, INF and ESSD are the only large Networks that increased their portfolio. FY06 IDA approvals were the highest ever, and one-half o f them were in the Afr ica Region. Measures implemented under the modernization and simplification agenda have resulted in a strong portfolio o f Simple and Repeater operations and in Additional Financing operations with lower processing time and costs. Portfolio composition has continued to shift from higher to lower income level countries. Disbursements in FY06 also registered a strong increase from FYOl and FY05.

PORTFOLIO SIZE AND TRENDS

2.2 The Bank’s portfolio consists o f 1,468 operations with net commitments o f $95.2 bil l ion3 in FY06 (Box 2.1). N e t commitments have been relatively stable in real terms4 for the past three years but are some 25 percent below i t s peak level in FY99 (Figure 2.1). Continuing the healthy recovery o f the past few years, approvals in FY06 reached $23.9 b i l l ion and were eight percent higher than FY05 and 23 percent above the level 10 years ago. Disbursements in real terms this year were some 11 percent higher than in FY05, reflecting the expansion in new approvals over the past three years. The current disbursements ($20.9 billion) are at about the same level as ten years ago (the disbursement levels reached in FY98-99 were an anomaly reflecting the Bank’s response to the East Asia and Russian Financial Crises). The commendable disbursement performance reflects an increase in fast-disbursing Development Policy Lending (DPL), and an increase in the disbursement ratio for investment operations to 24 percent from 20 percent 10 years ago.

2.3 The portfolio size in the future will depend largely on the level o f IDA replenishment, and on the level o f Bank engagement with IBRD partner countries, in particular through successful implementation o f the modernization and simplification agenda to reduce the costs o f doing business. Based on current plans, annual approvals during FY07-09 are expected to be in the $22-25 bi l l ion range, and the portfolio i s expected to stabilize around the current level.

Portfolio and approval figures do not include guarantees. A more detailed definition o f the portfolio i s in Annex 2, and a description o f portfolio dynamics i s provided in Box 2.1,

Trend l ines in Figure 2.1 are in real terms. A l l other financial data in this chapter are in nominal terms.


Box 2.1 : THE PORTFOLIO DYNAMICS

The portfolio as defined in the ARPP i s a “stock” concept. Lending by contrast i s a “flow.” The Bank portfolio consists o f the IBRD loans, IDA credits and grants, GEF grants, Montreal Protocol, and Special Financing operations (financed in part out o f the Bank’s net income). I t only includes operations that are active at the end o f the fiscal year. I t excludes operations which are closed or fully disbursed during the year. It i s recorded as the sum o f individual operations’ commitments, net o f cancellations, if any. The chart below illustrates those relationships for FY06 based on the Business Warehouse (BW) data.

+$23.9B (301 Operations) o f which:

33 Single Tranche Operations

Opening Balance $95.5B Closing

Balance* 1 (1,451 $95.2B Operations) of which $19.7B Exits during

(290 Operations)

(1,468 Operations) L t

etroactive Extension

* Closing balance o f FY06 includes approximately $0.7 bil l ion (6 projects) in projects closed in previous years, which were reopened in FY06.


FIGURE 2.1: KEY TRENDS (FY97=100)

I 160 , 1

140

120

- 100

80

60

al > al

FY96 FY97 FY98 FY99 WOO FYOl FY02 FY03 FY04 N O 5 FY06

-a- Approvals in FY -+-Disbursements -0- Net Commitments

2.4 End-year portfolio figures do not capture quick-disbursing operations that enter and exit the portfolio during the same fiscal year because o f their single tranche design (see Box 2.1). In FY06, there were 33 such operations for a total o f $4.1 bi l l ion in commitments, accounting for 17 percent o f total approvals (Table 2.1); these figures represent a quadrupling in number and more than doubling in dollar terms over FYOl levels. A contributing factor to this trend was the increasing use o f programmatic Development Policy Lending (DPL) in a series o f operations, phased to support countries in achieving their reform programs within an integrated framework, with triggers for moving from one operation to the next. While this trend first began in LCR, which continues to be a very large user o f DPLs, it i s now also significant in al l other regions except MNA. N o t surprisingly, the processing cost o f these operations (Bank average preparatiodappraisal and supervision costs o f $358,000 and $3 1,000, respectively) compare very favorably with those o f al l other operations ($489,000 and $321,000, respectively). However, the impact o f these single tranche DPLs on longer te rm institutional reforms remains to be assessed.

TABLE 2.1: SINGLE TRANCHE LOANS/CREDITS BY REGION (us$ MILLION)

FYOl FY05 FY06 Region No. of $ No. of $ No. of $

Projects Amount Projects Amount Projects Amount AFR 1 47 11 900 10 950 EAP 0 0 2 305 2 401 ECA 2 25 4 225 6 561 LCR 3 1,237 6 1,103 7 1,433 MNA 1 120 1 100 0 0 SAR 1 350 6 1,105 8 785 Bank-wide 8 1,779 30 3,737 33 4,129

GUARANTEES

2.5 Guarantees are available to al l countries eligible for borrowing from IBRD or IDA to mobilize private sector participation, help catalyze debt with extended maturities, and lower financing costs. Such guarantees aim to reduce r isks o f private transactions in emerging markets,


mitigate risks that are beyond the control o f the private sector, open new markets and improve project sustainability. By end FY06, 31 Guarantee operations ($2.5 billion) for 29 projects had been approved, with an estimated $10.2 bi l l ion o f private capital mobilized. Approvals include eight partial credit, 21 partial risk, and two policy-based Guarantees. The majority o f approvals since inception o f the Guarantee program have been for infrastructure projects, with AFR accounting for most o f the recent approvals and potential guarantee operations. Partial Risk Guarantee covering debt service default on loans to private sector projects caused by government failures to meet contractual obligations to private investors i s the most common type o f guarantee used in recent years. In FY06, three Guarantees for a total o f $64 mi l l ion were approved for two projects.

BOX 2.2: QUALITY-AT-ENTRY OF IBRDDDA GUARANTEES

The QAG assessment covered a l l nine IBRD and IDA Guarantees approved in FY05/06. Six Guarantees are in Africa, and one each in EAP, ECA, and LCR. The review concludes that:

The Guarantee instrument i s useful for supporting private sector investments in infrastructure, particularly in Afi ica. The use o f the Guarantees to support privatizatiodconcessioning o f existing assets i s a creative extension o f the Guarantee program. It offers potential for replication in other countries;

The use o f Guarantee as the instrument o f choice for Bank/IDA support was assessed to be generally appropriate;

There has been good cooperation among the Bank, MIGA and IFC staff;

Overall the Quality-at-Entry o f Guarantees was rated 78 percent Satisfactory. Whi le three are rated Highly Satisfactory, two were rated Unsatisfactory;

Understanding o f the Guarantee instrument i s s t i l l inadequate among staff, especially the basic macroeconomic and sector po l icy requirements that should underpin a Guarantee. The r isk o f the Guarantee being called, which should be at the heart o f risk assessment for Guarantees, was rarely assessed;

Inadequate readiness for implementation was the most common weaknesses for guarantees rated Moderately Satisfactory or less. As a result, several Guarantees have encountered significant delays in reaching fmancial closure;

Attempts to wholesale Guarantees through intermediaries show certain issues o f pol icy and practice that must be resolved if the Bank i s to pursue this type o f Guarantees; and

The internal review process for Guarantees has been weak and was insufficiently focused on technical design aspects. There i s a need for both simplifying and strengthening the process.

Fol low up to some o f these findings and recommendations are already underway.

I I

2.6 Because o f their unique characteristics, the Guarantee amounts are not included in the portfolio figures discussed in this chapter. The Bank's portfolio o f 31 Guarantees i s spread through six regions, with AFR and EAP leading with nine and seven operations respectively followed by E C A with four operations. The highest Bank exposure i s however concentrated in the E A P and E C A regions. The Power Sector accounts for 60 percent o f Guarantee operations, followed by the Financial Sector with 10 percent. There are 19 new operations currently under preparation. Given the growing volume o f Guarantees, and in response to senior management request, Q A G carried out an assessment o f Quality-at-Entry o f Guarantees approved in FY05/06 and preliminary findings are


summarized in Box 2.2. [Note: Findings are preliminary because the assessment report i s yet to be finalized].

IBRD PORTFOLIO

2.7 The Bank portfolio i s composed o f IBRD loans, IDA credits, Global Environment Facility (GEF)/Montreal Protocol (MP), and Special Financing (SF) grant funds. IBRD ne t commitments o f $53.1 billion account for the largest part (56 percent) o f the Bank’s net commitments o f $95.2 billion, although this share has declined from 64 percent in FYOl . In FY06, IBRD net commitments shrank by about two percent, because o f exits exceeding approvals, mostly in LCR whose net commitments shrank by $2.2 billion despite an increase o f $1 billion in approvals. Net commitments in LCR and EAP are 64 percent and 59 percent, respectively, o f the levels in FYO 1.

2.8 Compared with an average o f $7.2 billion in annual IBRD investment lending during FY02- 06, the $9.2 billion in FY06 was an improvement that built upon, and sustained the expansion o f almost 40 percent o f lending achieved in FY05 (Figure 2.2A). Among the Regions, the increase of $1.2 billion in LCR, mainly in Brazil and Argentina, was able to offset the decline in investment approvals in SAR and ECA.

FIGURE 2.2A: INVESTMENT APPROVALS

1 2 - c 0 z 1 0 - iz

a - v) 9 6 - C

E 4 2 -

: 4 -

0 - l 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

I +lBRD +IDA 1

2.9 New IBRD lending commitments for Development Policy Lending in FY06 were at $4.9 billion, close to the average for the last five years, and mostly concentrated in LCR and ECA, which together accounted for 90 percent o f total approvals (Figure 2.2B). The IBRD Development Policy Lending net commitments o f $5.8 billion in FY06 are one third less than its level o f $8.7 billion in FYO 1 (Statistical Appendix, Table 2.4), largely because o f the shift toward single tranche operations.

Annual ReDort on Portfolio Performance FY06 7

FIGURE 2.2B: DEVELOPMENT POLICY LENDING APPROVALS

7

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

1 +lBRD +IDA I

2.10 The higher level o f IBRD investment lending achieved in the last two years i s the cumulative result o f several recent initiatives and their consolidation: scaling-up o f the Bank’s support for more effective responses to the specialized needs o f Middle-Income Countries through the MIC Action Plan (paras. 2.13 and 2.14); modernization and simplification o f internal Bank processes to meet Borrowers’ needs in a more timely and flexible manner (para. 2.15); and the Infrastructure Action Plan to revitalize lending and help clients to address unmet infrastructure investment needs and broader development goals. Box 2.3 provides an example o f how these initiatives have played out in practice to increase the relevance o f Bank support and provided a stronger basis for increased investment lending.

IDA AND TRUST FUND PORTFOLIOS

2.1 1 IDA approvals at around $9.4 billion in FY06 were at a historic high, and represent a 10 percent increase from FY05 (Statistical Appendix, Table 2.17). At the same time, the current IDA net commitments o f $39.8 billion are seven percent larger than in FYO1. IDA net commitments in Africa recorded a 12 percent increase in FY06, and now account for 46 percent o f total IDA net commitments compared with 38 percent in FYOl (Statistical Appendix, Table 2.1). The HDN sectors experienced a significant decline in FY06 in their IDA net commitments because exits exceeded approvals, but this was offset by increases in INF and ESSD net commitments. The increase in INF net commitments i s due in part to an increase in new approvals resulting from the implementation of the Infrastructure Action Plan. When viewed in terms o f FY06 IDA approvals, Africa experienced a 24 percent increase over FY05, while approvals in South Asia declined by 11 percent. Together these two Regions accounted, respectively, for 50 percent and 27 percent o f IDA approvals in FY06. Among the Networks, ESSD approvals increased by 142 percent over FY05, while in the other Networks approvals either declined or remained approximately unchanged. Three-fourths o f IDA approvals were for investment lending and the remainder for DPLs, which accounted for about one quarter o f the total during the past five years. Given the need for a longer-term perspective to strengthen institutional capacity and policy frameworks, AFR has increasingly used programmatic lending for both investment and development policy support. Box 2.4 provides insights from the recently completed Quality o f Supervision Assessment (QSA7) o f operations for public sector management and civil service reform, on how a coordinated approach involving integration o f staff skills, borrower ownership, and partnership with donors can help improve IDA’S impact.


BOX 2.3: IMPLEMENTING THE INFRASTRUCTURE ACTION PLAN SUPPORTING THE ENERGY COMMUNITY OF SOUTH EASTERN EUROPE (ECSEE)

This $1 billion Adaptable Lending Program to support the development o f the Energy Community was approved by the Board in FY05, and $418 million has been committed to date. Bank financing i s being provided on a regional basis to support seven countries; as well as Kosovo under a closely related TA project. I t i s tailored to the needs of individual countries to meet their commitments under the regional Treaty which formally established the Energy Community. The first-phase loan to Romania under the program was approved by the Board in January 2005, while seven subsequent operations have since been approved by the Bank’s Management.

South Eastern Europe faces the need for very large addition to generation capacity and matching transmission and distribution system requirements, if severe power shortages and supply interruptions are to be avoided. Financing requirements are about $3040 billion, calling for significant private sector participation. Through the Energy Community, an EU-compatible regional market i s being developed, representing a much larger and more attractive destination for prospective investors.

The Bank’s support for analytical work has been a vital element in helping to focus on a least-cost basis across national boundaries. Through a Generation Investment Study, the Bank helped, in partnership with other donors, build institutional capacity for rational energy planning, develop databases, and promote a shared understanding by policymakers and energy planners.

In addition to the AAA support, the Bank also facilitated the design and implementation through the choice of an APL that sets reachable, yet meaningful goals, many of which have been reached in most countries, such as the signing and ratification of the Treaty, and having an electricity regulator and a transmission operator established and operational.

QAG panels reviewing the Quality-at-Entry o f the APL program and o f the analytic work highlighted the following strong aspects for this cross-country initiative: synergistic l i n k s to the EU efforts in the energy sector; effective institutional arrangements; responsiveness to the clients’ needs; and the introduction of an elaborate set of information interchange and coordination bodies. Panelists also noted that the APL has repositioned the Bank to lend in areas from which it had previously withdrawn and contributed to an effective and timely response to clients’ needs.

2.12 Operations financed by Trust Funds (GEFMontreal Protocol) and Special Financing operations, financed in part out o f the Bank’s net income, had net commitments in FY06 o f about $2.3 billion, the same level as in FY05 but about 42 percent more than in FYO1. New commitments o f about $0.3 billion were approved with Trust Fund financing in FY06. Although not included in the portfolio, recipient-executed Trust Funds, including Multi-Donor Trust Funds for country specific and regional emergency operations are being increasingly set up by the Bank and other donors. TFO has sponsored the creation o f a new product line for recipient-executed activities where the Bank has a fiduciary responsibility. A total o f 16 large, country-specific Multi-Donor Trust Funds are currently being managed by the Bank. These Funds have a total commitment o f over $4 billion and a net fund balance in FY06 o f over $2.2 b i l l i ~ n . ~ New contributions in FY06 to major programs such as the Afghanistan Reconstruction Trust Fund, Multi Donor Trust Fund for Indonesia Aceh and Niah, Multi-Donor Trust Funds for Sudan, Iraq Reconstruction Trust Fund, and the Trust Fund for East Timor, were about $879 million, and disbursements about $544 million. Given the growing volume

See FY06 Trust Fund Portfolio Review, Moving to Accountability for Results, November 10,2006 (Table 1.4).


o f recipient-executed Trust Funds, including Multi-Donor Trust Funds, and reputational risks they pose for the Bank, it i s recommended that they be recorded in the Bank’s portfolio, and subjected to regular Bank processes and quality assurance mechanisms for tracking and managing the health o f the portfolio.

BOX 2.4: PROGRAMMATIC SUPPORT FOR LONG-TERM CHANGE CIVIL SERVICE REFORM IN TANZANIA

The Tanzania C iv i l Service Reform Program provides the evidence o f implementation over several years o f the programmatic approach in helping clients. By definition, the scope o f the reforms i s broad, so as to address linkages between issues o f incentives and policy change, modernization o f systems and processes, and reinforcement o f capacity. The challenge in design was to set a series o f goals ambitious enough over a reasonable timeframe to effect tangible differences in accountability, performance, and delivery o f public services, while ensuring ownership o f borrower implementing staff and local agencies.

The QAG Panel that assessed quality o f the Bank’s supervision o f this operation noted several areas o f excellence. These provide insights into how some o f the Bank’s changes in recent years through decentralization, support for programmatic rather than project lending, and partnership wi th clients and other donors have played out for results. In particular, the Panel noted that the combination o f staff ski l ls in the field, o f sector specialists and fiduciary staff, permitted attention to both policy reform and problem solving. Borrower ownership was thus consolidated by real-time joint interventions o f the client, along with other donors and the Bank in addressing issues or moving to the next stage o f reform. Supervision i s joint, considerable resources are leveraged through other donors, and the latter have delegated responsibility for follow-up on procurement and financial management to the Bank because o f demonstrated credibility.

According to the panel, the supervision effort was appropriately focused on the following key development issues: (i) rationalizing public sector pay and linkage with performance; (ii) getting an M&E system launched after initial delays and failed efforts; and (iii) modernizing the payroll and HR management system. The project’s results to date show delay as against initial expectations, but the latter were clearly over-optimistic. Implementation was f i l ly integrated into the country dialogue, taking into account macroeconomic and fiscal constraints. A main conclusion o f the project team and the Panel i s that the Bank needs to be more realistic in the time expected for a comprehensive program o f public service transformation and for building capacity at various levels.

IMPLEMENTATION OF MIC AGENDA

2.13 The FY05 ARPP reported on the implementation o f the M I C agenda. Since the M I C task force presented i t s recommendations four years ago, the Bank has continued to make progress on improving i t s responsiveness to clients’ demands. Examples include the expanded menu o f financing and risk management products, reducing non-financial costs o f doing business with the Bank, broadening i t s freestanding delivery o f knowledge services, and offering treasury management services on the basis o f cost recovery. M ICs are looking for more customized financial and advisory services from the IBRD, although traditional bundled lending and knowledge management products remain important for many MICs. Box 2.5 presents an interesting example o f a customized Bank- country partnership.


Box 2.5: CUSTOMIZED COUNTRY PARTNERSHIP: THE CASE OF KAZAKHSTAN

Kazakhstan i s at the fi-ont end o f a major oil boom and by 2001 the World Bank had lost i ts place at the policy table, faced a small and shrinking portfolio, and a supply-driven analytical work program that was of poor quality. But there were good reasons for the Bank to stay engaged. Despite plentiful resources and rapid economic growth, the quality of education and health services were under threat, and much of the infrastructure out o f date, expensive or of poor quality.

To stay engaged, the Bank needed to work in partnership with the client, provide top-quality expertise, and improve its internal processes. Relevant measures adopted by the region resulted in the following:

Partnership. Agreement was reached on a Country Partnership Strategy that has no end date, no project or AAA lists, but an annually negotiated business plan.

Knowledge. This turned out to be a key driver o f the improved relationship. The Joint Economic Research Program (JERP) has driven the re-engagement. Unlike pay-for-service arrangements, this engaged both sides for its funding, and made both accountable for relevance and quality.

Bank Processes. A Central Asia Operational Team was established to process pipeline and portfolio better. I t also engaged the Government in a discussion on how it could speed up and improve the Borrower part o f the project cycle.

The evidence shows a major turn-around. Whi le the Bank delivered an average o f $0.6 million for AAA per year between 2000 and 2003, the figure increased to $2.2 million between 2004 and 2006. Similarly, after a period o f flat lending ($28 million on average between 2001 and 2004), approvals subsequently increased to an annual average o f about $100 million. The average preparation time for investment lending declined from 29 months during FY97-FY03, to 17 months in the last three years.

2.14 Lending to M I C clients in FY06 was $16.7 billion, an increase o f six percent over FY05 and 40 percent over FYOl , Extensive consultations with representatives from M I C countries and development partners were held in the course o f preparing a new paper, “Strengthening the World Bank’s Engagement with IBRD Partner Countries.” This culminated in an updated M I C agenda that calls for:

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0

0

0

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Accelerating actions for better and more flexible country-partnership strategies;

Reducing the non-financial cost o f doing business with the Bank by streamlining internal Bank procedures, and supporting the use o f country systems where those systems meet mutually agreed and verifiable indicators;

Simplifying loan pricing and preparing options to ensure competitiveness o f IBRD loans;

Mainstreaming IBRD participation in originating and administering public-sector lending at the sub-national level; and

Providing fee-based expert services, unbundled from lending and on a larger scale, where the Bank has comparative advantage.

While it i s too early to project the likely impact o f the above actions on the portfolio, the Bank has committed i t se l f to streamline i t s processes in the above areas, and to report on progress at the next Annual Meeting.


MODERNIZATION AND SIMPLIFICATION AGENDA

2.15 The FY05 ARPP also reported on the implementation o f the Modernization and Simplification agenda. Simplified internal processes for simple and repeater operations have continued to impact positively on the Bank’s portfolio. The quality o f these operations was reviewed by QEA7 and found to be satisfactory. During FY06, 58 Simple and Repeater operations were approved for an amount o f $3.3 billion compared to 31 operations in FY05 for an amount o f $2.3 billion. Preparation time under this program averaged less than 12 months per operation, which i s about 25 percent less than the average for investment operations, and at an average cost o f about $250,000 compared to $380,000 for investment operations. In addition, since June 1, 2005, a total o f $1.1 billion in net commitments have been approved under the new Additional Financing policy for operations. Another encouraging sign o f efficiency gains i s the reduction in elapsed time between project concept and Board approval for al l investment operations from 18 months in FY03 to 15.5 months in FY06. Given the growing volume o f additional financing, the next assessment o f Quality- at-Entry proposes to pay particular attention to these operations.

REGIONS AND COUNTRIES

2.16 Regional Trends. Three regions (AFR, ECA, and MNA) experienced an increase this year in their net commitments, while the other three regions experienced a decline. Over the last five years, AFR’s share o f total net commitments grew to 20 percent from 13 percent in FYOl (Table 2.2). While net commitments in MNA grew modestly over the past five years and remained steady in ECA and SAR, they declined sharply in EAP and LCR by 32 and 34 percent, respectively. Africa i s the only region with substantially larger net commitments in FY06 than in FYOI, showing an increase o f $4.1 billion. The decline in SAR net commitments in FY06 over FY05 was in major part due to lower than anticipated lending in India, mainly in the HNP sector. MNA’s increase in net commitments in FY06 over FY05 was helped by a $500 million Financial Sector Policy Loan to Egypt. An analysis o f disbursements over the past five years shows that LCR increased resource transfers to client countries by nine percent in FY06 over FYO1, and by 48 percent over FY05, in major part due to doubling o f disbursements for DPLs from $1.7 billion in FY05 to $3.3 billion in FY06. LCR accounted for 28 percent o f Bank-wide disbursements in FY06. Disbursements in AFR and SAR in FY06 were also higher by 74 percent and 65 percent over FYOl, but declined in EAP by 24 percent over the past five years.


TABLE 2.2: PORTFOLIO DISTRIBUTION AND DISBURSEMENTS BY REGION (US$ BILLION)

Commitments Disbursements FYOl FY05 FY06 FYOl FY05 FY06

Region

AFR EAP ECA LCR MNA

14.5 16.6 18.6 2.3 4.0 4.0 28.8 20.2 19.5 3.4 2.6 2.6 16.1 15.9 16.5 2.8 3.4 3.0 25.2 19.0 16.6 5.4 4.0 5.9 5.9 5.6 6.6 0.8 0.7 1 .o

SAR 17.7 18.2 17.4 2.6 4.1 4.3 Ban k-wide 108.3 95.5 95.2 17.3 18.8 20.9

2.17 Portfolio Concentration. The FY06 portfolio includes operations in 124 countries, with a heavy concentration in ten countries, which together account for about one half o f net commitments; by comparison, half the commitments in FYOl were accounted for by just seven countriesS6 The decline in the level o f concentration i s evidenced by the share in total net commitments o f the seven countries that were both on the FYOl and FY06 list declining, respectively, from 52 percent ($55.4 billion) to 43 percent ($41 billion). The largest decline in net commitments during this five-year period occurred in China ($6.7 billion), Mexico ($3.2 billion), Argentina ($3.1 billion), India ($2.2 billion), and Indonesia ($2 billion). On the other hand, during the same period the combined net commitments in Vietnam, Bangladesh, and Ethiopia increased from $6.7 billion to $8 billion. In comparison, this year about 70 o f the smallest borrowers account for only five percent o f net commitments. In terms o f number o f projects, however, there i s much less o f a disparity between the group o f ten largest borrowers and the group o f 70 smallest borrowers, which account, respectively, for about 26 and 21 percent o f the portfolio. These numbers illustrate the adaptability o f the Bank lending program to the diverse needs, interests and absorptive capacities o f different borrowers.

2.18 Portfolio Trend by Country Grouping. The net commitments with the largest decline (41%) over the past five years concerns the IBRD Investment Grade (IG) grouping o f countries (Table 2.3). The IG and IBRD Only net commitments, however, held steady in FY06 due to a large increase in lending over FY05, by almost 40 percent to IG countries and nine percent to IBRD Only countries, but this was offset by an increase in the volume o f exits. China and India have the two largest single country portfolios. Similar to IG country net commitments, China’s net commitments have declined by 39 percent during the period FYO1-FY06, and by 11 percent in FY06. Although lending to China increased in FY06 by 37 percent to $1.5 billion, exits exceeded approvals. Declines in India’s net commitments in FY06 are mainly due to lower lending by almost $1.5 billion and a large volume o f exits. Problems in lending to India’s health sector have now been resolved and there are encouraging signs for strong lending in FY07.

The ten largest borrowers in FY06 were India, China, Turkey, Brazil, Vietnam, Argentina, Mexico, Indonesia, Bangladesh, and Ethiopia, which had a combined population o f close to 3.4 billion or 62 percent o f the total population o f Low and Middle-Income Countries. The seven largest borrowing countries in FYO 1 were China, India, Mexico, Brazil, Argentina, Indonesia and Turkey.


TABLE 2.3: PORTFOLIO BY CLIENT GROUPING (US$ BILLION)

Commitment % Change FYOl -06 FYOl FY05 FY06

IBRD Investment Grade China IBRD Only (Others) India Blend IDA Only LICUS Multi-Countrv

18.4 17.5 27.3 13.5 7.3

21.4 2.9 0.1

10.9 12.0 25.7 12.8 5.6

23.5 4.4 0.7

10.8 10.7 25.5 11.3 6.1 25.2 4.4 1.2

-4 1 -39 -6 -16 -16 18 53 799

Ban k-wide 108.3 95.5 95.2 -1 2

2.19 Fragile states or L ICUS countries represent a critical challenge for the Bank and make up a significant segment o f IDA’S portfolio (Statistical Appendix, Table 2.8). Two regions, AFR and EAP account for two-thirds o f the L ICUS portfolio by number o f projects and AFR accounts for about two-thirds o f L ICUS net commitments (Table 2.4). The increase in the portfolio size o f the L ICUS countries during the past five years i s in major part due to high levels o f lending to Afghanistan and Democratic Republic o f the Congo.

TABLE 2.4: PORTFOLIO IN FRAGILE STATES (LICUS) BY REGION

Portfolio Size (FY06) Region Net Commitments

$ M o/. No. of Projects

EAP ECA LCR MNA

24 12 5 8

254 271 70 83

SAR 17 873 20 Ban k-wide 122 4,397 1 oo* * Figures do not tally due to rounding.

