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OP 8.45, Annex A - DGF Eligibility Criteria

These policies were prepared for use by World Bank staff and are not necessarily a complete treatment of the subject.
OP 8.45 - Annex A
October, 1999

Programs requesting grants through the Development Grant Facility (DGF) are reviewed against the following Board-approved eligibility criteria. DGF criteria are applied with careful judgment, to enable the Bank to best achieve the objectives of grant-supported activities.1

1.  The program contributes to furthering the Bank's development and resource mobilization objectives in fields basic to its operations, but it does not compete with or substitute for regular Bank instruments.  Special grants should address new or critical development problems, and should be clearly distinguishable from the Bank's regular programs.
2.  The Bank has a distinct comparative advantage in being associated with the grant program; it does not replicate the role of other donors.  The relevant operational strengths of the Bank are in economic, policy, sector and project analysis, and management of development activities.  In administering special grants, the Bank has expertise in donor co-ordination, fund raising, and fund management.
3.  The program encompasses multi-country benefits or activities which it would not be efficient, practical or appropriate to undertake at the country level.  Informational economies of scale are important for research and technology work; and operations to control diseases or address environmental concerns (e.g., protect fragile ecosystems) might require a regional or global scope to be effective.  In the case of grants directed to a single country, the program will encompass capacity-building activities where this is a significant part of the Country Assistance Strategy and cannot be supported by other Bank instruments or by other donors.  This will include, in particular, programs funded under the IDF.  It will also include programs related to initial post-conflict reconstruction efforts (for example, in countries or territories emerging from internal strife or instability).
4.  The Bank's presence provides significant leverage for generating financial support from other donors.  Bank involvement should provide assurance to other donors of program effectiveness, as well as sound financial management and administration.  Any single grant to a recipient should generally not exceed 15 percent of expected funding over the life of Bank funding to a given program, or over the rolling 3-year plan period, whichever is shorter.  Where grant programs belong to new areas of activities (involving, for example, innovations, pilot projects, or seed-capital) some flexibility will be introduced to allow for the Bank's financial leverage to build over time.  The target for the Bank grant not to exceed 15 percent of total expected funding will be pursued after allowing for an initial start-up phase (maximum 3 years).
5.  The grant is normally given to an institution with a record of achievement in the program area and financial probity.  A new institution may have to be created where no suitable institution exists.  The quality of the activities implemented by the recipient institution (existing or new) and the competence of its management are important considerations.
6.  The management of the recipient institution is independent of the Bank Group.  While an arm's length relationship with the Bank's regular programs is essential, the Bank may have a role in the governance of the institution through membership in its governing Board or oversight committee.  The arm's length relationship with the Bank's regular programs is appropriate in most cases, and will be maintained.  In cases of highly innovative or experimental programs, Bank involvement in supporting the recipient to execute the program will be allowed.  This will  provide the Bank with an opportunity to benefit from the learning experience, and to build operational links to increase its capacity to deliver more efficient services to client countries.
7.  Grant programs are expected to incorporate an explicit disengagement strategy. In the proposal, monitorable action steps should be outlined indicating milestones and targets for disengagement. The Bank's withdrawal should cause minimal disruption to an ongoing program or activity.2
8.  A key element of the DGF is that programs and activities financed under it should promote and reinforce partnerships with key players in the development arena, e.g., multilateral development banks, UN agencies, foundations, bilateral donors, professional associations, research institutions, private sector corporations, NGOs, and civil society organizations.
  1. The eligibility criteria are reproduced here as they appear in The Development Grant Facility: FY98 DGF Annual Review and Proposed FY99 DGF Budget (R98-258), October 28, 1998.
  2. The FY98 DGF Annual Review (R98-258) clarified that disengagement should be tailored to individual programs.  For some, it means completion or reduction of activities.  For others, it means handing the reins to other partners, commercializing services, or mainstreaming the activity into the Bank.  It could also mean refocusing resources on new opportunities within ongoing programs that continue to meet the Bank's strategic objectives. The FY99 DGF Annual Review (R99-150) further clarifies that (a) longer-term programs should take into account work programs and partnership arrangements, and (b) shorter-term programs to pioneer innovative approaches would typically disengage over a two- to four-year period.


OP 8.45 - Grants

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