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Building a path for the clean energy transition: Lessons from World Bank support for renewable energy

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Manik, a solar pump operator for Nusra works near the solar panels in Rohertek, Bangladesh on October 12, 2016. Nusra is an NGO working to bring solar irrigation to farmers and solar home systems to families in Rohertek. Photo: © Dominic Chavez/World Bank
The ongoing dominance of fossil fuels in global energy production accounts for more than 60% of overall greenhouse gas emissions. The Clean Energy Transition —the pathway for decarbonizing global energy— is essential for addressing climate change and will also provide a key means for the poor to access affordable, reliable, clean electricity. The transition will be central to achieving both the Show MoreThe ongoing dominance of fossil fuels in global energy production accounts for more than 60% of overall greenhouse gas emissions. The Clean Energy Transition —the pathway for decarbonizing global energy— is essential for addressing climate change and will also provide a key means for the poor to access affordable, reliable, clean electricity. The transition will be central to achieving both the goals of the Paris Climate Accords and key elements of the Sustainable Development Goals, and experts agree that Renewable Energy (RE) has a vital role to play in the Clean Energy transition. The Independent Evaluation Group (IEG) recently released its first systematic assessment of World Bank Group support for the supply of electricity from renewable energy. The evaluation looked at the evolution and the outcomes of the Bank Group’s approach from 2000 to 2017, and how well it helped developing countries address the myriad obstacles in the way of adopting renewable energy and seizing the opportunities presented by advances in RE  technology, ranging from battery storage to solar and wind technology to system planning and integration of renewables. In short, the World Bank Group has an important role to play. It is the single largest global contributor to RE in developing countries, where it is forecast that 70% of the required scale up in RE to meet the Clean Energy Transition goals will take place. The Bank Group’s role in the development of RE extends beyond its financing, with support such as policy advice to create the right environment for RE scale up and the convening of partners to mobilize financing and technical support also having an  important impact. Based on lessons drawn from almost two decades of Bank Group interventions, IEG has identified three key recommendations for leveraging the Bank Group’s comparative advantages to maximize the impact of its support for RE. Recommendation 1: Focus on integration of renewable energy into the grid  The technical advances and the falling costs of wind power and solar photovoltaic present significant opportunities, but to seize them will require overcoming a common challenge presented by these RE technologies. They are variable because wind power only generates electricity when the wind is blowing, and solar photovoltaic only works when the sun is shining.  Countries will need to adapt their power systems to cope with these variable sources of electricity.  Variable sources of power are projected to have the largest role in the RE scale-up, and the share of wind and solar photovoltaic in Bank Group RE projects has surged in line with global trends.  Integrating these variable sources of power into the grid to expand the power supply and replace higher carbon alternatives requires robust power system planning, adequate grid codes and standards for grid-friendly equipment, stronger and expanded transmission infrastructure to reach the often remote locations of RE installations, and the deployment of batteries or other storage technologies to convert variable sources of power into  a continuous supply to the grid, known as base-load power.    Hydropower, which represented US$1 billion of the Bank Group’s US$4.5 billion RE portfolio from financial years 2018 to 2020, has the advantage of being able to store ‘fuel’. By building a reservoir along with the hydropower dam, water can be stored and released to generate more electricity when the grid calls for it. This flexibility can be used to balance the load on the grid and compensate for the intermittency of solar photovoltaic and wind power. However, the scale of hydropower projects with storage are typically more complex to develop and can have greater environmental and social challenges. The Bank Group is supporting a decreasing number of large-scale hydropower projects with storage, with a shift to smaller-scale projects that rely solely on the flow of river water. In view of its track record as a dependable replacement for fossil fuels and its role in meeting the integration challenge, attention to developing hydropower with storage that meets high environmental and social standards should be a priority. IEG found that less than 7% of the Bank Group RE portfolio in the evaluation period focused on integrating RE into power systems. With notable exceptions, such as the power system planning support to Egypt to develop its wind power, the majority of Bank Group projects focused primarily on addressing policy and regulatory barriers. While the latter is critical, developing countries will need support to meet the integration challenge to take advantage of the rapid expansion of wind power and solar photovoltaic.  