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Resource Guide: Project Cycle

The Project Cycle is the framework used by the World Bank to design, prepare, implement and supervise projects.  In practice, the World Bank and the borrowing country work closely throughout the project cycle although they have different roles and responsibilities.  Generally, the duration of the project cycle is long by commercial standards.  It is not uncommon for a project to last over four years, from the time it is identified until the time it is completed. project cycle 

As is illustrated, the project cycle includes six stages: Identification, Preparation, Appraisal, Negotiation/Approval, Implementation, and Evaluation.  A project in one of the first three stages is referred to as in the “Pipeline”.  The Implementation stage may also be referred to as “supervision” since this is when World Bank staff will monitor the implementation of a project. Understanding the project cycle is central to identifying business opportunities. 

Pre-Pipeline

Prior to initiating projects, the World Bank will undertake a number of studies of development issues at the thematic, country and sector level.  These studies are commonly referred to as Economic and Sector Work (ESW).  ESW is used to improve the Bank’s understanding of development challenges and to promote best practice among staff and on individual projects.  Key documents in the Pre-Pipeline stage are Poverty Reduction Strategy Papers (PRSPs), Country Assistance Strategies (CAS), and Sector Strategies.

More information on the Strategic Frameworkfor Bank lending and support.
Specific information on
 PRSP
Specific information on Country Assistance Strategies
Information on Sector Work

Identification

Based on sector work and country strategies, the World Bank and borrowing countries jointly identify projects that support their development goals.  A project will typically be managed through the relevant government ministry – for example, a project in the health sector will be prepared and implemented by the Ministry of Health. The identification stage can take up to a year and a half.  After a project implementing agency has been identified and appropriate staff have been designated to manage the project, they will conduct pre-feasibility and feasibility studies.  Bank staff will monitor these studies and provide assistance as required.  They will advise the borrowing country on their initial efforts and conduct an “identification mission” to begin detailing key principles and conditions of the project.  Key project documents in the Identification stage include the Monthly Operational Summary (MOS) and the Project Identification Document (PID).

Preparation

The borrowing country is responsible for project preparation.  During this stage, which can last up to two years, the borrowing country continues to conduct further studies and impact assessments that refine the objectives, components, schedule, institutional responsibility and implementation plan of the project.  The Bank, on the other hand, starts to determine the conditions required for the project to succeed and for the Bank to be satisfied the project will have positive economic, financial, social and environmental impacts.  MOS and PIDs continue to be available during this stage.

Appraisal

Appraisal is the sole responsibility of Bank staff.  They will review all the studies conducted in previous stages, including the procurement plant that identifies the types and amounts of equipment, goods, civil works and services that will be purchased.  After an “appraisal mission”, the result of the review is described in the Project Appraisal Document (PAD) which provides a detail description of the project and its implementation.  The Appraisal stage often lasts between 3-6 months.  MOS and PIDS continue to be available during this stage.

Negotiation and Approval

During negotiations, the World Bank and borrowing country will agree on the terms of the loan supporting the project.  Typically, negotiations last about 1-2 months.  Following negotiations, the PAD and other loan/credit documents are sent to the Board of Executive Directors for approval.  A General Procurement Notice (GPN) is sometimes issued by the borrowing country during this stage.

Implementation and Supervision

After the loan or credit is approved, the borrowing country can use the funds to purchase the goods and services necessary to meet the project’s objectives.  The borrowing country, not the World Bank, is responsible for implementing the project.  At this stage, which can last a number of years, the World Bank’s role is to monitor project implementation to ensure that the terms of the loan/credit agreement are followed and that procurement is conducted according to the World Bank’s guidelines.  GPNs and Specific Procurement Notices (SPNs), and Requests for Expressions of Interest (REIs) are issued by borrowing countries during implementation.

Evaluation

Following completion of the project, the Bank’s Independent Evaluation Group, conducts an audit of the project, where the project's outcome is measured against its original objectives. The audit entails a review of the project completion report and preparation of a separate report. Both reports are then submitted to the executive directors and the borrower. These reports are not available to the public; however, IEG periodically prepares impact evaluations on sets of projects based on these reports.

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