2.20 N e t commitments for multi-country or regional projects have increased from an insignificant level in FYOl to $1.2 bi l l ion in FY06, with most o f the increase in the Africa Region. The multi- country portfolio i s mainly focused on regional infrastructure (e.g., power and gas grids), export promotion through trade facilitation, transport corridors and financial sector integration. Given the impetus provided under IDA 14, and challenges o f such multi-country projects, it i s recommended that the upcoming assessment o f Quality-at-Entry pay particular attention to the quality o f these operations.

NETWORKS, SECTORS AND THEMES

2.21 The Networks with the largest portfolio remain INF, HDN and ESSD, and together they account for 87 percent o f total net commitments (Table 2.5). The INF portfolio i s the largest, with net commitments representing 46 percent o f the total. The HDN Network has seen i t s portfolio continuing to decline. The decline o f the P R E M Network portfolio has to be seen in the context o f


increases in single tranche DPLs, which are approved and disbursed in the same year, and, therefore, do not show up in the stock o f the end-year portfolio. Despite increased lending in FY06, PREM’s portfolio declined because exits exceeded approvals. Approvals in FY06 for PREM, PSDN and FSE have increased by $1.4 billion, $0.8 bi l l ion and $0.5 billion, respectively, over FY05, but approvals for HDN, ESSD and INF have declined. For the first time in the past f ive years, new portfolio entries have been larger than portfolio exits resulting in a small increase in the portfolio in terms o f number o f projects.

TABLE 2.5: PORTFOLIO DISTRIBUTION BY NETWORK (US% BILLION)

Net Commitments Network

FYOl FY05 FY06 ESSD 22.4 19.3 19.9 FSE HDN INF PREM

4.2 24.5 43.9 10.4

3.3 22.3 42.5 5.8

3.5 19.8 43.6 5.0

PSDN 2.8 2.2 3.3 Bank-wide 108.3 95.5 95.2

2.22 The five largest sectors in the Bank’s portfolio are Transportation; Public Administration, L a w and Justice; Health and Other Social Services; Water and Sanitation; and Energy and Mining, together accounting for 72 percent o f total net commitments (Table 2.6). Transportation has remained the largest sector in the Bank’s portfolio, with net commitments at about $20 b i l l ion in FY06 and FYOl. The Energy and Mining sector shows the largest variation among al l sectors, with a decline in net commitments from $14.2 b i l l ion in FYOl to $10.1 bi l l ion in FY06, with most o f the decline occurring in electric power. In this context, recent initiatives (see Box 2.3) should help position the Bank strategically for greater relevance to meeting clients’ needs for competitive and economic electric power supply. N e t commitments for a l l other sectors have either declined significantly or remained only slightly below the levels in FYOl (Statistical Appendix, Table 2.7).

2.23 In terms o f themes that typically cut across sectoral boundaries, the current portfolio for Financial and Private Sector Development i s the largest at 18 percent o f total commitments, slightly below the level in FYOl (Table 2.6). The share o f the portfolio for Human Development, Public Sector Governance, and Trade and Integration has grown during the period FYO1-06, while the share o f Environment and Natural Resource Management has experienced the largest decline from 16 percent in FYOl to 12 percent in FY06. I t i s worth noting that because the statistics collected and reported in the SAP are based on operations mapped to sectors, it i s diff icult to track and assess cross-cutting themes such as gender because there are currently no operations mapped to gender. A related issue i s the frequent failure by TTLs to select gender as a theme even when the operation may have gender implications or components.


TABLE 2.6: PORTFOLIO BY SECTOR OF FOCUS AND THEME (Yo SHARE IN COMMITMENTS)

Sectormheme FYOI FY06 Sector

Agriculture, fishing, and forestry 9 9 Education 9 9 Energy and mining 13 11 Finance 6 5 Health and other social services 13 12 Industry and trade 5 5 Information and communications 1 1 Public Administration, Law, and Justice 16 17 Transportation 19 21 Water, sanitation and flood protection 10 11

Total* 100 100

Theme Economic management Environment and natural resources management Financial and private sector development Human development Public sector governance Rule of law Rural development Social devlg ender/i ncl us ion Social protection and risk management Trade and integration

2 16 19 11 8 2 14 7 6 3

1 12 18 13 9 2 14 8 7 5

Urban development 13 12 Total* 100 100 * Figures do not tally due to rounding.

2.24 N e t commitments for the Financial and Private Sector Development (FSE and PSDN) increased from $5.5 bi l l ion in FY05 to $6.8 bi l l ion or seven percent o f the total net commitments in FY06 (Statistical Appendix, Table 2.3). However, since this theme i s frequently included as a component or objective in multi-sectoral operations, i t s share o f total net commitments at 18 percent i s much higher. A Q A G review o f compliance with the Bank’s Operational Policy 8.30 for Financial Sector Operations managed by non-FSE units has raised several compliance issues. Additional reviews were carried out to assess the performance o f the fol lowing non-dedicated components (Le., the relevant components are included in operations being managed by another sector unit): Transport, Water Supply and Sanitation, and Information and Communication Technology. Findings from these reviews raise concerns about the quality o f Bank performance in preparing and supervising non- dedicated components in multi-sector operations, as compared with single sector operations. These assessments recommend greater inputs from sector specialists and allocating additional budgets for the supervision o f these non-dedicated components.


CONCLUSIONS AND RECOMMENDATIONS

2.25 The earlier declines in the portfolio have been stabilized, and both IBRD and IDA approvals and disbursements continued the upward trend o f the past two years. Recommendations aimed at better tracking and monitoring changes and trends in portfolio composition include:

0 Given the increasing volume o f recipient-executed Trust Funds and reputational risks they pose for the Bank, it i s recommended that they be recorded in the Bank’s portfolio, and subjected to regular Bank processes and quality assurance mechanisms for tracking and managing the health o f the portfolio; and

In view o f the growing volume of: (i) Additional Financing operations; (ii) multi- country or regional projects; and (iii) multi-sector operations, it i s recommended that they should be given special attention in the upcoming assessment o f Quality-at-Entry o f operations approved in FY06 and FY07.

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111. PORTFOLIO PERFORMANCE

3.1 The improving trend in development outcomes o f completed projects financed by the Bank continued in FY06 with satisfactory outcomes now surpassing the agreed target o f 80 percent. There are, however, substantial differences in performance by the type o f client, Region and Sector Board, suggesting opportunities for further improvements. While country capacity i s a key determinant o f success, Bank performance on quality-at-entry and the quality o f supervision are also important in ensuring that problems are identified early and issues addressed appropriately.

3.2 The recently completed Quality o f Supervision assessment suggests that while overall supervision performance remains commendable, some aspects, particularly monitoring and evaluation and reporting o f portfolio risks continue to be problematic. QSA panels found that over ha l f o f risky and problem projects are not being identified as such by staff and managers. One major consequence o f this i s that portfolio performance indicators (e.g., Projects-at-Risk, Realism Index, and Proactivity Index) derived from staff ratings, have become less reliable for tracking portfolio performance, undermining the Bank’s ability to adopt corrective measures in a timely fashion. Based on analysis done as a part o f this ARPP, modifications are proposed to the “Realism Index” to make it a more meaningful measure o f the quality o f portfolio reporting. The overarching issue in this respect i s o f managerial accountabilities and incentives for the quality o f portfolio reporting. Depending on the progress made on this in the coming years, further systemic changes may be necessary.

EVOLUTION OF DEVELOPMENT OUTCOMES

3.3 The development outcomes o f operations exiting the Bank’s portfolio rated satisfactory by IEG (Box 3.1) have continued the recovery that started in the mid-1990s. In FY06, satisfactory development outcomes are estimated to be 81 percent by number o f projects, and 91 percent when weighted by disbursement. Because o f significant year- to-year volatility, the development outcome trends are best analyzed using three-year moving averages (Figure 3.1). On that basis, ten years ago, one out o f three operations exited the portfolio with unsatisfactory outcomes accounting for a quarter o f the disbursements. Now, only one out o f five operations, i s unsatisfactory, accounting for about 12 percent o f disbursements.

BOX 3.1: RATING SCALE

As part o f the harmonization effort, IEG, OPCS and QAG have agreed to use the same six-point scale for rating purposes.

The f i r s t three ratings (Highly Satisfactory, Satisfactory and Moderately Satisfactory) indicate a satisfactory outcome (Le,, above the line) while the last three ratings (Moderately Unsatisfactov, Unsatisfactory and Highly Unsatisfactory) indicate an unsatisfactory outcome (Le., below the line). Unless specified otherwise, the terms “satisfactory” or “unsatisfactory,” when used in this chauter, follow the above definitions.


FIGURE 3.1 : DEVELOPMENT OUTCOMES (FY80-06)

+3-Year Moving Avg. (by number of projects)

+ 3-Year Moving Avg. (weighted by disbursement)

Source: IEG except for FY06* which i s a QAG projection.

3.4 Development Outcomes by Region. A breakdown o f satisfactory development outcomes for FY03-06 by number o f operations shows significant variations across Regions (Table 3.1). EAP, ECA, L C R and SAR have satisfactory outcome ratings in the 80 percent plus range, while AFR and MNA’s satisfactory outcomes are in the l ow 70 percent range. Satisfactory outcomes, weighted by disbursements, are slightly better for most regions. EAP and E C A regions have disbursement weighted satisfactory development outcome ratings in the 85-90 percent range, and SAR, MNA are also in 80 percent plus range. AFR and L C R have disbursement weighted satisfactory outcomes slightly below the 80 percent plus level o f other regions. LCR’s low satisfactory outcomes rating at 78 percent, weighted by lending amounts, i s mainly due to relatively poorer performance o f DPLs at 75 percent than for investment operations at 81 percent).

TABLE 3.1: OUTCOMES BY REGION AND LENDING INSTRUMENT (FY03-06)

DPL INVESTMENT ALL OPERATIONS Outcome Outcome Outcome

Region Outcome by by Dollar Outcome by by Dollar Outcome by by Dollar Number Amount Number Amount Number Amount % Sat. % Sat. % Sat. % Sat. % Sat. % Sat.

AFR 75 78 68 78 70 78 EAP ECA LCR M NA

88 98 82 90 83 91 91 98 81 79 83 87 80 75 83 81 82 78 100 100 69 76 72 82

SAR 86 90 79 79 80 82 Bank-wide 83 82 77 83 78 82

3.5 The low satisfactory outcomes in AFR reflect both “country” and “Bank” factors. AFR i s home to the ten poorest countries receiving Bank assistance and these countries account for 28 percent o f the region’s total net commitments. Completed projects in Fragile states (LICUS


countries) in the Africa region (Table 3.2) have satisfactory outcomes o f 48 percent. These countries have diff icult environments, with weaknesses in governance, institutions and policies, al l outside the Bank’s control, which explain a good part o f the lower outcome ratings. However, lower Quality-at- Entry and Quality o f Supervision in these countries, which are fully within the Bank’s control, are also contributing factors. Satisfactory development outcomes in AFR improved to 70 percent in FY03-06 from 64 percent in FY00-02, and when weighted by disbursement, to 78 percent from 65 percent. The l o w satisfactory development outcome in MNA at 72 percent during FY03-06, compared to 82 percent in FY00-02, i s similarly due to the problems in Fragile states, which have satisfactory development outcomes o f only 43 percent. Year to year data on L ICUS outcomes i s also presented in Statistical Appendix, Table 3.18.

3.6 Fragile States or L ICUS countries represent critical challenges for the Bank and in particular make up a significant segment o f the IDA portfolio (Table 3.2). There i s large scope for improvement in Quality-at-Entry and Quality o f Supervision, both o f which are aspects under the Bank’s control. The Bank has introduced the LICUS initiative since 2002 and an IEG review o f the initiative was completed in FY06.7 The review’s main conclusion was that, “the initiative has increased Bank attention to LICUS, but it i s too early to assess outcomes.” However, the review identified organizational capacity as a major constraint to implementation in a L ICUS context. Bank management i s taking a number o f actions to enhance the Bank’s organizational response through a three-tier strategy focused on: (i) the increased field presence in Fragile states; (ii) the establishment o f a stand-by capacity o f experienced sector and operational staff to support Bank teams in emergency and crisis situations; and (iii) the provision o f stronger institutional back up to emergency and fragile situations through additional guidance, cross-country sharing o f lessons, and rapid response teams in central and regional units. Furthermore, the enhanced organizational response and a new OP/BP on Rapid Response to Emergencies will shortly be presented to the Board. These measures should improve Bank performance and also help improve the quality o f operations in Fragile states.

TABLE 3.2: OUTCOMES IN FRAGILE STATES (LICUS) BY REGION

Region No. of Projects IEG % Satisfactory (FYO3-06) AFR 42 48 EAP ECA LCR MNA

14 13 0 14

64 77 NA 43

SAR 3 100 Bank-wide 86 56 * Figures do not tally due to rounding.

3.7 High satisfactory outcomes, however, are possible even in countries with low income and lower institutional capacities. Clients with especially high or low satisfactory outcomes are shown in Figure 3.2. The high performing group includes clients from most Regions.

’ Engaging Fragile States, IEG, 2006.


FIGURE 3.2: FY03-06 OUTCOMES FOR SOME SELECTED CLIENTS

OUTCOMES OREPITERMAN 85’hSAllSFACTORY OUTCOMES LESS M A N 65% SAllSFACTORY i o 0

so

* 80

[ 70

60

60 Bosnia- Colombia Tanzania, Armenia Kosovo, China Bazil West Bank and Bolivia Ghana Russian

krzegovina. Tunisia Nicaraoua c3aza Federation Romania, Vietnam

3.8 Development Outcomes by Sector Boards. A detailed analysis o f development outcomes by major Sector Boards (Table 3.3) shows that their relative performance varies significantly when measured based on the number o f projects and when weighted by disbursement. The Transport sector continues to outperform other sectors in satisfactory development outcomes in terms of number o f projects, while four sectors (Environment, Public Sector Governance, Health, Nutr i t ion and Population, and Private Sector Development) have satisfactory development outcomes below the Bank’s average o f 78 percent. When weighted by disbursement, only three Sector Boards (HNP, Economic Policy, and Environment) have satisfactory development outcomes that are below the Bank’s average o f 83 percent. It should also be noted that Network affiliation does not seem to have much impact on development outcomes as both higher performing and lower performing sector boards are found in each Network; e.g. Rural and Environment in ESSD, and Education and H N P in HDN. These results underscore the need for more cross-fertilization between Sector Boards in the same Network.

TABLE 3.3: OUTCOMES BY SECTOR BOARD (yo SATISFACTORY, FYO3-06)

% SATISFACTORY % SATISFACTORY (by no. of Projects) (Weighted by Disbursement) Sector Board ‘’

Transport 91 91 Rural 84 86 Financial 84 96 Education 83 84 Water & Sanitation 83 93 Economic Policy 81 65 b’

Social Protection 81 94 Urban Development 79 84 Energy, Mining & Telecom 78 85 Environment 71 73 Public Sector Governance 69 87 Health, Nutrition, Population 64 64 Private Sector Development 61 83 Bank-wide 78 83

a/

b/

For Sector Boards with 15 or more evaluations.

Satisfactory development outcomes for the Economic Policy Sector on a weighted disbursement basis are low mainly because of one large DPL operation that exited in FY03. Excluding this one DPL, satisfactory outcomes, weighted by disbursement, for EP would have been 92 percent.


3.9 With development outcomes at 64 percent satisfactory by number o f projects, the HNP sector faces performance problems, particularly in low CPIA countries. Improved performance o f HNP, including the HIV/AIDS portfolio, especially in the AFR region (Box 3.2), i s critical for progress in achieving the MDGs. Project designs need to be better adapted to a country’s implementation capacity. Also needed are proactive supervision efforts with a focus on the use o f performance indicators to assess progress on results, and candid and timely recognition of, and prompt actions to resolve, implementation problems. In Environment, excessive project complexity, weak institutional capacity, inadequate implementation readiness, and failure to restructure problematic projects are the main problems. A new H N P strategy i s at an advance stage o f preparation. I t discusses issues o f poor sector performance and proposes to sharpen Bank focus on results on the ground and on concentrating future Bank efforts on i t s comparative advantages, particularly in health system strengthening, health financing and economics. It also proposes to support government leadership and international community programs to achieve these results and to exercise greater selectivity in engaging with global partners.

BOX 3.2: AFRICA REGION HIV/AIDS PORTFOLIO

The Multi-Country HIV/AIDS Program (MAP) was launched in 2000 as a multi-sectoral, emergency response to the epidemic, focusing on advocacy, capacity building, and adopting “exceptional” measures to combat the disease, especially through community engagement. Twenty-nine country and four regional projects were approved with credits and grants totaling $1.32 billion, of which roughly two-thirds has been disbursed. A self-evaluation by the Region o f the MAP Program found that, in addition to increasing access and significant service delivery in prevention, care and treatment, the MAP Program has been catalytic in bringing development partners together to pursue harmonized procurement, supply chain management procedures, M&E systems and the development o f unified national AIDS strategies. The final outcome of these operations, however, i s a cause for concern. According to IEG ratings, more than half o f the completed HIV/AIDS projects in the Region have unsatisfactory outcomes. QSA7 Panelists noted the overly ambitious Development Objectives o f these projects and under-estimation o f difficulties during implementation. Other areas for improvement included: M&E, procurement, and project management and coordination. Based on better epidemiological knowledge and information, and lessons from experience, the Region i s addressing these shortcomings through:

restructuring o f the projects by revising their development objectives, and strengthening of the results scorecard;

heightened focus on capacity building, particularly with regard to fiduciary aspects and M&E; and

providing extra support for project supervision and portfolio monitoring.

The Region has also introduced an early warning system to identify potential problems. Some early success has been achieved in improving the supervision o f HIV/AIDs projects in Africa and the supervision of Guinea HIV/AIDs Project was judged to be “Highly Satisfactory.” This effort needs to be continued to improve the results from the rest o f the portfolio.

3.10 QSA data suggests significant missed opportunities due to lack o f candor in the Public Sector Governance sector. L o w development outcomes by number o f projects in this sector are o f particular concern because o f the Bank’s increased focus on improved public financial management, public administration, legal and judicial reform, and governance. M a i n problems with completed projects include: complex project designs, weak institutional arrangements, lack o f correct appreciation o f


government commitment to reform actions, inadequate attention to political economy issues of proposed reforms, inadequate risk management, and limited use o f performance indicators to assess progress.

3.1 1 Gender. Although the quality o f supervision o f gender issues shows a slight improvement in QSA7 compared to the QSA6 level, it continues to be low. Panels noted that, while many Task Teams readily acknowledged the relevance o f gender issues, there was a sense that they lacked support and guidance in dealing with these issues during supervision.

3.12 Development Outcomes by Source of Funding. IDA operations had a satisfactory outcome rate o f 77 percent in FY06 compared to 72 percent in FY03 on a three-year moving average, while IBRD operations had a satisfactory outcome rate o f 85 percent in FY06 with a similar improving trend. Despite this overall improvement, however, outcomes in L ICUS countries remain generally l o w (para. 3.6). In contrast, according to IEG, M I C operations that exited the portfolio during FY03- FY06 have achieved satisfactory development outcomes o f 82 percent.

3.13 Development Policy Lending Operations (DPLs). As shown in Table 3.1, DPLs have similar disbursement weighted satisfactory outcome levels (82%) to those o f investment operations (83 percent). However, the performance o f investment operations by numbers i s somewhat lower because o f the impact o f smaller countries, especially those with lower income.

3.14 Single Tranche DPLs. This category (para. 2.4) includes an increasing share o f al l DPLs and comprises operations that are approved and fully disbursed in the same year. Satisfactory development outcomes for single tranche DPLs were in the 90 percent plus range in FY06 on a three- year moving average. Wh i le nine o f these operations were unsatisfactory (four in AFR, three in LCR, and two in SAR), none o f them rated the Development Objectives (DO) in the ISRs, in part because these DPLs are approved on the strength o f up-front actions.

TRACKING OF DEVELOPMENT OUTCOMES

3.15 The Bank has been a pioneer in evaluating and reporting development outcomes o f projects and programs it supports. Currently, a l l projects at completion are subject to Implementation Completion Reports (ICRs) by staff with independent validation o f their findings and lessons by the IEG through desk-based I C R Reviews (ICRRs). Additionally, IEG prepares more in-depth Project Performance Assessment Reports (PPARs) for about 25 percent o f completed projects (Box 3.3). PPAR ratings override IEG’s earlier ICRR ratings, so that the portfolio-wide results reported by IEG are a combination o f those in the PPARs (for about a quarter) and the ICRRs (for the remainder). As explained in Box 3.3, IEG does not select projects for PPARs based on a random or representative sample; accordingly, it i s not possible to extrapolate the PPAR findings to the entire portfolio.


BOX 3.3: EVOLUTION OF PPAR COVERAGE BY IEG

Until the early 1980s, IEG prepared Project Performance Audits on all projects about one year after exit to analyze the extent to which project objectives had been attained and reasons for deviation. The main factor for 100 percent coverage o f completed projects for independent audits was driven by the Board’s concerns for accountability of Bank Management. In 1983-84, the audit coverage was reduced to 50 percent of completed projects because o f the budgetary and staffing reality of IEG’s growing portfolio and studies program. The audit ratio was fkrther reduced to 40 percent in 1986 and again to 25 percent in 1997 to generate the resources needed to allow IEG to focus on evaluations at a Country, Sector and Thematic levels. The audit ratio remains at 25 percent today.

The PPAR has evolved into an in-depth project evaluation based on field work, and i s prepared by IEG on average within three years after project completion. Projects for PPARs are selected along a number of criteria, including the potential to learn lessons fiom innovative projects, usefulness as building blocks for IEG’s Sector, Thematic, and Country Assistance Evaluations, and lack of information in the ICR or difference of opinion between IEG and the Region on ratings between the ICR and ICR Reviews.

3.16 Tracking o f development outcomes i s important to improve the effectiveness o f the Bank’s operational work, to strengthen institutional accountability, and to help reduce reputational risks to the Bank. Several important steps are already underway to strengthen the Bank‘s outcome tracking system including strengthening o f Project-level M&E systems to provide better underpinning for evaluations and refinements o f the ICWICRR process to resolve methodological issues. In partnership with DEC, IEG i s also considering detailed statistical analysis o f the PPAR data to look for further insights into the historical trends.

BANK’S PERFORMANCE DURING PROJECT PREPARATION AND SUPERVISION

3.17 IEG evaluation data suggest that while country factors are the strongest predictors o f project outcomes, the Bank’s performance i s also a major contributory factor. Satisfactory Bank performance during preparation and appraisal leads to better project design adapted to country situation. Improved risk identification and mitigation during implementation, and project restructuring to adjust to changing country circumstances, also contribute to successful outcomes.

3.18 Quality-at-Entry. Since FY97, QAG has carried out seven assessments o f Quality-at-Entry, and the results were reported in the last ARPP. The last Quality-at-Entry assessment o f projects approved in FY04-05 (QEA7) shows that overall satisfactory quality i s about 90 percenta8 A breakdown o f the findings o f QEA7, however, shows that 28 percent o f projects are in the moderately satisfactory category, indicating missed opportunities during preparation for corrective actions to enhance development i m p a ~ t . ~ Shortcomings in Quality-at-Entry can be addressed by paying more attention to the following four main factors that have been shown in IEG evaluations and QAG assessments to contribute to successful outcomes:

* Projects in LICUS have lower Quality-at-Entry at 80 percent satisfactory. MIC operations, on the other hand, have higher Quality-at-Entry at 97 percent satisfactory.

Starting with QSA6 and QEA7, QAG shifted the assessment fiom a four to a six-point scale of Highly Satisfactory (HS), Satisfactory (S), Moderately Satisfactory (MS), Moderately Unsatisfactory (MU), Unsatisfactory (U) and Highly Unsatisfactory (HU).

9


0 Lower project complexity that better matches the design with a country's institutional capacity;

Comprehensive assessment o f the risks and feedback into project design;

Operationally relevant results framework and baseline data at entry; and

Greater project readiness for implementation at entry. 0

3.19 Quality of Supervision. The recently completed Seventh Quality o f Supervision (QSA7) assessment o f the Bank's performance during supervision in FY05-06 shows overall satisfactory quality at 95 percent compared to 90 percent in QSA6 (Table 3.4). The share o f the portfolio in the moderately satisfactory category, however, has increased to 43 percent from 25 percent in FY03-04. In addition, supervision quality in the satisfactory or better category has declined from 65 percent in FY03-04 to 52 percent in FY05-06, across al l quality dimensions (Figures 3.3A and 3.3B). These results are a cause o f concern and indicate missed opportunities as well as substantial room for improvement. At the regional level, ECA, AFR, MNA and SAR have improved their performance in QSA7, while EAP and L C R have shown a slight decline.

TABLE 3.4: QUALITY OF PROJECT SUPERVISION QSA6 (FY03-04) and QSA7 (FY05-06)

of which % Satisfactory % Moderately Satisfactory

QSAG QSA7 QSAG QSA7 Region AFR 85 97 32 36 EAP 96 92 17 49 ECA 90 98 10 34 LC R 100 94 31 47 MNA 75 93 33 55 SAR 80 93 28 52

Network ESSD FSE HDN INF PREM PSDN

86 94 100 100 91 90 94 100 91 91 77 92

Source of Funds IBRD 94 94 IDA 88 97

32 44 32 53 35 41 22 47 10 46 0 8

25 50 25 41

LICUS I' 88 52

Ban k-wide 90 95 25 43 ' QSA6 assessment was not stratified by LICUS group o f countries.


3.20 Quality o f supervision in LICUS countries at 52 percent moderately satisfactory and 88 percent satisfactory i s below the Bank's averages. Major issues are: (i) lack o f focus on development effectiveness, including efforts to build capacity and approach to building institutions; (ii) lack o f management guidance on and responsiveness to supervision issues; and (iii) poor quality o f project performance ratings. L ICUS operations also have very l ow ratings on sustainability. With extremely weak institutions in LICUS, more focus on institution building and the intensity and quality o f Bank supervision could have a major impact on project outcomes. The Bank needs to assign more experienced staff and managers to supervise projects in these countries, as research has shown that supervision can have a high pay o f f in terms o f improving outcomes.

FIGURE 3.3 - QUALITY OF SUPERVISION BY DIMENSION

FIG. 3.3(A) lo QSA6 and QSA7 (YO S+)

FIG. 3.3(B)11 QSA7 (YO M S + and S+)

R1 R1

R4 R2

: Focus on Development Effectiveness : Supervision of FiduciarylSafeguard Aspec

R3: Adequacy of Supervision Inputs and Processes R3 R4: Candor and Quality of ISR R3

0 QSM, % S+ 0 QSA7, % S+

O%MS+ El%S+

3.21 A detailed analysis o f QSA7 shows the following main weaknesses:

0 Failure to correct in a timely manner quality-at-entry problems related to weaknesses in project design, poor quality o f results framework in the PAD, lack o f readiness for implementation at approval, and inadequate risk assessment;

Lack o f timely identification and assessment o f threats to achievement o f development outcomes;

lo S+ only includes two o f the three ratings that are above the line (Le., Highly Satisfactory and Satisfactory).

MS+ includes the three ratings that are above the l ine (Le., Highly Satisfactory, Satisfactory and Moderately Satisfactory).


0 Inadequate management attention and actions. Supervision efforts by, and the skill mix o f task teams, are areas where more effective guidance and support from both country and sector management could have made a difference;

Inadequate budget resources in about a fifth o f the sample; and

Poor performance reporting o f QSA7 projects resulting in understatement o f the riskiness o f the portfolio as reported to management. The ISRs continue to suffer from lack o f candor and there are problems with the quality and timeliness o f data to support performance indicators. Compared with the ISRs, panelists identified twice as many problem projects and three times as many risk flags in both FY05 and FY06.