Both China and Nicaragua had ambitious plans to expand wind power, and both faltered over lack of power systems planning to ensure the grid could handle the expanded source of intermittent power. The Bank Group is helping both countries address this issue, and lessons from experience should help guide similar integration challenges in other countries. Recommendation 2: Take comprehensive approaches to addressing the barriers to RE  IEG found that RE development proved more successful when the Bank Group engaged systematically over time, strengthening its relationships, and progressively and comprehensively helping countries implement the necessary reforms to remove barriers to RE development. These barriers include the right policies and regulatory environment to encourage the development of RE, power systems capable of integrating variable sources of power, the capacities to undertake new investments in RE and operate ongoing projects, and the ability to create the right environment to attract investors and mobilize the high up-front investments needed for RE. The Bank Group can build on the comparative advantages its constituent institutions to provide the kind of comprehensive support that addresses multiple barriers. While the World Bank  can utilize its lending and technical advisory capacity to focus  on RE policies and integration, the Bank Group’s private sector arm, the International Finance Corporation (IFC) can work on  mobilizing  private capital and promoting the adoption of environmental and social performance  standards and mechanisms for scaling-up, and the Bank Group’s risk guarantee agency, the Multilateral Investment Guarantee Agency can further extend its risk mitigation portfolio to cover a wider range of RE technologies. This coordinated and comprehensive support can have a significant impact. In 2002, the World Bank and IFC coordinated to rehabilitate the Pamir hydropower plant in the very poor Badakhshan region of eastern Tajikistan, mobilizing private finance and development partners for the first private investment in the country’s energy sector.  Following the collapse of the region’s diesel plant, the local population in Badakshan had been forced to resort to wood as fuel, schools and other public institutions closed during the winter, and indoor pollution rose as economic activity stalled. The Pamir hydropower plant now ensures 96% of households in Badakhshan enjoy 24 hours of electricity per day, all year-round. Recommendation 3: Keep Bank Group knowledge and skills up to date While there have been notable successes, keeping up with the dynamic nature of RE requires cutting-edge knowledge. It is important for the Bank Group to keep its knowledge up to date of technological changes and the evolving nature of policy and regulatory requirements on RE overall and specifically on integration, including storage and distributed generation, as well as financial structuring skills to mobilize private capital investment in RE. This will require constantly updating knowledge on issues ranging from power systems planning to pricing policy and procurement. Conclusion There are a range of studies that propose different pathways to the Clean Energy Transition, but they are unanimous in calling for a momentous expansion of RE. The Bank Group has an important role to play in working with developing countries to achieve this goal. To maximize the impact of Bank Group support, IEG recommends prioritizing interventions that focus on integrating RE sources into power systems, as part of comprehensive, long-term country engagements, with coordinated Bank Group solutions, backed by specialized skills that are continually updated to help developing countries address their pressing and rapidly evolving challenges to scale-up RE.   Read IEG’s Evaluation of the World Bank Group’s support for electricity supply from renewable energy resources, 2000–2017 Pictured above: Manik, a solar pump operator for Nusra works near the solar panels in Rohertek, Bangladesh on October 12, 2016. Nusra is an NGO working to bring solar irrigation to farmers and solar home systems to families in Rohertek. Photo: © Dominic Chavez/World Bank

