THE 2010‐2012 PROGRAMME AND BUDGET

African Development Bank Group THE 2010‐2012 PROGRAMME AND BUDGET TABLE OF CONTENTS EXECUTIVE SUMMARY.............................................................................................................. i 1 INTRODUCTION .................................................................................................................. 1 1.1 Context .............................................................................................................................. 1 1.2 Implementation of the 2009 Programme (see Annex 1) ................................................... 1 1.3 Implementation of the 2009 Budget.................................................................................. 2 2 CONCEPTUAL FRAMEWORK OF THE INDICATIVE WORK PROGRAMME ..... 2 2.1 Update on Relevance of the Medium Term Strategy (2008 – 2012) ................................ 2 2.2 Guiding Principles for the Work Programme ................................................................... 2 3 THE 2010-2012 INDICATIVE OPERATIONAL PROGRAMME (IOP) ....................... 3 3.1 Changing Medium Term Context ..................................................................................... 3 3.1.1 Fast-Tracking Transfer of Resources to RMCs ........................................................ 3 3.1.2 Augmenting Bank Resources .................................................................................... 4 3.2 Bank Group Lending Projections ...................................................................................... 4 3.2.1 ADB Projections ....................................................................................................... 4 3.2.2 ADF Projections ........................................................................................................ 5 3.2.3 2010-2012 Financing Targets ................................................................................... 5 3.3 Operational Areas of Focus............................................................................................... 6 3.4 Proposed Operational Programme .................................................................................... 6 3.4.1 Indicative Lending Programme ................................................................................. 6 3.4.2 Non-Financing Activities .......................................................................................... 8 3.5 Decentralization ................................................................................................................ 9 4 THE 2010-2012 INDICATIVE NON-OPERATIONAL PROGRAMME (INOP) .......... 9 4.1 Areas of Corporate Focus ................................................................................................. 9 4.2 Building Responsive Corporate Services ........................................................................ 10 4.3 Reinforcing Financial, Risk Management and Fiduciary Responsibilities ..................... 11 4.4 Improving Board Relations ............................................................................................. 12 4.5 Consolidating Budget Reforms ....................................................................................... 13 5 PERFORMANCE AND MONITORING FRAMEWORK ............................................. 13 5.1 2010–2012 Monitoring Framework ................................................................................ 13 5.2 Productivity, Savings and Efficiency Gains ................................................................... 14 5.3 Quality Assurance and Results Reporting ...................................................................... 16 6 ESTIMATE OF THE 2010-2012 BUDGETS .................................................................... 17 6.1 Proposed Allocation Criteria ........................................................................................... 17 6.2 2010-2012 Administrative Expenses Budget and Major Cost Drivers ........................... 18 6.3 Budgetary implications of the Indicative Work programme .......................................... 19 6.3.1 Work Programme Adjustments ............................................................................... 19 6.3.2 Estimates of Complexes’ Budgets .......................................................................... 20 7 THE 2010-2012 CAPITAL BUDGET ................................................................................ 21 7.1 Current Status of Implementation ................................................................................... 21 7.2 Status of 2010-2012 Capital Budgets.............................................................................. 21 8 REHABILITATION OF THE HEADQUARTERS IN ABIDJAN ................................. 22 9 RESOURCE ESTIMATES ................................................................................................. 23 9.1 Internally generated resources ........................................................................................ 23 Assumptions ............................................................................................................ 23 9.1.1 9.1.2 Sharing of Administrative Expenses by Institution ................................................ 23 9.1.3 Operational and Net Income Estimates for 2010-2012 Period ............................... 23 9.2 Bilateral and Multilateral Resources ............................................................................... 24 10 CONCLUSION AND RECOMMENDATIONS ............................................................... 