INTRODUCTION

The World Bank is an international financial institution that

provides loans and grants to the governments of low- and middle-income

countries for the purpose of pursuing capital projects. The World Bank is

the collective name for the International Bank for Reconstruction and

Development (IBRD) and International Development Association (IDA),

two of five international organizations owned by the World Bank Group.

It was established along with the International Monetary Fund at the

1944 Bretton Woods Conference. After a slow start, its first loan was to

France in 1947. In the 1970s, it focused on loans to developing world

countries, shifting away from that mission in the 1980s. For the last 30

years, it has included NGOs and environmental groups in its loan

portfolio.Its loan strategy is influenced by the United Nations' Sustainable

Development Goals, as well as environmental and social safeguards.

The project cycle is the framework used by the World Bank (‘the Bank’) to design,
prepare, implement, and supervise projects. In practice, the Bank and the Borrower
work closely throughout the project cycle, although they have different roles and
responsibilities.

The World Bank project cycle includes six-stages:

 Identification
 Preparation
 Appraisal
 Negotiation/approval
 Implementation
 Completion/validation and evaluation

Below is an outline of the six stages, the key documents produced during the various
stages, and links to access them.

1. Identification

The task of identifying and proposing projects for World Bank financing lies mainly
with the Borrower. The Borrower and the World Bank Group (WBG) produce
a Country Partnership Framework (CPF) to identify the country’s main priorities for
ending extreme poverty and promoting shared prosperity. Used in conjunction with
a Systematic Country Diagnostic (SCD), the CPF is a key tool that guides the WBG’s
partnership and support for a Borrower’s development program. For further
information, click on the WBG Directiveand Guidance.

Once a project is identified, the Borrower and the Bank agree on an initial project
concept and its beneficiaries, and the Bank's project team outlines the basic elements
in a Project Concept Note. This document identifies proposed objectives, risks to
these objectives’ achievement, alternative scenarios, and a likely timetable for the
project preparation process. Two Bank documents are prepared and disclosed to the
public during this phase. The Project Information Document which outlines the scope
of the intended project and the Environmental and Social Review Summary (ESRS)
for investment projects starting in October 2018 that apply the Environmental and
Social Framework (ESF). For investment projects under the previous Safeguard
Policies, an Integrated Safeguards Data Sheet is made available to the public. The
transition from the Safeguard Policies to the ESF will take several years, as projects
approved under the Safeguard Policies continue to apply those policies through the
end of the Project cycle.

 Project Information Document

 Environmental and Social Review Summary
 Integrated Safeguards Data Sheet

2. Preparation

The borrower is responsible for the project preparation phase, which includes
conducting technical, economic, social and environmental assessments and preparing
feasibility studies, engineering and technical designs, among others. Most Borrowers
typically contract with consultants and private sector firms for goods, works and
services, as needed, during this phase and later during the project's implementation
phase. During preparation, the Borrower and the Bank team also give attention to
other important concerns including citizen engagement, gender, climate change, fraud
and corruption, and grievance redress mechanisms. Beneficiaries and stakeholders
are also consulted during this phase to ensure the project considers their needs.

In addition to providing financing, the World Bank serves as a vehicle for global
knowledge transfer and technical assistance and generally takes an advisory role and
offers analysis and advice during this phase. The Bank team supports the Borrower in
developing the project design, identifying implementation arrangements, and
conducting various reviews and studies. The Bank assesses the relevant capacity of
the implementing agencies at this point to reach agreement with the Borrower on
arrangements for overall project management, such as the systems required for
financial management, procurement, environmental and social risk management,
reporting, and monitoring and evaluation.

Earlier screening by Bank staff may have determined that a proposed project could
have potential adverse environmental or social impacts. For new IPF projects, the
Bank currently applies the Environmental and Social Framework (ESF). The ESF sets
out the World Bank’s commitment to sustainable development through a Bank Policy
and a set of Environmental and Social Standards that are designed to support
Borrowers’ to better manage environmental and social (E&S) risks. It uses an up-to-
date and risk-based approach, addresses a wider range of environmental and social
risks and potential impacts and better integrates the Bank’s Environmental and Social
policies. The ESF clearly defines the role of the World Bank versus the Borrower,
whereby the Bank applies due diligence to the project under the Environmental and
Social Policy (ESP) and the Borrower follows the requirements of the
ten Environmental and Social Standards (ESS1-10). Development Policy and
Program-for-Results financing do not apply the ESF and have their own provisions
for environmental and social risk management.

