This evaluation explored the relevance and effectiveness of IFC’s approach to additionality in MICs and critical factors explaining why and where IFC realizes additionality. On the basis of the preceding chapters’ evidence-based analysis, we offer three recommendations to enhance IFC additionality in MICs.

Recommendation 1. To enhance institutional accountability, learning, and transparency, address gaps in internal systems related to monitoring, supervision, and reporting of additionality at the project and portfolio level.

IFC should update its internal additionality project-level tracking system, currently still hosted in the Development Outcome Tracking System platform. In addition, at the project level, IFC should systematically monitor whether necessary support is delivered within the stipulated timeline for anticipated additionalities that are to be fulfilled over the course of a project’s life. This should be followed up by a final assessment of whether additionality was realized or not and why. Proactive monitoring and supervision at the project level could enhance the realization of anticipated nonfinancial additionality claims.

IFC should introduce reporting of additionality at the portfolio level to enhance learning about patterns of additionality. Portfolio additionality ratings and information on additionality types (anticipated and realized) should be included in regular internal reports (for example, country- or sector-level portfolio reviews, scorecards) and considered in strategy discussions. Disclosure of anticipated additionality at the project level should continue, and external reporting of realized additionality at the portfolio level could follow the same approach as that taken for development impact information.

Recommendation 2. To enhance commitment to and fulfillment of IFC’s strategic objectives, IFC should bring its strategy for additionality in MICs and its pattern of activity in MICs into closer alignment.

This evaluation showed in chapter 2 that IFC’s stated strategy for MICs is not tightly linked to its observed patterns of anticipated and realized additionality. For example, IFC’s activities in UMICs do not systematically show greater innovation or reliance on knowledge compared with its activities in LMICs. However, its additionality varies in accordance with industry and stage of sector development. Because strategy serves to guide staff, management, and the Board regarding what to expect in IFC’s approach, a closer alignment between strategy and pattern of activity would enhance commitment to and fulfillment of IFC’s strategic objectives. Given the intuitive logic of IFC’s strategic statements on additionality, IFC could work to evolve its project design to better align with the stated strategy, with a stronger emphasis on innovation and nonfinancial additionality in UMICs. This may require providing additional attention and resources to innovation and knowledge additionality, including at appraisal and supervision. This would include support for delivery of complementary AS often associated with knowledge-based additionality. The alternative would be for IFC to offer the Board a revised strategy explaining how its additionality adapts to country and sector conditions, reflecting its actual practices in MICs, for example, adapting to sector or level of market sophistication.

Recommendation 3. To enhance its strategic approach to proactive creation of markets and mobilization of private capital to provide a critical contribution to the Sustainable Development Goals, IFC should incorporate its additionality approach into its country strategies and sector deep dives.

IFC 3.0 is about being proactive to create markets and mobilize private capital at significant scale to increase development impact. IEG’s observation of IFC’s good practices in identifying and realizing additionality at the sector and country level (chapter 4) suggests an opportunity to more deliberately envision and articulate additionality beyond the project level. Given the new tools for strategic engagement at the country and sector level that IFC introduced under IFC 3.0, there is a clear opportunity to increase the distinctive value that IFC adds in specific country and sector contexts. This opportunity raises the possibility of several potential enhancements to IFC additionality with greater benefits for creating sectoral markets and mobilizing capital at scale. As good practices discussed in this evaluation suggest, strengthening IFC’s strategies by applying the additionality lens may open the door to realizing additionality from strategic planning for the explicit complementarity and sequencing of projects, combining projects that work upstream and downstream, and coordinating collaboration and distribution of responsibilities across the Bank Group. As noted in chapter 2, the recent China country strategy points to the potency of identifying sector-specific additionality within a country context—an approach that could be extended to other MIC country strategies. IFC’s sector deep dives on housing and financial technology provide a good-practice glimpse of the benefits of a systematic consideration of IFC’s unique potential to add value at the sector level. IFC clearly has the capacity to use the additionality lens more routinely in both its country strategies and its sector deep dives.