1. April 2011

2. Why a New Instrument?
Change in client demand: Clients want Bank support for government’s own programs and increased focus on results. This demand can’t be fully met with existing instruments
Results: Focus incentives of borrower and lender squarely on development results
Institutions: Strengthen and work through the institutions and program systems that produce results
Partnerships: Many countries request support for their program(s) through medium-term partnerships with Bank and other development partners

3. An Instrument for Incentives Toward Results
Disbursements linked to results or performance indicators
These can be outputs, outcomes, or other actions/results
Definition of tangible, transparent, and verifiable disbursement-linked indicators
Monitoring and evaluation

4. Examples of Disbursement Linked Indicators
Percent of women receiving antenatal care or reduction in under-five mortality (Health)
Implementation of an improved system for managing procurement (Public Sector Management)
Time to start a business
(Private Sector Development)
Percent of municipalities with paved access (Transport)
Strengthening of school-based management system
(Education/
Governance)

5. An Instrument for Strengthening Institutions
Results are sustainably produced by country institutions
P4R is designed to help build institutions, capacities and country systems
Supports incentives within government programs to enhance focus on and delivery of results

6. An Instrument for Better Partnership
Will allow WB to effectively support larger program
Facilitates leveraging by financing a small part of large government program
Facilitates co-financing in pooled funding arrangements
Complements grant-funded TA programs

7. Key Features of P4R
Finances specific program sectoral or subsectoral expenditure programs
Disburses upon achievement of results and performance indicators, not inputs
Focuses on strengthening the institutional capacity essential to ensuring programs achieve their results and can be sustained
Provides assurance funds are used appropriately and an adequate system is in place to protect affected people and the environment

8. Complementary Instruments
Implementation Mechanism
Project Lending (IL)
Funds for specific expenditures
Bank IL rules and procedures
Funds for non- earmarked general budget support
Policy
Lending (DPL)
Country policy processes
Program Lending (P4R)
Funds for specific expenditures program
Program systems

9. P4R Guided by a Single Operational Policy
The distinct nature of P4R requires a dedicated instrument and associated set of operational policies
A new Operational Policy (OP) and Bank Procedures (BP) as well as guidance to staff will be developed to support implementation
P4R would be subject to the independent oversight functions that apply to all World Bank operations

10. Use of P4R
P4R can be used by any country in support of a program(s) or sub-program(s). World Bank will appraise the program and assess if it is a good candidate for a P4R operation
We expect frequent use in social sectors and large national programs with decentralized implementation (community development programs, local government programs)
P4R should not support investments (within programs) with:
Potentially significant, irreversible impact on the environment and affected people (typically Category A) , and
Investments requiring high value and/ or complex procurement packages

11. Appraisal of P4R Operations
Appraisal of P4R will focus on the assessment of:
Technical soundness (strategy, expenditures, and results)
System capacity and performance (fiduciary, social and environment)
Key risks of the program not to achieve its development objectives
As needed, assessments will identify actions to enhance capacity and systems performance
As part of appraisal, implementation support arrangements are defined, and agreement is reached on arrangements for audits

12. Expenditure Framework
Technical Assessment
Strategic Context
How the program is situated in a strategic context in the country and sector
Level of commitment and implementation capacity and support
Expenditure Framework
Focus on specific program(s) to be financed
Shift from traditional costing exercises to assess level, efficiency, and effectiveness of program(s)
Results Framework
Focus on the results framework of the program
Results are key part of the design and appraisal
Attribution is for the whole program and not Bank financed activities
M&E system capacity is a core element

13. Systems Assessments
Focus on the program to be supported by P4R and the institutions managing the program
Coverage: Program systems dealing with
Fiduciary and anti-corruption
Social and environment
Key principles to guide the assessment include:
Transparency, accountability, performance to support achievement of program’s results
Funds are used appropriately under the program and environmental and social impacts and risks of the program are adequately addressed

14. Implementation Support
Program provides regular monitoring reports and annual program audits
Implementation support includes:
Reviewing implementation progress and achievement of program results and DLIs
Providing support for implementation issues as well as institutional capacity building
Monitoring systems’ performance to ensure their continuing adequacy through program monitoring reports, audit reports, as well as field visits
Monitoring changes in risks to P4R operations and compliance with legal agreements and action plans

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