24 ANNEXES...................................................................................................................................... 25 Acronyms and Abbreviations AfDB ADI ADF ADOA APQR ASLC TRA AU AUC/ECA BCP BITS BWIs BUs CFAA CGSP CIMM CHRM CIPSC COBS COO CPAR CPR CRMU CSP CSVP CWP DARMS DOC ECA ECON EITI ELF EQY ERCU ERP ESAP ESW FAPA FCR FFMA FFCO FNVP FOs GCC GCI GECL GEF GGI GGS GLP African Development Bank African Development Institute African Development Fund Additionality and Development Outcome Assessment Action Plan for Quality and Results Adjusted Short-Lived Crisis Scenario Temporary Relocation Agency African Union African Union Commission/ Economic Commission for Africa Business Continuity Plan Broadband Integrated Telecommunication Services Bretton Woods Institutions Business Units Country Financial Accountability Assessment General Services and Procurement Department Information Management and Methods Department Human Resources Management Department Capital Investment Programme Steering Committee Strategy and Budget Department Chief Operating Officer Country Procurement Assessment Reports Country Portfolio Review Compliance Review and Mediation Unit Country Strategy Paper Corporate Services Vice-Presidency Country Work Programme Documents And Records Management System Drawn-Out Crisis Scenario Economic Commission for Africa Chief Economist Complex Extractive Industries Transparency Initiative Emergency Liquidity Facility Equity Participation (Private Sector) External Relations and Communication Unit Enterprise Resource Planning Environmental and Social Assessment Procedures Economic and Sector Work Fund for African Private Sector Assistance Fixed Cost Ratio Financial Risk Management Department Financial Control Department Finance Vice-Presidency Field Offices Governors’ consultative committee General Capital Increase General Counsel and Legal Services Department Global Environmental Fund Grants for Institutional Support Grants for Studies Specific Investment Grants GPOA GS GSI GSL GTE GTLP HIPC HQ HR HTM IAS ICA ICB ICF ICT IFAD IFC IRM JAS INOP IOP IPPF ISSC IT IWP JAI JEPA JSSO KPIs LGA LGI LGS LICs LLC LLP LSI LSL MASSP MDGs MDBs MDRI MEFMI MFW4A MICs MTS NEPAD NSDS NTF OAGL OPEV OpsCom OPSM Gender Plan of Action General Service Staff Sector Investment Grants Structural Adjustment Grants Loan Guarantee (Private Sector) Global Trade Liquidity Programme Highly Indebted Poor Countries Headquarters Human Resources Held to Maturity International Accounting Standards. Infrastructure Consortium for Africa International Competitive Bidding Investment Climate Facility Information and Communication Technology International Fund for Agricultural Development International Finance Corporation Independent Review Mechanism Joint Assistance Strategies Indicative Non-Operational Programme Indicative Operational Programme Infrastructure Projects Preparation Facility Information Systems Steering Committee Information Technology Indicative Work Programme Joint Africa Institute Joint Economic Performance Assessment Joint Secretariat Support Office Key Performance Indicators Loans for Project Cycle Activities Loans for Institutional Support Loans for Studies Low Income Countries Lines of Credit (Private Sector) Specific Investment Loans Sector Investment Loans Structural Adjustment Loans Mutually Agreed Staff Separation Programme Millennium Development Goals Multilateral Development Banks Multilateral Debt Relief Initiative Macro Economic and Financial Management Institute Making Finance Work for Africa Middle Income Countries Medium Term Strategy New Partnership for African Development National Statistical Development Strategies Nigeria Trust Fund Office of the Auditor General Operations Evaluation Department Operations Committee Private Sector Department ORPC PBA PBD PBO PCRs PER PL PPF PPP PMG PRST RAG RBCSP RECs RISP RMCs ROs RWSSI SAP SECU SEGL SLA SMCC SMEs SRF STS TA TFI TRS UA USD VPU WBS WP WPA WPS YPP YPs Operational Resources and Policies Department Performance Based Assessment Programme and Budget Document Policy Based Operations Project Completion Reports Public Expenditure Review Professional Level Staff Project Preparation Facility Public-Private Partnership Performance Monitoring Group Office of the President Rolling Agenda of the Board Result Based Country Strategy Paper Regional Economic Communities Regional Integration Strategy Paper Regional Member Countries Regional Operations Rural Water Supply and Sanitation Initiative Systems, Applications, Products Security Unit General Secretariat Service Level Agreement Senior Management Coordination Committee Small and Medium Enterprises Special Relief Fund Short Term Staff Technical Assistance Trade Finance Initiative Time Recording System Unit of Account United States Dollar Vice-Presidency Unit (also referred to as “Complex”) Work Breakdown Structure Work Programme Work Programme Agreement Working Paper Series Young Professional Programme Young Professionals EXECUTIVE SUMMARY The 2010-2012 Programme and Budget proposals are premised on the understanding that the Bank Group 2008-2012 Medium Term Strategy (MTS) will continue to guide the Bank’s interventions in the Regional Member Countries (RMCs). Consequently, the key guiding principles for the Bank’s Work Programme remain: i) selectivity and high quality operations; ii) focus on country level outputs and outcomes; and, iii) continuous improvement of knowledge generation and management. The Programme and Budget implementation environment builds