2020: EBRD Mobilisation of Private Finance
Mobilisation of incremental private sector finance by the multilateral development institutions has always been formally at the core of their public purpose. In some it is explicitly established as a central objective; EBRD’s Articles specifically do so, as do the founding Articles of the World Bank, IFC and other comparator institutions.
The study seeks to contribute to Board and Management understanding, strategic thinking and operational decision-making about the Bank’s role in mobilising additional private capital to support transition. Organisationally it begins by providing essential factual background, including details on the instruments used, and current MDB strategies, practice and outcomes; key findings of existing performance assessments and evaluations. The bulk of the paper then looks closely at mobilisation practices and issues specific to EBRD and its performance.
Cluster Review: Mining Operations in Mongolia
This is an EvD cluster evaluation of the mining portfolio in Mongolia since EBRD operations began in 2006 and involved a review of the themes emerging from 14 private sector projects, worth €734m of net cumulative investment (€704m debt, €30m equity) and associated donor funded EBRD technical assistance, most of which was non-transactional. The mining sector in Mongolia is critical to the economy, representing around 27% of GDP, 19% of state budget, and 88% of exports, mainly to China. Top mineral exports are coal, followed by copper and gold.
The first period of EBRD investment, from 2006 to 2012, was characterised by a mining boom with the EBRD becoming closely involved, less risk adverse and more prepared to support small and domestic players. From 2012 to 2016, global commodity prices fell. Around half the existing portfolio ended up in Corporate Recovery in part due to the global commodity price slump, business conduct issues and lack of sponsor support.
The review makes three recommendations based on its findings, which cover evaluation of the biggest current operation, improvements more generally to project design for stronger delivery of the Bank’s transition mandate, and critically, development of an improved programme of policy dialogue and IFI collaboration.
2020: EBRD-Ukraine Stabilisation and Sustainable Growth Multi-Donor Account
The ‘EBRD Ukraine Stabilisation and Sustainable Growth Multi-Donor Account’ (Ukraine MDA) was launched in 2014 as part of a multilateral crisis-response measures to provide urgent support to Ukraine in the wake of major political, security, economic and humanitarian crises.
A total of fourteen donors have contributed €53.5 million to the Ukraine MDA, out of which a portfolio of 38 projects have so far been or are being delivered, with a total earmarked value of €36.9 million. The Fund is managed by the EBRD and is the only such single-country focused arrangement in the Bank.
Bank’s independent Evaluation Department (EvD) was asked by EBRD management and the MDA donors to produce an interim evaluation on an accelerated basis in order to inform discussion and decisions about Fund’s effectiveness and potential extension ahead of its current July 2020 closure date.
The evaluation provides an assessment of: MDA relevance and effectiveness as a crisis response mechanism; its governance principles; the efficiency and effectiveness of its activities and sustainability of its results; and, any impact it has on the Ukrainian investment climate and economic growth, where possible to assess. The evaluation covers nine completed projects and 27 ongoing projects spanning 2014 to mid-2019.
2020: Project Self-evaluation in EBRD - EvD Discussion Paper for Management Working Group and Board of Directors
This paper provides EvD’s initial contribution to the Management review as directed by a first-ever “Independent External Evaluation of EBRD's Evaluation System” (Kirk Report). It consolidates analysis, findings and recommendations that EvD has largely provided in other contexts and that are directly relevant to the Kirk findings and Management’s work ahead. The objective is to contribute in an advisory capacity to a wider Management-led process in which EvD will also be systematically engaged. It also seeks to inform the Board and assist it to provide effective guidance for further system development. Overall, however, the findings and insights that are already available – from the Kirk Report, from the accumulated work of EvD, and from relevant experience across the IFI system -- provide a high-value basis on which Management can proceed.
