# Presentation: 436467

## Consulting Opportunities, Trust Funds, Technical Assistance Contracts at the World Bank William CenterAdvocacy Center, World Bank“Banking On Development”March 2006

**Notes:**
For FY05 IBRD loans, grants and guarantees were at their highest level in six years....279 lending and guarantee operations were delivered, totaling $22.3 billion, an increase of 10% over the previous year...70% of this total was for investment operations

New emphasis on infrastructure - increased demand has been translated into an approximate $1 billion increase in lending per year for infrastructure since FY03.  Total Bank lending for infrastructure in FY05 reached over $7.4 billion, representing 33% of the Bank’s total portfolio. 

## World Bank Operations

- In FY05, 279 Lending, Grant, Guarantee Operations for IBRD/IDA, totaling $22.3 billion
- In addition, 500 economic, sector work programs and 300 technical assistance projects
- IFC made 236 commitments totaling $6.4 billion
- IFC approved 133 technical assistance projects

**Notes:**
Typical lending operation has 50-75 contracts associated with it.

In FY06, WB is on track to lend at similar levels.  In addition, Bank will engage in between 450 – 500 economic and sector work programs, and 250-300 technical assistance projects

IBRD/IDA & IFC share basic principles in management and accounting, but the IFC has a different business model

Approximately 1,500 active projects at any given time.  

Donors fund more than 60,000 aid projects around the world.  Some developing nations receive as many as 800 new projects per year, host more than 1,000 missions to monitor the work and have to present 2,400 quarterly reports on progress

## FY07 Lending Program (notional)

|  | Total | Highlight |
| --- | --- | --- |
| Africa | $8.3 billion | $1 b - Ethiopia |
| East Asia Pacific | $5.3 billion | $1.1b - Vietnam |
| South Asia | $9.6 billion | $7.2 b - India |
| Europe/Central Asia | $5.3 billion | $1.8 Turkey |
| M. East/North Africa | $2.1 billion | $580 m - Egypt |
| Latin America | $9.3 billion | $1.3 - Argentina |

**Notes:**
FY07 EAP – (China $2.7 billion), ECA (Ukraine $880 million), MNA (Morocco $460 million), LCR (Brazil $3.7 billion, Mexico, $1.3 billion)

## A lot of Trust

- Over recent 5 years, amount of funds held in trust at the World Bank has grown from $3.5 billion to $8.6 billion
- 900 trust fund programs administered by the Bank
- Trend is towards untied multi-donor trust funds administered by the World Bank

**Notes:**
UK contributed $552 million in trust funds in FY05, the Netherlands $411 million, the European Community $408 million and Japan $405 million...Total trust fund contributions for FY05 are $4.8 billion
Japan Bank for International Cooperation (JBIC), signed Accelerated Co-financing Facility for Africa (ACFA) with AfDB.  President Kaberuka also signed with Mr. Yoneyama, the Executive Director for Japan at the ADB, exchange of letters for the Fund for African Private Sector Assistance (FAPA). 

These instruments are an integral part of the Enhanced Private Sector Assistance (EPSA) initiative, which entails the following components: (i) joint co-financing of sovereign guaranteed projects supporting private sector development (ACFA); (ii) a loan to the Bank for non-sovereign guaranteed operations and (iii) a grant component (FAPA) that would be used to support either self-standing technical assistance programs, or sovereign and non-sovereign operations. Japan has earmarked a US $ 1 billion for the loan components over a 5 year period and has made an initial commitment of US$ 20 million for the Technical Assistance component.

The European Union launched on Thursday a trust fund to disburse European aid for infrastructure in Africa independently of the World Bank, with initial contributions hitting 320 million euros ($383 million).  The fund aims to create a backbone of road, rail, energy, water and telecommunication infrastructure.  It will mainly provide subsidised low-interest loans, with a focus on cross-border projects.

Bank has discontinued use of tied consultant trust funds, but there are 44 trust funds at the IFC not similarly bound by the new policy...IFC project officers are assessed (in part) on the number and amount of trust funds used, and also on getting trust funds replenished
Of the $8.6 billion in trust, 97% were managed by the World Bank and $272 million or 3 percent by the IFC 

## Trust Funds Integral to Early Project Development

- Debt service and debt reduction
- Environment and Sustainable Agriculture
- Health and Human Development
- Poverty Reduction and Social Development
- Capacity Building and Technical Advisory Services
- Post-Conflict and Reconstruction Activities
- Financial Sector Strengthening and Crisis Management
- Private Sector and Infrastructure Development

**Notes:**
WB staff rely on trust funds for project preparation

More significantly, they steer their clients (countries) to trust funds

## Country Assistance Strategy

**Country Assistance Strategy**

**IMPLEMENTATION COMPLETION REPORT**

**PROJECT PREPARATION**

**PROJECT IDENTIFICATION**

**PROJECT APPRAISAL**

**LOAN NEGOTIATIONS**

**LOAN APPROVAL, SIGNING AND EFFECTIVENESS**

**Joint activity**

**Client activity**

**Bank activity**

**PROJECT SUPERVISION**

**Notes:**
Consulting opportunities exist at each stage of this cycle

## Business Opportunities During the Project Cycle

| Stage | Type of Opportunity | Buyer | Sources of Information |
| --- | --- | --- | --- |
| Concept | Short Term Consulting | World Bank | ESW,PRSP,CAS, Sector Studies, published REI |
| Identification | Short Term Consulting | World Bank | MOS,
Published REI |
| Preparation | Short-Term, medium term consulting services | Borrowing Country | MOS, PID |
| Appraisal | Short Term Consulting | World Bank | MOS, PID, published REI |
| Negotiation and Approval | N/A | N/A | GPN |
| Implementation | Consulting Services, Equipment, Goods & Civil Works | Borrowing Country | PID, PAD, GPN, REI, SPN, PP |
| Supervision | Short Term Consulting | World Bank | PID, PAD, GPN, REI, SPN, PP |
| Post Evaluation | Short Term Consulting | World Bank | PID, PAD, GPN, REI, SPN, PP |