on key institutional activities aimed at enhancing the Bank’s development effectiveness, notably by improving the quality assurance and results reporting systems; strengthening the risk management and financial framework; revamping the Bank’s internal and external communication; reinforcing the IT platform and data management capacity; consolidating the Decentralization Programme; empowering and motivating staff; strengthening partnerships; and, enhancing the RMCs’ capacity for improved governance and economic development. Operationally, the Bank will strengthen its focus on the MTS core areas of infrastructure, governance, private sector development, and higher education, science, technology and technical and vocational training. In so doing, the Bank will continue to promote regional integration, enhance its support to fragile states, deepen its engagement in the MICs, and foster high impact, selective support to agricultural development while mainstreaming the cross-cutting issues of gender, environment, climate change, and knowledge in all its operational work. The Bank will also continue to play a counter-cyclical role in response to the current economic and financial crisis, particularly through fast-tracking resource transfers to RMCs. The financing target for the Bank Group during 2010-2012 is characterized by a degree of uncertainty, owing to the impact of the global financial and economic crisis on the needs of RMCs and on the Bank’s financing capacity. Tentatively, the overall 2010-2012 financing target for the Bank Group is projected at about UA 16.968 billion: UA 5.586 billion in 2010, UA 5.340 billion in 2011; and UA 6.042 billion in 2012. Compared with the target of the 2009-2011 PBD, this represents an increase of 29%. According to the Medium Term Strategy, the Bank was planning to embark on discussions toward a General Capital Increase (GCI) by 2012. However, the recent sharp increase in the RMCs’ demand for financing has advanced the need to initiate these discussions. The Governors Consultative Committee (GCC) met in Tunis in mid-September to discuss the modalities for a potential GCI. In the meantime, the Bank is implementing a number of interim measures, including restructuring of its operations and requesting shareholder support through provision of contingent callable capital, so as to maintain its prudential ratios within acceptable limits. The Indicative Non Operational Programme will be tailored to provide maximum support to the operational agenda of the Bank. At the same time, Non Operational Complexes will continue to discharge their core corporate mandates such as: (i) corporate governance and improved coordination; (ii) holistic approach to risk management, fiduciary responsibilities and control environment; (iii) recruiting, training and retaining motivated and healthy staff; (iv) scaling up internal and external communication; (v) streamlining processes for better results, including the consolidation of budget reforms; (vi) revamped IT systems; (vii) support to the decentralization programme; and, (viii) building responsive corporate services. i In terms of required resources, the MTS conservatively anticipated a yearly real budget growth of 5% (i.e. 25 % for the period 2008-2012) of which 14.31% has already been approved for the implementation of the 2008 and 2009 Work Programmes. This leaves a balance of 10.69% for the remaining three years of the MTS. Management considers 2010 as a year of consolidation of the Bank’s delivery capacity, further optimization of the use of available resources, and leveraging on demonstrated efficiency gains and trade offs. Consequently, resource requirements proposals for 2010 have been prepared on the basis of a zero real growth scenario. This translates into a 4.32% nominal growth to cater for (i) the impact of higher travel costs on missions and consultants; (ii) other costs such as employee related costs (resettlement, recruitment), training and general expenses (rental, electricity, repair, maintenance and communication); and, (iii) a full year budget for all existing approved positions. The projected administrative budget for 2010 will, therefore, amount to UA 264 million (an increase of UA 11 million over 2009 Budget) instead of UA 281 million anticipated in the 2009-2011 PBD. Projections show a total administrative budget amounting to UA 280.56 million (6.27% real increase in 2011) and UA 293.70 million (4.67% real growth) in 2012. In the case of unforeseen and very exceptional developments, Management might propose to the Board, during the Mid-Year Review, adjustments to the Programme and Budget Document deemed necessary to respond to the situation. Nevertheless, Management is committed to remain within the overall growth scenario outlined in the MTS i.e. restrict total real budget growth in 2010 – 2012 to the remaining 10.69% margin. The proposed Capital Budget covers four corporate areas of focus: (i) interim consolidation of the Bank’s IT system – in the light of the findings of the Infrastructure Audit and Study; (ii) support of the Decentralization Programme; (iii) Buy/Building in Field Offices and, (iv) rehabilitation of the Headquarters Building, Villas and Cité BAD in Abidjan. The Bank Group’s projected operational income of UA 452.6 million, UA 450.3 million and UA 448.2 million 2010, 2011 and 2012 respectively, is adequate to sustain the proposed Budgets. ii 1 INTRODUCTION 1.1 Context Following discussions held with the Committee of the Whole on the 2nd of November 2009, Management presents, for consideration, proposals