From the Great Wall of Trees to Sustainable Management of Landscapes

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IEG visit to Weinalem Watershed in Raya Azebo, Tigray Regional State, Ethiopia, Oct 2019, Photo credit: Bekele Shiferaw
Lessons from Watershed Management Programs in Africa Lessons from Watershed Management Programs in Africa

Jamaica: Rural Economic Development Initiative (PPAR)

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The national poverty rate in Jamaica declined over the two decades prior to appraisal, but rural poverty remained stubbornly high. The Government of Jamaica recognized that if the country was to achieve its goal of “Developed World” status, as indicated in the Government’s Vision 2030 plan, economic development in rural areas needed to keep pace with that experienced in urban areas. In 2008, the Show MoreThe national poverty rate in Jamaica declined over the two decades prior to appraisal, but rural poverty remained stubbornly high. The Government of Jamaica recognized that if the country was to achieve its goal of “Developed World” status, as indicated in the Government’s Vision 2030 plan, economic development in rural areas needed to keep pace with that experienced in urban areas. In 2008, the Government requested World Bank support for a project that would promote rural economic development and income generation by improving access to markets for small-holder farmers and by encouraging rural tourism development. Unusual among the Bank’s productive alliance projects, the present project sought to combine both agriculture and tourism, reflecting the unique circumstances of Jamaica’s rural landscape and the potential for agriculture to engage more with the tourism sector, a major contributor to foreign currency receipts. The Bank also determined that the rural agriculture and tourism sectors offered the most significant potential for rural growth and development. The resulting Bank project, the Rural Economic Development Initiative (REDI), was designed to stimulate rural economic growth and increase rural incomes. Ratings for the Rural Economic Development Initiative are as follows: Outcome was satisfactory, Overall efficacy was substantial, Bank performance was moderately satisfactory, and Quality of monitoring and evaluation was negligible. This assessment offers the following issues: (i) For complex productive alliance projects involving the selection of multiple rural subprojects and the introduction of new private-sector market concepts to rural communities, substantial investment to ensure project implementation readiness during project preparation can contribute to a faster and more effective project start. (ii) For productive alliance projects introducing modern technologies and new business management practices into rural populations, ensuring adequate skills and capacity in the implementing agencies will enhance the achievement of results. (iii) Technical assistance supporting private sector market approaches can be critical for linking rural agricultural and tourism operations to new and evolving markets.

Scaling the Great Green Wall?