3.22 Quality o f supervision can be improved by more attention to the following:

Ensuring that needed technical expertise i s present in supervision teams;

Strengthen incentives and accountabilities to improve the quality o f supervision reporting;

Address factors that impede timely management attention and actions on supervision issues;

Address supervision skill mix issues by ensuring that decentralized staffs have adequate access to specialized and global skills;

Provide guidance and training to task teams in the area o f improving the results framework, including disseminating best practice examples across regions; and

Ensure that procurement and financial management specialists are better integrated with supervision teams.

0

0

PORTFOLIO RISKS AND REALISM OF RATINGS

3.23 The effectiveness o f the system to measure portfolio performance and status (Projects-at- Risk f lag system, Realism Index, and Proactivity Index) depends on the quality o f the ISRs (Annex 2). However, if risks are under-reported in the ISRs, management’s ability t o focus t imely attention on problems i s compromised. As reported in previous ARPPs, candor and realism o f portfolio reporting are long standing problems. In response to proposals in previous ARPPs, some actions have been initiated:

In early 2005, revisions to ISR system placed greater emphasis on results and made them more issues and action oriented;

Some regions, particularly AFR, are strengthening supervision effort for problem projects, and this i s encouraging more candid reporting by TTLs and sector managers (Box 3.4); and

Intensified attention from senior managers, as in the case o f Net Disconnect between IEG ratings and the ratings in last ISR, has provided increased incentive for managerial attention.

Nevertheless, the overall situation remains problematic.


3.24 Based on the FY06 ratings in the ISRs, only ten percent o f the portfolio was classified as having serious problems and a further four percent acknowledged as having potential problems. Based on this, other related indicators (realism and proactivity) are currently being reported and used (Statistical Appendix, Tables 3.1 and 3.2). However, QAG’s analysis shows that the following three factors raise questions about the reliability o f the current portfolio risk system:

0 Excessive optimism in the ratings means that many risky and problematic projects are not being identified as such by staff and managers, and, therefore, do not generally receive the resources and attention they require. Validation o f the ISR ratings by the QSA7 Panels shows that 14 percent o f the FY06 portfolio i s at risk o f not meeting i t s development objectives (DOs) and an additional 11 percent o f the portfolio i s having implementation problems and require intensive attention (IP unsatisfactory), for a total o f 25 percent o f the portfolio facing serious issues;

The Net Disconnect (the gap between the ratings for DO in the last ISR before closing and IEG’s outcomes ratings at exit), which declined from 15 percent in FY03 to seven percent in FY04-06, may be sending a false signal o f improved candor in reporting (Figure 3.4). Analysis shows that the lower level i s too often due to downgrading o f the DO ratings in the last ISR before project closing (through so called “death-bed conversions”). When measured based on ISR ratings one year prior to closing, the Net Disconnect during FY04-06 was about 13 percent. While such late downgrading o f the DO ratings in the ISRs reduces the Net Disconnect (which i s monitored by senior Management), it i s more important to recognize problems early on to permit t imely corrective actions; and

In addition to serving as an “early warning” risk system for Management on the health o f the portfolio, the Projects-at-Risk rating i s used in the formula for allocation o f IDA resources. This may distort incentives for candid reporting.

3.25 QSA reviews point to frequent failures in the ISRs to trigger discretionary risk flags. Validation o f risk flags by QSA7 Panels shows that the ratings for M&E, Project Management, and Financial Management, which are good predictors o f project development outcomes, should have been rated unsatisfactory in 39, 28 and 16 percent o f the FY06 ISRs, respectively, compared to the five-six percent range assigned by regional staff and managers (Statistical Appendix, Table 3.25).

3.26 A review o f IEG’s outcomes ratings shows that whenever an ISR assigns a Moderately Satisfactory (MS) rating to the Development Objectives (DOs), there i s a higher likelihood o f the outcome being rated Unsatisfactory by IEG (31% o f the instances) than in instances where DOs in the ISR are rated Satisfactory (7%). The MS ratings are, therefore, useful to guide attention to areas where there i s a need for more focused attention to improve project performance.

3.27 A review o f the ISRs by the E C A region carried out in mid-FY06 found that 70 percent o f the ISRs were satisfactory for realism o f the key ratings. About 40 percent o f the ISRs were satisfactory on the realism o f the key ratings, and also on results framework. While results orientation was satisfactory for 75 percent o f the ISRs reviewed by ECA, it was concluded that there i s room for reducing the number o f cases where the links between indicators and ratings were perceived as weak. In some cases, the E C A review found excessive focus on implementation and disbursements to gauge progress instead o f paying more attention to progress towards meeting development objectives. Therefore, the E C A review emphasized the need for using results as the main source for justifying ratings, including cases where rating upgrades were undertaken.


FIGURE 3.4: NET DISCONNECT BETWEEN 1% OUTCOMES AND ISR RATINGS DURING FY04-06

C C 0

Q) 2 n

18 16 14 12 10

8 6 4 2 0

W04 FY05 WO4-06

1 lil %Net Disc. (IEG- DO(ISR)) 0 %Net Disc. (IEGDO(ISR-1)) I

3.28 The ISR sign o f f system by Sector Managers has not so far assured candid reporting o f potential risks and there i s a continuing perception that a Task Team Leader o f a problem project i s himself or herself a problem. The FY06 COSO Report” noted that Sector Staff and Country Management Units feel that both formal and informal incentives were primarily focused on getting projects to the Board, with quality, safeguards and supervision being secondary. Additionally, the COSO Report noted that despite the behavioral references in the annual staff performance evaluation process to teamwork, staff continue to believe that their performance i s being measured on individual rather than team achievement. Moreover, a problem project or a project that moves into the At-Risk category comes under Management scrutiny and the TTL i s asked to fix the problem quickly, in many instances without adequate Management guidance and/or resources. B o x 3.4 provides details o f an innovative process introduced in FY06 by the Afr ica Region to address this concern.

3.29 One major consequence o f the excessive optimism in the ISRs’ risk ratings i s that portfolio performance indicators derived from the ISR database-Projects-at-Risk, the Realism Index that measures the degree o f unreported problems, and the Proactivity Index that measures actions taken to resolve identified problems--have now become less reliable. They do not provide “early warning” o f risks that threaten the achievement o f project development objectives. This weakness compromises the ability o f managers to devote in a timely manner resources and attention to the more risky portion o f the portfolio.

l2 IBRD and IDA FY06 COSO Year-end Report (No. AC2006-0093), October 13,2006 (paras. 68-69).


BOX 3.4: STRENGTHENING SUPERVISION OF PROBLEM PROJECTS: THE AFRICA APPROACH

In FY06, the RVP o f the Afiica Region encouraged staff to be more candid and responsive to implementation problems. The Region provided additional funding for intensive supervision o f problem projects from an escrow fund o f $1.1 million on a demand basis. Thirty-seven problem projects received funding and results have been promising. About one-half o f these projects have been upgraded andor restructured. Lessons learned indicate the need to agree up-front on a strategy to address systemic issues, establish close l i n k s between finding and the proposed actions and expected results, and to complete corrective actions during the fiscal year. The Region i s continuing to provide additional finding for supervision o f projects in difficulty in FY07. Task Teams have been encouraged to access the funds early in the Fiscal Year. Sector Units wi l l prepare quarterly progress reports on the proposed actions.

AFR’s average supervision budget in FY06 for both problem ($136,000) and non-problem ($105,000) projects i s the highest among all regions. Average supervision budget Bank-wide in FY06 i s $1 12,000 and $90,000 for problem and non-problem projects, respectively, showing less differentiation in supervision effort between the two categories. More modest increases in budgets for problem projects can also be found in SAR, EAP and ECA. Recently-approved project restructuring procedures wi l l further improve incentives, lower procedural constraints, and encourage more flexibility during implementation.

3.30 Based on QSA findings and IEG’s exit ratings, a more realistic estimate o f Projects-at-Risk i s likely to be about 25 percent, significantly higher than the 14 percent level reported in FY06. This level i s consistent with the reported unsatisfactory outcomes o f 22 percent in FY03-06. The current Projects-at-Risk system, therefore, needs recalibration so that it can provide a more realistic estimate o f the share o f the portfolio that i s at risk o f not achieving the development objectives.

3.31 Mindful o f the increased distortions in the measurement o f portfolio performance, Q A G commissioned a special review o f the projects at-risk system, and subsequently undertook further analysis to evaluate the impact o f changes in the methodology for estimating portfolio riskiness and realism o f project ratings.13 The review recognized that the existing Projects-at-Risk system i s not producing realistic results in the absence o f adequate incentives for more candid reporting and increased managerial attention.

3.32 Revise the Realism Index. Further strengthening o f efforts to inculcate greater candor in performance ratings could be achieved by intensifying Senior Management attention to this issue; and improving incentives for recognizing implementation risks and increasing candor in the ISR ratings. Based on the findings from the latest review, the ARPP recommends revising the current Realism Index to make it a more meaningful measure o f the quality o f portfolio reporting, to simplify i ts calculation and to make it more robust. The revised Realism IndexI4 will link it directly to actual recent outcomes reported by IEG thereby making it more dependent on actual outcomes. It will be calculated as the ratio o f the number o f problem projects recognized by staff and managers to the level o f IEG’s outcomes that are below the l ine in the most recent three years (equivalent to about 1,000 evaluations), on a rol l ing basis. While there i s remarkable persistence in IEG’s ratings on a country and sector basis, it i s recognized that in some cases rapid improvement in outcomes can

“Review of the Risk Flag System,” by Marc Blanc, Nidhi Khattri, Joshua Wimpey, and Irina Tratch, July 2006; and “Improving Portfolio Management, Proposed Changes in the At-Risk Flag System,” QAG, August 27, 2006.

Currently, the Realism Index i s calculated as a ratio o f actual problem projects to total number o f projects at risk (sum o f actual problem projects and potential problem projects) (see Annex 2).

13

14


occur. Accordingly, if regions provide sufficient justification, OPCS can agree to override historic performance data and to introduce an alternative expected risk measure (e.g., by relying on the last year’s IEG ratings rather than the three year average). Applying the proposed modification will result in an init ial lowering o f the end FY06 index from 80 percent to 50 percent as shown in Table 3.5. EAP and MNA among the Regions, and Environment and Urban Development among Sectors would experience the greatest change. In contrast, the change for LCR, Transport, and Social Protection i s l ikely to be quite minimal. The target for the Realism Index would be retained at the 70+ percent level. In order to improve the index Bank-wide, some 70 additional projects (or about 5% o f the portfolio) would have to be classified as Problem Projects. Depending on the impact o f this change, other portfolio indicators may also need to be revisited in the coming year.

TABLE 3.5: COMPARISON OF CURRENT AND PROPOSED REALISM INDEX (AS OF JULY 1,2006) Active Portfolio Latest 1,000 IEG Evaluations % Realism Index

No. of Projects % Problem No. of % Unsat. Current Proposed (A) Projects (B) Evaluations (C) Outcomes (D) (E) [(B/D)VOO]

REGION AFR EAP ECA LCR MNA SAR OTH

NETWORK

ESSD Environment Rural Sector Social Development

Sub Total

FSE

HDN Education HNP Social Protection

Sub Total

INF Energy and Mining Global InformationlComm. Transport Urban Development Water Supply & Santn

Sub Total

PREM Economic Policy Poverty Reduction Public Sector Gov

Sub Total

371 229 315 209 110 151 3

130 247 20

405

53

136 152 67 355

133 Tech. 12

152 77 99

473

19 6 97 122

15 6 9 13 9 10 0

6 9 16 9

0

9 18 16 14

11 17 9 5 14 10

26 0 11 13

253 144 220 200 96 07 0

50 155 10

223

42

90 74 71

243

64 6

80 57 46

263

60 11 93 172

30 22 15 19 24 21 NA

29 17 30 21

17

17 35 21 24

25 0 11 19 22 10

19 0 27 22

72 93 90 61 100 79 NA

67 85 71 70

80

67 82 92 80

94 100 01 57 08 04

83 NA 85 84

50 26 59 71 30 40 NA

21 51 60 41

45

51 52 70 60

45 NA 75 27 65 57

100 NA 42 59

PSDN 60 10 57 39 67 26

TOTAL 1,468 11 1,000 22 80 50


CONCLUSIONS AND RECOMMENDATIONS

3.33 The conclusions and recommendations are:

Quality at Entry and Supervision. Address the areas o f weakness and missed opportunities during project appraisal and supervision;

Realism Index. Modi fy the current Realism Index, basing it on recent IEG evaluations, to make it more robust and less susceptible to under reporting o f risk. In case the regions feel that major changes in country conditions require exceptions, they can be agreed to following a review by OPCS; and

Strengthening accountabilities o f teams and managers and examining how to achieve greater realism in portfolio reporting.


IV. ANALYTIC AND ADVISORY ACTIVITIES

4.1 Analytic and Advisory Activities (AAA) are a key component o f the Bank’s tool-kit for promoting economic development and reducing poverty among i t s clients. They provide the basis for the Bank’s pol icy dialogue with clients, the development o f country assistance strategies, and the design o f effective lending programs. They are also important for building institutional capacity and promoting aid coordination and harmonization among the donor community. During FY06, the Bank spent (both from i t s own budget and TFs) a total o f $222 mi l l ion on AAA, with almost 30 percent o f the Regional country services budgets being devoted to these activities.

4.2 AAA expenditures have risen over the past five years resulting in a significant increase in outputs delivered to the clients, reflecting a conscious management decision to strengthen and deepen the AAA program. Various assessments o f AAA quality also suggest steady improvement in their relevance and likely impact with over 90 percent o f the AAA work now rated Satisfactory. However, there i s scope for greater l ikely impact through more attention to dialogue and dissemination. Despite major efforts over the past few years in strengthening the planning, tracking and managing o f the AAA program, these areas remain a cause for concern with potential for significant further gains in efficiency and effectiveness o f resources used for AAA. This Chapter presents a stock taking o f AAA activities in terms o f expenditures and deliveries, and a review o f activities by client and Networks/Sector Boards. The Chapter concludes with a discussion o f key issues and related recommendations.

TRENDS IN AAA EXPENDITURES AND DELIVERIES

4.3 Overall Expenditures and Deliveries. As shown in Table 4.1(A), overall AAA expenditures have grown from $143 mi l l ion in FY02 to $222 mi l l ion in FY06--an increase o f 55 percent in nominal terms and 31 percent in real terms. Seen in the context o f a stable Bank budget overall for the past few years, the trend in AAA expenditures i s indicative o f the increasing importance o f “knowledge” activities in the Bank’s assistance programs. During this period, expenditures and deliveries o f AAA products experienced a sharp increase between FY02 and FY03 and a modest decline between FY05 and FY06. Two factors contributed to the init ial increase. First, responding to perceived gaps in the availability o f basic building blocks o f analytical work, special priority was attached by Management to increasing the stock o f ESW reports, especially diagnostic work. These products account for slightly more than hal f the increase in deliveries and even a greater percentage o f the increase in expenditures. Second, starting in FY03, Network anchor deliveries were formally brought under the AAA governance framework, adding about 120 deliveries for that year.


TABLE 4.1A: AAA PROGRAM BY COST ($M) (BANK-WIDE)

FY02 FY03 FY04 FY05 FY06

A. Tasks in Progress at the Begining of the Year

B. Total Expenses in FY

C. Tasks Delivered in FY

D. Tasks Dropped in FY a’

E. Expenses of Tasks Delivered in Previous FYs

108 142 163 183 184 (100%) (131%) (151%) (169%) (170%)

143 168 189 200 222 (100%) (117%) (132%) (140%) (155%)

92 129 139 166 163 (100%) (140%) (152%) (180%) (177%)

7 7 16 18 24 (100%) (96%) (212%) (251%) (327%)

10 11 14 14 19 (100%) (108%) (144%) (141%) (194%)

F. Tasks in Progress at the End of the Year (A+B-C-D-E) 142 163 183 184 200 (100%) (115%) (129%) (130%) (141%)

TABLE 4.1 B: AAA PROGRAM BY NO. OF TASKS (BANK-WIDE)

FY02 FY03 FY04 FY05 FY06

A. Tasks in Progress at the Begining of the Year

B. Tasks Initiated in FY

C. Tasks Delivered in FY

D. Tasks Dropped in FY a’

787 1,065 1,256 1,222 1,087 (100%) (135%) (160%) (155%) (138%)

1,164 1,399 1,340 1,179 1,087 (100%) (120%) (115%) (101%) (93%)

725 1,065 1,037 1,045 908 (1 00%) (1 47%) (1 43%) (1 44%) (1 25%)

161 143 337 269 193 (100%) (89%) (209%) (167%) (120%)

E. Tasks in Progress at the End of the Year (A+B-C-D) 1,065 1,256 1,222 1,087 1,073 (100%) (118%) (115%) (102%) (101%)

Dropped AAA tasks that were dropped in FY07 are treated as Dropped in the fiscal year in which the last expense took place. Data as o f January 17, 2007 represents partial cleanup o f AAA program. The figures in brackets denote trends in AAA using FY02=100%. FY02 i s used as base year since this i s the first year for which comparable data i s available for such analysis. Costs include both BB and TF.

4.4 Three factors account for the decline in deliveries between FY05 and FY06. The more important one (accounting for more than hal f the decline) reflects the Regions’ drive to adopt a more programmatic approach by consolidating tasks to optimize resources, improve Management oversight, and prevent fragmentation o f nonlending activities. These efforts, in turn, help explain the more modest decline in expenditures for delivered tasks. Reduction in the number o f diagnostic reports (para. 4.12) i s the second factor contributing to the decline. The third factor was tighter


management o f the task codes through the introduction o f the TA governance framework.” These figures need to be treated with care, however, since as indicated in para. 4.24, some o f the changes are simply due to inappropriate coding16 or reporting o f AAA activities.

4.5 Along with the increase in AAA expenditures, there has also been a modest r ise in average unit cost, which at about $186,000 per delivered task i s now about 10 percent higher in (real terms) than in FY02 (Statistical Appendix, Table 4.10). This increase may reflect the added cost linked to the increasingly participatory nature o f AAA work and to greater efforts at the consolidation o f tasks noted above, at coordination with other partners, and more attention to dissemination. Three other noteworthy trends are the increase in post delivery expenditures (Le., those associated with tasks delivered in the previous year), the increase in the number o f and expenditures for dropped tasks, and the leveling o f the number o f tasks in progress. These aspects are discussed below.

4.6 Post Delivery Expenditures. These expenditures fund various activities occurring after delivery o f a task to the client (e.g., output finalization, translation o f documents, dissemination o f findings, and in some instances, further field visits). Expenditures for dissemination (for the purpose o f this analysis, they are equated with those for post delivery) are currently $19 million, or nearly double the FY02 level. This increased focus on dissemination i s a welcome development and response to earlier ARPP recommendation. However, the data should be interpreted with caution. Some dissemination activities occur prior to task delivery (i.e., they appear under the line item for tasks delivered in the fiscal year); large expenditures have been entered in the system several years after task client delivery, raising doubts as to whether they were dissemination activities; and some tasks may have required further work for completion, thus overstating the resources going into dissemination. Given that post delivery expenditures are now a significant share o f AAA expenditures, and the data reliability issues, better monitoring o f these expenditures, as wel l as o f their l ikely impact and effectiveness i s recommended. Future AAA assessments should include a review o f post delivery expenditures. Dissemination aspects are further discussed in paragraphs 4.1 8, 4.24 and 4.26.

4.7 The Bank has generally encouraged the dropping or cancellation o f activities (ESW, TA or lending) if they encounter insurmountable difficulties which would prevent them from achieving the desired results. As shown in Table 4.1(A), the cost o f dropped AAA activities increased from $7 mi l l ion in FY02 to $24 mi l l ion in FY06. Over the past three years, some 800 tasks (about a quarter o f a l l AAA tasks initiated) with an aggregate cost o f about $60 mi l l ion have been reported as dropped. Disaggregation o f the data on dropped tasks suggests the problem to be more acute in AFR, for Global and Regional AAA, and for TA. Contrary to good management practices, many dropped tasks also seem to carry a high price tag (average o f $125,000 in FY06) suggesting that they are being dropped too late in the task cycle.

Dropped Tasks.

Starting in FY05, certain ESW and TA output types (e.g., Consultations/Country Dialogue and ConferencesIWorkshops) were reclassified into T A while other ESW and TA activities were reclassified into product l ines outside the AAA umbrella.

The word “coding” refers to the selection o f a product line. Inappropriate coding or miscoding refers to the selection o f an inappropriate product l ine for a particular activity (e.g., an ESW task i s created and then used to fknd a project appraisal or supervision activity; a TA task i s created to conduct an internal knowledge activity, etc.).

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4.8 Caution i s needed in interpreting the above findings because o f the data quality. It would seem, however, that about one quarter o f the costs associated with dropped tasks could be attributed to changes in the Bank’s classification o f activities as we l l as the reclassification o f AAA activities into other product lines, which means that the expenditures were not totally lost (though the conversion distorts the true cost o f activities in the new product lines). Another 20 percent o f the costs associated with dropped activities are due to factors such as changes in the CAS or client priorities. The balance or roughly half, which represents 5 percent o f AAA expenditures, reflect probably inadequate Management oversight over the initiation, implementation and completion o f AAA activities. A priority for the coming year should, therefore, be better management o f the AAA program to bring down the volume and cost o f dropped tasks. This also points to the need for regular monitoring and for future AAA assessments to review o f dropped tasks.

4.9 Tasks in Progress. As shown in Table 4.1(B), the stock o f tasks in progress at the end o f the fiscal year, which had risen sharply in FY03, appears to be stabilizing. There were 1,073 AAA tasks in progress at the end o f FY06 with total expenditures o f about $200 mill ion. Between FY02 and FY06, there has been a modest increase in the number o f tasks in progress, while expenditures increased by about $60 mill ion. Among the Regions, AFR had the highest number o f AAA tasks in progress (288 tasks), representing 26 percent o f the total, and together with EAP these two regions accounted for about 46 percent o f AAA tasks in progress. End FY06 work in progress can also be divided into Global and Regional AAA (256 tasks costing $81 mill ion) and Country AAA (817 tasks costing $119 million). The relatively high cost already incurred for GRAAA tasks in progress (averaging $315,000 compared to $146,000 for Country AAA) i s worrisome, suggesting the need for further scrutiny.

AAA DELIVERIES BY OUTPUT TYPE

4.10 During the past couple o f years there have been several major changes in the delivery o f AAA activities along output types. The most noteworthy changes between FY05 and FY06 were the decline in the delivery o f core diagnostic reports, other diagnostic reports, policy notes, and TA products. These changes are discussed in the following paragraphs.


4.1 1 Delivery o f Core Diagnostic R e p ~ r t s , ' ~ which are a sub-set o f ESW, declined from 122 in FY04 to 81 in FY06. This was in l ine with the Bank's decision in 2004 that once gaps in country coverage by core diagnostic products (including CPAR, CFAAA, PER, POR and CEMDPR) were eliminated, the frequency o f such reports would be programmed on a country-by-country basis, depending on the types and level o f the Bank engagement and partner country priorities and circumstances, and the availability o f relevant knowledge from development partners. Another factor contributing to this decline i s the shift toward Integrative Fiduciary Assessments, which integrate in a single activity the work otherwise carried out under stand-alone PERs, CPARs, and CFAAs. This shift may also have contributed to the small increase in unit costs.

TABLE 4.2: MAJOR AAA PRODUCTS (FY02-FY06)

Deliveries (#) Initiation to Completion Costs (US$ Million) b' AAA Products FY02 FY03 FY04 FY05 FY06 FY02 FY03 FY04 FY05 FY06

ESW Reports 253 443 487 501 472 41 Core Diagnostic Reports Other Diagnostic Reports Advisory Reports

ESW Policy Noteslother Products Policy Note Other

All ESW Products

TA Output Types Client Document Review Institutional Development Plan Knowledge-Sharing Forum ModelISurvey "HOW-TO" Guidance

All TA Products

87 119 122 90 81 43 101 123 140 123 123 223 242 271 268

206 283 247 193 129 115 153 152 193 129 91 130 95 NA NA

459 726 734 694 601

17 27 22 21 21 61 83 92 90 70

26 22 13 13 11 115 129 74 95 128

46 7a 102 132 77

265 339 303 351 307

17 6 18

18 10 a

59

2 16 5 5 18

45

69 26 15 2a

23 14 9

92

5 15 12 2 16

50

82 24 18 39

27 16 12

109

3 17 14 2 9

43

96 22 22 52

36 36 NA

132

3 13 21 2 11

49

98 21 25 52

19 19 NA

117

2 17 15 2 15

52

All AAA Products 724 1,065 1,037 1,045 908 103 141 153 181 168

a/ Delivery means delivery to the client. b/ Initiation to Completion costs include post-delivery costs. Costs include both BB and TF. c/ In FY05, most Other ESW output types (e.g., ConferencedWorkshops and ConsultatiordCountry Dialogue) were

reclassified as TA.

Core diagnostic reports include Poverty Assessments (PORs), CEMs/Development Policy Reviews (DPRs), Public Expenditure Reviews (PERs), Country Procurement Assessment Reports (CPARs), Country Financial Accountability Assessments (CFAAs), and Integrative Fiduciary Assessments (PFPs).

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Annual Reuort on Portfolio Performance FY06 37

4.12 end o f FY06:

A recent review18 covering a more restricted universe o f diagnostic studies found that at the

54 percent o f active IDA-eligible c o u n t r i e ~ ' ~ had five up-to-date core diagnostic products, compared to only 13 percent at the end o f FY03, with about 85 percent o f active IDA-eligible countries having up-to-date PERs, CFAAs, and CPARs at the end o f FY06; and

There has been a growing tendency, particularly in AFR, to integrate PERs, CFAAs, and CPARs in one task.

Looking forward, for the next several years it i s unlikely that there will be major changes in the number o f core diagnostic reports prepared by the Regions.

4.13 These two ESW report type categories primarily seek to lay the foundation for sector dialogue and for Bank lending. There has been a slight decline in the number o f Other Diagnostic Reports delivered in FY06 and a leveling o f f in the number o f Advisory reports delivered. However, expenditures on these two report types have either remained constant or increased showing a continuation o f the earlier trend towards more effort on these customized reports that respond to client demand and less towards core diagnostic reports. This i s a welcome development that confirms that customized diagnostic work i s not being crowded out by core diagnostic work. This should also limit the risk o f gaps in the Bank's sector and macroeconomic knowledge in individual countries.

Other Diagnostic and Advisory Reports.20

4.14 Policy Notes. Within ESW, a noteworthy change in FY06 was the sharp decline in the number o f Policy Notes delivered to the client, which after peaking in FY05, declined by about a third, while expenditures declined by nearly 50 percent. As a result, the share o f Policy Notes in total AAA expenditures dropped from 20 percent in FY05 to 11 percent in FY06. The average cost o f Policy Notes has increased from $88,000 in FY02 to $148,000 in FY06 and appears high given that they are meant to be quick-response, short, focused pieces. By output type (Statistical Appendix, Table 4.12), Policy Notes are among the outputs showing the largest increase in preparation time (four months) compared to FY02. Short, effective Policy Notes o f the type init ially conceptualized are s t i l l being prepared but in some instances there appears to be a clustering o f related policy notes into a larger piece, which partly explains the decline in delivery numbers as well as the increase in average cost and preparation time.

