Project Preparation Facility (PPF) Operations Clinic October 25, 2018

Transcription

1 Project Preparation Facility (PPF) Operations Clinic October 25, 2018

2 Outline Project Preparation Facility (PPF) overview What is the PPF and how does it work? What can a Preparation Advance (PA) be used for? Considerations in requesting a PA PPF trends Programmatic approach - new flexibilities PA process 2

3 PPF Overview

4 What is the Project Preparation Facility (PPF)? What is it? How does it work? Who approves funding? Provides prep. advances (PA) against future IBRD/IDA financing Governed by the IPF Policy and Directive Board approves commitment authority and limits on individual PAs Finances preparatory and limited implementation activities Can be used for preparation of IPF, DPF and PforR CEO approves Regional allocations Operates as a revolving fund: PA refinanced when future loan effective Individual PAs up to US$6M; in FCS can be up to US$10M Approval of PAs delegated to Management (CD) 4

5 Commitment authority increased to $750 ml Region Current Regional Allocations (US$ millions) Share of total commitment authority (%) Total PPF Commitments (September 30, 2018) Africa East Asia & Pacific Europe & Central Asia Latin America & the Caribbean Middle East & North Africa South Asia Reserve TOTAL

6 What can a PA be used for? TA for project design and implementation start-up, institutional strengthening & incremental operating support PAs may finance (a) preparatory and limited initial implementation activities for the Project or Projects; or (b) preparatory activities for operations to be financed by DPF or PforR Financing; or (c) activities that strengthen borrower institutions required to carry out the Project(s) or operations. paragraphs 17-18,Section III, IPF Policy. What is limited implementation?: Depends on scope of follow-on operation; but in no case should PA funds be used for physical construction 6

7 Typical activities financed by a PA for an IPF setting up of PIUs or other implementation arrangements training to build requisite capacity for implementation preparing operational manuals developing project-specific anti-corruption action plan undertaking analytical and technical design work, including feasibility studies carrying out consultations with project stakeholders to refine project design and/or raise awareness prior to implementation preparing environmental and social related documents for the project developing fiduciary capacity for the implementing agency to follow country financial management systems during project implementation readying financial management systems to prepare IFRs and audit statements preparing procurement plans, as well as the PPSD for the project developing M&E systems to track project progress 7

8 Typical activities financed by a PA for a DPF undertaking sector diagnostics and technical studies, including support with drafting legislation, to help design the prior actions and the path to achieving them building capacity and providing the institutional support to help achieve prior actions and support their sustainability undertaking environmental and social assessments including PSIA and EIAs as well as setting up the systems to review, strengthen oversight, and improve compliance (e.g. for screening a PPP pipeline for environmental effects and social impacts that may results from a DPF supported policy action related to enacting the PPP law and/ or implementing regulations) assessment of the fiduciary management systems and related capacity strengthening, developing governance and anti-corruption plans assessment of the procurement systems and related capacity strengthening activities establishment of systems for M&E, specifically for a DPF series stakeholder consultations & workshops related to potential DPF supported policy areas 8

9 Typical activities financed by a PA for a PforR program conceptualization including finalizing Program strategy documents, identifying boundary delineation between the broader program and the PforR-supported Program, the details of expenditures supporting the Program development of results frameworks, including gathering baseline data, detailing results chains and implementation plans for the achievement of DLIs systems strengthening actions as identified in the technical, fiduciary, and environmental and social systems assessments and/ or the Program Action Plan actions to meet appraisal, negotiations, or effectiveness conditions development of operational manuals or capacity building of institutions that are key in implementation of the Program, including the development of monitoring and evaluation systems, and corruption prevention and mitigation measures developing verification protocols and arrangements, including hiring verification agents for verification of prior results 9

10 When not to use a PA? Bridge financing use Additional Financing (AF) Generalized TA project preparation: strong probability of follow-on operation needed Active implementation of downstream operation Tasks that are the responsibility of the Bank When cheaper sources of financing available (e.g. Recipient-Executed Trust Fund - RETF) or when borrower has own resources/ cash flow not a constraint (no accrued interest/ service charges) 10

11 Considerations in requesting a PA Timing & in-country approval process PA amount commensurate with borrower need & absorptive capacity Availability of funds in the regional PPF allocation PA is an advance (reduces envelope for implementation, accrues interest/ service charges), does not increase the amount of the followon operation 11

12 Refinancing how does it work? Typically: refinancing date = expected effectiveness date of follow-on operation Financing terms determined by financing available to borrower at time of PA agreement IBRD only IBRD terms IDA eligible countries Core IDA terms; yellow light countries: IDA credit terms (PA on grant terms only available to red light countries) Blend countries can choose financier typically IDA If follow-on operation dropped, borrower can repay or refinance from another operation in portfolio 12

13 PPF Trends

14 USD million Preparation advances approved (FY96-FY18) FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 IBRD IDA TOTAL 14

15 Number of PAs USD million PPF usage by region (FY96-FY18) USD M 1059 PAs USD M USD M USD M USD 62.6 M USD 33.9 M 52 PAs 170 PAs 148 PAs 40 PAs 125 PAs 0.0 AFR EAP ECA LCR MNA SAR No. Amount ($) 15

16 PPF usage by Practice Group (PAs approved FY17-FY18) FCI Macro, Trade and Investment Poverty and Equity Governance Social Protection & Labor Health, Nutrition & Population Education Water Transport & DD SURR Environment & Natural Resources Energy & Extractives Agriculture Programmatic Number of PAs approved 16

17 Number of PAs PPF usage by instrument (PAs approved FY17-FY18) PAs IPF PAs PforR 2 PAs 5 PAs Guarantees Programmatic 17

