Transcript Independent Review of the Bank's Non

Independent Review of the Bank’s NonSovereign Portfolio: Preliminary Findings on
Private Sector Policy
Rakesh Nangia
Mohamed Manai
OPEV
African Development Bank
www.afdb.org/opev
Overview – Strategic Priorities
Infrastructure,
Industry & Service Sectors
Financial
Intermediary
Support
MSME’s
Equity
Member
Support
Cautious
Growth
2
LIC’s
Fragile States
Risk Sharing
Instruments
Political
Risk
Exposure
Limits
DFI
Partnerships
Strong
Growth
Portfolio
Quality
Operational
Efficiency
Government
Risk Rating Environment
Targets
Social
Household
©2011 Deloitte Global Services Limited
To What Extent is the PSO Portfolio Aligned to the Strategy’s Five Objectives?
1. Improving the Investment Climate
• Objective fits with “one bank” concept of integrated operations
3
©2011 Deloitte Global Services Limited
To What Extent is the PSO Portfolio Aligned to the Strategy’s Five Objectives?
2.
Supporting Private Enterprises
• Need to define SME’s and require DO monitoring
• Interventions through intermediaries and DFI’s have tradeoffs:
‒ Positives: financial additionality, reduced risk exposure
‒ Concerns: loss of control over funds usage, limited ability to
monitor and impact DO, different priorities between PSO
and client financial institutions
• Increasing equity fund investments reach SME’s, create high additionality
‒ Strong concerns: far greater risk exposure, need for additional monitoring and
management, lack of defined exit strategies, overall coordination
4
©2011 Deloitte Global Services Limited
To What Extent is the PSO Portfolio Aligned to the Strategy’s Five Objectives?
3.
Building Competitive Infrastructure
• Very high catalytic effect
• 43% achieved in LIC’s, a strategic priority
• Higher risk ratings than overall portfolio
• Limited use of TA on infrastructure project
• Portfolio strongly aligns to core objective and multiple priorities
• Targeted TA utilizing WB Group model can reduce risk exposure, improve outcomes
5
©2011 Deloitte Global Services Limited
Approval Stages (1 of 4)
• Gating stages during
the approval process
AfDB
Criteria
•
•
Approval process stages are similar to benchmarked MDBs, but AfDB’s internal
steps are more cumbersome
AfDB has twice as many approval gates as other MDBs
IFC
EBRD
AFD
IDC
DBSA
Approval
duration
11 months
(5 year avg.)
6 months
6 months
4 – 6 months
6 months
3 - 6 months
Exploratory
review
Divisional
Management
Combined with
concept review
Combined with
concept review
Combined with
concept review
Combined with
concept review
Combined with
concept review
Senior
Management
Opscom
Screening
Committee
Head of Business
Unit
Opscom equivalent
Departments
Review
Concept Review /
Preliminary
analysis
Country Team
Credit Comm.
OIVP
Opscom
6
©2011 Deloitte Global Services Limited
Approval Stages (2 of 4)
•
• Gating stages during
the approval process
•
AfDB
Criteria
Repeating approval steps between Concept Review and Final Review is more
detailed than other IFI’s, adds time and administrative requirements
Other IFIs utilize Board notification on smaller projects and finish approval steps
within division management/OPSCOMM reviews
IFC
EBRD
AFD
IDC
DBSA
Department Review
Opscom equivalent
Country Team
Final Review/
Project appraisal
Credit Comm.
OIVP
Departmental
Management
Opscom
Project Committee
Head of Business
Unit
Secretariat
Credit committee
Opscom
COO
Final Approval
President
Board
7
Board Notification
for smaller projects
Board Notification
for projects under
€10 million
Investment
Committee/ Board
Credit Committee/
Executive team/
Board
Board
©2011 Deloitte Global Services Limited
F: Timeline for Submission of
Independent PSO Review
o Finalize Technical Draft Reports by End Of November
o Discuss Draft Consolidated Report by Mid-December
o Submit Consolidated Report and Final Technical Reports for
Management Response by End of December
o Submit Consolidated Report and Final Technical Reports to
CODE for Consideration by End of January 2013