4.15 Technical Assistance. There was a modest increase in TA deliveries during the period FY02-FY06 with a small increase starting in FY05 following the reclassification o f most Other ESW output types as TA. Nevertheless, Table 4.2 shows relative stability in TA delivery during the review

'* l 9

World Bank, IDA 14 Mid-Term Review: ESW Progress, October 2006.

IDA-eligible countries include both IDA and Blend countries.

Other Diagnostic reports and Advisory reports are more customized to client demand and provide macroeconomic and sector knowledge. Other Diagnostic reports include Accounting and Auditing Assessments, Corporate Governance Assessments, Country Environmental Analysis, Country Gender Assessments and Education Sector Review to name a few. Advisory reports cover topics such as Commodities, Debt and Creditworthiness, Foreign Trade, Law and Justice, Energy, Infkastructure etc.

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period. The most recent Q A G assessments o f the quality o f Technical Assistance2’ found i t s quality to be strong and often superior to that o f ESW. In particular, the assessments noted that TA was a very valuable knowledge transfer tool that had been used quite effectively by the Bank. The clearer focus and articulation o f results o f TA was generally found instrumental in making TA effective in achieving i t s objectives. The assessments found that the strength o f TA activities was their strategic relevance in support o f the client’s development agenda and the quality o f dialogue and dissemination associated with them. However, as one assessment found that these tasks were affected by coding issues, several actions have been initiated to improve performance, including the launch o f the TA governance framework in FY05.

AAA BY CLIENT

4.16 Country AAA. The increased focus on “knowledge” activities has meant a r ise in the share o f country services allocated to AAA (Le., the “Country AAA intensity”)22 from 24 percent in FY02 to 29 percent in FY06 (Statistical Appendix, Table 4.13). As i s to be expected, the intensity varies considerably among Regions and countries. Over the five-year period, MNA has had the highest intensity (34%), in part due to the large Program o f Reimbursable TA in the Gulf countries. At only 18 percent, the AAA intensity in L C R i s the lowest reflecting stronger capacity for analytical work within the Region but also perhaps a tighter budget envelope for the L C R Region. The AAA intensity was lower for IDA countries (22%) than for the IBRD borrowers (28%) due to the greater perceived priority o f lending in the former. Consistent with the agreed LICUS initiative, there has been a rapid increase in AAA expenditures in the LICUS countries with the AAA intensity increasing f rom 18 percent in FY02 to 30 percent in FY06.

4.17 The AAA program retained a high degree o f concentration during the FY02-06 period, with 10 countries accounting for 21 percent o f total deliveries and a quarter o f a l l expenditure^.^^ Seven o f these countries (India, China, Indonesia, Brazil, Vietnam, Pakistan and Philippines) are also countries with large lending portfolios suggesting considerable synergies between the lending and AAA activities. The l i s t also includes, however, two countries (Russia and Thailand) with l i t t le or no lending but where AAA i s at the heart o f the country partnership strategy. Saudi Arabia, with a f i l l y reimbursable TA program, i s the remaining country on the l ist.

4.18 Preliminary results from Phase I1 o f the Country AAA Assessment, currently underway, confirm the Phase I findings reported in the last ARPP and suggest continuing strong performance in terms o f analytical quality as well as closer alignment with client development frameworks and CAS objectives. Although the Stage I1 Country AAA assessment shows some early s igns o f progress in this area, dissemination continues to need more attention. It needs to be planned and funded as an integral part o f task design and management. All too often the Bank i s missing opportunities to integrate and disseminate AAA o f potential interest to clients. This reduces the potential o f the Bank to contribute to development as an agent o f change, particularly in the more open polit ical environments that now characterize many clients. More progress i s also needed in improving

Assessment of the quality o f Nonlending Technical Assistance delivered to the client in FY04 and the Country AAA assessment of Nonlending Technical Assistance delivered to the client during the period FY02-04.

The country intensity i s a measure of the relative effort devoted to Country AAA. I t i s obtained by dividing all AAA expenditures for a given country by all expenditures for country services for that country.

Statistical Appendix, Tables 4.6 and 4.7.

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coherence o f Country AAA programs and integrating them better with related work by other donors and by the clients themselves. The likely impact at the individual task level i s strong, particularly when the Bank facilitates and supports, rather than leads and dominates the policy-making process. However, there i s some scope to further improve l ikely impact through greater management attention, particularly during the task preparation and dissemination stages. Phase I1 Assessment covering a total o f 17 country programs i s expected to be completed in April 2007 and full results and recommendations should be available by end FY07.

4.19 Assessing AAA impact i s diff icult given attribution issues. As part o f i t s AAA assessments Q A G assesses the likely impact o f each task or country AAA program. The Country AAA assessments identified several AAA programs, whose l ikely impact was rated highly satisfactory. From the Bank’s perspective the common features o f these successful AAA programs include: i) strong managerial attention at-entry and during implementation; ii) continuity and quality o f staff; iii) strong dialogue and participatory approach to promote government ownership; and iv) adequate budgetary resources. Box 4.1 discusses several such AAA programs. In light o f the sizeable Bank resources devoted to AAA, IEG has launched an evaluation that will assess the extent to which AAA has met i t s stated objectives, and derive findings on how to improve the effectiveness with which AAA products meet their objectives. The evaluation will review the extent to which ESW/TA informs lending, policy, builds analytical capacity, informs/stimulates public debate and influences other donor activities. However, given the enormous difficulties related to attribution, IEG does not intend to evaluate A A A ’ s impact on the development outcomes related to the Millennium Development goals.

Box 4.1: Selected Country AAA Programs wi th H igh Likely Impacts

The likely impact o f the Vietnam AAA program was found extremely high in particular because it helped improve Vietnamese understanding o f the broad requirements o f moving towards and managing a market economy. The panel assessing the quality o f this AAA program also fel t that it i s likely to continue to play a significant role in the reform process. The panel noted that the Bank facilitated and supported, rather than led or dominated the policy making process.

The panel assessing the quality o f Chile’s AAA program found that i t s likely impact on the client was highly satisfactory. The panel noted that authorities have taken maximum advantage o f the Bank’s ESW work in al l areas o f the AAA program to improve policy implementation. As a result the program has had a significant impact in terms o f likely revisions to incentive arrangements for regional development and SME development, the establishment o f innovative regimes for new initiatives (social protection and rural infrastructure services) and improvements in existing national systems for financial management, procurement and financial supervision. The Panel found that managerial attention had been particularly impressive both at entry and during implementation and that highly qualified staff and consultants had been selected.

The El Salvador AAA program’s likely impact was rated highly satisfactory based on actions already taken by the government and the prospect for future actions. The panel fe l t that this program has made a substantial intellectual contribution to the government’s approach to reform and poverty reduction, as well as to the quality o f the debate at the level o f government ministries and in civ i l society at large. Key Salvadorian counterparts openly acknowledged this contribution and they and foundations and think-tanks emphasized the need for continued engagement wi th the Bank. The Panel noted the strong involvement o f the Country and PREM teams.


4.20 The MNA Region has had Reimbursable Technical Assistance (RTA) programs in five Gulf countries (Bahrain, Kuwait, Oman, Qatar, and UAE) since 2002 and in the Kingdom o f Saudi Arabia since 1975. Both programs are intended to be totally “paid for” and largely demand-driven; are not guided by country assistance or partnership strategies, and were managed in each case by a dedicated unit outside the country-sector organization.

4.21 At the MNA Region’s request, Q A G undertook separate Quality Enhancement Reviews (QERs) o f these programs in FY06, adopting an approach similar to Country AAA assessments. The main findings o f the QERs were that the Programs have been subject to ad hoc programming, and corresponding unpredictability and uncertainty because o f the absence o f a longer-term framework that defines priorities for undertaking AAA--factors that have contributed to weak internal incentives. The QERs found a measure o f ambivalence on the part o f Bank Management about the appropriate role for the Bank, the modality o f i ts engagement, the evolution o f that engagement over time similar to that o f a paid consulting firm. The QERs also noted that the limited contribution o f the Programs to capacity development and the growing reservations by the clients about the Programs also contributed to this ambivalence.

4.22 Against this backdrop, the Q A G Panel outlined three options for the hture o f the RTA program--continue along the present lines, scale back the Program, or recast the relationship with the recipient countries to that o f a sustained, strategic partner and policy advisor (as with any other client country) versus a “paid, ad-hoc consulting firm.” Following discussions o f options within the Bank and with clients, the Region i s in the process o f implementing the third option.

4.23 Regional AAA. While AAA has traditionally been directed to the country level, a growing share o f AAA output i s Regional in scope. Since FY02, the cost o f Regional deliveries has tripled (from $14 mi l l ion to $39 mill ion) compared to a 60 percent (nominal) increase in Country AAA deliveries. In FY06, Regional AAA deliveries amounted to close to one-fifth o f the total AAA delivered to the clients in terms o f number o f tasks and close to a quarter o f the total delivery cost.

4.24 Given the growing importance o f Regional AAA in the Bank’s work, Q A G assessed a sample o f such tasks delivered during July 2004 to December 31, 2005. The assessment found the quality o f Regional AAA comparable to that o f Country AAA. In particular, the likely impact o f these tasks was found to be high, above 90 percent. However, the assessment noted some missed opportunities for greater l ikely impact due to insufficient attention to dialogue and dissemination aspects. In particular, panels found that dissemination strategies at entry were often vague, imprecise, incomplete and that actual dissemination arrangements were often ad hoc and opportunistic, reflecting both a lack o f resources and wel l thought out strategy. Also, opportunities for greater impact were missed as a result o f the insufficient engagement o f key stakeholders. Panelists identified 13 good practice tasks, including the Shocks & Social Protection in Central America ESW task (Box 4.2) which was rated highly satisfactory. The assessment found that quality was good in ECA, LCR, EAP but was lagging in AFR. Another area in need o f improvement i s the quality o f trust funded tasks where weaknesses were attributed to failure to fol low the Bank’s quality assurance mechanisms. The assessment also found that improper coding and reporting o f tasks remains an issue, resulting in inflated numbers o f Regional AAA tasks and playing a large role in the apparent significant increase in Regional AAA expenditures during the period FY02-06.


BOX 4.2: SHOCKS AND SOCIAL PROTECTION IN CENTRAL AMERICA LESSONS FROM THE COFFEE CRISIS

The Shocks and Social Protection study i s part o f an ongoing engagement between the Bank and i t s counterparts in Central America on social protection, comprising both policy dialogue and operational support to governments to extend basic services to their poorest inhabitants and to protect the most vulnerable fiom the impacts o f shocks.

This $260,000 Economic and Sector work was undertaken in response to requests f iom several Central American governments for support in understanding the welfare impacts o f the coffee crisis--an unprecedented decline in world coffee prices between 1997/98 and 2001/02--and i t s broader lessons for public policy.

The quality o f this task was rated Highly Satisfactory overall. I t s strategic relevance was found particularly high given that i t s objectives were highly supportive o f the Bank’s advocacy role, o f the policy dialogue and provided a strong underpinning to strategy development. Quintessentially demand-driven, it was designed to go beyond a short-term response to a particular crisis and seek to improve the effectiveness o f social safety nets in dealing wi th any kind o f shock. The Panel also noted that the quality o f the analysis was first rate, the findings persuasively presented, and the quality o f the written output excellent.

The Panel rated the task’s likely impact as Highly Satisfactory since substantial results had already been achieved less than six months after completion o f the task. In Nicaragua, a pilot safety net program embodying the main fmdings o f the work has already been initiated. In El Salvador, a conditional cash transfer program had been launched as the f i r s t phase o f development o f a safety net. The Panel also noted that prospects for achieving further results were good in Honduras and, even though not part o f this task, in Panama and possibly Colombia as well.

4.25 Global AAA. Since FY02, the cost o f reported Global AAA deliveries has tripled (from $2 million to $6 million) compared to a 60 percent (nominal) increase in the Country AAA. However, in FY06, Global AAA remained a small share o f total AAA.

4.26 QAG assessed a sample o f such tasks delivered during July 2004 to December 3 1,2005. The assessment found the quality o f Global AAA inferior to that o f Country AAA but recommended treating this finding with caution as it may be caused by issues with the current classification o f Global activities under the ESW and T A product lines. OPCS has since agreed to review the appropriateness o f the classification o f Global activities under the AAA l ine o f products. The assessment found that some o f these global tasks had significant likely impact including the Costs o f Compliance with International Agro-Food Standards ES W task (Box 4.3). However, similarly to regional AAA, the assessment found missed opportunities for greater likely impact, due to insufficient attention to dissemination aspects. The assessment found that quality was good in HDN but was lagging in INF. As noted for regional AAA (para. 4.24) above, the quality o f trust funded tasks was also found to be weaker.


BOX 4.3: COSTS OF COMPLIANCE WITH INTERNATIONAL AGRO-FOOD STANDARDS - A GLOBAL PERSPECTIVE

This global task was to better define the nature of the agro-food standard challenge facing developing countries in international markets for high-value agricultural products in order to bring about an attitudinal and strategic shift in relation to agro-food standards and trade. Since much of the conventional wisdom held that emerging standards were barriers to trade, and that developing countries had few options to respond, this ESW was to alter this paradigm by instilling or strengthening the notions that developing countries do have room for maneuver in designing policies and strategies to ensure compliance with the standards-and hence, continued international market access and competitiveness.

The Panel concluded that this $320K task had been Highly Satisfactory overall. In particular, it noted that the strategic relevance o f the task was very high because its objectives were highly consistent with the Bank’s sector strategies in both rural development and trade. Task timeliness was found very good in the context of the stalled Doha Round of trade negotiations and the increasing recognition by three of the existing world standards making bodies that they did not have the economic competence needed to complement their technical expertise. The quality o f the written report was found outstanding, with an excellent summary and well presented recommendations.

Actual dissemination arrangements were found exemplary, including an impressive E-learning program with MI, a dedicated Trust Fund for mainstreaming, a well-designed and comprehensive website and frequent presentations by the main authors to diverse audiences.

Finally, likely impact was also rated Highly Satisfactory because the task has already had a substantial impact on governments (who have requested Bank assistance in developing strategic visions for using standards to improve national agro-food trade competitiveness or have incorporated strategic analyses related to standards as components in export competitiveness and trade studies), the wider development community, as well as the Bank.

I

AAA BY NETWORK NETWORKS/SECTOR BOARDS

4.27 There were considerable differences in the number and cost o f AAA deliveries by Networks/Sector Boards (Statistical Appendix, Table 4.2 ) and summarized below:

0 Infrastructure. After peaking in FY03, deliveries in this Network experienced a decline though expenditures continued to grow and the cost per task this year ($216,000) i s more than double the cost in FY02 ($105,000). The rapid increase in expenditures o f nearly three-fold between FY02 and FY06 was partly in response to the Bank’s Infrastructure Initiative aimed at reversing the decline in lending in the Infrastructure sectors. There are sharp year-to-year fluctuations in expenditures for AAA activities among the sectors in this Network but when considered over the last f ive years, the Urban Sector received the largest share o f resources (46%) followed by Energy (23%), WSS (13%), Transport Sectors (9%) and GIC (9%). The data need to be interpreted with care, however, as some o f the trends highlighted are possibly driven by the coding practices o f INF’s Global Programs and Partnerships (GPPs). Some GPP products that had earlier been coded as Knowledge Products are now coded as AAA and City Alliance tends to code their tasks as Bank outputs whereas some GPPs do not.

PREM. Expenditures in this Network have increased gradually over the past five years but with the rate o f increase being slower than in other Networks. As a result, although


P R E M st i l l has the largest share o f AAA deliveries, this percentage has declined from 33 percent o f the total in FY02 to 29 percent in FY06. PREM st i l l leads in the delivery o f AAA products though the Network’s share declined slightly over the period. Economic Policy accounts for nearly ha l f the expenditures in the Network. Poverty Reduction, in line with the Bank’s continued emphasis on poverty, saw an increase in expenditures o f nearly 50 percent between FY02 and FY06. There was also a sharp increase in expenditures per task to $247,000, largely reflecting the undertaking o f more substantive poverty assessments.

ESSD. Both expenditures and deliveries declined from the FY05 record level. Declines were especially pronounced in the Environment and Social Development sectors, while the Rural Sector registered an increase for the fourth year in a row.

Other Networks. The Financial and Private Sector Development Networks experienced a sharp decline in the number o f deliveries though these themes were also addressed in many AAA activities managed by other Networks. As for Human Development, the slight increase in Education and the more pronounced increase in Social Protection more than offset the decline in Health, though it was noted that Health issues (e.g., HIV/AIDS) were frequently taken up in work conducted by other sectors.

KEY ISSUES IN AAA MANAGEMENT

4.28 Zero Cost Deliveries. Bank data show that a number o f tasks are reported every year as delivered to the client with a zero cost. There are close to 300 such tasks during the review period, o f which 32 in FY06. A quick review o f the 32 FY06 zero cost deliveries shows that they are overwhelmingly located in the Afr ica Region (23 out o f 32). All Activi ty Init iation Summaries (AIS) for these tasks were approved by managers although most did not include an estimated task budget. Several AIS indicate that work was indeed carried out and an output delivered to the client although no expenditure was recorded. These anomalies affect data reliability and can be directly traced to poor managerial oversight and weak monitoring o f AAA activities.

4.29 Tracking AAA Programs. Over the past few years, Q A G assessments (most recently o f GRAAA) o f AAA Quality pointed to numerous errors in task coding and reporting in the Bank’s information system. Despite major efforts and significant improvements over the past few years, quality o f the data remains a major constraint to effective management and oversight o f the Bank AAA programs. Key problems in the management o f the AAA information system, which i s based on inputs and updates provided by the Task Teams, include:

Inadequate incentives for accurate reporting including end-of-the year pressures for inflating deliveries and reluctance to report unviable (dropped) tasks in a timely fashion;

Incomplete monitoring tools to provide management with meaningful summary information in a timely fashion. While the current monitoring system monitors AAA deliveries it does not focus on upstream monitoring o f AAA activities (Le,, monitoring entries o f new tasks into Bank systems as well as monitoring the implementation o f tasks in progress) and cannot identify anomalies in system entries in a timely fashion;


Poor quality o f task level data with reporting responsibilities often assigned to junior staff with limited familiarity o f the underlying concepts and without adequate supervision by the TTLs; and

While progress has been made in defining the ESW and TA product lines, other product lines have not yet been fully defined. This leads to frequent miscoding o f activities both within AAA and with other product lines.

4.30 The data deficiencies have meant a need for periodic “clean up” efforts to resolve problems accumulated over a period o f time, which are expensive in terms o f staff time and efforts and also make it diff icult to analyze trends over time. Eliminating the need for such periodic clean ups calls for tighter oversight o f the AAA process (e.g., work in progress, slippage, delays in delivering pol icy notes, coding, reporting and dropped projects) by Regional and Network managers. There i s also scope for OPCS, CSR, and ISG to work together with the operations staff to resolve the underlying problems for a more sustainable systemic improvement.

RECOMMENDATIONS

4.31 Considering the short period between approval o f the FY05 ARPP recommendations (strengthening management oversight, eliminating delays in AAA delivery, ensuring accurate coding and reporting and better dissemination o f results), and the preparation o f the present report, the limited progress to-date i s understandable. These recommendations, especially the first three, s t i l l remain valid. More specifically, given the issues identified in this ARPP, it i s recommended that:

Strengthen managerial oversight and monitoring o f the AAA program. The RegionshJetworks should clearly define the preferred arrangement for AAA oversight. Specifically, the responsibilities o f the Chief Administrative Officer, Chief Economist, and Quality Directors should be clearly defined;

CSR, in cooperation with Regions/Network Anchors, other concerned units (including Q A G as appropriate) and OPCS should identify a set o f indicators that would enable effective monitoring and reporting on ESW and TA activities from task initiation through task completion; and

Future AAA assessments to review dropped tasks as we l l as post delivery expenditures.


V. RECOMMENDATIONS

A. STATUS OF FY05 ARPP RECOMMENDATIONS

TABLE 5.1: IMPLEMENTATION STATUS

RECOMMENDATION I. STRENGTHEP

Improving the Quality-at-Entry of operations in low CPIA countries.

Improving Candor and Realism of portfolio performance ratings.

Improving Development Outcomes in lagging sectors (Environment, Health, Private Sector Development and Public Sector). Identifying potential weaknesses in current Fiduciary Policies and propose remedial measures.

Improving Management Oversight of M A .

Strengthening A M Dissemination.

Controlling Delays in A M Delivery.

STATUS NG LENDING AND PORTFOLIO MANAGEMENT Not Rated QEA8 (covering lending during FY06/07) to assess progress. Results to be reported in the next ARPP.

Moderately Unsatisfactory Commendable actions have been taken to put in place a system for identifying high risk operations ex-ante. However, QSA findings indicate that candor in portfolio reporting remains a serious issue.

Not Rated Too early to judge; preliminary results point to limited progress.

Satisfactory 0 A strategy paper for Strengthening Bank Group

Engagement on Governance and Anticorruption was issued and i t s implementation i s underway;

Management work are in place; and 0 Measures to strengthen the Bank’s Public Financial

0 The INT Department introduced a Voluntary Disclosure Program.

,LYTIC AND ADVISORY ACTIVITIES Moderately Satisfactory Quality and relevance of AAA activities i s high but concerns remain about effective monitoring and use o f AAA resources. In particular, AAA monitoring and oversight between task initiation and delivery i s weak and does not permit the identification of anomalies (work in progress, slippage, delays in delivery, coding, and reporting) before formal delivery.

Moderately Satisfactory Attention to dissemination has improved and additional resources are being provided but the likely impact o f these efforts remains uncertain. Moderately Satisfactory While AAA delivery overall remains within acceptable limits, slippage (the difference between planned and actual delivery) continues to grow and has now reached about eight months.


Training staff on managing for results.

Implementing the Results Reporting System.

Not rated. To be reported on separately by the Results Secretariat. QSA7 results indicate about half the portfolio s t i l l lacks a sound results framework.

Monitoring o f CAS implementation. 1 OVERALL Moderately Satisfactory

B. FY06 ARPP RECOMMENDATIONS

As summarized above, there has been only modest progress in follow-up to the recommendations o f the last ARPP, reflecting in part the relatively long lead times needed for results in some o f the areas. The realism o f portfolio risk ratings and the management o f the AAA programs, in particular continue to be problematic with significant scope for improvement. Most recommendations made last year s t i l l remain valid. The FY06 ARPP includes the following recommendations:

Include recipient-executed Trust Funds in the Bank’s portfolio, and subject them to regular Bank processes and quality assurance mechanisms for tracking and managing the health o f the portfolio;

Give special attention to Repeater and Additional Financing operations, multi-country or regional projects and multi-sector operations in the upcoming assessment o f Quality- at-Entry ;

Address the areas o f weakness and missed opportunities during project appraisal and supervision;

Modify the current realism index to make it more robust and less susceptible to under- reporting o f risk;

Strengthen accountabilities o f teams and managers and examine how to achieve greater realism in portfolio reporting;

Strengthen managerial oversight to improve tracking and management o f the AAA program. The Regions/Networks should clearly define the preferred arrangement for AAA oversight. Specifically, the responsibilities o f the Chief Administrative Officer, Chief Economist, and Quality Directors should be clearly defined;

CSR, in cooperation with Regions/Network Anchors, other concerned units (including QAG as appropriate) and OPCS should identify a set o f indicators that


would enable effective monitoring and reporting on ESW and TA activities from task initiation through task completion; and

Future AAA assessments to review dropped tasks as well as post-delivery expenditures.


Annex 1

THE PORTFOLIO -AN OVERVIEW TABLE

Fiscal Year

3pening Balance IBRD IDA TF

4pprovals in FY IBRD IDA TF

Cancellations in FY IBRD IDA TF

Exits IBRD IDA TF

Errors in reconciliation b'

PORTFOLIO: end-year balance Real

Opening Balance IBRD IDA TF

Approvals in FY IBRD' IDA TF

Exits IBRD' IDA TF

Errors in reconciliation

End-Year Balance b'

FYOl FY02 FY03 FY04 FY05 FY06

117,589 108,261 104,577 96,930 94,703 95,479 Net Commitments ($ M)

79,761 69,295 64,741 57,336 52,791 54,309 36,403 37,346 37.860 37,436 39,763 38,902 1,426 1,620 1,976 2,157 2,149 2,267

17,508 19,789 18,729 20,353 22,215 23,904 10,487 11,452 11,231 11,045 13,334 14,135 6,764 8,068 7,283 9,035 8,559 9,446 257 270 216 273 322 322

4,652 1,881 3,258 1,792 2,092 1,132 4,410 1,557 2,890 1,437 1,588 917 242 323 366 355 504 215 0 0 0 0 0 0

22,050 21,682 24,242 20,716 20,081 23,827 16,340 14,302 16,499 14,056 10,734 14,419 5,598 7,252 7,532 6,333 9,021 9,194 112 129 212 327 325 214

-134 90 1,124 -72 733 769

108,261 104,577 96,930 94,703 95,479 95,194 126,781 124,019 106,930 97,734 98,534 95,194

Number of Projects 1,593 1,561 1,543 1,516 1,466 1,451 768 718 680 642 582 567 737 739 748 753 764 765 88 104 115 121 120 119

256 252 258 265 297 301 91 96 99 87 116 112 134 133 141 158 158 167 31 23 18 20 23 22

284 275 289 319 317 290 141 133 138 149 133 125 133 125 139 147 160 147 10 17 12 23 24 18

-4 5 4 4 5 6

1,561 1,543 1,516 1,466 1,451 1,468

a/ Cancellations represent partial reduction in commitments but do not include commitments for projects that exit in the fiscal year. They therefore reduce commitment amounts but not the number o f projects in the portfolio. End-year balance may not equal opening balance plus approvals minus cancellations and exits due to synchronization errors between systems. FY06 prices, based on Manufacturers Unit Value (MW) Index. The Number o f Projects in Business Warehouse for IBRD Source o f Funds includes Blend operations.

b/

c/ d/


Annex 2

BASIC PORTFOLIO DEFINITIONS AND DATA SOURCES

PORTFOLIO DEFINITIONS

1. The portfolio covered by the FY06 ARPP includes a l l IBRD, IDA, GEF, Montreal Protocol, and Special Financing operations approved through FY06 and 'excludes those that were completely cancelled and/or closed during the fiscal year. All dollar figures are in nominal te rms unless otherwise stated. IBRD/IDA commitment deflators varied by 17 percent between FYOl and FY06. Terms used in reference to the portfolio include:

e Portfolio. All loans approved through FY06 excluding those which were closed or completely cancelled prior to the end o f the fiscal year. The portfolio includes GEF, IBRD, IDA, Montreal Protocol, and Special Financing operations. The portfolio only includes operations that are active at the end o f the fiscal year;

e Actual Problem Projects. Projects for which Implementation Progress i s rated unsatisfactory and/or the Development Objectives are rated as unsatisfactory;

e Country Client Groupings. Countries are grouped according to the level o f their income, size, risk and performance for purposes o f portfolio trend analysis. IBRD Investment Grade Countries include countries that have high credit ratings. There are presently 29 countries in this group. The LICUS country group (severe and core only) includes 26 countries with low CPIA ratings. China and India, with populations over one b i l l ion each, are in individual categories because o f their size. The other three groups are IBRD Only, IDA Only, and Blend. They are categorized according to IDA/IBRD eligibility criteria. Country groupings are mutually exclusive. Therefore, the IBRD Only group excludes Investment Grade countries and China. The Blend group excludes India, and the IDA only group excludes LICUS;

e Commitments at Risk. Commitments at risk o f not meeting their development objectives. problem projects;

This includes commitments associated with both actual and potential

e Country Policy and Institutional Assessment (CPIA). The Country Policy and Institutional Assessment i s an annual exercise in which country teams provide input to OPCS in order to assess the quality o f each borrower's policies and institutions in the areas generally considered to be relevant to economic growth and poverty reduction and effective aid use;

e Deflator. Where so indicated nominal net commitments have been converted to real terms by using Manufacturers Unit Value (MUV) Index Deflator converted to 2006 $ by using an index o f 1.17 for FYO1, 1.19 for FY02, 1.10 for FY03, 1.03 for FY04, and 1.03 for FY05;


Development Objectives (DO). The rating o f an operation’s DO i s based on the likelihood o f attaining the development objectives set in the Project Appraisal Document or as formally revised during Implementation. This rating may be satisfactory or unsatisfactory and i s the responsibility o f the Task Team Leader, who must report on it, at least, annually in the Implementation Status and Results Report. The DO rating takes into account not only implementation progress, but also other factors such as inappropriate design, unforeseeable adverse economic and financial developments, price fluctuations o f project outputs, and changes in government policy;

Disbursement Ratio. undisbursed balance at the beginning o f the fiscal year, investment operations only;

The ratio o f disbursements during the fiscal year to the

Implementation Progress (IP). The IP rating i s based on an overall judgment o f implementation performance in relation to the benchmarks in the Project Appraisal Document or as formally revised during implementation. The rating i s the responsibility o f the Task Team Leader, who reports it generally at least once a year in the ISR;

Net Commitments. Total commitments net o f cancellations for al l projects in the portfolio;

Net Disconnect. The difference between the percentage o f projects rated as unsatisfactory by IEG and the percentage rated by the Regions in the final ISR as unsatisfactory for achieving their development objectives;

Portfolio Improvement Program (PIP) Country. A country designated for intensive portfolio monitoring and supervision. Normally, PIP countries are those with 50 percent plus o f projects and/or 35 percent plus o f commitments at risk, with more than eight active projects and/or $250 mi l l ion in commitments. Once designated for intensive monitoring, graduation to normal status requires evidence o f robust and sustainable improvement;

Portfolio Improvement Program (PIP) Project. A project with more than $200 mi l l ion in commitment at risk;

Potential Problem Projects. Projects which are rated satisfactory on I P and DO but have other risk factors historically associated with unsatisfactory outcomes. The criteria to consider projects as potential problem projects are described below in the Section on “Measuring Portfolio Performance;”

Proactivity Index The proportion o f projects rated as actual problem projects 12 months earlier that have been upgraded, restructured, suspended, closed, or partially (20% plus) or fully canceled;

Projects-&Risk. Projects at risk i s the sum o f actual problem projects and potential problem projects;

Projects at risk o f not meeting their development objectives.

