Previous PageTable Of ContentsNext Page

MAJOR PROGRAMME 3.2: SUPPORT TO INVESTMENT

Programme Outcome

Regular Programme   US$ `000
  Appropriation 21 698
  Expenditure 20 179
  Over/(Under) Spending, US$ `000 (1 519)
  Over/(Under) Spending, % (7%)
Field Programme   US$ `000
  Extra-Budgetary TF and UNDP Delivery 1 620
  Extra-Budgetary Emergency Project Delivery  
  TCP and SPFS Delivery 245
  Total Field Programme Delivery 1 865
  Ratio of Field to Regular Programme 0.1
  Technical Support Services, Prof. Staff Cost  
  Technical Support Services, % of delivery  

Achievements

272. The Major Programme continued to assist developing countries and countries in transition by providing a range of investment-related services. Most resources were concentrated on helping countries to formulate investment projects to attract funding from multilateral lending institutions lending for agriculture and rural development. The investment support services to Member Nations are carried out by the Investment Centre Division (TCI) in close cooperation with a wide range of financing institutions including the World Bank, IFAD, the Regional Development Banks, the European Bank for Reconstruction and Development (EBRD), the United Nations Capital Development Fund (UNCDF) and sub-regional development banks.

273. The Major Programme encompasses Programme 3.2.1: FAO/World Bank Cooperative Programme (CP), which prepares projects for financing by the World Bank/International Development Association (IDA), and Programme 3.2.2: Investment Support Programme (ISP), which helps countries formulate projects for funding by all other associated financing institutions. Under current arrangements, 75 percent of the costs of the assistance provided by FAO through the CP are paid by the World Bank, while missions carried out through the ISP are partly reimbursed under specific cost-sharing agreements with the institutions concerned. For the purposes of reporting on achievements the two programmes are considered together.

274. An increase in the number of Investment Centre-assisted projects approved for financing was recorded in 1996-97, mainly as the result of increases in the approval of projects by the World Bank and Regional Banks (see Table 3.2-1). In 1996-97, a total of 86 projects were approved for financing, in comparison to 55 in 1994-95. Total investments exceeded US$ 5 billion in both 1994-95 and 1996-97 with a steady growth in external financing, as indicated in Chart 3.2-1.

Table 3.2-1: Investment Centre-assisted Projects Approved for Financing

  World Bank IFAD Regional Development Banks UNCDF Other Total
Number of Projects            
1992-93 32 17 12 10 3 74
1994-95 29 20 2 0 4 55
1996-97 44 19 13 1 9 86
External Finance, US$ '000            
1992-93 2 149 600 300 440 244 650 42 440 118 570 2 855 700
1994-95 2 697 910 306 510 78 800 0 36 210 3 119 430
1996-97 2 506 660 356 770 457 090 5 550 69 480 3 395 550
Government Funds, US$ '000            
1992-93 1 282 070 137 750 36 850 7 970 29 380 1 494 020
1994-95 2 089 690 137 050 118 350 0 11 480 2 356 570
1996-97 1 401 110 246 860 164 750 420 51 170 1 864 310
Total Investment, US$ '000            
1992-93 3 431 670 438 190 281 500 50 410 147 950 4 349 720
1994-95 4 787 600 443 560 197 150 0 47 690 5 476 000
1996-97 3 907 770 603 630 621 840 5 970 120 650 5 259 860

Undisplayed Graphic

275. The external financing by source of funds for 1996-97 is shown in Chart 3.2-2. The proportion of project budgets financed from external sources has remained relatively stable, being 65 percent in 1992-93 and 1996-97 and 57 percent in 1994-95. Similarly, the share of the World Bank within the total external financing has remained at about 75 percent.

Undisplayed Graphic

276. The conventional staged approach to investment projects, with its distinctive phases of identification, preparation and appraisal, is giving way to a more continuous process through which a project moves from an initial idea to an approved financial package. At the same time, with the growth in national project preparation capacities, the frequency with which the Investment Centre assumes full responsibility for project preparation is diminishing. Instead, more resources are used in backstopping national preparation teams, requiring shorter, smaller and more frequent missions. As a result, the number of missions rose dramatically from 548 in 1992-93 to 903 in 1996-97, as shown in Table 3.2-2. The distribution of missions by potential funding source is shown in Chart 3.2-3.