## MDB’s = Major Consulting Revenues

- Conservatively, 7,000 consulting opportunities at World Bank alone, worth $700 million annually
- Average size of WB consultant contract is $350,000
- Average size of IFC Technical Assistance Contract is $135,000
- IFC budgets $65 million for T.A. annually

**Notes:**
65,000,000 / 135,000 = 481
Statistics show many companies that are winning between 8-20 contracts a year from the Bank valued at over $200,000

As World Bank moves back into infrastructure the contract sizes should grow and start to re-attract consultants who have been attracted to other sources in recent years.  

## Consultant Trust Funds

- World Bank has stopped accepting tied consultant trust funds
- IFC continues to use them

**Notes:**
IBRD CTF exists through July 2007.  Those who wanted to terminate them stressed that tied trust funds were inconsistent with the international community’s emphasis on development effectiveness, simplification and harmonization.  

Migration to IFC....interest in staff exchanges....

Different countries have different rules for accessing consultant trust funds
	Australia vests authority in the alternate ED to approve trust funds; others need to go to capitals for approval (France), others to embassy (Netherlands)...Some give over full discretion to Bank staff for hiring consultants (Austria, Ger)

USTDA  requires consultations with WB staff, then approval of TOR, then USTDA Management must approve...While US Consultants are in demand, USTDA turns down a high percentage of requests for consultants

IFC has 44 trust funds

WB consultants prohibited from writing TOR for follow on work (ADB allows this)...IADB used to use open pre-qualification vs short list...

## Process behind the Process

- IFC investment officers assessed on number and amount of trust fund used
- Trust Funds pay administrative overhead
- Some funds easier to use than others
- Whether tied or untied – trust funds are a competitive factor in winning follow-on work

**Notes:**
IFC project officers assessed on number and amount of trust fund used
Also, they are assessed on getting trust funds replenished

TATF used for IFC forward strategy, ie a T.A. is used to produce ‘investment climate reports, etc. that identify areas that need strengthening’

Largest use of TA at IFC is legal advice

From IFC viewpoint, large number of TDA requests are turned down

## Bidding Standards Problematic

- Over-reliance on Quality and Cost Based Standards
- Bank currently reviewing a change in the guidelines for procuring consultant services

**Notes:**
Bank starting introducing cost into the selection criteria of consulting contracts many years ago and now 90% of the contracts are being bid on a QCBS basis. 

Billing rates average $20,000 per month...too low for management consultants (effect of QCBS)

Bank staff have taken note that many qualified consultants no longer bid on Bank work because of the cost factor.   Management consultants do little work with the Bank.  

Poor TOR a discouraging factor...quality of evaluating committee an on-going concern

## Key Thresholds	

- $50,000
- $100,000
- $200,000
- CPAR/CFAA

**Notes:**
CFAA -  Country Financial Accountability Assessment

CPAR -  Country Procurement Assessment Report

$30k and $40k contract extension merely requires SM approval

Evaluation committee comprised of TTL and any 2 or more persons

On prior review, Bank reviews RFP and technical proposals

Qualification Based Selection vs Quality Based Selection (procurement method)

Fixed budget selection is most commonly used method

QCBS

Sole Source  

## Wrap Up

- MDB is steady business for consultants
- The Banks are clearinghouses for project information & for short term consulting opportunities
- The clients, ie countries, are sources of larger consulting opportunities

**Notes:**
Bank staff like US consultants.   They have good reputations and they are convenient (“can start tomorrow”).  

The CS wants to increase US consultant work at the Bank for the obvious follow-on opportunities that they can create.  

Pursuing WB consulting work is a good market development strategy:  it adds to one’s bona fides, and participating in mission work is a good way to gain entrée to decision-makers in emerging markets

It doesn’t happen easily...need board and management support...might be lower success rate than core business...

Diversify revenue and client base

## More Information

- WWW.WORLDBANK.ORG
- Home > Publications > Documents & Reports > Document Type > Country Assistance Strategies (Lending Programs)
- Home > Publications > Documents & Reports >Document Type >Procurement Plans
- Home > Projects & Operations > Search/Browse Project Database

**Notes:**
Wrap up 
Whether using an industry orientation or a geographic orientation, multi-lateral lending institutions should  be a factor in your business mix
Any of the MDB’s can become a source of recurring consulting business if a company can stay the course for the time it takes to become accepted by the individual bank culture.  
US consultants in demand for their expertise and also their availability (convenient/practical)

## More Information (cont’d)

- _[WWW.DEVBUSINESS.COM](http://www.devbusiness.com/)_
- WWW.DGMARKET.COM