Recommendation 2: IFC PPP Advisory Services should rethink its client engagement management with a view to ensuring broad stakeholder consultation up front and maintaining or even improving, government commitment to PPP transactions, in collaboration with relevant World Bank Group staff.
Although almost all IFC advisory services for PPPs transaction cases (97 percent) delivered specific advice for phase 1, about half resulted in an award of a contract. Among projects that failed to reach contract closure, the top drivers of failure were political and economic risk factors and lack of government commitment.
Collectively the two factors contributed to the failure in 75 percent of these projects. Of projects where government capacity was weak, over half of them reached contract closure, which indicates that IFC advisory can step in with its capacity to handle the process. An important lesson is that more upfront work should be undertaken to better assess client commitment and to determine the areas of potential support and opposition to a project within the client government. Such work could occur before signing the Financial Advisory Services Agreement. For projects that involve commitments from multiple stakeholders, IFC should engage in a pre-mandate assignment to identify and map stakeholders and engage in discussions with them to determine their support for the projects. It is also important to ensure that the client has real decision-making authority and is not a source of technical expertise/oversight who still needs to go elsewhere for decisions on project implementation. This is likely to require more field presence of senior staff who can technically engage in such business development activities with key policy makers. Efforts to increase awareness about the circumstances under which PPPs can present a solution for infrastructure constraints and how PPPs work, would be important components of such upfront work.
IFC Agrees. The recommendation is consistent with IFC's understanding of the critical nature of ensuring client commitment. It is also in harmony with IFC's due diligence process and current efforts to integrate WBG colleagues in the project approval and implementation. IFC PPP Advisory Services already have a process of mapping out the key stakeholders at project approval and will continue to strengthen the practice.
IFC PPP Advisory Services will continue to work on improving government commitment by building capacity of government counterparts through workshops. The workshops are intended to enhance the government understanding of the process and requirements for a successful transaction
Strengthen the practice of stakeholder mapping by supporting teams to carry out stakeholder identi
2 (a) . IFC Specific Action:
Strengthen the practice of stakeholder mapping by supporting teams to carry out stakeholder identification and analysis during the pre-implementation phase of project preparation, and to engage clients in stakeholder analysis after project signing.
Indicator: Stakeholder mapping and analysis process in place (including mapping exercise with client after signing, communication plan for high risk projects, etc.)
Baseline: Current practice is a basic stakeholder mapping prepared by IFC team for quality at entry meetings.
Target: Stakeholder mapping and analysis carried out with client, and communication strategy developed, for 33% of advisory mandates in 2015 and 50% in 2016.
Timeline: Completed by Jan 2016
Continue to promote good practice and understanding of key PPP issues among government counterparts
2 (b). IFC Specific Action:
Continue to promote good practice and understanding of key PPP issues among government counterparts with workshops and seminars.
Indicator: Number of capacity building workshops with government participation.
Baseline: Current baseline is two training courses per year and project-specific capacity building seminars.
Target: 2 PPP learning courses in FY15 and 6 regional general workshops sponsored by C3P in collaboration with others.
Timeline: FY15: 2 PPP learning courses; FY15-16: 6 regional workshops per year
The Management Update indicates meeting and even surpassing of both objectives for Action 2 (a) and (b).
At the end of the second and final year of the implementation plan, the results for both actions a) and b) have surpassed the intended targets.
On action 2 (b), in FY16 the PPP Transaction Advisory unit implemented 2 Learning courses, 2 specific FCS-focused events and conducted 12 additional regional workshops and trainings. The two learning course were a continuation of a successful partnership with the Harvard Kennedy School executive education program and were intended to bring together senior staff, clients and donors. For the first time this year, the one-week long intensive course was also offered in Singapore.
Of note are the two events for Africa and EAP which were focused on FCS countries These events were focused seminars with peer-to-peer learning specifically designed for senior level government participants from the respective regions and they are intended to prepare ground for further engagement by IFC AS in FCS countries.
The 12 regional were evenly spread out among all regions. Further details on the capacity building workshops can be found in the attached spreadsheet with the caveat that these represent a lower boundary for the number of workshops conducted throughout the year. At time of submission there were still a few pending requests for information.
At the end of the second and final year of implementation, IFC AS has consistently delivered and gone above the intended targets for Action 2 (b).