Annual ReDort on Portfolio Performance FY06 5 1

0 Quality-at-Entry Assessment (QEA). A periodic exercise conducted by Q A G to measure the Quality-at-Entry o f projects shortly after they are approved by the Board. Quality-at-Entry i s a prime determinant o f successhl development outcomes, and deficiencies in design are diff icult to correct during Implementation. The foundations o f a project are laid during Preparation, before it enters the portfolio. QEA7 was the last Quality-at-Entry exercise and covered al l projects approved by the Board in FY04-FY 05 ;

0 Quality of Supervision Assessment (QSA). A periodic exercise conducted by Q A G to measure the quality o f supervision for projects, during a specific period. The Quality o f Supervision Assessments are real time reviews o f overall supervision performance for the previous two years. The assessment focuses on the quality o f the supervision o f Bank projects and not on the quality o f the projects per se. The most recent exercise, QSA7, covered FY05-FY06; and

0 Realism Index The ratio o f actual problem projects to total projects at risk.

MEASURING PORTFOLIO PERFORMANCE

2. Experience shows that IP and DO ratings have tended to be over-optimistic when compared to the outcomes ratings that projects are given by IEG upon completion. To address this deficiency, the FY96 ARPP introduced the concept o f projects at risk as the basic measure o f portfolio performance.

3. Projects at risk include both actual and potential problem projects. Potential problem projects are those that, although rated as satisfactory for both I P and DO, are affected by factors likely to bring about an eventual unsatisfactory outcome. These projects are identified by criteria (“flags”) that take into account not only various aspects o f actual implementation experience, but also other relevant factors such as economic management and past portfolio performance in the country. Specifically, potential problem projects are identified as projects exhibiting three or more o f the fol lowing twelve risk “flags” for investment projects:

e Legal Covenants. Any o f the Critical Legal Covenants rated “Not Complied with” in the last ISR;

0 Safeguards. Ratings o f MU, U or HU on any Applicable Safeguard Policy in the last ISR;

0 Counterpart Funds. Counterpart Funding rated MU, U or HU in the last ISR (formerly the Financial Performance Flag);

0 Monitoring and Evaluation (M&E). Monitoring and Evaluation rated MU, U or HU in the last ISR;

0 Financial Management. Financial Management rated MU, U or HU in the last ISR;

0 Procurement. Procurement rated MU, U or HU in the last ISR;


0 Project Management. Project Management rated MU, U or HU in the last ISR;

0 Long-Term Risk. Project with I P or D O rated MU, U or HU for any 24 months cumulative during the l i f e o f the project. This flag i s removed when the project has been rated MS, S, or H S for IP and DO for the previous 24 months;

0 Effectiveness Delay. Elapsed time between Board approval and effectiveness o f more than nine months for investment and more than three months for emergency operations. This flag i s turned o f f three years after Board approval;

0 Disbursement Delay. Disbursement delay o f 24 months or more for investment and 6 months or more for emergency operations. Delay i s calculated based on the init ial or formally revised disbursement schedule for the project;

0 Country Environment. Located in a country with weak economic management (CPIA rating o f less than 3.0 on a scale o f 1 to 6). Once "flagged," the CPIA rating must exceed 3.5 for the flag to be removed. This flag also includes countries which are in a conflict or post-conflict environment; and

0 Country Record. Located in a country with a net disconnect o f 20 percent or more, or where net commitments associated with unsatisfactory projects (as rated by IEG) represent more than 40 percent o f commitments for completed projects over the previous five years. In cases where the sample o f IEG evaluations i s too small, I C R data, data on mature projects, and experience o f other donors i s used to arrive at a robust conclusion. This flag also captures countries with less than Moderately Satisfactory Country Assistance Evaluation (CAE) ratings by IEG in previous five fiscal years.

4. projects with two or more o f the fol lowing seven flags (at least one project specific):

For Development Policy Lending operations, potential problem projects are identified as

8 Monitoring and Evaluation. Monitoring and Evaluation rated MU, U or HU in the last ISR;

0

0

Project Management. Project Management rated MU, U or HU in the last ISR; Long-term Risk. Project with I P or DO rated MU, U or HU for any 24 months cumulative during the l i f e o f the project. This flag i s removed when the project has been rated MS, S or, H S for I P and DO for the previous 24 months;

0 Effectiveness Delay. Elapsed time between Board approval and effectiveness o f more than six months for policy-based lending. This flag i s turned o f f three years after Board approval;

0 Disbursement Delay. Disbursement delay o f 6 months or more for policy-based lending. Delay i s calculated based on the init ial or formally revised disbursement schedule for the project;


Country Environment. Located in a country with weak economic management (CPIA rating o f less than 3.0 on a scale o f 1 to 6). Once “flagged”, the CPIA must exceed 3.5 for the flag to be removed. This flag also includes countries which are in a conflict or post-conflict environment; and

Country Record. Located in a country with a net disconnect o f 20 percent or more, or where net commitments associated with unsatisfactory projects (as rated by IEG) represent more than 40 percent o f commitments for completed projects over the previous five years. In cases where the sample o f IEG evaluations i s too small, I C R data, data on mature projects and experience o f other donors i s used to arrive at a robust conclusion. This flag also captures countries with less than Moderately Satisfactory C A E ratings by IEG in previous five fiscal years.

5. The at-risk ratings provide a better picture o f the current state o f the portfolio than IPDO ratings taken in isolation, because they are more comprehensive and provide an early warning o f potential failures and their causes.

6. Golden Flag. The projects at risk concept, however, i s not perfect. It has been noted that some operations that get flagged as “risky” are subsequently evaluated as Satisfactory because risks have been addressed, and others that are evaluated as unsatisfactory were not captured by the system. To correct for this, the Regions can override the at-risk rating with a thirteenth flag f i rs t introduced in FY97--the “Golden Flag.” In each o f the fiscal years from FY03-06, approximately one percent o f the portfolio had the golden flag. A Golden Flag for a project i s turned o f f if the project becomes unsatisfactory for IP or DO, or the total number o f at risk flags for that project goes below three for investment and below two for policy-based lending operations. If the project subsequently gets three or more at-risk flags for investment and two or more for policy-based lending operations, a new request and justification for a Golden Flag i s required.

DATA SOURCES

7. Data for the ARPP Report and Statistical Tables are taken from the Bank’s Business Warehouse. The ISR ratings used in the ARPP were “frozen” by ISG as o f June 30, 2006. Other data sources include the Loan Accounting System for data on disbursements and cancellations.

8. Blend operations include both IDA and IBRD. In the ARPP Statistical Tables, number o f projects, portfolio status indicators, IEG outcomes and net disconnect for blend operations are included under IBRD. Commitment amounts, however, are included under IDA and IBRD, respectively.

9. Budget (BB) and Trust Fund (TF).

10. L ICUS countries as o f July 7,2006 from LICUS Web site.

All costs related to AAA in the ARPP Report and Statistical Tables include both

L ICUS country category in the ARPP Report and Statistical Tables i s based on the

Bank

ist o f


PORTFOLIO CLASSIFICATION

11. lending i n ~ t r u m e n t . ~ ~

The portfolio i s classified in the ARPP by region, networkhector board, sector, theme and

12. those projects that are rated by IEG.

The “Projects (No.)” column in the Statistical Appendix, Tables 3.11 to 3.18 includes only

24 These classifications are assigned by Task Team Leaders during project preparation. Wh i le the classification by Regions i s reliable, there are ambiguities and overlaps in the classification by sectors and lending instruments, e.g., projects which belong to the Urban Development sector board may be misclassified by the task team to other sector boards.


COUNTRY CLIENT GROUPINGS

Country Client Groupings Country

BRD Investment Grade (IG) Aruba Bahamas, The Barbados Botswana Bulgaria Chile Croatia '

Cyprus Czech Republic El Salvador Estonia Hungary Kazakhstan Korea, Republic of Latvia Lithuania Malaysia Mauritius Mexico Namibia Poland Romania Russian Federation Slovak Republic Slovenia South Africa Thailand Trinidad and Tobago Tunisia

:HINA China BRD Algeria

Antigua and Barbuda Argentina Australia Austria Bahrain Belarus Belgium Belize Brazil Brunei Darussalam Canada Colombia Costa Rica Denmark Dominican Republic

Country Cltent Groupings Country

3RD (Continued) Ecuador Egypt Equatorial Guinea Fiji Finland France Gabon Germany Greece Guatemala Iceland Iran Iraq Ireland Israel Italy Jamaica Japan Jordan Kuwait Lebanon Libya Luxembourg Macedonia, FYR of Malta Marshall Islands Micronesia, Federated States of Morocco Netherlands New Zealand Norway Oman Palau Panama Paraguay Peru Philippines Portugal Qatar San Marino Saudi Arabia Seychelles Singapore Spain St. Kitts and Nevis Suriname Swaziland Sweden


Annex 3

FY07 PIP COUNTRIES AND PIP PROJECTS

PIP COUNTRIES

Region Country Net Commitment Projects Commitment Fyo6 No. of

Projects Commitment at Risk ($ at Risk at Risk (%) Country ($ Million) Million) (%I

AFR Chad 7 273 I a6 71 68 Y AFR AFR AFR AFR AFR ECA ECA LCR LCR LCR MNA MNA SAR

Total

Eritrea Guinea Malawi Niger Nigeria Ukraine Uzbekistan Argentina Bolivia Dominican Republic Lebanon West Bank and Gaza Bangladesh

7 9 10 9

20 12 5 29 6

6

24

160

a

a

254 192 31 7 299

1,009 237

3,492 266 304 297

2,052

10,918

I ,a43

a3

164 127 a3 a2

489 260 141

1,330 105 212 20 43 782

4,027

71 33 30 33 40 25 60

33 50 17 50 29

41

4a

65 66 26

27 26 60

40 70 7 52

2a

3a

3a

37

Y N Y Y Y Y Y Y N Y Y N N

Bank-wide Portfolio 1,468 95,194 11,000 14 12

% Share of PIP Countries 11 11 37

PIP PROJECTS

Commitment at Risk FY06 PIP ($ Million) Project Region Country Project Name Network

LCR Argentina AR Economic Recovery Support SAL FSE 500 Y LCR Argentina LCR Mexico SAR Bangladesh SAR Bangladesh SAR India SAR India SAR India

Total

Bank-wide Portfolio

AR National Highway Asset Management INF 200 Y MX: 1 1 1 Basic Health Care Project HDN 350 Y BD Private Sector Infrastructure Dev INF 199 Y HNP Sector Program HDN 300 N TN Roads INF 348 N Mumbai Urban Transport Project INF 542 N India Tsunami ERC INF 465 N

2,904

11,000

% Share of PIP Projects 26

ANNUAL REPORT ON PORTFOLIO PERFORMANCE

Fiscal Year 2006

February 13,2007 (STATISTICAL APPENDIX)

QUALITY ASSURANCE GROUP

PORTFOLIO SIZE AND COMPOSITION ...................................................................... 4-29 Table 2.1 Table 2.2 Table 2.3 Table 2.4 Table 2.5 Table 2.6 Table 2.7 Table 2.8 Table 2.9 Table 2.10 Approvals by Region Table 2.11 Table 2.12 Approvals by Instrument Table 2.13 Approvals by Theme Table 2.14 Approvals by Sector Table 2.15 Table 2.16 Table 2.17 Table 2.18 Table 2.19 Table 2.20 Table 2.21 Table 2.22 Table 2.23

Portfolio Distribution by Region Portfolio Distribution by Region/Country Portfolio Distribution by NetworklSector Board Portfolio Distribution by Instrument Portfolio Distribution by Source of Funds Portfolio Distribution by Theme Portfolio Distribution by Sector Portfolio Distribution by Country Category Grouping Portfolio Concentration by Country (FY06)

Approvals by NetworklSector Board

Approvals by Country Category Grouping Entries and Exits by Region Entries and Exits by Source of Funds Entries and Exits by NetworWSector Board Entries and Exits by Instrument Entries and Exits by Theme Entries and Exits by Sector Entries and Exits by Country Category Grouping Number of Overage Projects by RegionlNetwork

PORTFOLIO PERFORMANCE ............................................................................. 3 0 - ~ Table 3.1 Table 3.2 Table 3.3 Table 3.4 Table 3.5 Table 3.6 Table 3.7 Table 3.8 Table 3.9 Table 3.10 Table 3.1 1 Table 3.12 Table 3.13 Table 3.14 Table 3.15 Table 3.16 Table 3.17 Table 3.18 Table 3.19 (a) Table 3.19 (b) Table 3.20 Table 3.21 Table 3.22

Portfolio Status Indicators by Region Portfolio Status Indicators by NetworklSector Board Portfolio Status Indicators by Sector Portfolio Status Indicators by Theme Portfolio Status Indicators by Instrument Portfolio Status Indicators by Source of Funds Portfolio Status Indicators and IEG Outcomes by Region for IDA Projects Portfolio Status Indicators by Country Category Grouping Portfolio Risk Status Ordered by Country (FY06) Performance of Projects Exiting the Portfolio by Region Net Disconnect by RegionlCountry Net Disconnect by instrument Net Disconnect by Source of Funds Net Disconnect by RegionlExit Year Net Disconnect by NetworWExit Year Net Disconnect by ThemelExit Year Net Disconnect by Sector/Exit Year Net Disconnect by Country Category GroupinglExit Year Changes in Outcomes Ratings between ICRR and PPAR by Exit Year (FY90-05) Summary of Changes in Outcomes Ratings between ICRR and PPAR Changes in Outcomes Ratings between ICRR and PPAR by Region (FY90-05) Changes in Outcomes Ratings between ICRR and PPAR by Network (FY90-05) Changes in Outcomes Ratings between ICRR and PPAR by Source of Funds (FY90-05)

PORTFOLIO PERFORMANCE (cont'd)

Table 3.23 Table 3.24 Table 3.25 Table 3.26 Table 3.27 Table 3.28 Table 3.29 Table 3.30 Table 3.31 Table 3.32 Table 3.33 Table 3.34 Table 3.35 Table 3.36 Table 3.37 Table 3.38 Table 3.39

A M . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Table 4.1 Table 4.2 Table 4.3 Table 4.4 Table 4.5 Table 4.6 Table 4.7 Table 4.8 Table 4.9 Table 4.10 Table 4.11 Table 4.12 Table 4.13 Table 4.14

Net Changes in Outcomes Ratings between ICRR and PPAR by Elapsed Time between ICRR and PPAR (FY90-05) Net Change in Outcomes Ratings between ICRR and PPAR by ICR Quality Portfolio Risk Factors Portfolio Risk Factors by Region Disbursement Ratio by Region and Country Category Grouping Cancellations by Region/Country Cancellations by NetworWSector Board Quality of Supervision by Region Quality of Supervision by Network Quality of Supervision by Country Category Grouping Quality of Supervision by Source of Funds Quality of Supervision by LlCUS and Non-LICUS Quality of Supervision by Non-Dedicated Multi-Sectors Quality of Transport, Water Supply and Sanitation and ICT in Multi-Sectoral Projects Trends in Quality of AAA Quality of AAA by Region Quality of AAA by Network

.. . . . .. . . ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . .65-80 AAA Deliveries and Costs by Region/Country AAA Deliveries and Costs by Network/Sector Board AAA Deliveries and Costs by Country Category Grouping AAA Deliveries (NO. OF TASKS) by Region and Network/Sector Board, FYO2-06 AAA Deliveries (US$ '000) by Region and NetworklSector Board, FYO2-06 AAA Concentration: Top Ten Countries by Number of Deliveries, FYO2-06 AAA Concentration: Top Ten Countries by Cost of Deliveries, FYO2-06 AAA Deliveries and Costs by Output Type ESW Deliveries and Costs by Report Type AAA Size Variations by Cost RangelMajor Output Type Timeliness of AAA Reports by Region and by NetwoMSector Timeliness of AAA Deliveries by Output Type Country AAA Intensity by RegionlBorrower AAA Products by Major Sector and Theme

9 a

c C

1 hi

1 hi

- m 0 I- U

O co 0 d

L

TABLE 2.2: PORTFOLIO DISTRIBUTION BY REGlONlCOUNTRY

Proiects (No.) Net Commitments (US$ Million) FYOI FY05 FY06 FYOI FY05 FY06 RegionlCountry

AFR Africa 5 14 20 20 495 1,019 Angola 4 5 5 105 176 176 Benin 12 7 8 194 203 233 Burkina Faso 9 13 16 323 469 61 1 ~

Burundi 5 10 7 116 352 272 Cameroon 9 7 9 429 193 260 Cape Verde 6 4 5 74 58 68 Central African Republic 2 1 0 28 17 0 Chad 9 8 7 250 303 273 Comoros 6 1 1 45 13 13 Congo, Democratic Republic of 0 8 8 0 1,332 1,407 Congo, Republic of 0 6 6 0 157 157 Cote d'lvoire 12 0 0 563 0 0 Eritrea 8 8 7 295 294 254 Ethiopia 17 22 22 1,814 1,615 2,017 Gabon 3 0 2 38 0 42 Gambia, The 4 4 5 68 65 73 Ghana 23 17 17 1,055 1,041 1,096 Guinea 10 7 9 194 225 192 Guinea-Bissau 3 4 5 51 57 72 Kenya 15 13 13 822 635 599 Lesotho 7 6 7 141 112 119 Liberia 0 0 1 0 0 30 Madagascar 17 14 13 785 857 882 Malawi 12 13 10 399 376 31 7

- - -

Mozambique 15 17 18 766 924 873 Namibia I 2 n 7 12 Niger 9 9 9 240 264 299 Nigeria 5 17 20 254 1,511 1,843 Rwanda 10 10 11 292 276 295 ~~ ~ ~

Sao Tome and Principe 2 2 2 10 12 12 Seneaal 21 15 15 953 642 641

I - .__ _ - Sierra Leone 7 9 8 151 217 202 South Africa 2 4 4 37 37 37 Swaziland 1 0 0 29 0 0 Tanzania 18 21 26 917 1,340 1,912 Toao 5 0 0 137 0 0 - Uganda 24 20 21 1,223 1,064 1,134 Western Africa 1 1 0 9 40 0 Zambia 16 12 9 780 502 291 Zimbabwe 5 0 0 21 1 0 0 Sub Total 369 351 371 14,536 16,605 18,569

5 of 80


Proiects (No.) Net Commitments IUS$ Million) FYOI FY05 FY06 FYOI FY05 FY06 RegionlCountry

EAP Cambodia China East Asia and Pacific Indonesia Kiribati Korea, Rewblic of Lao People’s Democratic Republic Malaysia Mongolia Papua New Guinea Philippines Samoa Solomon Islands Thailand Timor-Leste

Vanuatu Vietnam Sub Total

12 13 12 270 279 265 108 85 79 17,461 11,951 10,724 1 2 4 11 22 37 _ _ _ -

52 30 26 4,345 2,621 2,344 0 0 0 0 0 4 4 0 0 283 0 0 10 11 13 234 167 178 3 1 1 266 25 25 8 9 12 195 137 163 8 4 3 197 82 72

22 22 23 1,374 1,144 1,435 7 4 4 19 27 27 _ _. _. . - 2 1 1 21 4 4 14 2 2 1,478 129 129 8 7 7 54 48 54 - - . . - - . 0 3 3 0 18 18 1 0 0 4 0 0

25 35 39 2,557 3,539 3,975 280 229 229 28,769 20,193 19,453

ECA Albania 20 15 17 254 234 261 Aral Sea 1 0 0 12.2 0 0 Armenia 13 16 18 268 256 275 Azerbaijan 13 18 18 288 426 578 Belarus 2 1 2 56 23 73 Bosnia-Herzegovina 18 17 17 352 358 345 Bulgaria 12 10 7 44 1 395 223 Central Asia 1 2 1 Croatia 12 13 15 Estonia 2 0 0 Europe and Central Asia 1 1 1 Georgia 19 18 19 Hungary 3 1 2 Kazakhstan 13 8 10 Kosovo 9 7 7 Kyrgyz Republic 15 16 17 Latvia 9 1 1 I ithiiania 8 4 4 -. . . . . . - - Macedonia, former Yugoslav Republic of 13 10 10 Moldova 9 11 15 Poland 15 11 10 Romania 22 22 22 Russian Federation 34 22 22 Serbia and Montenegro 2 18 19 Slovak Republic 0 5 6

10 35 25 516 443 592 40 0 0 4 6 6

353 34 1 303 107 32 46 696 518 653 33 29 33

262 244 232 155 2 2 228 88 88 236 84 122 133 149 181

1,414 1,244 1,184 1,113 1,424 1,486 3,854 1,977 1,951

0 270 293 n 111 97

Slovenia 2 0 0 Tajikistan 9 10 14 130 148 169 Turkey 19 21 24 4,317 5,965 6,057 Turkmenistan 2 0 0 45 0 0 Ukraine 8 12 12 480 796 1,009 Uzbekistan 7 7 5 277 285 237 Sub Total 313 297 315 16,103 15,883 16,514

6 Of 80

TABLE 2.2: PORTFOLIO DISTRIBUTION BY REGIONKOUNTRY

Proiects (No.) Net Commitments (US$ Million) FYOI FY05 FY06 FYOI FY05 FY06

Argentina 40 33 29 6,635 4,624 3,492 Barbados 1 1 1 15 15 15 Belize 2 1 0 21 13 0 Bolivia 17 12 6 581 478 266 Brazil 57 54 53 5,582 5,023 4,490 Caribbean 1 2 2 6 14 14 Central America 1 3 4 0 23 36 Chile 5 7 9 287 199 229 Colombia 22 20 20 1,370 1,375 1,359 Costa Rica 4 4 4 86 95 125 Dominica 2 0 0 11 0 0 Dominican Republic 10 9 8 345 383 304 Ecuador 11 10 9 350 307 299 El Salvador 8 8 8 352 48 1 448 Grenada 2 5 4 18 38 28 Guatemala 12 11 12 406 503 550 Guyana 4 2 4 49 15 36 Haiti 2 3 5 47 75 70 Honduras 13 18 18 565 46 1 416 Jamaica 3 4 5 77 110 107 Latin America 0 3 3 0 24 24 Mexico 28 23 23 5,912 2,841 2,703 Nicaragua 16 14 13 466 380 36 1 OECS Countries 2 2 2 30 6 6 Panama 10 3 3 279 93 101 Paraguay 6 7 6 218 151 118 Peru 9 15 17 516 451 549 St. Kitts and Nevis 1 3 2 9 13 9 St. Lucia 2 6 5 9 43 36 St. Vincent and the Grenadines 0 4 2 0 22 13 Trinidad and Tobago 2 2 2 62 31 31 Uruguay 9 11 8 383 630 359 Venezuela 12 3 2 510 74 35 Sub Total 314 303 289 25,197 18,991 16,628

RegionlCountry

LCR

MNA Algeria 10 9 7 668 337 84 Djibouti 5 4 6 49 53 70 Egypt, Arab Republic of 19 14 16 1,088 1,085 1,795 Iran, Islamic Republic of 3 9 9 373 1,355 1,355 Iraq 0 0 2 0 0 235 Jordan 11 8 8 298 278 278 Lebanon 13 7 6 729 322 297 Morocco 20 11 13 749 446 824 Red Sea and Gulf of Aden 1 0 0 6 0 0 Tunisia 21 17 17 1,094 846 854 West Bank and Gaza 17 13 8 207 154 83 Yemen, Republic of 20 17 18 636 687 748 Sub Total 140 109 110 5,898 5,563 6,621

7 of 80


Proiects (No.) Net Commitments (US$ Million) FYOI FY05 FY06 FYOI FY05 FY06 RegionlCountry

SAR Afghanistan 0 17 17 0 726 873 Bangladesh 26 26 24 2,367 2,326 2,052 Bhutan 4 6 4 41 80 51 India 76 64 56 13,458 12,778 1 1,269 Maldives 1 2 3 18 20 42 Nepal 8 12 12 221 424 422 Pakistan 16 16 19 1,215 990 1,853 Sri Lanka 13 18 16 415 875 81 5 Sub Total 144 161 151 17,735 18,220 17,376

OTH 1 1 3 25 25 32 Sub Total 1 1 3 25 25 32

Total 1,561 1,451 1,468 108,261 95,479 95,194

8 Of 80

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TABLE 2.5: PORTFOLIO DISTRIBUTION BY SOURCE OF FUNDS

Projects (No.) Net Commitments (US$ Billion) FYOl FY05 FY06 FYOl FY05 FY06 Source of Funds

IBRD 71 8 567 554 69.3 54.3 53.1 IDA 739 765 791 37.3 38.9 39.8 GEF 49 81 91 0.8 1 .I 1.2 MONT 19 17 17 0.6 0.9 0.9 SPF 36 21 15 0.3 0.2 0.1 Total 1,561 1,451 1,468 108.3 95.5 95.2

GEF Global Environment Facility MONT Montreal Protocol SPF Special Fund

11 of80

TABLE 2.6: PORTFOLIO DISTRIBUTION BY THEME

Proiects (No.) Net Commitments (US$ Million) FYOI FY05 FY06 FYOI FY05 FY06 Theme

Economic management Macroeconomic management Sub Total

7 5 3 21 19 16

1,340 405 21 1 2,161 1,272 768

Environment and natural resources management Environmental policies and institutions Pollution management and environmental health Water resource management Sub Total

54 39 41 75 58 59 45 41 39 254 222 227

2,581 1,557 1,535 5,906 4,343 4,015 3,743 3,000 2,545 16,832 12,439 11,428

Financial and private sector development Infrastructure services for private sector development Other financial and private sector development Regulation and competition policy State enterpriselbank restructuring and privatization

Human development Education for all Health system performance Sub Total

Public sector governance Administrative and civil service reform Decentralization Sub Total

Rule of law Law reform Sub Total

Rural development Rural services and infrastructure Sub Total

Social developmentlgenderlinclusion Participation and civic engagement Sub Total

62 65 71 52 37 34 51 45 45 46 31 27

245 209 210

5,053 5,794 6,959 4,837 2,709 2,207 4,556 2,829 3,199 4,408 2,385 2,075 21,018 16,008 16,878

45 47 46 44 36 38 192 212 218

3,138 3,005 2,749 3,202 2,187 1,985 11,846 12,986 12,598

36 39 46 .. _ _ 39 37 36 122 137 151

20 14 14 58 50 48

640 589 685 1,742 1,797 1,948

126 109 115 10,206 8,702 8,608 206 183 192 14,995 13,257 13,010

86 83 78 156 147 135

3,859 4,143 3,991 7,985 8,082 7,656

Social protection and risk management Improving labor markets Sub Total

32 23 20 94 93 87

1,872 1,801 1,374 6,525 7,142 6,795

Trade and integration Expon oeve opment and compet tiveness Sub Total

Urban development Access to urban services and housing Municipal governance and institution building Other urban development Sub Total

23 19 17 56 59 60

60 56 54 37 28 27 50 32 35 157 122 124

I , U l O I ,LJJ 1,535

3,260 4,027 4,799

1,561 1,451 1,468 108,261 95,479 951 94

1. This table shows sub-themes where the no. of projects or commitments exceeds 2.5% of the portfolio, or the largest sub-theme if no sub-theme exceeds 2.5%.