for the 2010-2012 Indicative Work Programme (IWP) and associated budgets. Similar to the 2009-2011 Work Programme and Budget, this document combines the Indicative Operational Programme (IOP) and the Indicative Non-Operational Programme (INOP) as well as the resource requirements for the period 2010-2012. In line with the institutional reforms launched in 2006, the proposed programme and associated budgets are derived from a Bank wide exercise which started with agreements on Work Programmes before the determination of the resource envelope. Alignment of the 20102012 IWP with the Institutional priorities has been strengthened and re-focused on Country Work Programmes. This has also included improved coordination between Headquarter and Field Offices. Deliverables of the Non-Operational Complexes have been clearly defined and aligned with the Operational agenda. As a necessary background, Management has critically reviewed past experiences in the implementation of the Bank’s annual Work Programmes and Budgets. Identified lessons have informed the proposals outlined in this document. 1.2 Implementation of the 2009 Programme (see Annex 1) Total Bank Group financing approvals as at end of November1 reached UA 5,316.17 million, of which UA 1,650.04 million is from the ADF window and UA 3,666.13 million from the ADB window. The latter includes UA 1,074.25 million pertaining to ADB Private Sector lending, which represents 128% of its 2009 target. The overall Bank Group Financing stands at 130% of the 2009 target and projections show that the lending target will be achieved by the end of the year2. Eighty-nine Knowledge Management Products (CSPs, CPRs, ESWs and related papers) have been delivered, representing an implementation rate of 64% of the yearly targets. Unrealistic target and historically low execution of this component of the Operational Work Programme has led Management to rethink the level of programming and to fine-tune some internal processes in order to have more credible targets and increase the quality of the products (see Para 3.4.2). Disbursements point to yearly targets being achieved or surpassed by Year End. Portfolio Management performance shows good results whilst performance on Process Efficiency Indicators is very promising. 2 The implementation rate is set against the target set in the KPIs at beginning of the year - which excludes HIPC, ADB special assistance SRF & Other Grants, 2009 operations (un-programmed) to respond to the Financial Crisis (Botswana for example) and operations under the ELF and the TFI umbrellas. On the other hand, when all these are taken into consideration, then total Bank Group approvals as at 9th of December amount to UA 7,910 billion. 1 1.3 Implementation of the 2009 Budget The utilization rate at end November stands at 73% (UA 184.73 million) or 82% if known commitments to the end of the year are factored in. 2 CONCEPTUAL FRAMEWORK OF THE INDICATIVE WORK PROGRAMME 2.1 Update on Relevance of the Medium Term Strategy (2008 – 2012) The MTS was approved by the Board of Directors in December 2008. Its implementation is underway and reflects the underlining principles articulated in the High Level Panel Report for poverty reduction and development through growth and economic integration. The MTS makes it clear that the Bank will focus on a number of interlocking and mutually reinforcing areas: infrastructure, governance, promoting a more robust private sector, and developing technical and higher level skills. These are areas in which the Bank has solid experience, expertise, and demonstrated capacity to deliver. During this implementation period, the role of the Bank Group has increased due to the effects of the global crisis and the additional negative impact of limited resources and policy space available to RMCs. The validity of the MTS is, therefore, being defined by the level of demand which is certainly increasing, the subsequent availability of resources, the levels and speed of disbursements and the change in risk levels for the Bank in the face of the unprecedented demand. During the 2009 Annual Meetings, the Board of Governors re-affirmed the Bank’s strategic thrust under the MTS. They also endorsed the Bank’s counter-cyclical role to mitigate the impact of the crisis. In addition, the Governors noted that the Bank had made progress in three key areas; (i) there have been significant increases in lending and disbursements, as well as major capacity improvements; (ii) the Bank took quick actions to prevent the financial crisis from escalating; and, (iii) it continues to align its priorities with those of the RMCs. However, successful implementation of the Strategy hinges on three key parameters: (i) attending to the challenges associated with increased demand; (ii) maintain and scale-up capacity for delivery, and increasing corporate business efficiency; and, (iii) the elimination of bottlenecks. These issues will continue to be addressed in the 2010-12 PBD. 2.2 Guiding Principles for the Work Programme The Bank will be guided by the following key principles: Selectivity - by focusing on areas of added value, leaving other Partners to work where they have comparative advantage. High Quality Operations - continuous improvement of processes for ensuring better quality at entry, at supervision and at exit for its operations. This will include results-based programming tools, extending its readiness review, improving its supervision and completion reporting for enhanced learning and accountability and reinforcing the Additionality and Development