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View of the Fada Great Green Wall site, showing millet farms in the middle of acacia plantations. Credit: Nick Parisse, Dawning
As the recent One Planet Summit pivoted international attention to issues around climate and the protection of ecosystems, global leaders were eager to point to examples of successful efforts to protect and restore nature. While many efforts to stem environmental destruction have failed – and failed spectacularly – one effort, the project to plant trees across the Sahel known as the Great Green Show MoreAs the recent One Planet Summit pivoted international attention to issues around climate and the protection of ecosystems, global leaders were eager to point to examples of successful efforts to protect and restore nature. While many efforts to stem environmental destruction have failed – and failed spectacularly – one effort, the project to plant trees across the Sahel known as the Great Green Wall, has achieved many of its envisioned technical and environmental goals. But while there is much talk of taking this successful ecosystem protection effort to scale, backed by announcements at the summit of new investments totaling US$14 billion, there is a need to learn much more about the science behind the initiative, its differentiated impacts and their costs; including the social impacts on the resource-dependent poor. Along with the achievements, there are valuable lessons to be learned about what is working and for whom that can help guide the planned scale-up. The Great Green Wall and the World Bank Decades ago, several African Heads of State envisioned, and eventually lent their support to, the development of a Great Green Wall: a large belt of trees that stretches across twelve states of the Sahel. The concept of the Great Green Wall was developed to combat land degradation and desertification of the Sahel, a concept that has grown in importance as the threats posed by climate change intensify. Twenty-one African countries have signed on to the initiative, along with at least 11 international partners; including the African Union, European Union, and the World Bank. The World Bank has played a contributing role over the past two decades through the Sahel and West Africa Program in Support of the Great Green Wall Initiative (SAWAP), a programmatic approach using $1.2 billion from World Bank projects and $106 million of Global Environment Facility financing “to expand sustainable land and water management in targeted landscapes and in climate vulnerable areas in twelve West African and Sahelian countries”. The Independent Evaluation Group has evaluated a number of the projects under the SAWAP umbrella, including in Benin, Burkina Faso, Chad, Ethiopia, Mali, Niger and Togo. Some of these evaluations included site visits and extensive discussions with government counterparts and local community members to deepen understanding of the overall impact of the Great Green Wall project and Bank support for it. Our findings point to some important issues to consider when designing future projects. {"preview_thumbnail":"/sites/default/files/Data/styles/video_embed_wysiwyg_preview/public/video_thumbnails/CtzIkAJJubA.jpg?itok=V0fim1IG","video_url":"https://youtu.be/CtzIkAJJubA","settings":{"responsive":0,"width":"854","height":"480","autoplay":1},"settings_summary":["Embedded Video (854x480, autoplaying)."]} The World Bank’s support for the Great Green Wall has been successful from a technical perspective. Earth observations (satellite imagery, drone footage) combined with site observations support this view. Vegetation has been successfully established, land has been rehabilitated through large commitments of labor for soil works, and the density of trees and shrubs have increased dramatically at rehabilitation sites (although observations at older rehabilitation sites suggest that these technical successes may be short-lived, due to limited funds for upkeep and necessary maintenance). Most notable amongst these positive effects is the large swaths of degraded land that have been reclaimed in critical watersheds in Ethiopia. However, a precise understanding of the change in vegetation cover across the Sahel, attributable to donor investments in the Great Green Wall, has been limited because of an underinvestment in measurement (e.g. a normalized difference vegetative index to measure the change in vegetation, recommended through a regional project by the World Bank at the beginning of the SAWAP, was never implemented). And, importantly, none of the World Bank projects estimated the effect of changing rainfall patterns on the greening effects. The misestimation of the role of rainfall variability as the key parameter affecting vegetative cover and agronomic productivity has a long history in the African drylands. Many unqualified statements have and continue to attribute Sahelian greening entirely to the actions of farmers. But in a region grappling with food insecurity, persistent violent conflict, and rural poverty, environmental gains supported by investments in the Great Green Wall must also benefit the poor. Just prior to the coronavirus pandemic, there were 30 million food insecure people in the Sahel, and that number continues to grow. This large cohort consists of farmers, agro-pastoral, and nomadic populations – all of whom engage in traditional land-use arrangements that provide mutual food and livelihood benefits. In these settings, even the most degraded land has value: these are important areas of passage and grazing for livestock, particularly during the rainy season, and are sources of wild plants and wood gathered by women. But the use of area enclosures – a land management practice that seeks to restore degraded land by excluding livestock and humans from openly accessing it in the short to medium term – runs the risk of exacerbating vulnerability; and in the absence of good land governance, possibly causing harm. Some policymakers point to the possibility of benefits “trickling down”, but given the very moderate economic benefits of many of the SAWAP projects, that is unlikely to play out. Increasing the value of degraded land, as was done by the Great Green Wall initiative, changes the decision-making calculation of land users – with enhanced farm value, these lands can be predated upon by elites, and can lead to encroachment by non-traditional farmers which risks displacing the local population. Such was the case in sites visited by IEG in Niger, where land was effectively restored, but where parcels were also sold outside of the community, in areas that lacked good land governance. Predation also occurs as a result of decisions to support crop agriculture alongside tree planting. While land restoration activities took place on communal land, the introduction of “inter cropping” facilitated individualized claims on community land. A lesson learned is that such projects should be designed with an understanding of customary, flexible tenure arrangements and the coping strategies of vulnerable resource users who access degraded lands as a social safety net. And, importantly, that emphasis should be placed on ensuring that clear, enforceable land-use agreements are in place prior to land restoration activities, to protect the land-use rights of the most vulnerable. Because land restoration mainly benefits those that have access to land, some women and youth are especially disadvantaged in the Sahel. In Niger, a very large number of women are forced to fend for themselves and their families because their husbands and sons have migrated to other West African countries, such as Nigeria, Côte d’Ivoire and Senegal, to look for work. This migration is often associated with a lack of access to arable land, especially for male youth. Projects that support land and resource restoration can ensure that women and youth benefit by addressing participation barriers, linked to social and cultural norms. For example, since in some conservative areas, some women’s participation in cash for work programs is prohibited, programs must propose alternative income generating options to ensure equity. The Great Green Wall has proved to be an effective approach to reclaiming land in a region coping with disproportionate impacts of climate change. Yet rather than delivering social benefits, the planned scale up could run the risk of increasing communal tensions without careful attention paid to unintended consequences. Evidence on the impacts of the investments on both the land and communities needs to be studied carefully as a first step to ensuring the Great Green Wall leads to equitable, inclusive and sustainable development.     Stakeholder interviews in Niger were conducted in collaboration with DAWNING. Pictured at top: View of the Fada GGW site, showing millet farms in the middle of acacia plantations. Credit: Nick Parisse, Dawning

Jamaica: Hurricane Dean Emergency Recovery Loan (PPAR)

