How to Do Business with the major IFIs: World Bank,

European Investment Bank, Inter-American Development

Bank, Asian Development Bank, African Development

Bank & Millennium Challenge Corporation

(MCC)/USA

The Dos & Don'ts

ANNUAL ENERGY SECTOR MISSION/PSLO Network, Washington D.C.

November, 2013

How to go about getting into this market, or staying in this market and increasing shares?

My assumptions: 1.You know it all about the IFIs and their simple, very simple procedures…….2.You know where to find the information about country/project of interest……

What is Next?

The MDBs/MCC procedures:

All IFIs—About similar process for deciding what to do/work on in a partner (developing/emerging economy) country: CAS/WB/IADB/all MDBs, Compact/MCC—3-5 years investment plans: objectives, projects, amounts.

Start up information on project, PIDs/MDBs, GPN—MDBs/MCC, PADs, SPNs

What is Next?---2

Depending on whether supplies, works or TA: SPN, prequalification/short listing, tender—technical and financial proposal—The 80/20 rule…..

Who makes the decisions on tenders? --Evaluation Committees?--Recipient country?--MDBs/MCC?

The role of each…..Confusion?

What is Next?---3

The cowboy shooting from the hip

approach

—How? GPN, SPN, pre-selection if any,

tender = win

The methodology:

There are two ways:

Can be very quick but short term and medium term—an initial investment of about 18-24 months in time and cost.

The PFD Group formula: 7/3/1

The project cycle—when to intervene and when not

What are the ingredients and the recipe for winning and who makes the final contract award decisions?

The Golden Formula…..

The Project CycleThe Project Cycle

Management decision to limit business and geographic areas to those with highest chances to win— THREE main decision factors:

1. Focus, focus, focus, focus; focus and ---5 X FACTOR

2. References, references, references-, references--4 X FACTOR

3. Implementation/Delivery, Implementation/Delivery, Implementation/Delivery---3 X FACTOR

4. Luck—0 X FACTOR……

The Ingredients for Winning….

Review IFI markets in your targeted business and geographic areas including CASs and sector reports

Choose the first 10-12 business options—mix of short term and long term

Form best internal to company and external (international and local companies WITH COMPLEMENTARY REFERENCES) teams for first 2-3 business options for which tenders are expected in next 2-3 months and go get them…….

The Ingredients for Winning….

BY REGION

BY SECTOR

BY THEME

IBRD Top Ten Borrowers │ Fiscal 2012IBRD Top Ten Borrowers │ Fiscal 2012millions of dollars millions of dollars

IDA Top Ten Borrowers │ Fiscal 2012IDA Top Ten Borrowers │ Fiscal 2012millions of dollars millions of dollars

Largest Share of IDA Lending went to AfricaLargest Share of IDA Lending went to AfricaShare of total lending of $14.8 billion Share of total lending of $14.8 billion

Africa

Africa

Africa

Energy and the World Bank

Energy at the World Bank

Energy--Allocation of funding by the World Bank

• In 2012 FY, the World Bank Group committed $8.2 billion to support energy finance; $3 billion from IBRD, $1.9 billion from IDA, $2 billion from IFC, and $500 million from MIGA

• Since 2007, the Bank Group has provided $12.5 billion for renewable energy projects and programs, over 1/4 of all energy financing over the same period, which totaled $49.2 billion

Energy--WB funding allocation continued…

• In FY 2012 renewable energy projects totaled $3.6 billion; 44% of the year’s energy sector commitments.

• Within power generation projects approved in FY 2012, renewables accounted for an even larger share 84%.

• The Climate Investment Funds have committed over $7.6

billion to date into clean energy projects.

WB Sustainable Energy lending

Lending in Hydropower is about $5.4 billion (43%) of the Bank Group’s renewable energy lending since 2007 has been for hydropower;

• $1.1 billion (8.5%) each for geothermal and solar PV

• $875 million (7%) for wind, and smaller amounts for biomass and solar thermal

WB Sustainable Energy lending

Lastly but not least•$3 billion to projects in which the specific clean energy technology supported was not identified beforehand; these include renewable energy funds, credit lines and community-driven development projects which typically support a mix of micro-hydro, solar, and wind power.

WBG Energy Portfolio by Region:FY07-12

WBG Energy Portfolio by Sector:FY07-12

World Bank Energyinvestment focus by Region

The Ingredients for Winning….

Get max possible “intelligence”—technical and financial from: IFI HQ, IFI Country mission, Government authority, government utility in charge, identify international and local partners, follow up all along…..

The importance of “Lessons Learned”

Top engineering approach and methodology: is it enough to win?

Start preparing early for the prequalification, if such step is needed

Start preparing early for the tender

The “story line” of the EOI and Tender, where applicable

The Ingredients for Winning….

Critically review quality of all tender documents. Peer review?.

Sexy documentation, a plus? Need for a super Editor?

Win or lose---Need for post mortem—open and candid

The Ingredients for Winning….

Negotiations and contract award/signature

Is there corruption? What to do?

Implementation and payments problems—daily routine?

The Ingredients for Winning….

The Ingredients for Winning….

Bottom line for winning: a top quality tender and a super good price

Financials Offer? Bottom line: as low as possible but with which goods/supplies/services can be delivered with chin up and reputation of company untarnished.

Contact

The PFD Group818 18th Street, NW, Suite 1010Washington, D.C. 20006USATel. + 1 202 785-0052               + 1 202 785-0053     Fax + 1 202 521-0596

Email:

Spiros Voyadzis svoyadzis@pfdusllc.com

Thank You!

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