 Environmental Assessment
 Environmental Action Plan
 Indigenous Peoples Plan
 Procurement Plan

3. Appraisal

Appraisal gives the Borrower an opportunity to review the project design in detail and
resolve any outstanding questions. The Borrower and the Bank review the work done
during the identification and preparation phases and confirm the expected project
outcomes, intended beneficiaries, application of ESF requirements (for IPF) and
evaluation tools for monitoring progress. Agreement is reached on the viability of all
aspects of the project at this time. The Bank team confirms that all aspects of the
project are consistent with all World Bank operations requirements, assesses the
project’s readiness for implementation, and that the Borrower has institutional
arrangements in place to implement the project efficiently. All parties agree on a
project timetable and on public disclosure of key documents and identify any
unfinished business required for final Bank approval. The Project Information
Document and Environmental and Social Review Summary (for IPF) are updated and
disclosed during this phase.

4. Negotiation/Approval

Once all project details are negotiated and accepted by the Borrower and the Bank,
the Bank team finalizes the Project Appraisal Document (for IPF), the Program
Appraisal Document (for PforR) or the Program Document (for DPF), along with
other financial and legal documents, for submission to the Bank's Board of Executive
Directors for consideration and approval.

 Project Appraisal Document

 Program Document
 Loan Agreements
5. Implementation

Project implementation is the responsibility of the Borrower, while the Bank’s role is
to provide effective implementation support to improve results, help manage risks,
and increase institutional development. With technical assistance and support from
the Bank, the Borrower prepares the specifications for the project and carries out all
procurement of goods, works and services needed, as well as any environmental and
social impact mitigation set out in agreed plans, including those described in the
Environmental and Social Commitment Plan (ESCP). Financial
management and procurement specialists on the Bank's project team ensure
that adequate fiduciary controls on the use of project funds are in place. Changing
circumstances, project delays and unexpected events can sometimes require
adjustments to the project design, such as implementation arrangements or even
objectives, resulting in a restructuring.

The implementing agency reports regularly on project progress and results. The
Borrower and the Bank also join forces at least twice a year to prepare a review of
project progress. Based on this review, the Bank team prepares an Implementation
Status and Results Report.

 Implementation Status and Results Report

6. Completion/Validation & Evaluation

When a project is completed and closed at the end of the loan disbursement period,
the World Bank, with input from the Borrower and other stakeholders, compiles
an Implementation Completion and Results Report, which evaluates the project’s
outcomes; challenges, and lessons learned to determine what additional measures are
needed to sustain the benefits derived from the project. In addition, the evaluation
team assesses how well the entire operation complied with the Bank's operations
policies and accounts for the use of Bank resources.

 Implementation Completion and Results Report

Validation and Evaluation

The Independent Evaluation Group (IEG) evaluates the development effectiveness of

the World Bank Group. IEG is independent of the Management of the World Bank
Group and reports directly to the Executive Board. IEG conducts different types of
evaluation, validation, and synthesis exercises. At the project cycle level, IEG
validates 100% of the self-evaluations that WB operational teams conduct upon
project completion. In addition, IEG conducts strategically selected project-level
evaluations through Project Performance Assessment Reports
SIMILARITIES BETWEEN THE WORLD BANK AND THE TRADITIONAL
CIRCLE

The Bank and many other bilateral and multilateral agencies have used GNI8 as a workable and
reasonable measure of economic and institutional development for over fifty years. GNI is a
broad-based measure of income generated by a nation’s residents from international and
domestic activity: GNI per capita measures the average amount of resources available to persons
residing in a given territory.

The Atlas method is designed to smooth the effects of short-term transitory changes in exchange
rates which introduce undesirable volatility into the classification system. The Atlas conversion
factor for any year is the average of a country’s exchange rate for that year and its exchange rates
for the two preceding years, adjusted for the difference between the rate of inflation in the
country and international inflation.
References

https://en.m.wikipedia.org/wiki/World_Bank

https://documents.worldbank.org/curated/en/696601478501928227/pdf/109412-BRI-WBG-
PUBLIC-date-04-01-1993-The-World-Bank-Project-Cycle.pdf

https://documents1.worldbank.org/curated/en/408581467988942234/pdf/WPS7528.pdf