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Jamaica is highly exposed to natural disasters. The negative impacts on economic development and social well-being are exacerbated as approximately 82 percent of Jamaica’s population lives within 5 kilometers of the coast, increasing the relative vulnerability of residents, major infrastructure, and the housing stock. Hurricane Dean made landfall in Jamaica on August 19, 2007, causing economic Show MoreJamaica is highly exposed to natural disasters. The negative impacts on economic development and social well-being are exacerbated as approximately 82 percent of Jamaica’s population lives within 5 kilometers of the coast, increasing the relative vulnerability of residents, major infrastructure, and the housing stock. Hurricane Dean made landfall in Jamaica on August 19, 2007, causing economic losses of roughly $329 million. The hurricane resulted in significant and extensive damage to primary and early childhood schools, community-based health clinics, and parochial and agricultural feeder roads in directly impacted parishes. In the aftermath of the hurricane, Jamaica’s Ministry of Finance confirmed that the recovery would require financial support from multiple sources, both national and international. In that context, the government of Jamaica approached the World Bank to support reconstruction works in poor communities affected by Hurricane Dean. The general aim was the reestablishment of prehurricane living conditions in these communities through the implementation of specific local infrastructure projects that would directly improve the conditions of the most vulnerable populations. Given the ongoing emergency, the World Bank and the government of Jamaica agreed to sign an emergency recovery loan to expedite the disbursement of resources. Additionally, the World Bank and the government of Jamaica agreed that the Jamaica Social Investment Fund (JSIF) would be the implementing agency. Ratings for the Hurricane Dean Emergency Recovery Loan are as follows: Outcome was moderately satisfactory, Risk to development outcome was moderate, Bank performance was moderately satisfactory, and Borrower performance was satisfactory. Lessons from this project include: (i) Using existing agencies with a proven track record can be an effective approach for implementing emergency response projects. (ii) When designing rehabilitation works, close consultation with users can ensure the provision of better services. (iii) Expectations need to be managed as there are limits to how much progress can be made on disaster risk reduction or emergency preparedness under an emergency operation.

Evaluation of the World Bank Group’s support for electricity supply from renewable energy resources, 2000–2017

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Pictured above: Ain Beni Mathar Integrated Combined Cycle Thermo-Solar Power Plant. Photo credit: Dana Smillie / World Bank
This evaluation assesses the performance of the World Bank Group (WBG) in its support to electricity production from renewable energy resources in client countries over the period 2000 to 2017.This evaluation assesses the performance of the World Bank Group (WBG) in its support to electricity production from renewable energy resources in client countries over the period 2000 to 2017.

Ethiopia: Sustainable Land Management Project I and II (PPAR)

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Serious long-term degradation of communal areas and farmlands results in substantial losses to the economy. The combination of fragile soils, steep slopes, agroclimatic conditions, environmentally unsustainable intensification of agriculture, and traditional cultivation techniques practiced by smallholder farmers in Ethiopia over many decades has led to excessive soil erosion and land degradation Show MoreSerious long-term degradation of communal areas and farmlands results in substantial losses to the economy. The combination of fragile soils, steep slopes, agroclimatic conditions, environmentally unsustainable intensification of agriculture, and traditional cultivation techniques practiced by smallholder farmers in Ethiopia over many decades has led to excessive soil erosion and land degradation. Two sequential projects were designed and implemented to achieve the SLMP’s objectives. Sustainable Land Management Project Phase I (SLMP I) introduced SLM practices in selected areas of the country to rehabilitate previously uneconomical and unproductive degraded areas within 45 critical watersheds situated in six regional states. SLMP II sought to scale up this support by expanding the geographical coverage to 135 watersheds and continued addressing poor farmland management practices, rapid depletion of vegetation cover, unsustainable livestock grazing practices, and land tenure insecurity. SLMP II also sought to integrate new activities targeting land productivity, deforestation, and reduction of greenhouse gas emissions. Ratings for the Sustainable Land Management Project I are as follows: Overall outcome is satisfactory, Risk to development outcomes is moderate, Bank performance is moderately satisfactory, Borrower performance is moderately satisfactory, and Quality of M&E is negligible. For Sustainable Land Management Project II, they are as follows: Overall outcome is satisfactory, Overall efficacy is substantial, Bank performance is moderately satisfactory, and Quality of M&E is modest. Lessons from these projects include: (i) Watershed management programs can lead to significant land restoration outcomes when appropriate structural and biological measures are introduced to treat the affected landscape with active participation of the local community. (ii) Area closures are relevant for the restoration of degraded lands but require increased investments for alternative supply of forages to convince the local communities to forgo livestock grazing and other benefits during the process of natural regeneration. (iii) Farm productivity growth requires arresting both the on-site and off-site soil erosion to prevent the degradation of farmlands and enable investments in modern farm inputs. (iv) Effective demonstration of upfront economic and livelihood benefits is fundamental for smallholder farmers to protect and maintain the SLM practices introduced on their lands through project support. (v) In drought-prone areas, small-scale irrigation is the key enabler for translating the benefits of land restoration into reduction in household vulnerability to climate shocks through income diversification and protection against droughts. (vi) Market-oriented agroforestry interventions (for example, Acacia decurrens) that provide sustainable income for smallholders can be vital ingredients in creating incentives for the adoption of biological measures for land restoration and improving household resilience to climate shocks.