EBRD Women in Business Programme in Turkey
The Women in Business programme in Turkey was the first EBRD approach to “support women’s access to finance and entrepreneurship, combining dedicated financing, backed by technical advice to local financial institutions and a direct engagement with women entrepreneurs through access to training, advisory services, mentoring and networking.” This study seeks to review the first phase of the programme in Turkey from 2014 to 2017 and assess its relevance, its effectiveness in achieving intended results and its efficiency. The Evaluation Department aims to answer three evaluation questions to in this review:
Relevance: Has TurWiB been aligned with and supportive of EBRD’s strategic agenda, country and donor priorities?
Effectiveness: Has TurWiB achieved its intended objectives and what evidence is available to this?
Efficiency: Has TurWiB’s structure, resourcing and management supported efficiently the achievement of its intended results?
Climate Initiatives Special Study
Recognition of climate change as a major global public policy challenge has grown since key concerns were raised in 1992. The G8 elevated the importance of climate change in 2005 and there have been a series of international initiatives since that time. In 2015 developed countries were urged to mobilize US$100bn annually by 2020 and a comprehensive framework was agreed in Paris based on enforceable country-level commitments to carbon targets. Against this backdrop EBRD substantially increased the strategic priority to be given to work on sustainability and, more specifically, climate. This evaluation reviews the main climate initiatives in terms of strategic objectives, operational focus and instruments, organization arrangements, portfolio structure, and performance. It confirms that EBRD has initiated major steps on an institution-wide basis to respond to shareholder directions. At the same time, the evaluation also confirms opportunities to strengthen existing approaches and the pressing need to improve processes. This includes much improved clarity as to priorities and objectives, particularly with respect to results; a more systematic and transparent approach to allocating resources; and, building capacity to assess actual results in accordance with country needs.
This study was requested by the Board Effectiveness and Efficiency Group, following the implementation by the Bank of a pilot, which increased the EBRD’s delegated authority threshold from €10 million to €25 million. On the completion of this pilot, the increased threshold became the Bank’s permanent policy. At the same time, the Evaluation Department (EvD) was asked to analyse the changes in the Bank’s approvals structure, quality of information provided to the Board on sub-projects approved by delegation, as well as quality of reporting on framework and sub-project performance.
Property Sector Strategy Evaluation
The EBRD’s 2010 Property Strategy was strongly shaped by the financial crisis of 2008, which hit the Property and Tourism sector (P&T) particularly hard. “Crisis response” was an immediate and dominant operational priority. Longer-term, the Strategy’s objectives were limited to a demonstration of energy efficiency in buildings, “institution building” and an increased emphasis on projects in less advanced countries and secondary cities.
During the Strategy period (2010-2017) the Bank financed 65 P&T projects for €1.18 billion, broadly unchanged from under the previous strategy; sub-sectoral and country composition of operations were also similar, albeit with sharply lower post-crisis investments into property funds.
Legal Transition Programme
Since its launch in 1995 as an ad hoc technical assistance resource, the EBRD’s Legal Transition Programme has been through many transformations. Presently it is a key driver of legal reforms in the Bank’s countries of operation.
The Evaluation Department’s (EvD) 2018 Work Programme includes a thematic evaluation of the LTP, which will focus on the impact and sustainability of activities approved and implemented over the period 2011-2018.
The evaluation team has identified several evaluation questions that will guide the analysis and shape final findings and recommendations. The emphasis of the evaluation will centre on efficiency, effectiveness, impact, and sustainability both externally (benefiting the country) and internally (benefiting the Bank’s own policies and operations). The evaluation will also include three or four case studies, which will be representative of various transition stages.
Credit Lines – Lending through financial intermediaries
Lending through financial intermediaries, widely known internally as “credit lines,” has been a significant part of the Bank's operations since its inception. Credit lines have allowed it to reach larger numbers of smaller borrowers than possible through direct lending, and alongside other forms of support have contributed to financial sector development and growth of strong partner intermediaries. They have also evolved significantly over time and are critical instruments for delivery by the Bank on a wide and ambitious range of new commitments.
This evaluation examines the design, targeting, execution, monitoring and effects of a large sample of recent credit lines, defined for its purposes as “term loans extended to financial intermediaries with a defined use of proceeds.” and focuses principally on the market context, strategic approach and signed operations of the period 2011-2015.