18 Trends on PPF usage Duration Normally about months; closing (aka refinancing ) date is normally the estimated effectiveness date of the follow-on loan. Average duration of active PA portfolio (as of Sept. 30, 2018) is around 12 months. Amount Average commitment of active PA portfolio: US$ 2.11 million (largest PA is US$ 6 million, smallest is US$ 357K) 18

19 Current PPF portfolio (as of September 30, 2018) ECA 1 MNA LCR 2 2 EAP 12 PPF usage by Regions (number of PAs) SAR 11 MNA LCR 3M ECA 3M 4M EAP 26M PPF usage by Regions (value of PAs) SAR 30M AFR 99 AFR 207M 19

20 Current PPF portfolio (as of September 30, 2018) PPF usage in IBRD vs IDA (by number of PAs) IBRD 6% PPF usage in fragile states (by number of PAs) IDA grant 26% FCS 35.5% IDA credit 68% Not FCS 64.5% 20

21 Programmatic Approach

22 Programmatic Approach to Enhance Flexibility Programmatic PA Multi-project Pipeline development Core capacity 22

23 Programmatic Approach to Enhance Flexibility General TA 23

24 Programmatic: Illustration, Wastewater Treatment Single pre-identified operation Feasibility study for the Waste Water Treatment Plant (WWTP) Counterpart: Water Ministry Refinancing: Pipeline operation Multi-project programmatic approach Engineering designs for both the WWTP and access roads under separate transport operations Counterpart: Ministry of Planning (or Finance) Refinancing: proportional (or FIFO) Pipeline development Urban water and wastewater sector strategy and capacity building plan to define an operation Counterpart: Ministry of Urban Devpt Refinancing: proportional (or FIFO) Core capacity development Support central government s procurement capacity Counterpart: Public Procurement Reg Agency Refinancing: proportional (or FIFO) General TA Support to PPP cell to facilitate PPP investments in WWT, no Bank financing envisaged downstream Out of scope for PA 24

25 Considerations in a programmatic PA Added flexibility: Processing and technical efficiencies Eligible activities typically broader, multiple operations Timeline typically longer; but 4-yr (VP approval) holds $6ml ($10 ml) Refinancing can be refinanced from several operations Added planning: Coordination TTLs on Bank side (CMU broker) and client Set up a single P code (PP product line in SAP) Demonstrate operational link no regional operations Align refinancing to expected effectiveness of last operation Align refinancing to subsequent operations legal agreements 25

26 Active programmatic PAs (as of Sept. 30, 2018) Country Name Project ID Project Name TTL PA Product PA # FCS? (Y/N) Commit ments ($M) Disburse ments ($M) PA Status PA Approval Date Original Closing Date Age (months) Micronesia, Federated States of Sri Lanka Samoa Kiribati Tonga P P P P P Federated States of Micronesia - Annette Gaye Programmatic IDA Grant V1220 Y Disbursing 11-Sep- Leith 2017 Preparation Advance Sri Lanka Valerie Marie Programmatic Helene Project Preparation Layrol Facility Independent State of Samoa - Programmatic Preparation Advance Republic of Kiribati - Programmatic Preparation Advance Kingdom of Tonga - Programmatic Preparation Advance IBRD P4910 N Disbursing 26-Jan Jane Millicent IDA Grant V2020 N Disbursing 29-May- Sprouster 2018 Jane Millicent IDA Grant V1900 Y Effective Sprouster Toufiq Ahmed 7-May IDA Grant V1960 N Disbursing 16-May Mar Dec Jun Jun Mar

27 Process

28 How to process a PA Policy requirements in Bank Policy/Directive for IPF Mandatory processing instructions found in PPF Procedure; additional details found in PPF Guidance (good practice, examples of PPF usage). Processing currently done offline (not in operations Portal) First step is to contact your Regional PPF Coordinator to check availability of funds. For regular PA: PA is linked to P-code of the follow-on operation being prepared; no separate P-code. For programmatic PA: new P-code needs to be created; AIS is created in SAP under PP product line and submitted for CD approval. 28

29 Processing requirements to access a PA Team prepares PPF package including: confirmation of availability of funds from regional PPF coordinator borrower s request for the PA, draft memo to CD (template available) draft Advance Agreement (prepared by CL), draft Disbursement and Financial Information Letter (prepared by WFA), draft Procurement Plan, draft Environmental and Social Commitment Plan (ESCP) and Stakeholder Engagement Plan (SEP). Clearances required from CL, WFA, FMS, PS and ESSA Concurrence required from PM CD decides Assessments (e.g. PPSD, FM, ESCP/SEP) simple/commensurate with activities and limited to scope of PA 29

30 How to amend a PA Can funds be added to an existing PA? Check availability of funds with regional PPF coordinator. To access more PPF funds, team processes a request for a new PA, linked to the same P-code; there is currently no process for top-ups. How are amendments to a PA processed, including extension of refinancing date? TL prepares package including: borrower s request for amendment/extension, draft memo to CD (or RVP if cumulative extension of more than 4 years after PA approval date) draft notice of extension or amendment letter to the Advance Agreement, revised Disbursement and Financial Information Letter (if required), revised Procurement Plan (if required), updated ESCP and SEP (if applicable). Clearances required from CL, WFA (and FMS, PS and ESSA if applicable) Concurrence required from PM (and CD if RVP decides) CD (or RVP) decides 30

31 PPF Resources (type ipf in url) Policy requirements: IPF Policy and Directive Processing instructions: PPF Procedure PPF Guidance Request for PA Template PPF Regional Coordinators PPF Dashboard in Standard Reports (see Project Preparation Facility L12 reports) 31

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