An Evaluation of the World Bank Group’s Support to Municipal Solid Waste Management, 2010–20 (Approach Paper)

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Municipal solid waste (MSW) has emerged as one of the most pressing challenges for urban areas across the world. This evaluation is the Independent Evaluation Group’s (IEG) first major study of the Bank Group’s support for MSWM. It is timely given the rapidly increasing scale of MSW in most MICs and LICs and considering the spectacle of massive open garbage dumps in cities as diverse as Manila, Show MoreMunicipal solid waste (MSW) has emerged as one of the most pressing challenges for urban areas across the world. This evaluation is the Independent Evaluation Group’s (IEG) first major study of the Bank Group’s support for MSWM. It is timely given the rapidly increasing scale of MSW in most MICs and LICs and considering the spectacle of massive open garbage dumps in cities as diverse as Manila, Lagos, and New Delhi. The evaluation will highlight the linkages of MSWM with other sectors and themes such as water supply and sanitation, environment, climate change, health, jobs, and social protection. This can point to how the Bank Group can better support the development of synergistic policy frameworks and regulations for MSWM in client countries. This has implications for developing systematic collaboration between various sectors within the Bank Group and among client government ministries and for leveraging opportunities for climate finance.

Bangladesh Country Program Evaluation (Approach Paper)

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The Country Program Evaluation (CPE) for Bangladesh aims to assess the development effectiveness of the World Bank Group’s engagement with Bangladesh during the last 10 years (fiscal year [FY]11–20). The CPE will review the extent to which the Bank Group contributed to Bangladesh’s development outcomes. In so doing, it will assess the extent to which Bank Group support was aligned with the Bank Show MoreThe Country Program Evaluation (CPE) for Bangladesh aims to assess the development effectiveness of the World Bank Group’s engagement with Bangladesh during the last 10 years (fiscal year [FY]11–20). The CPE will review the extent to which the Bank Group contributed to Bangladesh’s development outcomes. In so doing, it will assess the extent to which Bank Group support was aligned with the Bank Group’s corporate twin goals—ending extreme poverty and boosting shared prosperity—and with International Development Association (IDA) priorities. It also will assess how that support adapted over the evaluation period to changing circumstances and priorities. It will cover two country engagement cycles as defined in the Country Assistance Strategy (CAS) for FY11–15 and the Country Partnership Framework (CPF) for FY16–21.

Results and Performance of the World Bank Group 2020 (Concept Note)

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With the Results and Performance of the World Bank Group 2020 (RAP 2020), the Independent Evaluation Group (IEG) is rethinking its approach to the annual review of World Bank Group development effectiveness. Similar to past years, the report will synthesize ratings and other evidence from IEG evaluations and validations to give an aggregated picture of the results and performance of the World Show MoreWith the Results and Performance of the World Bank Group 2020 (RAP 2020), the Independent Evaluation Group (IEG) is rethinking its approach to the annual review of World Bank Group development effectiveness. Similar to past years, the report will synthesize ratings and other evidence from IEG evaluations and validations to give an aggregated picture of the results and performance of the World Bank, the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA). The scope of the report and the data sources used will be broader than in past years to deepen some of the analysis on drivers of performance and allow for the rethinking of statistical methods. The report will review the results, outcomes, and performance of the Bank Group at the level of projects, country programs, and corporate priorities and will also reflect on the systems used to measure outcomes. The RAP will not have a special theme. Its title will stay the same, except for the year, which will be updated to denote the calendar year in which the report is finalized. Hence, although the previous RAP was titled RAP 2018, the next one will be titled RAP 2020.