Transport Sector Strategy Review
The transport sector is a key enabler of economic growth and transition in the region and investment in the sector has been central to the Bank’s strategy and operations since its inception in 1992. This is a review of the Bank’s 2013 Transport Sector Strategy and resulting operations; it is intended to inform Management development and Board consideration of a planned new sector strategic document in early 2019.
EvD outlined the intended focus of its review in an Approach Paper discussed and agreed with Management. Three evaluation questions were asked: whether the TSS set appropriate priorities; what results are observable while the strategic period is not ended yet and how well the Bank has implemented the strategy. EvD reviewed 82 operations approved between January 2013 and May 2017 amounting to nearly €5billion, together with data on 114 transport TC operations for €40.5 million.
The EBRD’s Investment Climate Support Activities
Mobilizing private capital has been central to the Bank’s core transition mandate since its founding, and to achieving major recent institutional commitments such as supporting the SDGs, climate resilience, and inclusion. Significantly greater private investment, both domestic and foreign, is in turn critically dependent upon a supportive investment climate, which has long been identified as a strategic and operational priority for the Bank and an area of comparative advantage.
This EvD study identifies the principal objectives and components of the Bank’s work on investment climate (IC) improvement, assesses the effectiveness of design and delivery, and presents findings and conclusions that may contribute to programmatic performance in the future. Its intended scope includes efficiency and resource deployment across multiple work streams and observable contributions toward IC improvements, including analysis of the Investment Climate and Governance Initiative (ICGI) and other initiatives, and case studies. Its principal purpose is to draw out findings relevant to existing and emerging operational and strategical priorities and provide evidence-based insights useful for future programme design and delivery and internal learning.
EBRD Country Strategies Review
The proposed study is intended to:
contribute to the further development and implementation of new country strategies and the overall results architecture of the Bank;
assess to what extent the new approach to country strategy design and implementation enables the Bank to more effectively identify and translate its mandate and medium-term priorities into country-level objectives; recognise, measure, and report on its performance, and to deliver value for shareholders and other stakeholders.
Infrastructure Project Preparation Facility – Thematic evaluation
Large infrastructure financing gaps in EBRD countries of operation have long been identified as a key challenge and opportunity for the Bank. There is an increasing recognition that traditional government funding and methods are not sufficient to close growing gaps, and increased private sector engagement is now widely understood to be essential.
The EBRD Infrastructure Project Preparation Facility (IPPF) was a high profile initiative approved by the Board in October 2014 to scale up infrastructure support. As a “delivery mechanism to improve the efficiency, quality and replicability of infrastructure projects,” the IPPF is meant to help governments build an infrastructure project pipeline using additional and improved project preparation support along with policy dialogue.
On approval of the IPPF the Board requested a stock taking after three years and this interim review by the Evaluation Department is intended to assess IPPF’s performance against its wider objectives, identifying any early results and difficulties, and its potential to be a co-investment multi donor fund for specific countries and sectors.
Review of the EBRD Energy Sector Strategy
The Review of the 2013 EBRD Energy Sector Strategy investigates key issues around: what were the stated intentions and expectations of the 2013 Energy Sector Strategy; how did it reflect and integrate transition challenges and develop operational priorities; were clear and measurable goals established; were critical execution issues such as resources and cross-institutional collaboration addressed effectively; what results are observable thus far. Lastly, the Review identifies actionable recommendations for the next EBRD Energy Sector Strategy to be approved by end 2018.
Additionality in the EBRD – Review of Concept and Application
Additionality is one of EBRD’s three foundational operating mandates. It has featured centrally since 1992 in investment selection and design, in Bank representations of its role and purpose, and in Board/shareholder engagement with Management. For EBRD shareholders Additionality is the foundation of their claim for public resources and therefore has been of consistently high interest and concern. This review seeks to fill some gaps that exist around additionality in EBRD and contribute to emerging Board and Management efforts to develop a stronger and more satisfactory institutional framework.