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How Projects are Made
Project Cycle

The IDB provides financing to the public sector through Sovereign-Guaranteed Loans.

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Project Cycle


The Bank periodically defines and revises its country strategies through a structured and continuous dialogue with the borrowing member country. The country and the Bank jointly identify initiatives to be incorporated into the Bank’s active pipeline. These initiatives are identified through several important tasks: diagnostic studies, objective formulation, analysis of alternatives, and selection of the financial instrument. The results of these tasks are developed into a Project Profile (PP). The PP provides basic information on the project, including its justification and objectives, the technical aspects and its relevant sector background, the proposed environmental and social safeguards, a fiduciary evaluation, the projected funding amounts, and a preliminary agenda for the project’s execution. The PP is first evaluated at the Eligibility Review Meeting (ERM), which determines the eligibility of the operation, and its strategy for development, and validates its timeline and resource requirements. Following approval of the PP by the ERM, the Proposal for Operations Development (POD) is drafted. The POD specifies the activities, resources, and timetable that are necessary to prepare and supervise the project. The POD also includes the Development Effectiveness Matrix (DEM), Monitoring and Evaluation Plan (M&E), and the Economic Rate of Return (ERR). The POD is evaluated to determine if the institution s resources will be properly used. The POD undergoes further examination in the Quality and Risk Review (QRR). Further adjustments are made if needed, and then a Draft Loan Proposal (DLP) is prepared for the Operations Policy Committee (OPC) for approval. Once the OPC approves the DLP, the project team may proceed to distribute the document for Board consideration and approval.

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Once the Board approves the project, the loan contract can be signed by the borrowing member country.

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Once the loan contract has been signed, implementation can begin. Implementation of public sector projects includes periodic monitoring of the activities and outcomes through the Progress Monitoring Report (PMR).

The implementation also includes supervision and monitoring activities on disbursement, financial management, procurement procedures, risk management, and/or safeguards compliance policy.

Key Task:

Completion and Reporting


Once a project has been executed, evaluations are completed to measure development outcomes for a project. The Project Completion Reports (PCR) contribute to institutional learning within the IDB, as well as the Bank’s accountability because they are a key source of information about a project's performance and outcomes. Under the Development Effectiveness Framework (DEF), the production of PCRs was improved and the results are being validated to establish baselines for the data contained in the PCRs. The IDB also produces Impact Evaluations (IEs) and its Office of Evaluation and Oversight(OVE) collects ex-post evaluation data to include in comprehensive reports on broader trends in projects undertaken by the Bank. These conclusions and findings will be useful in the planning and development of future projects based on empirical results.

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Each project the IDB finances passes through a series of stages:

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Measuring Results
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Environmental Impact Assessments
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The Monthly Operational Summary (MOS)
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IDB Project Cycle Glossary
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