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CSV
Lesson
Technical assistance with a narrow focus, immediate policy relevance, and carried out with national champions with financial and/or planning authority was key to the successful integration of climate technologies in country investment plans. Careful and realistic planning is required for the production and dissemination of outputs, since this involves multiple institutions within a given timeframe.

Project Number: No PN
Project Name: Climate Change Fund, 2008–2019
Report Date:
Lesson
Institutional capacity development on climate change in ADB’s DMCs requires long-term engagement. Just over half of CCF resources went toward capacity development. The lack of basic climate data, technical expertise, and qualified local staff in many DMCs means that some processes, especially baseline studies, vulnerability assessments, and cost–benefit analysis of mitigation and adaptation measures, have to be adjusted to reflect realities on the ground.

Project Number: No PN
Project Name: Climate Change Fund, 2008–2019
Report Date:
Lesson
The strategic oversight of funds is enhanced when their governance structure includes some form of third-party engagement. The original Board paper outlined the governance structure of CCF and included at its apex ADB and external financing partners, whose function would be to provide strategic direction to the CCF and to meet ADB for annual consultations and to review progress, administration, and the annual work program. Since there are no external financing partners, ADB sits alone at the apex of the governance structure.

Project Number: No PN
Project Name: Climate Change Fund, 2008–2019
Report Date:
Lesson
Active engagement of national stakeholders and ADB resident missions from the outset helps improve ownership and project success. The likelihood of success is greater when an RCIF TA project is designed with genuine consultation with concerned line ministries, national agencies, the private sector (if relevant), and ADB resident missions. Active engagement of in-country stakeholders helps ADB to identify binding constraints and solutions, and to internalize implementation challenges at the TA design stage. This makes clear the roles and responsibilities of each stakeholder.

Project Number: No PN
Project Name: Regional Cooperation and Integration Fund, 2007–2019
Report Date:
Lesson
Clear delineation of country activities with transparent funding allocations in cross-border RCI TA projects involving several countries helps smooth implementation and increase project success. The transaction costs in cross-border RCI TA projects tend to be high both in terms of resources and the time required to achieve agreement among stakeholders in the participating countries. It takes much longer to negotiate and agree to a common proposal in a cross-border RCI TA project than in a usual TA project.

Project Number: No PN
Project Name: Regional Cooperation and Integration Fund, 2007–2019
Report Date:
Lesson
A small equity investment can have a large impact in the right circumstances, especially if it is supported by TA and policy reforms. Although ADB’s equity investment in BNB was largely effective in achieving its aims, it illustrates that small investments are not easy for ADB to handle within its cost structure.

Project Number: 29243/29243-01/31912
Project Name: Financial Sector Intermediation Facility and Equity Investment in Bhutan National Bank
Report Date:
Lesson
The key problems and constraints of SME access to credit in Bhutan needed to be better understood. Problems included high interest rates, short loan amortization periods, and excessive collateral requirements. The FSIF loan had no effect on these.

Project Number: 29243/29243-01/31911
Project Name: Financial Sector Intermediation Facility and Equity Investment in Bhutan National Bank
Report Date:
Lesson
The failure of interest rate liberalization was also partly a failure of analysis. Removing overt administrative control of interest rates may make little difference to prevailing rates and practices if there is little competition between lenders because of the sector’s oligopolistic and closely held structure. Several factors made it unlikely that simple deregulation of rate setting would be conclusive.

Project Number: 29243/29243-01/31910
Project Name: Financial Sector Intermediation Facility and Equity Investment in Bhutan National Bank
Report Date:
Lesson
Delays in the establishment of a credit information bureau was also partly a failure of analysis. Costs were underestimated and the problems were not fully understood. Founding a CIB in Bhutan is not only a problem of coordination among the lending institutions. The challenge is more fundamental, with the essential problem being the poor data systems and practices of the lending institutions. Substantive analysis at the design stage of the FSIF would probably have identified this issue and allowed ADB and RGoB to address it earlier.

Project Number: 29243/29243-01/31909
Project Name: Financial Sector Intermediation Facility and Equity Investment in Bhutan National Bank
Report Date:
Lesson
Insufficient analytical underpinnings led to formal rather than substantive compliance with tranche release conditions. Joint undertakings with other donors and RGoB might have strengthened the substantive analysis of policies and the robustness of the dialogue with RGoB. 60 For example, requiring that RGoB formulate an FDI policy, without engaging substantively on the substance of that policy, was not useful. A policy was written and adopted, but a new attempt was being made to formulate a workable policy in 2009.

Project Number: 29243/29243-01/31908
Project Name: Financial Sector Intermediation Facility and Equity Investment in Bhutan National Bank
Report Date:
Lesson
Another lesson is that if ADB brings a private partner into the deal with the aim of facilitating capacity development, it should only go with a strategic investor with relevant banking experience, who will remain as a shareholder for a long time and thus play an active role in the management and corporate governance of an institution. In this particular case, the investor was not actively involved in managing the institution and acted more like a financial than a strategic investor.

Project Number: 29243/29243-01/31913
Project Name: Financial Sector Intermediation Facility and Equity Investment in Bhutan National Bank
Report Date:
Lesson
Project management must pay more attention to the scheduling of project implementation. Substantial delays experienced by all three projects should have been avoided or shortened. In contemporary infrastructure management, time overrun, like cost overrun, is a key performance indicator and affects the project’s efficiency. On-time completion is particularly important for a road rehabilitation project. The service level of a road under the rehabilitation is downgraded because the capacity of the road should be constrained during civil works.

Project Number: 29151-013, 30311-016
Project Name: Road Rehabilitation Project, Second Road Rehabilitation Project, and Third Road Rehabilitation Project [Loans
Report Date:
Lesson
ADB’s guidelines for economic analysis of projects require that a national affordability assessment be carried out for large projects. A project is considered large if it may have a substantial impact on the country’s foreign exchange revenues, expenditure, or budget resources. During the implementation of the second project, the IMF introduced a PIP ceiling in 2001 because it was concerned about the government’s fiscal sustainability. It set a rigid ceiling and thereby contributed to a significant delay in project implementation.

Project Number: 29151-013, 30311-015
Project Name: Road Rehabilitation Project, Second Road Rehabilitation Project, and Third Road Rehabilitation Project [Loans
Report Date:
Lesson
The creation of a road fund has been a key component of all three projects. It was to ensure the availability of adequate financing for operation and maintenance of project roads. To date, however, the road fund has not operated as envisaged. Because of the IMF restriction that the government should have only one consolidated central budget account, the government requested, and in 2001 was granted, an ADB waiver on the loan covenant that a special account for a road fund be created.

Project Number: 29151-013, 30311-014
Project Name: Road Rehabilitation Project, Second Road Rehabilitation Project, and Third Road Rehabilitation Project [Loans
Report Date:
Lesson
The institutional and policy reforms envisaged in the projects were complex and far-reaching and needed a longer time to come to fruition. There was no sharp focus on road asset management, which was a theme common to the three projects. Each of the projects left an unfinished agenda, which suggests that TA was spread too thinly over too many reform issues. The designs of succeeding projects did not indicate or act on the fact that some reform measures in the precursor projects were pending, at risk, and in need of ADB’s continued attention.

Project Number: 29151-013, 30311-013
Project Name: Road Rehabilitation Project, Second Road Rehabilitation Project, and Third Road Rehabilitation Project [Loans
Report Date:
CSV