Table 3.2-2: Investment Centre Missions

  Sub-Sector Analysis Project Identification Project Preparation Assessment of Project Results Other, Appraisal and Supervision Total
Number of Missions            
1992-93 49 99 265 58 77 548
1994-95 45 103 324 71 135 678
1996-97 61 163 322 60 297 903
Number of Person Days            
1992-93 3 534 7 411 28 012 4 125 3 152 46 234
1994-95 2 105 5 924 25 590 4 160 3 775 41 554
1996-97 2 844 5 826 20 770 3 361 14 834 47 635

Undisplayed Graphic

277. The range of services offered by the Investment Centre was broadened, including support to the SPFS. This explains the sharp increase under the "project preparation" and "other" categories in Table 3.2-2 and illustrates the need to move away from the number of projects formulated as the main measure of performance. The number of investment projects for which formulation was completed, as shown in Table 3.2-3, declined from 96 projects in 1992-93 to 64 in 1996-97. This reflected the greater reliance of countries on their own resources for project formulation, greater emphasis on assisting national efforts and delegating work to national teams, more frequent formal collaboration with NGOs, and the attention given to the SPFS. The proportion of time spent on different types of missions in 1996-97 is shown in Chart 3.2.4.

Table 3.2-3: Number of Project Formulations Completed

  World Bank IFAD Regional Development Banks UNCDF Other Total
1992-93 49 27 20 6 4 96
1994-95 45 25 18 0 7 95
1996-97 36 12 12 1 3 64

Undisplayed Graphic

278. Project design methodology was adapted to the changing priorities of countries and the requirements of financing institutions. Particular attention was given to promoting the fuller participation of beneficiaries in both the identification and implementation of projects with the aim of improving project relevance, impact and sustainability. There was also increased focus on assessing the environmental impact of projects. The main areas in which projects were formulated were: natural resources management, including forestry development, provision of improved agricultural inputs and services, soil conservation and optimizing the use of water resources, including through irrigation schemes. In addition, a growing number of projects had important privatization, as well as private sector development components.

279. There was a significant change in the regional distribution of projects approved for financing in 1996-97, as shown in Table 3.2-4. In terms of percentage of the total, projects in the Africa Region accounted for 36 percent of the projects approved in 1996-97, compared with 50 percent in 1992-93. The share of the Near East and North Africa also declined from 12 to 6 percent. In contrast, the share of Latin America and the Caribbean increased from 12 to 24 percent. The resources approved showed a similar change with Africa declining from 21 percent in 1992-93 to 15 percent in 1996-97, the Near East and North Africa declining from 16 percent to 4 percent and Latin America and the Caribbean increasing from 22 percent to 40 percent. The distribution of investment by region in 1996-97 is shown in Chart 3.2-5.

Table 3.2-4: Investment Centre Projects Approved for Financing by Region

  Africa Asia and the Pacific Near East and North Africa Latin America and the Caribbean Europe Total
Number of Projects            
1992-93 37 17 9 9 2 74
1994-95 24 12 6 10 3 55
1996-97 31 16 5 21 13 86
External Finance, US$ `000            
1992-93 599 370 911 780 459 650 641 000 243 900 2 855 700
1994-95 449 600 1 531 900 394 230 640 600 103 100 3 119 430
1996-97 524 270 1 115 460 137 170 1 340 650 278 000 3 395 550

Undisplayed Graphic

280. The share of Least Developed Countries (LDCs) in external financing has tended to remain relatively steady, while there has been a steady decline in the number of projects (Chart 3.2.6), largely reflecting the fall in funding approved for Africa. In this regard, projects in the LDCs, particularly those in Africa, were generally smaller than projects in Latin America and the Caribbean and Europe.

Undisplayed Graphic

Investment Centre Contribution to Decentralized Rural Development
and Water Resources Management Programmes in Northeast Brazil

The Investment Centre, through the CP has played an active role in assisting the State Governments of Northeast Brazil in formulating a series of innovative projects that aim at reducing rural poverty and introducing, on a wide scale, decentralized and participative implementation mechanisms. More than 1.6 million rural poor families in 8 of the Northeast States are being assisted at a cost of some US$ 662 million. The Rural Poverty Alleviation Projects (RPAPs) are designed to finance basic social and economic infrastructure on a demand-driven basis, and to decentralize resource allocation and decision-making to the lowest levels possible. By providing matching grants to rural communities to finance small-scale investments selected, operated and maintained by the beneficiaries themselves, and by supporting involvement of community-based municipal councils and beneficiary associations in investment planning and implementation, the RPAPs are leading to cost-effective service delivery, increased transparency and accountability, as well as resources mobilization at the community and municipal levels. The approach is considered by the World Bank as a model for poverty alleviation programmes in Latin America and elsewhere.

A second programme, PRO┴GUA, provides reliable and sustainable access to water for domestic, municipal and other uses in priority river basins in the drought-prone Northeast and promotes rational and participatory management of water resources in the whole of Brazil. The first phase, costing US$ 330 million, has as one of its most prominent features the decentralization of water resources management to river basin committees and local water user associations and is expected to be followed with a second phase.

Previous PageTable Of ContentsNext Page