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Evaluation Objectives

Assess the performance and impact of IFAD-supported operations in Nepal;

Assess the IFAD-Government partnership; and

Generate findings and recommendations that can inform the next COSOP (planned in 2013).

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Evaluation Methodology

Assessment of three pillars of the partnership: (i)Project portfolio (ii) Non-lending activities; and (iii) COSOPs and country program management

Internationally recognised evaluation criteria and a six point rating scale

Evaluation period 1999-2012Included analysis of conflict and fragility

(using WDR-2011 methodology) Conflict and Fragility (using WDR-2011 methodology)

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Evaluation Process

December 2011 Preparatory Mission, Jan-Feb 2012 Desk Review March-April 2012 Main Evaluation Mission, May-July 2012 Report WritingSept-Oct 2012 Discussion and FeedbackNovember 2012 Presentation at the

BoardJanuary 2013 National Roundtable

Workshop Feb-March 2013 Agreement at

Completion Point (ACP) Point

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Country Context Low-income country (GDP per capita US$ 642)

Difficult political situation: internal armed conflict since 1990’s, fragile peace since 2006

Population concentrated in rural areas – approximately 83%

Moderate economic growth (3.5% in 2011)

Economy dominated by agriculture (< 33% of GDP), employing more than 33% of population. Low yields and constraints on land (only 25% cultivable).

Human Development Index ranking 157 out of 187 countries

Strong gains in poverty reduction (from 42% in 1996 to 25% in 2011), mainly driven by remittances (22% of GDP) and migration. Yet poverty remains severe with malnutrition and food insecurity. Unequal progress across gender, ethnicities and regions.

Among most assisted countries in the world (US$ 1,080 million disbursed by multilateral and bilateral donors in fiscal year 2010/2011). ODA to Nepal has almost doubled since 2006.

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IFAD Country ProgrammeTotal IFAD lending: US$146m; total portfolio

cost US$363m, out of which USD$ 55m in counterpart funding)

Two country strategies (COSOPs):

I. 2000 COSOP: supporting “sustainable livelihoods and social justice” in remote, isolated and disadvantaged areas of the Mid- and Far-Western Regions

II. 2006 COSOP: (i) increased access to economic opportunities – focus on growth nodes; (ii) community infrastructure and services; and (iii) greater inclusion of disadvantaged groups

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IFAD Country Programme (cont.)

13 projects since 1978 (four on-going). 7 country specific grants (US$ 2.8m) and 32 regional grants (US$ 32.2m)

Main thematic areas of the portfolio: leasehold forestry; rural finance; infrastructure development; support for agriculture (crops and livestock); and agricultural value chain development.

Cross-cutting themes: gender equality and social inclusion (GESI); income-generating activities; and social development

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Integrated Rural Development Project

Small Farmer Development Project

Command Area Development Project

Second Small Farmer Development Project

Aquaculture Development Project

Production Credit for Rural Women Project

Hills Leasehold Forestry and Forage Development Project

Groundwater Irrigation and Flood Development Project

Poverty Alleviation Project in Western Terai

Western Uplands Poverty Alleviation Project

Leasehold Forestry and Livestock Programme

Poverty Alleviation Fund Phase II

High Value Agriculture Project in Hill and Mountain Areas

Improved Seeds for Farmers ProgrammeTC

IFAD-Supported Projects Timeline

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Main FindingsPortfolio Performance

Overall relevant objectives and thematic focus, in line with GON priorities. Negative role of exogenous factors: armed insurgency and weak institutional capacity.

Gender equality and social inclusion aspect in IFAD projects generally improved over time.

Design issues: geographic dilution (43 districts) and complexity (too many components and implementing agencies) in the context of severe institutional fragility.

Visible improvements on most aspects of portfolio in recent years, but sustainability remains a big issue (e.g. project-supported community groups)

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Main Findings (cont.)Portfolio Performance (cont.)

Leasehold Forestry – new concept of forest management; effective (but costly) mechanism for poverty reduction, community development and forest regeneration

Rural development (incl. community development, infrastructure, agriculture) – positive contributions in terms of group formation, income generation and community infrastructure development (PAF) but less so in PAPWT and WUPAP

Rural finance – ad hoc approach, the least successful part of the portfolio. Micro-finance (Grameen Bank model) efforts unsuccessful.

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Main Findings (cont.)Non-Lending Activities

Policy dialogue agenda relevant, but very ambitious, lacked specific objectives and not supported by adequate resources.

Knowledge management (in 2006 COSOP) mainly through grants program. Some valuable studies financed (e.g. ICIMOD). Visible improvement during last year.

Partnership strategy overall relevant, but few concrete examples of co-financing (PAF, bilateral TA, ADS).

Significant grant resources mobilized (total 39 grants, incl. regional). Some very effective (LLP), but regional grants had modest synergies with country programme.

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Main Findings (Cont.)

COSOP Performance

Overall, positive contribution: project pipeline implemented, but policy dialogue did not materialize.Strategic objectives relevant and in line with development prioritiesAt the same time, modalities and resources for working in conflict were not specifiedUnderestimated challenges of low capacity at local government level

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Main Findings (Cont.)

Program ManagementLack of continuity: 8 Country Programme Managers (CPMs) in 10 years, all Rome-basedPositive development: appointment of CPC in 2007Inadequate resources for programme management in conditions of institutional weakness and fragilityFragmentation of programme implementation (multiple implementing agencies, large areas)Lack of coordination with donor partners – generally fragmented ODA for agriculture and rural development

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Key ConclusionsOverall positive and productive presence in the country,

Relevant but overly ambitious country strategies

At times poor program design and implementation

Challenging country context – post-conflict

Country dialogue weak due to frequent staff changes and lack of resources

Need to diversify strategy, move away from “business as usual”

Two-pronged approach

Poverty reduction driven by remittances and migration

Limited resources for programme management1515

Main recommendationsI. Strategic Partnership

Paradigm shift: two-pronged approach, combining “basic needs” approach with high-value agriculture development focusing on developing profitable rural enterprises rather than aid-dependent groups

Avoid geographic dilution, concentrate on fewer districts, and on road corridors for high value agriculture

Factor in the conflict dimension in IFAD strategies and programmes

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Main recommendations (cont.)

II. Policy Dialogue

Strengthen the link between policy dialogue and portfolio – include policy work in project budgets

Agree with Government on joint policy dialogue agenda

Improve cooperation with local and international partners through a better-targeted grant programme

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Main recommendations (cont.)

III Operations and Program Management:

Local context and implementation support: need more resources in fragile state context. Possible sources: grants and project financing.

Class and caste-based interventions: Consider forming groups based on economic criteria, while making sure disadvantaged groups are included.

Improve measuring and communicating impact of IFAD-supported operations.

Align COSOP and PBA cycle management to avoid “last moment utilisation” of the PBA.

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Thank you

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