On Action 2 (a), we continue to apply improved and more comprehensive practices for stakeholder identification, analysis and engagement. At Quality at Entry all stakeholder mappings continue to be reviewed by the senior communications specialist. IFC E;S officers continue to review and appraise all PPP mandates and issue recommendations for stakeholder analysis and engagement where needed, along with guidance on TORs. These two practices are solidly embedded the PPP Transaction advisory workflow.
At the end of June 2016, there were 49 advisory mandates in the portfolio at stages where a stakeholder mapping or communication strategy may be expected (Strategic review, Transaction Design, Pre-Qualification, Bid in Process, Final Closure). At the time of reporting, out of the 49 mandates at least 26 projects have carried out stakeholder mappings during their due diligence phase and/or have a detailed communication plan. This represents just over 53% of the projects in the portfolio at a stage where such a mapping/communications strategy can be expected.
Two additional projects are also expected to complete stakeholder mapping the near future - they have just started due diligence. If those two projects are included, that would bring the overall percentage to 55%, again surpassing the agreed target. Further details on the projects can be found in the attached excel spreadsheet.
At the end of the second and final year of implementation, IFC AS has consistently delivered and gone above the intended targets for Action 2 (a) as well.
2(a) Stakeholder mapping was carried out for 19 of the listed 24 projects; communication strategies prepared for 8 out of 24. With this IFC AS has achieved / surpassed its envisaged target of 33 % of projects having undergone a stakeholder mapping and communication strategy developed.
2(b) IFC provides evidence that it had implemented 17 workshops and 2 training courses. It has hence achieved its target for FY15.
The implementation plan encompasses 2 years. At the end of the first year, the results for both actions a) and b) have largely reached or surpassed the intended targets. That leaves Management convinced that IFC is on track towards achieving the overall targets outlined in the MAR.
On Action 2 (b), in FY15 the PPP Transaction Advisory unit implemented 2 learning courses and conducted 20 regional workshops. The two learning courses were as follows:
1. Senior IFC/Harvard Training on Public-Private Partnerships and Project Finance Program, May 11-15, 2015. Cambridge, MA. 55 participants (9 donors, 16 clients, 9 WBG staff, 21 C3P staff)
2. Executive Training: PPPs in the Health Care Sector, Dec 8-12, 2015. Frankfurt, Germany. 25 IFC clients
The 20 workshops were intended for both current and prospective clients across all regions. Details on the regional client capacity building workshops can be found in the attached excel spreadsheet.
On Action 2 (a), PPP transaction advisory has taken major steps to strengthening client commitment through enhanced stakeholder identification and engagement. The stakeholder mappings we perform generally fall into three types: stakeholder identification during Quality at Entry; Preliminary stakeholder mapping, conducted during the Due Diligence phase of the projects by E;S consultants; and in case of complex projects, detailed communications strategy and engagement.
As a first improvement, all basic stakeholder mappings at Quality of Entry (the baseline) are now reviewed and commented on by a Senior communications specialist, with specific recommendation on where and how they can be improved. As a second step, IFC E;S officers review and appraise all PPP mandates and in the vast majority of cases issues recommendations for stakeholder analysis and provide teams with TORs for the task. Directly addressing the target, in FY15 17 projects carried out stakeholder mappings during their due diligence phase. For at least 4 projects there was an extended and detailed stakeholder engagement complete with a communications strategy. At the end of June, the 17 projects represent just over 33% of the 50 projects in the portfolio which are at the stages where stakeholder mapping can be expected: Strategic review, Transaction Design, Pre-Qualification, Bid in Process, Final Closure. .
In the case of high risk or more complex projects, the teams and communication officer also developed a more detailed stakeholder mapping along with a communications strategy. For these projects the stakeholder mapping was designed as a collaborative process, drawing from multiple perspectives, to determine a key list of stakeholders. Stakeholder mapping was carried out through brainstorming, debates, and discussions with the people and agencies involved with the project to get a clearer picture of the various stakeholder perspectives, concerns, information requirements, and inter-relationships. Once a list of stakeholders was created, they were mapped on a traditional stakeholder map with axis points determining their estimated level of Power/Influence and their level of Support/Opposition towards the project. Influence refers to how powerful a stakeholder is in terms of influencing the direction of the project and its outcomes and were qualitatively assessed using three main related variables of Power (political or financial), Urgency, and Legitimacy.
(note: Isabel Chatterton has reviewed and cleared/approved the assessment/update and the ratings for this recommendations and has asked Kris Luniku to click/approve in the system as a Reviewing Manager on her behalf).