2. The number of projects or commitments in a theme is the sum of the individual fractional parts attributed to each theme within a project.

12 of 80

TABLE 2.7: PORTFOLIO DISTRIBUTION BY SECTOR

Projects (No.) FYOI FY05 FY06 Sector

Agriculture, fishing, and forestry General agriculture, fishing and forestry sector 41 55 60

Sub Total 155 154 167 Irrigation and drainage 44 43 44

Commitments (US$ Million) FYOI FY05 FY06

2,733 2,193 2,210 3,783 3,775 3,630 9,781 8,588 8,645

Primary education 52 46 44 4,006 3,397 3,061 Sub Total 162 140 133 9,941 8,564 8,222

Energy and mining Power 72 67 73 Sub Total 120 113 126

Finance . . . . -. . - - Banking 19 23 21 Sub Total 66 69 69

Health and other social services Health 141 124 119 Other social services 86 97 88 Sub Total 227 221 208

Industry and trade General industry and trade sector 33 19 18 Sub Total 91 65 67

Information and communications Telecommunications 10 13 12 Sub Total 15 23 22

Public Administration, Law, and Justice Central government administration 272 232 232 Sub-national government administration 56 67 73 Sub Total 383 360 369

Transportation General transportation sector 23 22 22 Roads and highways 133 119 119 Sub Total 184 164 163

Water, sanitation and flood protection General water, sanitation and flood protection sector 40 27 29 Sewerage 29 27 26 Water supply 63 58 60 Sub Total 158 141 146

(Historic)Environment (Histor1c)Other environment 1 0 0 Sub Total 1 0 0

10,419 6,442 6,924 14,246 9,001 10,080

2,489 1,838 1,567 6,026 4,790 4,374

9,461 7,319 6,128 4,481 5,628 5,547 13,943 12,947 11,675

1,864 1,055 1,150 5,231 4,679 4,870

80 1 315 257 1,000 54.4 493

10,958 8,864 8,377 3,330 3,892 4,554 17,060 16,195 16,354

2,279 2,337 2,514 15,237 15.918 15,276 20,075 20,536 20,175

Total 1,561 1,451 1,468 108,261 95,479 95,194

1. This table shows sub-sectors where the no. of projects or commitments exceeds 2.5% of the portfolio. or the largest sub-sector exceeds 2.5%.

2. The number of projects or commitments in a sector is the sum of the individual fractional parts attributed to each sector within a project.

13 of 80

TABLE 2.8: PORTFOLIO DISTRIBUTION BY COUNTRY CATEGORY GROUPING

Countrv Cateaorv GrouDina Total Projects (No.)

IBRD Investment Grade China

FYOI FY05 FY06 ~~

224 164 169 108 85 79

IBRD Onlv (Others) 354 31 2 31 2 India Blend IDA Onlv

76 64 56 152 145 136 507 523 554

Licus 124 127 122 ~~ ~

Multi-Country Total

Commitments (US$ Billion) IBRD Investment Grade China

16 31 40 1,561 1,451 1,468

~~

18.4 10.9 10.8 17.5 12.0 10.7

IBRD Onlv (Others) 27.3 25.7 25.5 India Blend IDA Onlv

13.5 12.8 11.3 7.3 5.6 6.1

21.4 23.5 25.2 Licus 2.9 4.4 4.4 Mu I ti-Cou n try

Total 0.1 0.7 1.2

108.3 95.5 95.2

14 of 80

TABLE 2.9: PORTFOLIO CONCENTRATION BY COUNTRY (FY06)

Arranged by Countries with Largest Number of Projects Arranged by Countries with Largest Commitments Cummulative Commitments Cummulative %

Country Projects of

China 79 10,724 5 India 56 11,269 12 India 56 11,269 9 China 79 10,724 23 Brazil 53 4,490 13 Turkey 24 6,057 29 Vietnam 39 3,975 15 Brazil 53 4,490 34 Argentina 29 3,492 17 Vietnam 39 3,975 38 Indonesia 26 2,344 19 Argentina 29 3,492 42 Tanzania 26 1,912 21 Mexico 23 2,703 45 Turkey 24 6,057 23 Indonesia 26 2,344 47 Bangladesh 24 2,052 24 Bangladesh 24 2,052 49

Philippines 23 1,435 27 Russian Federation 22 1,951 54

Projects Commitments (US$ Million) t:ij:::: (us$ Million) Commitments

Country

Mexico 23 2,703 26 Ethiopia 22 2,017 52

Ethiopia 22 2,017 29 Tanzania 26 1,912 56 Russian Federation 22 1,951 30 Pakistan 19 1,853 58 Romania 22 1,486 32 Nigeria 20 1,843 60 Uganda 21 1,134 33 Egypt, Arab Republic of 16 1,795 61 Nigeria 20 1,843 35 Romania 22 1,486 63 Colombia 20 1,359 36 Philippines 23 1,435 64

Africa 20 1,019 37 Republic of 8 1,407 66 Pakistan 19 1,853 39 Colombia 20 1,359 67 Georgia 19 303 40 Iran, Islamic Republic of 9 1,355 69 Serbia and Montenegro 19 293 41 Poland 10 1,184 70 Mozambique 18 873 43 Uganda 21 1,134 71 Yemen, Republic of 18 748 44 Ghana 17 1,096 72 Azerbaijan 18 578 45 Africa 20 1,019 73 Honduras 18 416 46 Ukraine 12 1,009 75 Armenia 18 275 47 Madagascar 13 882 75 Ghana 17 1,096 49 Afghanistan 17 873 76 Afghanistan 17 873 50 Mozambique 18 873 77 Tunisia 17 854 51 Tunisia 17 854 78 Peru 17 549 52 Morocco 13 824 79 Bosnia-Herzegovina 17 345 53 Sri Lanka 16 815 80 Albania 17 261 54 Yemen, Republic of 18 748 81 Kyrgyz Republic 17 232 56 Kazakhstan 10 653 81 Egypt, Arab Republic of 16 1,795 57 Senegal 15 841 82 Sri Lanka 16 815 58 Burkina Faso 16 61 1 83 Burkina Faso 16 61 1 59 Kenya 13 599 83 Senegal 15 641 60 Croatia 15 592 84 Croatia 15 592 61 Azerbaijan 18 578 85 Moldova 15 181 62 Guatemala 12 550 85 Tajikistan 14 169 63 Peru 17 549 86 Madagascar 13 882 64 Mali 13 547 86 Morocco 13 824 65 El Salvador 8 448 87 Kenya 13 599 65 Nepal 12 422 87 Mali 13 547 66 Honduras 18 41 6 88 Nicaragua 13 361 67 Nicaragua 13 36 1 88 Lao People's Democratic

Congo, Democratic

Republic 13 178 68 UNguay 8 359 88 Ukraine 12 1,009 69 Bosnia-Herzegovina 17 345 89 Guatemala 12 550 70 Malawi 10 317 89 Nepal 12 422 71 Dominican Republic 8 304 89 Cambodia 12 265 11 Georgia 19 303 90 Mongolia 12 163 72 Ecuador 9 299 90 Rwanda 11 295 73 Niger 9 299 90 Poland 10 1,184 74 Lebanon 6 297 91 Kazakhstan 10 653 74 Rwanda 11 295 91 Malawi 10 31 7 75 Serbia and Montenegro 19 293 91 Macedonia, former Yugoslav Republic of 10 122 76 Iran, Islamic Republic of 9 1,355 76 Ecuador 9 299 77 Niger 9 299 78 Zambia 9 291 78 Mauritania 9 277 79

Zambia 9 291 92 Jordan 8 278 92 Mauritania 9 277 92 Armenia 18 275 92 Chad 7 273 93 Burundi 7 272 93

15 of 80


Arranged by Countries with Largest Number of Projects Cummulative Projects Commitments

(US$ Million) :,ti:::' Country

Cameroon 9 260 79 Chile 9 229 80 Guinea 9 192 81 Congo, Democratic Republic of 8 1,407 81 El Salvador 8 448 82 Uruauav a 359 82 .~ ~~ .,, Dominican Republic 8 304 83 Jordan 8 278 83 Benin 8 233 84 Sierra Leone 8 202 84 West Bank and Gaza 8 83 85 Chad 7 273 85 Burundi 7 272 86 Eritrea 7 254 86

Bulgaria 7 223 87 Lesotho 7 119 87 Algeria 7 84 88 Timor-Leste 7 54 88 Kosovo 7 33 89 Lebanon 6 297 89 Bolivia 6 266 90

Congo, Republic of 6 157 90 Paraguay 6 118 90 Slovak Republic 6 92 91 Djibouti 6 70 91 Uzbekistan 5 237 92 Angola 5 176 92 Jamaica ti I 07 97 ._ _._ _ _ Gambia, The 5 73 93 Guinea-Bissau 5 72 93 Haiti 5 7n 93

Cape Verde 5 68 94 St. Lucia 5 36 94 Costa Rica 4 125 94 Lithuania 4 88 94 Bhutan 4 51 95 _ _ _ South Africa 4 37 95 East Asia and Pacific 4 37 95 Central America 4 36 96 Guyana 4 36 96 Grenada 4 28 96 Samoa 4 27 96 Panama 3 101 97 Papua New Guinea 3 72 97 Maldives 3 42 97 World 3 32 97 ' atin America 3 24 97

I naiiana L 1 LY YU Rrlanic 7 71 CIR

Hungary 2 46 98 Gabon 2 42 98 Venezuela 2 35 98

Caribbean 2 14 99 St. Vincent and the

Trinidad and Tobago 2 31 99

Grenadines 2 13 99 Namibia 2 12 99 Sao Tome and Pnncipe 2 12 99 St. Kitts and Nevis 2 9 99 OECS Countries 2 6 99

Arranged by Countries with Largest Commitments

Country Cummulative %

of

Bolivia 6 266 93 Cambodia 12 265 94 Albania 17 26 1 94

ProJects Commitments (us$ Million) commitments

Cameroon 9 260 94 Eritrea 7 254 94 Uzbekistan 5 237 95 .~_. .. ~.

Iraq 2 235 95 Benin R 2.13 95 -_ _ _ _ _ _ Kygyz Republic 17 232 95 Chile 9 229 96 Bulgaria 7 223 96 Sierra Leone 8 202 96 Guinea 9 192 96 Moldova 15 181 96 Lao People's Democratic Republic 13 178 97 Angola 5 176 97 Tajikistan 14 169 97 Mongolia 12 163 97 Congo, Republic of 6 157 97 Thailand 2 129 97 _ _ - - -_ Costa Rica 4 125 98 Macedonia, former Yugoslav Republic of 10 122 98 Lesotho 7 119 98 Paraguay 6 118 98 Jamaica 5 107 98 Panama 3 101 98 Slovak Republic 6 92 98 I ithiiania 4 RR 98 Algeria 7 84 99 West Bank and Gaza 8 83 99 Gambia, The 5 13 99 Belarus 2 73 99 Papua New Guinea 3 72 99 Guinea-Bissau 5 72 99 Djibouti 6 70 99 Haiti 5 717 99 -. _ _ Cape Verde 5 68 99 Timor-Leste 7 54 99 Bhutan 4 51 99 Hungary 2 46 99 Maldives 3 42 99 Gabon 2 42 99 South Africa 4 37 99 East Asia and Pacific 4 37 99 St. Lucia 5 36 99 Central America 4 36 100 Girvana A 36 inn Venezuela 2 35 100 Kosovo 7 33 100 Worid 3 32 100 Trinidad and Tobago 2 31 100 Liberia 1 30 100 Grenada 4 28 100 Samoa A 77 inn Central Asia 1 25 100 'Malaysia 1 25 100

Latin America 3 24 100 Tonga 3 18 100 Barbados 1 15 100 Caribbean 2 14 100 Comoros 1 13 100

16 of 80


Arranged by Countries with Largest Number of Projects Arranged by Countries with Largest Commitments Cummulative Commitments

Country (US$ Million) ~ ~ ~ . ~ ~ ~ ' Liberia 1 30 99 Central Asia 1 25 100 Malaysia 1 25 100 Barbados 1 15 100 Comoros 1 13 100 Mauritius 1 12 100 Europe and Central Asia 1 6 100 Solomon Islands 1 4 100 Latvia 1 7 i no Kiribati 0 4 100 Central African Republic 0 0 100 Total I .468 95.194 I 0 0

Cummulative % of Projects Commitments Country

(us$ Million) commitments St. Vincent and the Grenadines 2 13 100 Mauritius 1 12 100 Namibia 2 12 100 Sao Tome and Principe 2 12 100 St. Kitts and Nevis 2 9 100 OECS Countries 2 6 100 Europe and Central Asia 1 6 100 Kiribati 0 4 100 Solomon Islands 1 4 100 Latvia 1 2 100 Central African Republic 0 0 100 Total 1.468 95.194 I00

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TABLE 2.10: APPROVALS BY REGION

Region

AFR F A D

ECA LCR MNA SAR OTH Tntal

Projects (No.) Commitment Amount (US$ Million) FYOZ FY03 FY04 FY05 FY06 FYOZ FY03 FY04 FY05 FY06

31 28 33 40 42 1,842 2,344 2,647 2,926 3,462 56 58 54 63 65 5,580 2,697 3,594 4,071 4,071 57 58 55 61 68 4,411 5,896 5,352 5,002 6,024 17 20 14 19 16 596 1,111 1,149 1,339 1,701 22 31 35 35 28 3,525 2,919 3,423 5,033 3,805 0 0 0 0 1 0 0 0 0 3

252 258 265 297 301 19,789 18,729 20,353 22,215 23,904

69 63 74 79 81 3.836 3,762 4,188 3,843 4,838

TABLE 2.11: APPROVALS BY NETWORWSECTOR BOARD

Projects (No.) FYOZ FY03 FY04 FY05 FY06 Network/Sector Board

ESSD

Commitment Amount (US$ Million) FYOZ FY03 FY04 FY05 FY06

_ _ _ _ Environment 17 16 15 21 28 Rural Sector 31 31 38 36 55 Social Development a 8 7 5 2 Sub Total 56 55 60 62 85

FSE Financial Sector 16 10 9 14 11 Sub Total 16 10 9 14 11

HnN Education 22 26 21 27 25 Health, Nutrition and Population 22 30 25 22 22 Social Protection 16 13 22 16 10 Sub Total 60 69 68 65 51

INF Energy and Mining 15 20 19 29 28 Global InformationIComrnunications 2 2 1 3 2 TransDort 19 17 31 17 25 Urban Development 1" I " u L" I "

Water Supply and Sanitation 10 10 14 21 11 =' == 74 93 82 -

PREM Economic Policy Poverty Reduction Public Sector Governance Sub Total

PSDN Private Sector Development Sub Total

20 13 11 20 23 n 6 7 a A - " 26 29 25 22 25 46 47 43 51 56

158 477 319 954 825 2,263 1,930 2,009 2,679 2,752 114 470 219 483 192

2,536 2,817 2,547 4,116 3,768

3,812 1,214 1,279 1,195 1,734 3,812 1,214 1,279 1,195 1,134

1,228 2,158 1,534 1.288 1,810 986 1,193 1,761 1,011 1,015

~~

868 1,348 1,660 2,108 991 3,081 4,699 4,955 4,408 3,816

1,664 808 1,055 1,636 2,788

37 14 22 69 15 2,379 2,827 3,691 2,513 2,865 898 1,231 721 2,748 2,023 430 639 1,105 1,565 705

5,408 5,519 6,594 8,532 8,396

2,884 1,185 1,760 1,495 2,894 0 451 546 745 488

1,744 2,299 1,446 1,118 1,368 4,628 3,935 3,752 3,358 4,749

13 12 11 12 10 13 12 11 12 I O

324 486 1,227 606 1,441 326 686 1.227 606 1.641

Total 252 258 265 291 301 19,189 18,729 20,353 22,215 23,904

18 of 80

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TABLE2.16: ENTRIES AND EXITS BY REGION

Projects Approved (No.) Projects Exiting (No.) Approvals - Exits (No.) FY04 FY05 FY06 FY04 FY05 FY06 FYO4-06 Region

AFR 74 79 81 80 79 62 13 EAP 33 40 42 49 47 42 -23 ECA 54 63 65 64 74 47 -3 LCR 55 61 68 73 57 83 -29 MNA 14 19 16 25 31 15 -22 SAR 35 35 28 28 29 41 0 OTH 0 0 1 0 0 0 1 Total 265 297 301 319 317 290 -63

Region

AFR EAP ECA LCR MNA SAR n-ru Total

Projects Approved (US$ Million) Projects Exiting (US$ Million) Approvals - Exits (US$ Million) FY04 FY05 N O 6 FY04 FY05 FY06 FYO4-06 4,188 3,843 4,838 3,302 3,999 3,158 2,410

3,594 4,071 4,071 3,685 2,595 3,278 2,179

1,149 1,339 1,701 81 1 877 433 2,067 3,423 5,033 3,805 3,165 3,970 4,885 240

0 0 3 0 0 0 3 20,353 22,215 23,904 20,716 20,081 23,827 1,849

2,647 2,926 3,462 4,265 4,082 4,104 -3,416

5,352 5,002 6,024 5,487 4,557 7,969 -1,634

TABLE2.17: ENTRIES AND EXITS BY SOURCE OF FUNDS

Source Projects Approved (No.) Projects Existing (No.) Approvals - Exits (No.) ofFunds FY04 FY05 FY06 FY04 FY05 N O 6 FYO4-06 IBRD 87 116 112 149 133 125 -92 IDA 158 158 167 147 160 147 29 TF 20 23 22 23 24 18 0 Total 265 297 301 319 317 290 -63

Source Projects Approved (US$ Million) Projects Exiting (US$ Million) Approvals - Exits (US$ Million) ofFunds FY04 FY05 FY06 FY04 FY05 FY06 FYO4-06

IDA 9,035 8,559 9,446 6,333 9,021 9,194 2,492 TF 273 322 322 327 325 214 52 Total 20,353 22,215 23,904 20,716 20,081 23,827 1,849

IBRD 11,045 13,334 14,135 14,056 10,734 14,419 -695

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TABLE 3.1: PORTFOLIO STATUS INDICATORS BY REGION

Region

AFR EAP ECA LCR M NA SAR OTH Total

Region

AFR EAP ECA LCR MNA

144 161 151 1 1 3

1,561 1,451 1,468

Actual Problem Projects (No.) FYOI FY05 FY06

45 71 56

Net Commitments (US$ Billion) FYOI FY05 FY06 14.5 16.6 18.6 28.8 20.2 19.5 16.1 15.9 16.5 25.2 19.0 16.6 5.9 5.6 6.6 17.7 18.2 17.4 0.0 0.0 0.0 .. ..

108.3 95.5 95.2

Potential Problem Projects (No.) FYOI FY05 FY06

9 28 22 20 12 13 24 19 28 ~ ~.

29 51 38 21 12 10

6 2 1 13 7 3 7 11 9 3 1 0 ~

14 17 I S 1 2 4 SAR OTH 0 0 0 0 0 0 Total 153 182 160 39 51 39

Projects at Risk (No.) Commitments at Risk (US$ Billion) FYOI FY05 FY06 FYOI FY05 FY06 Region

AFR 54 99 78 2.5 4.4 3.3 EAP 26 14 14 2.0 0.8 0.8 ECA 37 26 31 2.5 1.4 1.2 LCR 36 62 47 3.0 3.9 2.6 MNA 24 13 10 1 .I 0.4 0.3 SAR 15 19 19 1.6 1.8 2.9 OTH 0 0 0 0.0 0.0 0.0 Total 192 233 199 12.7 12.7 11.0

% at Risk Yo Commitments at Risk Region

AFR 15 28 21 17 26 18 EAP 9 6 6 7 4 4 ECA 12 9 10 16 9 7 LCR 11 20 16 12 20 16 M NA 17 12 9 19 8 4 SAR 10 12 13 9 10 16 OTH 0 0 0 0 0 0 Total 12 16 14 12 13 12

FYOI FY05 FY06 FYOI FY05 FY06

% Realism Yo Proactivity FYOI FY05 FY06 FYOI FY05 FY06

Region

AFR 83 72 72 88 78 80 EAP 77 86 93 92 80 83 ECA 65 73 90 90 94 89 LCR 81 82 81 83 76 82 MNA 88 92 100 89 75 75 SAR 93 89 79 100 89 76 OTH NA NA NA NA NA NA Total 80 78 80 90 82 81

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m

TABLE 3.5: PORTFOLIO STATUS INDICATORS BY INSTRUMENT

% Projects at Risk FYOI FY05 FY06

Dev. Policy DPL NA 0 10 ECO 0 NA NA PRC 0 0 NA PSL 0 17 50 SAD 17 38 20 SAL 10 36 29 SubTotal 11 24 18

Investment

% Commitments at Risk FYOI FY05 FY06

NA 0 4 0 NA NA 0 0 NA 0 6 55 7 21 19 3 49 5 4 19 12

% Realism % Proactivity FYOI FY05 FY06 FYOI FY05 FY06

NA NA 100 NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA 100 100 NA NA 100 100 83 100 67 50 100 100 100 100 100 50 100 100 92 100 86 50 100

APL 7 23 11 14 21 9 100 68 90 100 87 79 ERL 11 25 22 9 18 21 50 46 54 100 67 67 FIL 17 6 6 LtL 11 19 32 SIL 13 14 13 SIM 22 22 13 TAL 11 15 16 SubTotal 12 16 13

13 6 8 12 20 29 12 11 11 19 16 15 11 18 14

13 13 11

100 100 100 100 100 100 78 78 67 100 79 100 78 83 80 89 82 79 100 88 80 86 83 100 62 75 86 86 93 73 79 77 80 90 84 80

Total 12 16 14 12 13 12 80 78 80 90 82 81

Investment Dev. Policy APL Adaptable Program Loan DPL Development Policy Lending ERL Emergency Recovery Loan ECO Expanded Cofinancing Operation FIL Financial Intermediary Loan PRC Poverty Reduction Support Credit LIL Learning and Innovation Loan PSL Programmatic Structural Adjustment Loan SIL Specific Investment Loan SAD Sector Adjustment SIM Sectoral investment and Maintenance SAL Structural Adjustment Lending TAL Technical Assistance Loan

TABLE 3.6: PORTFOLIO STATUS INDICATORS BY SOURCE OF FUNDS

Source of % Projects at Risk YO Commitments at Risk % Realism % Proactivity Funds FYOI FY05 FY06

IBRD 12 15 12 IDA 13 18 15 GEF 8 10 8 MONT 0 0 0

FYOI FY05 FY06 11 11 9

FYOI FY05 FY06 76 84 85

13 17 16 8 12 9 0 0 0

81 74 7% 100 88 71 NA NA NA

FYOI FY05 FY06 91 81 83 8% 85 81 100 71 86 100 NA NA NA 100 0 SPF 11 5 27 1% 5 32 100 100 100

Total 12 16 14 12 13 12 80 78 80 90 82 81


33 of 80

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TABLE 3.8: PORTFOLIO STATUS INDICATORS BY COUNTRY CATEGORY GROUPING

% at Risk FYOI FY05 FY06

Country Category Grouping

IBRD Investment Grade 10 6 8 China 5 2 1 IBRD Only (Others) 14 21 15 India 8 14 11 Blend 11 14 13 IDA Only 11 17 13 Licus 27 28 30 Multi-Country 6 10 8 Total 12 16 14

% Commitments at Risk FYOI FY05 FY06


IBRD Investment Grade 13 9 10 China 5 4 2 IBRD Only (Others) 14 16 10 India 8 9 15 Blend 13 13 6 IDA Only 10 17 15 Licus 45 30 30 Multi-Country 9 11 3 Total 12 13 12

% Realism FYOI FYO5 FY06

IBRD Investment Grade 73 80 86 China 100 100 100 IBRD Only (Others) 76 89 83 India 100 100 83 Blend 88 85 94 IDA Only 82 74 80 Licus 74 56 67

Total 80 78 80


Multi-Country 100 100 100

% Proactivity FY06

Country Category Grouping FYOI FY05

IBRD Investment Grade 80 90 88 China 100 67 100 IBRD Only (Others) 94 75 83 India 100 89 89 Blend 90 88 76 IDA Only 88 85 81 Licus 86 79 75 Multi-Country 100 NA 67 Total 90 82 81

37 of 80

TABLE 3.9: PORTFOLIO RISK STATUS ORDERED BY COUNTRY (FY06)

% Net Countnr Commitments Commitments

at Risk (US$ Million) Bangladesh 38 2,052 Argentina 38 3,492 Ghana 29 1,096 Nigeria 27 1,843 Ukraine 26 1.009

Risk (US$ Million) Bangladesh 38 2,052 Argentina 38 3,492 Ghana 7R I nne

LO

Tanzania 23 1,912 Congo, Democratic Republic of 19 1,407

_ _ _ _ _ ~ ~ ~ ~ - India 15 11,269 Mexico 14 2.703 Russian Federation 13 1,951 Iran, Islamic Republic of 10 1,355 Uganda 8 1,134 Vietnam 7 3,975 Phitimines 7 1.435 Romania 5 1,486 Indonesia 5 2,344 Ethiooia 3 2.017 - r - -.

