Highlights

The findings of the evaluation and the forward look led to two Independent Evaluation Group recommendations: one on building on the benefits of platforms revealed in the pilot period and a second on platform reporting rooted in clear results frameworks.

Summary of Findings on the International Finance Corporation’s Platforms Approach

IFC platforms have achieved several of the objectives they set out to achieve (response to crisis at scale, engaging with small clients and new clients, engaging with clients in IDA countries and FCS, and engaging in new sectors). However, given the early-stage nature of this evaluation, it is not possible to assess their achievement of outcomes. Their achievements are largely explained by three features of platforms under IFC’s approach:

• Operational efficiency, including expedited approval, and streamlining and standardization of internal processes
• Pooling of risk and mitigation of risk using blended finance
• Focusing on specific development challenges

However, the importance of the platforms approach in enabling the achievement of these objectives varies across platforms, and there is no shared articulated program logic on IFC’s platforms approach. Expectations regarding IFC platforms sometimes differ among the Board, IFC management, and clients.

Based on expected loss (an ex ante risk indicator), there is no indication that platform projects covered by this evaluation will increase IFC’s overall portfolio risk. Comparisons of overall projected expected loss for loans and CRRs for equity investments suggest that the platform portfolio as a whole does not increase IFC portfolio risk.1 IFC applies similar due diligence to platforms as it does to its stand-alone projects. However, specific platforms (BOP and ISC) serve riskier clients.

Despite significant evolution, challenges remain in aligning reporting with Board expectations. A gap remains in content, format, and frequency between information the Board has stated that it wants and the information that IFC reports routinely. This gap applies to reporting on additionality, risk ratings, and risk-adjusted return on capital. Furthermore, platforms established measurable indicators and targets inconsistently as a basis for reporting and oversight.

Recommendations for the International Finance Corporation’s Future Use of the Platforms Approach

The evaluation makes two recommendations on the future use of platforms and on platform reporting and monitoring:

• IFC should extend the approach embodied in its pilot to new platforms that both build on the benefits revealed in the pilot period and enrich and generate new learning on platform performance. Experience to date suggests that platforms can be designed to facilitate small transactions, respond rapidly to crisis, manage risks associated with new clients more efficiently (through pooling of risk and mitigation of risk using blended finance), engage with clients in IDA countries and FCS, and focus on specific global challenges (for example, in health and digital technologies, using lessons from the GHP and ISC platform). In addition, platform design may combine short- and longer-term financial instruments to be prepared for future crises and to address longer-term development needs. A caveat in extending the pilot approach is that individual platform outcomes are not yet known, and the base of experience in this evaluation is both limited and diverse among the seven in-scope platforms. Given the likely scale-up of platform use to address global challenge priorities, incorporating and supporting learning is vital.
• To facilitate oversight of and learning from platforms, IFC and the Board should reach and implement an agreement on the level, content, format, and frequency of reporting on platforms and individual projects within them, rooted in clear results frameworks. The agreement should balance the information that the Board uses for oversight—for example, information on development impact, additionality, risk ratings (credit, E&S, and integrity due diligence), efficiency, and risk-adjusted return on capital—with what IFC can provide feasibly. Despite progress, a gap remains between the information the Board has stated that it wants in discussions on individual platforms and the information IFC reports routinely. IFC systems could be updated to fill this gap at agreed periods. Furthermore, Board oversight and IFC’s monitoring and evaluation of platforms should be based on results frameworks (consistent with each platform’s program logic) with specific indicators and quantifiable targets agreed to with the Board when individual platforms are approved or extended.