China 2 10.724 Brazil 1 4,490 Turkey 1 6,057 Africa 1 1.019 Egypt, Arab Republic of 1 1,795 Pakistan 0 1,853 Colombia 0 1,359 Poland 0 1,184

% Projects No. of at Risk Projects Country

Argentina 48 29 Niaeria 40 20 Bangladesh 29 24

Bosnia-Herzegovina 24 17 Albania 18 17

Serbia and Montenegro 26 19

Ghana 18 17 Peru 18 17 Mozambique 17 18 Tanzania 15 26

Honduras 11 18 India 11 56

Russian Federation 9 22 Mexico 9 23 Vietnam 8 39 Indonesia 8 26 Croatia 7 15

Georgia 11 19

Senegal 7 15 Egypt, Arab Republic of 6 16 Sri Lanka 6 16 Brazil 6 53 ~

Yemen, Republic of 6 18 Africa 5 20 Uganda 5 21 Romania 5 22 Turkev 4 24 China 1 79 Colombia 0 20 Pakistan 0 19 Armenia 0 18 Azerbaijan 0 18 Kyrgyz Republic 0 17 Tunisia 0 17 Moldova 0 15

Note: Only countries representing 1% or more of Bank commitments or projects are shown.

38 of 80

v)

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L

TABLE 3.11: NET DISCONNECT BY REGIONKOUNTRY

RegionlCountry

AFR Africa Angola Benin Botswana Burkina Faso Burundi Cameroon Cape Verde Central African Chad Comoros Congo, Democrat Congo, Republic Cote d'lvoire

Comoros Congo, Democrat Congo, Republic Cote d'lvoire Djibouti Eastern Africa Equatorial Guin Eritrea Ethiopia Gabon Gambia, The Ghana Guinea Guinea-Bissau Kenya Lesotho Liberia Madagascar Malawi Mali Mauritania Mauritius Mozambique Niger Nigeria Rwanda Sao Tome and Pr Senegal Seychelles Sierra Leone Somalia South Africa Sudan Swaziland Tanzania Togo Uganda Western Africa

FY90-06 Projects % Unsat % Unsat % Net

(No.) DO Outcome Disc

5 0 40 40

34 3 74 71 11 l a 36 l a _ . _ . - . 6 17 33 17 32 13 16 3 26 35 42 8 27 37 67 30 15 0 7 7 17 71 a2 12 25 I 6 74 8 _ _ - 12 42 50 a 33 67 88 21 7 14 86 71 41 24 44 20 4 25 25 0 _ _ _.

1 0 100 100 8 63 7s 13 R n 17 17 " " 32 25 31 6 a 13 50 38 15 A7 A7 n .- 78 13 33 21 41 29 41 12 18 22 33 11 _ _ ._

55 35 60 25 17 29 41 12 1 100 100 0

5A 17 11 15 - . - . .- 44 7 45 39 37 a 38 30 31 26 29 3 - . _ _ _.

15 27 27 0 33 9 1s A -- 31 35 42 6 55 31 55 24 27 41 56 15 10 20 50 30 49 l a 24 6 3 0 33 33 19 32 47 16 10 a0 a0 0 2 0 0 0 19 16 42 26 2 0 0 0

48 13 19 6 24 33 63 29 55 7 33 25 3 0 33 33

38 18 50 32 22 14 27 14

1,206 23 40 17

FYO3-06 Projects % Unsat % Unsat % Net

(No.) DO Outcome Disc

3 0 33 33 2 0 50 50 7 n 14 14 , . . . 0 NA NA NA R 1 1 1 1 n z U U U 5 0 20 20 A 0 17 17

0 NA NA NA 0 NA NA NA 0 NA NA NA 3 0 33 33 7 n I A l A . . 2 0 50 50 2 100 50 -50 17 6 41 35 5 80 a0 0 2 50 50 0 9 33 56 22 5 An 4n n - ._ .- 0 NA NA NA 12 25 25 0

10 20 20 0 2 0 0 0 t i n n n 7 0 43 43 2 50 50 0

0 0 n r n r n

0 3 n

L JU 3U U

16 13 25 13 0 NA NA NA R I?, I?, n . - .- 0 NA NA NA 2 0 0 0 0 NA NA NA 1 n n n

a 13 25 13 1 100 100 0

233 18 30 13

40 of 80

TABLE 3.11: NET DISCONNECT BY REGIONKOUNTRY

F Y m m ~ y n 3 - m RegionlCountry

EAP Cambodia China Fiii , ', , Indonesia Korea, Republic Lao People's De Malaysia Mongolia Myanmar Papua New Guine Philippines Samoa Solomon Islands Thailand Timor-Leste Tonga Vanuatu Vietnam Sub Total

ECA Albania Aral Sea Armenia Azerbaijan Belarus Bosnia-Herzegov Bulgaria Croatia Cyprus Czech Republic Estonia Georgia Hungary Kazakhstan Kosovo Kygyz Republic Latvia Lithuania Macedonia, form Motdova Poland Portugal Romania Russian Federat Serbia Slovak Republic

Turkmenistan Ukraine Uzbekistan Yugoslavia, for Sub Total

Projects % Unsat % Unsat % Net (No.) DO Outcome Disc

Projects %Unsat %Unsat %Net (No.) DO Outcome Disc

12 8 17 a 190 4 9 6 4 0 0 0

169 14 27 14 42 0 10 10 24 13 25 13

.- - - 14 14 36 21 19 21 58 37 67 12 28 16

-17 6 17 0 5 20 60 40

4.4 9 14 5 9 0 56 56 2 0 50 50 3 33 67 33 l a 0 0 0

670 8 20 I 1

47 i n 14 5 - 1 0 100 100

22 0 9 9 11 18 45 27 5 20 40 20 39 0 8 8 27 11 19 7 17 0 29 29 8 0 13 13 6 n n n a 0 0 0 19 5 16 11 38 13 11 -3 l a 22 17 -6 13 a a 0 17 12 24 12 16 0 0 0 13 a 23 15

15 7 27 20 37 11 19 8 a 50 50 0

29 3 10 7 41 20 4.4 24 10 0 0 0 4 0 0 0 8 0 13 13 1 n n n

22 0 l a l a

7 14 14 0 56 2 11 9 0 NA NA NA 35 17 31 14

- 0 NA NA NA 1 0 100 100

1 0 0 0 n N A N A N A 9 0 0 0 6 n R 7 67 -. _. 0 NA NA NA 0 NA NA NA 10 0 0 0

150 7 17 I 1

71) i n 15 5 1 0 100 100 11 n 9 9 . I - - a 13 38 25 0 NA NA NA 13 0 0 0 a 13 13 0 FI n I ? I? - .- . - 0 NA NA NA 0 NA NA NA 1 0 0 0 a 0 13 13 n N A N A N A . .. . . .. . . .. . 5 40 20 -20 10 10 10 0 6 33 50 17 6 0 0 0 4 25 50 25 9 0 11 11 5 0 20 20 Q n I 1 11

0 NA NA NA 15 0 0 0 18 28 39 11 9 0 0 0 1 n n n

" 12 25 25 0 5 40 20 -20 65 20 31 11 13 23 15 -8 3 100 100 0 2 100 100 0 21 14 14 0 6 17 17 0 6 17 50 33 3 33 67 33 11 9 27 l a 0 NA NA NA

613 11 20 9 207 12 17 6

41 of 80

TABLE 3.11: NET DISCONNECT BY REGlONlCOUNTRY

FYQO-06 FYM-06

RegionlCountry Projects % Unsat % Unsat % Net (No.) DO Outcome Disc

Projects % Unsat % Unsat % Net (No.) DO Outcome Disc

LCR Argentina Bahamas, The Barbados

71 11 73 11 1 9 11 If3 5 . . . . -- . . 2 0 50 50 6 17 33 17 8 13 25 13 50 10 30 20 138 9 I 9 9

. - . - . . - 0 NA NA NA 0 NA NA NA 2 0 50 50 16 25 50 25

Belize Bolivia Brazil 33 9 12 3

0 NA NA NA I n n n

_ _ . _ 6 50 50 0 1 n n n

Caribbean Central America Chile Colombia Costa Rica Dominica Dominican Repub Ecuador El Salvador Grenada Guatemala

32 6 9 3 63 8 25 17 -

4 0 0 0 21 0 5 5 2 0 0 0 3 33 33 0 9 22 11 -1 1 9 11 33 22 A n n n

I U U U 6 33 17 -1 7 15 27 20 -7 39 10 21 10 17 n n n

1 0 0 0 A n 76 76

Guyana Haiti Honduras Jamaica

4 0 25 25 0 NA NA NA 6 17 0 -1 7

29 14 38 24 101 6 16 10 22 5 9 5 7 n n n

2 0 0 0 21 5 19 14 10 10 10 0 " n n n

Mexico N caragua OECS Countr es L U U U

8 13 25 13 4 25 50 25 8 13 25 13 m m m n

- 11 9 18 9 13 15 54 38 30 13 20 7

Panama Paraguay Peru St. Kitts and N

.. _.

3 33 33 0 A 17 33 17

L U U u 3 n n n St. Lucia

St. Vincent and Trinidad and To

3 0 0 0 7 I d A? 79

24 4 4 0 23 26 57 30 806 11 23 12

Uruguay Venezuela Sub Total

M NA

5 0 0 0 7 ?a A? I A

212 10 18 8

40 40 55 15 6 33 50 17 40 20 30 10 7 I d I A n

Algeria Djibouti Egypt, Arab Rep Iran, Islamic R

6 50 67 17 4 0 25 25 8 13 25 13 0 NA NA NA 6 17 0 -1 7 8 13 38 25 17 6 18 12

40 3 8 5 11 27 45 18 75 12 32 20

Jordan Lebanon Morocco . _ -

3 U U U 0 NA NA NA 1 n 0 0 1 n n n

Oman Red Sea and Gul

59 7 19 12 71 19 38 19

13 15 8 -8 14 29 57 29 11 9 27 18 88 16 28 13

- . - -- . - 68 22 31 9 373 17 29 13

SAR Afghanistan Bangladesh Bhutan India Maldives Nepal Pakistan

3 0 0 0 76 14 26 12 8 0 13 13

191 13 27 14 5 n n n

3 0 0 0 12 8 25 17 1 n n n

36 11 17 6 n N A N A N A

- . .. . . .I . . .. . 14

n " C " C

29 7 14 " q

43 19 30 12 96 13 29 17 46 13 33 20 Sri Lanka _ _ _. 9 11 33 22

Sub Total 468 13 27 14 81 9 20 11 Total 4,136 15 28 13 971 12 22 10

42 of 80

TABLE 3.12: NET DISCONNECT BY INSTRUMENT

Instrument FY90-06 FYO3-06

Projects % Unsat Yo Unsat % Net Projects % Unsat YO Unsat % Net

Dev. Policy DPL DRL PRC PSL RIL SAD SAL SSL Sub Total

Investment APL ERL FII LI L SIL SIM TAL Sub Total

Total

(NO.) DO Outcome Disc (NO.) DO Outcome Disc

5 0 40 40 . - .-

11 0 9 9 24 0 13 13

A n n - - 4L U I I 21 14 24 10 21 5 8 22 14 275 8 29 20 " n n "

595 7 24 16

5 0 40 40 0 NA NA NA 22 0 14 14 29 0 10 10

n n n I U U U

23 4 9 4 67 7 22 15 2 0 0 0

149 4 17 13

57 19 19 0 52 17 17 0 i i n 3 R 5 34 3 R 3 . . - - - - 202 22 45 22 71 17 27 10 -

2,335 16 28 12 44 1 18 30 12 325 16 34 18

3,541 16 29 13 4,136 15 28 13

13 15 23 8 63 17 27 10

558 13 23 10 34 21 21 0 68 13 28 15

822 14 23 9 971 12 22 10

Investment APL ERL FIL LIL SIL SIM TAL

Dev. Policy Adaptable Program Loan DPL Development Policy Lending Emergency Recovery Loan DRL Debt and Debt Service Reduction Loan Financial Intermediary Loan PRC Poverty Reduction Support Credit Learning and Innovation Loan PSL Programmatic Structural Adjustment Loan Specific Investment Loan RIL Rehabilitation Loan Sectoral Investment and Maintenance SAD Sector Adjustment Technical Assistance Loan SAL Structural Adjustment Lending

SSL Special Structural Adjustment Lending

TABLE3.13: NET DISCONNECT BY SOURCE OF FUNDS

FY90-06 FYO3-06 Source of Funds Projects % Unsat YO Unsat % Net Disc

(No.) DO Outcome (No.) DO Outcome % Net Disc Projects % Unsat

IBRD 2,083 13 26 13 447 11 18 7 IDA 1,927 18 32 14 466 13 24 11 GEF 68 9 19 10 24 13 21 8 MONT 8 0 0 0 2 0 0 0 SPF 50 10 28 18 32 16 41 25 Total 4,136 15 28 13 971 12 22 10


43 of 80

TABLE 3.15: NET DISCONNECT BY NETWORWEXIT YEAR

FY03 FY04 FY05

Projects % Unrat % Unsat %Net Projects % Unrat % Unrat K Net (No.) DO Outcome Disc (No.) DO Outcome Dlrc

NetworklExit Year

ESSD Environment 15 33 40 7 16 25 44 19 Rural Sector 39 10 31 21 46 4 9 4 Social Development 2 5 0 5 0 0 5 20 40 20 Sub Total 56 18 34 16 67 10 19 9

Financiai Sector 12 8 17 8 11 27 27 0 Sub Total 12 8 17 8 11 27 27 0

FSE

unu Education Health, Nutrition and Population Social Protection Sub Total

Gender and Development Poverty Reduction Public Sector Governance Sub Total

24 0 17 17 17 6 35 29 25 12 24 12 66 6 24 18

17 18 24 6 3 0 0 0 20 5 15 10 17 12 41 29 15 20 13 -7 72 13 22 10

24 4 21 17 0 NA NA NA 3 0 33 33 30 10 30 20 57 7 26 19

36 8 19 11 25 20 28 8 25 8 24 16 86 12 23 12

16 19 19 0 0 0 3 0

23 9 4 4 12 17 17 0 16 19 25 6 70 14 14 0

18 11 22 11 0 NA NA NA 3 0 0 0

30 13 33 20 51 12 27 16

Projects % Unsat % Unrat %Net (No.) DO Outcome Disc

20 10 10 0 43 7 12 5 4 25 25 0 67 9 12 3

17 6 6 0 17 6 6 0

25 12 8 4

12 0 8 8 62 16 24 8

12 17 25 8 1 0 0 0

25 12 16 4 24 8 13 4 14 7 7 0 76 11 14 4

25 28 48 20

4, 1 4

0 NA NA NA 4 0 25 25 17 4 0 2" , 4 L , 82 I"

44 14 23 9 PSDN

Private Sector Development 16 17 28 11 15 27 47 20 17 24 41 18 Sub Total 18 17 28 11 15 27 47 20 17 24 41 18

Total 281 11 26 15 300 13 22 9 283 12 18 6

Total FY06

Projects % Unrat % Unsat %Net (No.) DO Outcome Disc

NetworklClosing Year

ESSD Environment 7 14 29 14 Rural Sector 16 6 13 6

Sub Total 26 12 19 8 Social Development 3 33 33 0

FSE Financial Sector Sub Total

Education Health, Nutrition and Population Social Protection Sub Total

Energy and Mining Global Information/Communications Transport Urban Development Water Supply and Sanitation Sub Total

Economic Policy Gender and Development Poverty Reduction Public Sector Governance Sub Total

HDN

INF

PREM

DE""

3 33 33 0 3 33 33 0

11 9 27 18 8 0 25 25 6 0 0 0 25 4 20 16

4 25 25 0 0 NA NA NA 18 0 0 0

1 1 4 1

8 38 38 o 38 13 13 0

3 0 33 33 1 0 0 0 2 0 0 0 6 17 33 17 12 a 25 17

Projects % Unrat % Unsat %Net (No.) DO Outcome DISC

58 21 29 9 144 7 16 9 14 29 36 7

216 12 21 9

43 14 16 2 43 14 16 2

96 7 17 9 75 17 36 19 68 7 19 12 239 10 23 13

49 1-8 2-2 4

86 7 9 2 61 11 21 10 53 19 19 0 256 13 16 4

58 7 19 12 1 0 0 0

12 0 17 17 93 14 31 17 164 10 26 15

r"",.

Private Sector Development 3 0 33 33 53 21 38 17 Sub Total 3 0 33 33 53 21 30 17

Total 107 10 19 8 971 12 22 10

45 of 80

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TABLE 3.23: NET CHANGES IN OUTCOMES RATINGS BETWEEN ICRR AND PPAR BY ELAPSED TIME BETWEEN ICRR AND PPAR (FY90-05)

Elapsed Time between ICRR and corresponding PPAR No. of IEG Evaluations No. of Net Changes % Net Change c=2 Year 'a 55 1 38 6.9 >2 & e= 5 Years 354 42 11.9 >5 Years 66 9 13.6 Total 971 89 9.2

About 38 projects with PPAR evaluation date less than their corresponding ICRR evaluation date in the system have been eliminated a/

from the above analysis.

51 of 80

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TABLE 3.25: PORTFOLIO RISK FACTORS (As a Percentage of the Active Portfolio)

Risk Factor FY05 FY06 Country Environment* 21 20 Country Record* 32 29 Counterpart Funds 5 4 Effectiveness Delay* 7 7 Financial Management 4 5 Legal Covenants 7 6 Long Term Risk* 4 4 Project Management* 6 6 Monitoring & Evaluation* 7 6 Procurement Problems 7 6 Safeauards 2 3 Slow Disbursing* 11 11 Golden Flaa 0 1

* Risk-flags applicable to Development Policy operations as well.

53 of 80

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TABLE 3.27: DISBURSEMENT RATIO' BY REGION AND COUNTRY CATEGORY GROUPING (In Percent)

Region F Y O 1 FY05 FY06

AFR EAP ECA LCR MNA OTH SAR Total

23 25 26 20 20 19 18 24 17 23 25 33 15 16 18 10 57 57 22 26 28 21 23 24

Country Category Grouping F Y O 1 FY05 FY06

IBRD Investment Grade China IBRD Only (Others) India Blend IDA Only Licus Multi-Country Total

19 26 24 18 22 21 20 20 23 21 24 25 29 28 33 22 24 23 22 28 28 18 11 9 21 23 24

' Disbursement Ratio is the ratio between "IBRDADA Disbursements in the Fiscal Year" and "Opening Undisbursed Amount at the beginning of the Fiscal Year," and is restricted only to Investment projects.

55 of 80

TABLE 3.28: CANCELLATIONS BY REGlONlCOUNTRY (US$ Million, IBRDllDA and SPF Only)

RegionlCountry FY02 FY03 FY04 FY05 FY06 AFR

Cote d'lvoire 1 11 152 0 28

Nigeria 0 8 0 0 41 Tanzania 73 3 2 0 1 Zimbabwe 103 58 0 7 0 Sub Total 343 290 338 59 81

EAP China 26 1 436 370 168 54 Indonesia 97 189 55 172 23 Sub Total 451 788 525 409 152

ECA Kazakhstan 156 41 1 1 9 Poland 26 12 0 79 10 Russian Federation 207 131 180 15 45 Turkey 442 974 176 10 40 Sub Total 928 1,266 485 272 193

LCR Argentina 76 30 2 24 239 Brazil 69 196 288 173 112 Colombia 9 29 85 2 19 Mexico 139 358 122 596 1 Uruguay 5 0 0 76 0 Sub Total 377 746 549 941 453

MNA Algeria 7 110 79 44 179 Egypt, Arab Republic of 4 154 35 18 22 Tunisia 40 4 67 32 12 Sub Total 139 344 246 172 242

SAR Bangladesh 45 152 2 1 171 India 232 280 198 632 104 Sub Total 336 495 233 650 283

Total 2,573 3,928 2,377 2,503 1,405

Notes: 1. The table includes projects that are either partially or fully cancelled, while Annex 2 includes partial

cancellations for projects that are either active or have exited the portfolio. 2. The table shows individual countries with cancellations exceeding 2.5% of the Bankwide total.

56 of 80

TABLE 3.29: CANCELLATIONS BY NETWORWSECTOR BOARD (US$ Million, IBRD/IDA and SPF Only)

NetworkEector Board FY02 FY03 FY04 FYo5 FY06

Environment 198 294 91 214 27 Rural Sector 201 419 32 1 917 180 Sub Total 399 728 41 9 1,154 209

FSE Financial Sector 489 1,004 121 21 9 Sub Total 489 1,004 121 21 9

HDN Education 189 193 190 193 200 Health, Nutrition and Population 95 324 185 175 72 Social Protection 120 126 81 18 45 Sub Total 405 642 456 387 31 7

INF Energy and Mining 432 507 307 216 87 Transport 397 377 270 189 277 Urban Development 30 250 243 229 124 Water Supply and Sanitation 78 275 117 128 65 Sub Total 968 1,423 973 763 563

PREM Economic Policy 68 7 39 37 0 Public Sector Governance 62 77 154 75 253 Sub Total 130 84 193 111 258

PSDN Private Sector Development 182 47 215 66 49 Sub Total 182 47 21 5 66 49

Total 2,573 3,928 2,377 2,503 1,405

Notes: 1. The table includes projects that are either partially or fully cancelled, while Annex 2 includes partial

cancellations for projects that are either active or have exited the portfolio. 2. The table shows individual Sector Boards with cancellations exceeding 2.5% of the Bankwide total.

57 of 80

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TABLE3.33: QUALITY OF SUPERVISION BY SOURCE OF FUNDS (% Moderately Satisfactory or Better)

Source of No. of Funds Projects OA R1 R2 R3 R4

IBRD 41 94 97 96 94 83 IDA 74 97 97 94 98 87 GEF 10 93 93 93 93 83 MONT 2 100 100 100 100 100 SPF 3 29 64 100 66 29 Bankwide 130 95 96 95 96 85

TABLE 3.34: QUALITY OF SUPERVISION BY LlCUS AND NON-LICUS (% Moderately Satisfactory or Better)

No. of LICUS Projects OA R1 R2 R3 R4

Yes 33 88 91 91 91 76 No 97 96 97 95 97 86 Bankwide 130 95 96 95 96 85

TABLE 3.35: QUALITY OF SUPERVISION BY NON-DEDICATED MULTI-SECTORS (% Moderately Satisfactory or Better)

Non- Dedicated No. of

Multi-Sectors Projects OA R I R2 R3 R4 Yes 21 100 100 91 100 91 No 109 94 96 95 95 83 Ban kwide 130 95 96 95 96 85

OA = Overall Assessment R1 = Focus on Development Effectiveness R2 = Supervision of FiduciaryEafeguard Aspects R3 = Adequacy of Supervision Inputs and Processes R4 = Quality and Realism of Reporting

60 of 80

TABLE 3.36: QUALITY OF TRANSPORT, WATER SUPPLY AND SANITATION AND ICT IN MULTI-SECTORAL PROJECTS

Table 3.36(a): Quality of Transport (TR) in Non-dedicated Multi-sectoral Projects

% Satisfactory ?4 Moderately or Better Satisfactory

% Mopderately Satisfactory or No. of

Projects p,.u,... Y S L . S I

OA Overall Assessment 16 75 25 50 R1 Strategic Relevance and Approach 16 a i 44 37 R2 Technical, Financial, Economic and Safeguard Aspects 16 75 19 56 R3 Policy and institutional Aspects and Implementation Arrangements 16 69 25 44 R4 Risk Assessment 16 50 38 12 R5 Focus on Development Effectiveness during Supervision 14 79 57 22 R6 Bank Inputs and Processes 16 75 31 44 R6A During Project Preparation and Appraisal 16 75 31 44 R6B During Supervision 11 73 45 2a

Table 3.36(b): Quality of Water Supply and Sanitation (WSS) in Non-dedicated Multi-sectoral Projects

OA Overall Assessment R1 Strategic Relevance and Approach R2 Technical, Financial, Economic and Safeguard Aspects R3 Institutional Aspects and Implementation Arrangements R4 Risk Assessment R5 Supervision Focus on Development Effectiveness R6 Bank inputs and Processes R6A During Preparation R6B During Supervision

2a a2 61 21 29 76 52 24 29 79 45 34 2a 64 54 10

29 a3 4a 35 29 a3 52 31 17 aa 76 12

17 94 76 i a

Table 3.36(c): Quality of Information and Communication Technology (ICT)

OA Overall Assessment R1 Strategic Relevance and Approach R2 Technical, Financial, Economic and Safeguard Aspects R3 Policy and institutional Aspects R4 Implementation Arrangements R4 Risk Assessment R6 Implementation Oversight R7 Bank inputs and Processes

No. of t:g::$: % Satisfactory % Moderately or Better Satisfactory Better Projects

24 sa 42 16 77 73 45 28

I *:-%tory % Moderately Y,.ier Satisfactory Better Pi v , r r ra

24 sa 42 16 77 73 45 28 -- . - .- -_ 22 59 36 23 77 91 64 77 -- - 22 68 23 45 23 57 22 35 22 77 55 22 23 43 35 a

61 of 80

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TABLE3.38: QUALITY OF AAA BY REGION (% Moderately Satisfactory or Better)

No. of Tasks OA R1 R2 Region FY98-99 FY05-06 " FY98-99 FYO5-06 FY98-99 FYO5-06 FY98-99 FYO5-06

AFR 24 30 50 80 63 93 43 83 . .. . . EAP 15 7 87 100 87 100 87 86 ECA 25 24 80 96 92 100 80 96 LCR 16 11 75 91 94 100 81 91 MNA 9 16 89 94 100 100 89 93 SAR 11 28 91 100 100 100 91 93 O T H ~ 0 21 NA 86 NA 95 NA 95 Total 100 137 75 91 86 98 75 91

No. of Tasks R3 R4 R5 Region FY98-99 FYO5-06 I' FY98-99 FYO5-06 FY98-99 FYO5-06 FY98-99 FYO5-06

AFR 24 30 64 87 42 80 29 70 EAP 15 7 80 100 80 100 87 71 ECA 25 24 84 96 72 92 76 92 LCR 16 11 81 100 63 100 63 91 MNA 9 16 100 73 89 80 78 81 SAR 11 28 82 100 64 96 73 96 O T H ~ 0 21 NA 86 NA 86 NA 86 Total 100 137 80 91 65 89 64 85

' Includes one Active task with a Client Delivery in FY08. * Tasks denote Global tasks.

OA = Overall Assessment R1 = Strategic Relevance R2 = Internal Quality R3 = Dialogue and Dissemination R4 = Likely Impact R5 = Bank Inputs and Processes

63 of 80

TABLE3.39: QUALITY OF AAA BY NETWORK (% Moderately Satisfactory or Better)

No. of Tasks OA R1 R2 Network FY98-99 FYO5-06 ' I FY98-99 FYO5-06 FY98-99 FYO5-06 FY98-99 FYO5-06

ESSD 20 23 FSF 7 11 HDN 11 23 INF 11 21 .. .. ~

OPCS 0 7 PREM 47 43 PSDN 4 8 .

zZz2 0 1

75 87 85 96 79 83 71 82 100 91 86 91 73 100 82 100 64 91 73 95 82 95 73 95 NA 86 NA 100 NA 86 74 88 85 100 72 93 100 100 100 100 100 100 NA 100 NA 100 NA 100

Total 100 137 75 91 86 98 75 91

No. of Tasks R3 R4 R5 Network FY98-99 FYO5-06 ' I FY98-99 FYO5-06 FY98-99 FYO5-06 FY98-99 FYO5-06

ESSD 20 23 79 96 65 87 60 78 FSE 7 11 71 82 57 73 57 82 HDN 11 23 64 96 64 100 55 91 INF 11 21 82 86 73 90 64 90 OPCS 0 7 NA 100 NA 86 NA 86 PREM 47 43 83 88 62 86 66 81 PSDN 4 8 100 100 100 100 100 88 . zZz2 0 1 NA 100 NA 100 NA 100 Total 100 137 80 91 65 89 64 85

' Includes one Active task with a Client Delivery in FY08. Tasks that have not been assigned a Sector Board.

OA = Overall Assessment R1 = Strategic Relevance R2 = Internal Quality R3 = Dialogue and Dissemination R4 = Likely Impact R5 = Bank Inputs and Processes

64 of 80

TABLE 4.1: AAA DELIVERIES AND COSTS BY REGlONlCOUNTRY

Deliveries (#) initiation to Completion Costs (US$ '000) RegionlCountry FY02 FY03 FY04 FY05 FY06 FY02 FY03 FY04 FY05 FY06

AFR Africa 40 73 68 45 57 3,076 8,810 15,281 22,638 15,190 Angola 1 2 4 2 7 82 505 1,431 408 556 Benin 6 1 3 6 2 269 4 510 1,016 80 Botswana 0 0 0 2 3 0 0 0 392 374 Burkina Faso 3 1 5 5 2 116 74 776 423 341 Burundi 2 0 6 2 4 52 0 555 143 450 Cameroon 3 2 4 2 5 77 537 403 180 867 Cape Verde 0 1 4 1 4 0 41 133 147 207 Central Africa 0 0 0 0 1 0 0 0 0 111 Central African Republic 0 1 0 1 0 0 30 0 549 0 Chad 1 1 3 3 4 0 236 297 483 507 Comoros 2 2 0 0 2 55 70 0 0 49 Congo, Democratic Republic of 1 4 6 6 1 0 736 91 2 789 357 Congo, Republic of I 3 0 2 2 119 259 0 483 146 Cote d'lvoire 2 2 2 2 1 48 226 479 66 119 Eastern Africa 0 0 0 0 2 0 0 0 0 350 Eritrea 4 3 2 0 1 523 37 154 0 28 Ethiopia 9 6 12 14 12 687 422 1,382 2,213 2,767 Gabon 0 1 0 0 2 0 230 0 0 387 Gambia, The 2 2 2 5 1 19 172 482 96 39 Ghana 1 5 7 9 7 12 486 930 1,060 740 Guinea 1 1 5 5 1 65 93 388 49 22 Guinea-Bissau 0 0 2 0 2 0 0 187 0 274 Kenya 3 11 9 8 9 669 1,267 1,894 800 1,666 Lesotho 0 2 5 2 2 0 589 870 248 427 Madagascar 3 6 3 9 7 128 707 536 1,699 1,186 Malawi 1 4 8 6 3 131 925 829 763 830 Mali 0 5 8 6 4 0 418 392 550 322 Mauritania 6 5 3 4 4 108 457 461 271 642 Mauritius 2 7 3 1 4 344 467 169 0 1,121 Mozambique 5 8 1 12 4 665 1,249 205 1,809 649 Namibia 2 0 1 2 3 502 0 442 62 522 Niger 2 2 5 5 3 263 50 652 505 252 Nigeria 10 8 20 13 12 921 1,790 2,183 2,219 1,643 Rwanda 1 6 3 4 3 864 806 42 453 45 1 Sao Tome and Principe 0 4 1 1 1 0 512 29 11 174 Senegal 4 10 4 9 6 745 1,021 513 765 436 Seychelles 0 1 1 0 3 0 132 110 0 260 Sierra Leone 1 4 3 2 5 69 257 562 40 950 Somalia 0 0 1 1 3 0 0 173 548 189 South Africa 7 4 4 6 10 1,191 159 953 655 2,022 Southern Africa 0 0 0 0 1 0 0 0 0 0 Sudan 2 2 2 7 4 45 71 0 269 3,829 548 Swaziland 0 0 2 3 3 0 0 174 480 641 Tanzania 5 10 11 12 8 728 1,032 1,107 1,724 1.384 Togo 2 2 4 2 3 67 168 324 480 436 Uganda 6 6 10 13 4 295 447 1,166 1,468 279 Western Africa 2 1 0 0 2 31 111 0 0 372 Zambia 3 9 8 5 6 1,608 1,384 1,079 1,145 814 Zimbabwe 1 3 1 2 1 30 308 23 600 39 Sub Total 147 231 256 247 241 14,605 27,934 39,459 52,257 42,216

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Deliveries (#) Initiation to Completion Costs (US$ '000) RegionlCountry FY02 FY03 FY04 FY05 FY06 FY02 FY03 FY04 FY05 FY06

EAP Australia 0 0 0 0 1 0 0 0 0 43 Cambodia 5 8 7 10 5 812 1,163 1,047 1,843 657 China 19 24 33 32 36 3,161 4,498 4,272 5,256 6,124 China, Hong Kong SAR 0 2 0 0 0 0 61 0 0 0 East Asia and Pacific 15 21 16 15 8 2,786 4,628 2,901 4,211 3,945 Fiji 0 0 3 1 1 0 0 105 129 109 Indonesia 36 34 26 29 21 8,230 6,176 6,491 5,868 3,258 Japan 0 1 0 0 0 0 35 0 0 0 Korea, Republic of 4 4 1 0 0 1,537 485 78 0 0 Lao People's Democratic Republic 3 2 4 4 8 397 118 406 335 1,948 Malaysia 2 0 2 5 5 371 0 489 220 422 Mekong 0 0 0 1 2 0 0 0 162 904 Mongolia 4 13 5 5 12 626 826 866 259 1,514 Pacific Islands 4 3 1 1 7 497 297 61 251 1,613 Palau 0 0 1 0 0 0 0 64 0 0 Papua New Guinea 3 5 3 0 2 227 803 945 0 978 Philippines 21 19 9 20 8 2,437 2,204 1,346 3,284 2,635 Samoa 0 0 1 2 0 0 0 16 68 0 Singapore 0 0 1 0 0 0 0 118 0 0 Solomon Islands 0 0 1 2 2 0 0 440 134 89 Thailand 19 11 9 13 10 7,532 2,929 979 1,824 881 Timor-Leste 8 5 6 3 4 796 1,123 522 301 435 Tonga 0 1 0 1 1 0 41 0 95 193 Vanuatu 0 0 0 0 1 0 0 0 0 145 Vietnam 12 26 15 16 13 1,849 2,298 2,092 1,850 1,781 Sub Total 157 179 144 160 147 31,258 27,683 23,237 26,oaa 27,676

ECA Albania 4 5 2 7 4 408 461 395 706 461 Armenia 5 5 7 5 3 1,605 668 928 857 301 Austna 0 0 1 0 0 0 0 36 0 0 Azerbaijan 4 9 6 12 5 377 1,413 1,248 981 559 Belarus 4 2 2 4 1 597 396 298 678 86 Bosnia-Herzegovina 6 4 8 2 8 1,018 598 799 393 1,197 Bulgaria 5 11 9 4 2 831 763 708 361 653 Caucasus 1 0 3 1 0 43 0 74 32 0 Central Asia 1 3 3 7 1 161 51 1 302 761 33 Croatia 2 8 2 3 3 183 1,342 205 238 548 Cyprus 0 0 1 0 1 0 0 166 0 -2 Czech Republic 2 6 5 5 3 432 277 234 359 193 EU Accession Countries 0 0 2 2 13 0 0 127 129 1,923 Estonia 0 0 2 0 0 0 0 106 0 0 Europe and Central Asia 23 36 24 23 16 2,459 7,534 2,900 6,380 3,809 Georgia 3 11 6 3 5 441 1,237 429 560 702 Hungary 2 4 3 4 0 137 176 195 438 0 Italy 0 0 0 0 1 0 0 0 0 55 Kazakhstan 7 4 9 13 9 386 227 1,518 2,779 2,204 Kosovo 3 6 3 4 5 874 445 391 700 31 1 Kyrgyz Republic 3 7 8 2 5 156 1,394 1,003 488 825 Latvia 0 5 7 5 1 0 237 775 429 130 Lithuania 3 5 8 5 0 655 473 483 484 0 Macedonia, former Yugoslav Republic of 5 5 3 5 2 884 351 447 653 255 Moldova 7 7 9 3 7 907 506 1,160 775 684 Montenegro 0 0 0 0 2 0 0 0 0 224 Poland 4 6 7 8 7 669 658 1,172 573 1,218 Romania 6 8 7 9 1 1,014 938 1,215 509 530 Russian Federation 18 17 24 20 18 4,517 2,579 4,942 2.840 3,172 Serbia 9 10 9 7 12 715 1,627 1,337 839 1,313

Slovenia 0 1 5 1 0 0 48 339 45 0 South Eastern Europe and Balkans 4 3 6 3 3 699 216 1,385 180 153 Tajikistan 0 4 5 6 3 0 423 1,603 1,358 922 Turkey 11 12 8 9 7 1,635 1,489 838 1,889 1,373 Turkmenistan 2 3 0 0 0 40 306 0 0 0 U kratne 9 13 7 4 10 708 2,059 1,284 681 1,693 United Kingdom 0 1 0 0 0 0 77 0 0 0 Uzbekistan 1 4 4 2 0 135 1,685 833 229 0 Sub Total 160 231 219 193 162 23,559 31,905 29,987 29,132 25,621

Slovak Republic 6 6 4 5 2 874 791 111 806 98

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Deliveries (#) Initiation to Completion Costs (US$ '000) RegionlCountry FY02 FY03 FY04 FY05 FY06 FY02 FY03 FY04 FY05 FY06

LCR Andean Countries 0 2 2 1 3 0 153 94 109 137 Antigua and Barbuda 0 0 0 1 0 0 0 0 95 0 Argentina 7 9 6 2 4 1,293 1,525 265 724 1,464 Barbados

Caribbean Central America

Colombia Costa Rica Dominica Dominican Republic Ecuador El Salvador Grenada Guatemala Guyana Haiti Honduras Jamaica Latin Amenca Mexico Nicaragua OECS Countnes Pa" lml . -. , .- Paraguay

St. Kitts and Nevis Peru

St. Lucia St. Vincent and the Grenadines Trinidad and Tobago Uruguay Venezuela, Republica Bolivariana de Sub Total

MNA Algeria Bahrain Djibouti Egypt, Arab Republic of Gulf Cooperation Council Iran, isiamic Republic of

Jordan Kuwait Lebanon . .. Libya Malta Middle East and North Africa Morocco Oman uatar SaLd Arabia Syr an Arab RepJO IC - Tunisia h t e d Arab Emorates West Bank and Gaza Yemen RepJb IC of - - Sub Total

2 4 5 2 4 19 26 13 17 11 5 1 2 1 1

1 4 7 3 4 8 15 11 6 9 1 2 2 2 4 0 2 2 0 0 1 3 3 4 2 3 5 6 5 3 2 2 5 3 2 0 0 1 0 0 3 0 1 3 4 I J " I L

0 0 0 1 3 3 4 5 1 3 0 2 1 2 3 13 14 12 21 22 I 1 7 9 R 7 9 5 A I n n 7 3 I n 0 0 2 0 3 0 2 2 1 0 0 0 2 0 3 5 6 3 3 2 9 2 9 7 6 n I n n n 9 2 9 7 6 n I n n n

0 22 0 0 0 330 830 667 175 530

3,443 3,749 1,452 2,323 7,415 759 0 89 338 172 406 413 305 1,809 430 0 847 1,379 181 983

886 1,117 1,969 1,258 1,412 139 271 89 148 749 0 74 327 0 0 32 627 268 428 242 363 167 1,136 605 496 182 243 736 96 546 0 0 25 0 0

1,100 0 235 495 540 108 494 0 28 384 0 0 0 359 304

525 449 287 21 296 0 363 168 200 406

1,593 1,883 2,404 2,852 3,690 902 1,533 1,841 1,706 1,738 235 338 323 10 0 0 125 288 234 0 0 0 90 0 709

652 368 331 713 355 771 523 725 1,295 2,982 n AR7 n n n 0 0 0 56 0 n n n I A d n

0 1 0 1 0 1 0 3 3 4 0 0 2 1 1

97 128 119 110 109

n AR n 1n7 n T 1 --.

142 0 301 983 781 0 0 190 341 21

13,839 16,628 15,985 18,033 26,782

3 13 5 8 4 401 1,279 486 668 425 3 2 1 3 2 578 409 402 526 132 1 2 4 3 2 32 45 384 290 548 5 10 8 9 10 1,880 845 633 1,398 2,350 0 1 0 0 0 0 57 0 0 0 1 6 12 7 5 246 1,273 1,435 925 1,204 0 0 14 26 5 0 0 1,840 4,053 769 3 7 11 4 4 292 449 1,563 858 247 1 10 8 2 5 183 2,501 1,307 159 1,078 4 4 6 4 4 397 253 892 406 516 0 2 0 1 0 0 61 0 331 0 0 4 0 0 1 0 599 0 0 113 13 18 11 13 15 1,152 3,680 3,138 2,380 4,849 11 20 9 12 11 1,170 2,086 1,235 1,704 1,872 1 3 1 2 2 53 31 4 117 21 4 162 0 0 0 1 3 0 0 0 396 235 10 14 13 18 16 998 2,194 2,074 3,378 1,527 2 1 4 3 1 130 45 165 61 4 134 5 8 7 5 7 608 1,228 596 759 1,502 0 0 3 2 0 0 0 133 1,125 0 3 9 7 8 7 408 914 396 1,329 1,161 8 5 10 13 10 51 7 527 1,090 1,034 1,517 74 139 134 142 114 9,044 18,740 17,685 22,546 20,340

67 of 80


Deliveries (#) Initiation to Completion Costs (US$ '000) RegionlCountry FY02 FY03 FY04 FY05 FY06 FYO2 FY03 FY04 FY05 FY06

SAR Afghanistan 5 4 12 10 9 376 811 1,779 3,371 1,257 Bangladesh 13 18 7 15 7 1,159 1,840 896 1,935 1,646 Bhutan 2 2 2 3 4 155 320 123 294 198 India 31 38 35 39 38 4,475 6,619 8,479 8,313 10,119 Maldives 1 2 1 4 4 180 39 17 206 529 Nepal 4 5 6 9 3 277 336 1,145 987 543 Pakistan 9 11 12 10 12 1,580 1,420 1,909 1,910 2,951 South Asia 3 7 7 12 9 93 851 930 979 1,069 Sri Lanka 7 7 10 6 10 935 741 1,222 593 1,858 Sub Total 75 94 92 108 96 9,230 12,976 16,500 18,589 20,169

OTH Asia 0 0 0 0 1 0 0 0 0 16 World 14 63 73 85 38 1,889 5,414 10,018 14,069 5,671 Sub Total 14 63 73 85 39 1,889 5,414 10,018 14,069 5,687

Total 724 1,065 1,037 1,045 908 103,425 141,280 152,871 180,715 168,490

Notes: 1. The table includes ESW Reports, Other ESW and TA products. 2. The Deliveries (#) and the Initiation to Completion Costs (US$ '000) includes supplemental deliveries. 3. Effective July 1, 2004, '"ConsultationslCountry Dialogue" and "ConferenceMrorkshop" output types are no longer valid for the

ESW product line. 4. Initiation to Completion Costs include post-delivery costs.

68 of 80

TABLE4.2: AAA DELIVERIES AND COSTS BY NETWORWSECTOR BOARD

Deliveries (#) Initiation to Complet ion Costs (US$ '000) NetworWSector Board FY02 FY03 FY04 FY05 FY06 FY02 FY03 FY04 FY05 FY06

ACS

Administrative and Client Support 0 0 1 0 1 0 0 83 0 2,416 Sub Total 0 0 1 0 I 0 0 83 0 2,416

Fssn ---- Environment 30 51 47 70 38 3,850 6,757 6,378 12,175 9,509 Rural Sector 37 55 64 77 70 5,586 7,641 9,064 14,893 18,987 Social Development 28 32 34 44 32 2,297 6,226 7,775 8,005 4,105 Sub Total 95 138 145 191 140 11,733 20,624 23,218 35,074 32,601

Financial Sector 54 129 139 108 90 12,305 16,834 16,274 13,013 13,910 Sub Total 54 129 139 108 90 12,305 16,834 16,274 13,013 13,910

- HDN

Education 36 41 52 48 48 3,500 3,793 9,223 7,807 8,313 Health, Nuttition and Population 36 31 45 66 37 3,771 3,003 5,904 10,154 8,800 Social Protection 32 45 48 54 47 4,518 6,072 5,773 6,139 8,635 Sub Total 104 117 145 168 132 11,788 12,868 20,900 24,099 25,748

INF Energy and Mining 40 5a 48 27 38 3,548 5,561 9,562 4,866 6,351 Global Information1 Communications Technology 3 11 19 11 13 35 571 1,672 890 2,615 Transport 15 41 24 33 21 1,588 3,056 3,239 4,224 2,450 Urban Development 29 39 34 44 41 2,718 4,457 5,267 9,131 12,928 Water Suppiy and Sanitation 11 16 16 31 18 2,364 1,104 1,536 7,116 3,556 Sub Total 98 165 141 146 129 10,254 14,749 21,275 26,227 27,900

IO,.

Professional Development 2 3 0 0 0 403 367 0 0 0 Sub Total 2 3 0 0 0 403 367 0 0 0

narr "rho

Financial Management 32 50 47 36 40 Operational Servtces 2 14 8 4 2 Procurement 17 28 30 19 8 Sub Total 51 92 85 59 50

DDEU

Economic Policy Gender and Development Poverty Reduction Public Sector Governance Sub Total

99 140 121 119 135 7 i n 1R ? A .rn , " . " , . .-

44 43 50 53 54 73 76 57 72 67

223 269 246 258 266

DCnN

6,451 5,560 4,095 4,372 3,461 60 423 529 583 150

~~

1,171 2,877 2,829 1,775 453 7,682 8,861 7,453 6,729 4,064

10,284 23,083 18,309 28,157 23,848 1,604 546 1,661 1,276 959 9,009 8,211 11,600 7,743 13,355 13,320 12,634 11,191 12,613 10,914 34,218 44,475 42,762 49,789 49,076

. --.. Private Sector Development 95 142 122 106 97 14,790 22,121 19,501 24,090 12,301 Sub Total 95 142 122 106 97 14,790 22,121 19,501 24,090 12,301

PSI Project Finance and Guarantees 2 0 0 0 0 252 0 0 0 0 Sub Total 2 0 0 0 0 252 0 0 0 0

RMN - Resource Management 0 0 2 0 0 0 0 203 0 0

Sub Total 0 0 2 0 0 0 0 203 0 0

Sector Board not Applicable 0 10 11 9 3 0 382 1,203 1,693 474 Sub Total 0 10 I 1 9 3 0 382 1,203 1,693 474

Total 724 1,065 1,037 1,045 908 103,425 141,280 152,871 180,715 168,490

Notes: 1. The table includes ESW Reports. Other ESW and TA products. 2. The Deliveries (#) and the Initiation to Completion Costs (US$ '000) includes supplemental deliveries. 3. Effective July 1,2004, "ConsultationslCountry Dialogue" and "ConferenceNVorkshop" output types are no longer valid for the ESW

product line. 4. Initiation to Completion Costs include post-delivery costs.

69 of 80

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TABLE 4.6: AAA CONCENTRATION: Top Ten Countries by Number of Deliveries, FYO2-06

Region

SAR

EAP

EAP

ECA

LCR

EAP

EAP

MNA

AFR

MNA

Sub Total

Total

Country Initiation to Completion Costs (US$ '000)

BB TF Total Delieveries (#)

India 181 28,142 9,864 38,006 Indonesia 148 16,294 13,728 30,022 China 144 15,225 8,085 23,310 Russian Federation 97 15,828 2,221 18,050 Brazil 86 12,484 5,898 18,382 Vietnam 82 6,939 2,931 9,870 Philippines 77 7,692 4,214 11,906 Saudi Arabia 71 10,169 0 10,169 Nigeria 63 6,345 2,411 8,756 Morocco 63 7,892 176 8,068

1,012 127,010 49,528 176,538

4,779 557,108 189,674 746,781

% of Total 21% 23% 26% 24%

Notes: 1. The table includes ESW Reports, Other ESW and TA products. 2. The Deliveries (#) and the Initiation to Completion Costs (US$ '000) includes supplemental deliveries. 3. Effective July 1, 2004, "ConsultationslCountry Dialogue" and "ConferencehVorkshop" output types are no longer

4. Initiation to Completion Costs includes postdellvery costs. * Expenditures from the BB budget are reimbursed by governments of Saudi Arabia under the reimbursable technical

valid for the ESW product line.

assistance program.

TABLE 4.7: AAA CONCENTRATION: Top Ten Countries by Cost of Deliveries, FYO2-06

SAR

EAP

EAP

Initiation to Completion Costs (US$ '000) BB TF Total

India 181 28,142 9,864 38,006

Indonesia 148 16,294 13,728 30,022

Region Country Delieveries (#)

LCR

ECA

EAP

EAP

MNA

EAP

SAR

China 144 15,225 8,085 23,310

Brazil 86 12,484 5,898 18,382

Russian Federation 97 15,828 2,221 18,050

Thailand 62 9,176 4,969 14,145

Philippines 77 7,692 4,214 11,906

Saudi Arabia 71 10,169 0 10,169

Vietnam 82 6,939 2,931 9,870

Pakistan 54 8,591 1,179 9,770

Sub Total 1,002 130,540 53,089 183,629

Total 4,779 557,108 189,674 746,781

% of Total 21% 23% 28% 25%

Notes: 1. The table includes ESW Reports, Other ESW and TA products. 2. The Deliveries (#) and the Initiation to Completion Costs (US$ '000) includes suppiemental deliveries. 3. Effective July 1, 2004, "ConsultationslCountry Dialogue" and "ConferenceiWorkshop" output types are no longer

4. Initiation to Completion Costs includes post-delivery costs. * Expenditures from the BB budget are reimbursed by governments of Saudi Arabia under the reimbursable technical

valid for the ESW product line.

assistance program.

73 of 80

TABLE4.8: AAA DELIVERIES AND COSTS BY OUTPUT TYPE

Deliveries (#) Initiation to Completion Costs (US$ '000) Reports

FY02 FY03 FY04 FY05 FY06 FY02 FY03 FYO4 FY05 M 0 6 ESW Reports 253 443 487 501 472 40,558 68,679 81,960 95,825 97,829 Core Diagnostic Reports 87 119 122 90 81 16,584 25,746 24,484 22,074 20,743

PA 12 14 19 19 21 4,374 4,578 6,893 4,312 6,588 CEWOPR 13 27 26 23 23 2,293 7,892 6.518 10,000 7,123 PER 25 22 29 22 19 6,988 6,700 5,967 5,196 3,373 CFAA 22 30 23 10 8 1,554 3,567 2,457 766 477 CPAR 14 25 24 14 1 872 2,572 2,211 1,415 84 PFP 1 1 1 2 9 504 439 439 386 3,099

FSAP 10 27 20 14 18 1,727 7,164 4,635 3,201 4,353 Other Diagnostic Repotts 43 101 123 140 123 6,063 14,699 18,390 22,075 24,784

Other 33 74 103 126 105 4,336 7,535 13,755 18,874 20,431 Advisory Reports 123 223 242 271 268 17,911 28,234 39,085 51,676 52,301

ESW Policy Notedother Products 206 283 247 193 129 18,225 22,887 27,472 35,678 19,137 Policy Note 115 153 152 193 129 10,161 14,022 15,522 35,678 19,137 ConferenceNVorkshop 38 65 37 NA NA 2,373 5,635 6,109 NA NA ConsultationsICounty Dialogue 53 65 58 NA NA 5,691 3,229 5,841 NA NA

All ESW Products 459 726 734 694 601 58,783 91,566 109,432 131,503 116,966

TA Output Types Client Document Review 17 27 22 21 21 1,701 5,072 2,999 2.882 1,975 Institutional Development Pian 61 83 92 90 70 15,866 14,588 16,654 13,103 17,152 Knowledge-Shanng Forum 46 78 102 132 77 4.586 11,675 13.581 20,807 14,913 ModeliSuwey 26 22 13 13 11 4,711 2,206 1,565 1,687 2,104 "HOW-TO" Guidance 115 129 74 95 128 17,778 16,172 8,640 10,732 15,380

All TA Products 265 339 303 351 307 44,643 49,714 43,439 49,212 51,524

Ail AAA Products 724 1,065 1,037 1,045 908 103,425 141,280 152,871 180,715 168.490

Notes: 1 The table includes ESW Repads, Other ESW and TA products 2 The Delivenes (#)and fie Initiation to Completion Cmts (US$ 'WO) includes supplemental deliveries. 3. Effective July 1,2004, "ConsultationdCoun~ Dialogue" and "ConferenceNVorkshop" output types are no longer valid for the

4. Initiation to Completion Costs includes postdelivery msts ESW product line.

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TABLE4.9: ESW DELIVERIES AND COSTS BY REPORT TYPE

Dellverles (#) initiation to Completion Costs (US$ '000) FY02 FY03 FY04 FY05 FY06 FY02 FY03 FY04 FY05 FY06

Report Type

Core Diagnostic Reports AFR EAP ECA LCR MNA

MULTl Total Core Dlagnostlc Reports

17 37 44 30 27 2,356 6,308 7,167 9,029 6,416 17 15 8 7 7 2,853 3,285 1,607 987 2.086 22 30 25 17 14 4,767 8,339 8,835 4,624 3,955 18 22 29 25 19 3,452 3,657 4,121 5,252 4,920 6 6 1 4 8 9 1,129 1,536 2,196 1,765 1,299 7 9 2 3 5 2,027 2,421 557 417 2,068 0 0 0 0 0 0 0 0 0 0 87 119 122 90 81 16.584 25,746 24,484 22,074 20,743

Other Dlagnostlc Reports AFR EAP ECA LCR MNA SAR

MULTI Total Other Dlagnostlc Reports

1 7 0 3 7 43 101 123 140 123

982 2,475 3,851 5,499 7,653 1,072 1,523 2,334 3,951 2,937 1,470 4,204 4,627 4,323 3,343 1,237 3,416 2,050 3,269 5,880 599 1,994 2,786 1,695 2,153 665 574 2,742 3,078 2,531 38 514 0 261 287

6,063 14,699 18,390 22,075 24,784

Advlsory Reports AFR 24 51 55 56 70 1,925 4,303 5,997 8,225 11,837 EAP 15 25 33 24 49 1,667 4,217 8,219 5,468 11,673 ECA 31 49 46 46 42 5,879 7,468 4,888 8,630 7,041 LCR 31 26 34 36 34 4,544 3,204 6,238 7,587 7,638 MNA 9 17 16 19 16 1,913 2,760 2,928 3,155 3,893 SAR 12 17 24 24 29 1,966 3,119 5,751 7,104 6,893 MULTI 1 38 34 66 28 15 3,163 5,065 11,506 3,327

Total Advisory Reports 123 223 242 271 268 17,911 28,234 39,085 51,676 52,301

All ESW Reports AFR 53 105 130 129 134 5,264 13.085 17,015 22,753 25,906 VIP 38 52 50 48 68 5,593 9,024 12,160 10,407 16,696 ECA 61 107 107 94 76 12,116 20,011 18,349 17,577 14,339 LCR 57 67 84 86 83 9.234 10,477 12,410 16,108 18,438 MNA 19 37 46 34 33 3,640 6,290 7,910 6,614 7,345 SAR 23 30 36 41 43 4,658 6,114 9,050 10,598 11,492 MULTl 2 45 34 69 35 54 3,677 5,065 11,767 3,614

Total All ESW Reports 253 443 487 501 472 40,558 68,679 81,960 95,825 97,829

Notes: 1. The table includes ESW Reports only. 2. The Deliveries (#) and the initiation to Completion Costs (S'OOO) Includes supplemental deliveries

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ANNUAL IXEPQRT ON PORTFOLIO PEIEEIFOMANCE · 2016. 7. 15. · Annual Reuort on Portfolio...

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