Outcome Assessment (ADOA) for private sector operations. Focus on Country Level Outputs and Outcomes - strengthened focus on results. To this end, the Bank will continue to monitor key country outcomes, using adequately designed results 2 frameworks. It will also focus on enhancing the incentives and systems that drive implementation of the Bank’s operations. This will include measures aimed at promoting results-oriented supervision and timely preparation of completion reports, strengthening portfolio management information systems, and rewarding staff performance. Bank as a Knowledge Institution - The Bank will continue its efforts aimed at enhancing: (i) the generation and management of Knowledge across its organizational units; (ii) its statistical capacity and its existing Knowledge platforms; and (iii) internal and external communication for a wide dissemination of Knowledge. Capacity Building in RMCs – The Bank will pay special attention to: (i) Strengthening Statistical Capacity: attention will be placed on designing and implementing National Statistical Development Strategies (NSDS) which include strengthening the generation of statistics in key sectors and areas; reinforcing in-country statistical training and statistical training centres; improving data management and dissemination systems; and mainstreaming data generation and results measurements into Bank’s operations; (ii) Strengthening Financial Management Capacity in LICs and Fragile States: The Bank will continue to rely on dialogue and training initiatives to enhance RMCs’ capacity to plan and manage public resources, implement and supervise Bank supported operations, as well as design and manage a conducive macroeconomic environment which attracts investment and stimulates growth. Enhancing Institutional Effectiveness: To support the above-highlighted Operational principles, the Bank has been implementing a number of institutional programmes aimed at increasing its delivery capacity. Management considers 2010 as a year of consolidation of the acquired capacity and anticipates, following demonstrated performance and quantifiable efficiency gains, a contained increase of the Bank’s delivery capacity from 2011. In 2010, the following areas have been identified as requiring particular attention: (i) consolidation of the Decentralization Programme; (ii) enhancement of the Risk Management function; (iii) strengthening IT platform and skills; (iv) improved communication; and (v) staff empowerment and motivation. Cost savings and efficient use of resources are important pillars of the Bank’s Programming and Budgeting framework, and Management will strengthen its oversight in this area. Work Programmes have been reviewed to identify areas of potential trade offs, scale down or further streamlining. 3 THE 2010-2012 INDICATIVE OPERATIONAL PROGRAMME (IOP) 3.1 Changing Medium Term Context As discussed in para 2.1, the MTS remains a robust framework and strategic guide for the Bank. However, the financial crisis and current high demand for Bank financing require higher levels of lending than those under the MTS. The Bank has, therefore, adjusted the pace of delivery of its support to the RMCs and is taking further steps to increase its financing capacity to better respond to the additional needs of its clients. 3.1.1 Fast-Tracking Transfer of Resources to RMCs The Bank Group has responded promptly to the crisis by supporting its RMCs in mitigating the adverse impacts of the crisis, substantively relying on programmatic or policy based operations to provide quick-disbursing resources. The ADF, on the other hand, used the fixed amount of resources of its envelope for activities which were for the most part already scheduled. Only a few operations were added to respond to the crisis. Nonetheless, the Fund has made available some resources through: i) frontloading, notably to finance a backlog of 3 projects using resources from the Regional Operations Envelope and the Fragile States Facility; and, ii) disbursements and portfolio restructuring. Additional instruments were also introduced in 2009, including: the USD 1.5 billion Emergency Liquidity Fund (ELF) and a USD 1 billion Trade Finance Initiative (TFI) (0.5 billion of this is managed by the Global Trade Liquidity Programme - GTLP) 3.1.2 Augmenting Bank Resources Looking ahead, the Bank Group has estimated that the demand for its financing will remain high in the medium to long term. This will likely not be at the level of the 2009 spike in demand, but above MTS lending scenarios. Additional steps have been undertaken to respond to this higher demand, while preserving the Bank’s prudential ratios. A number of the instruments used by the Bank to support RMCs during the financial and economic crisis are fast disbursing with a higher call on risk capital. On the basis of its Medium Term Strategy, the Bank had planned the launching of GCI discussions by 2012. The increasing demand for financing from RMCs continues to put pressure on the Bank’s prudential ratios, calling for additional risk capital. This has advanced the Bank’s plans for discussions regarding a potential GCI. A meeting to this effect was held with the GCC in mid-September. In the meantime, the Canadian and Korean authorities have granted the Bank a contingent callable capital3 to prevent the curtailing of the Bank’s financing goals. These developments will allow the Bank to maintain its prudential ratios within the limits up to the end of 2010. As requested by the ADF Deputies, the Mid-Term Review of the ADF-11 reported in Helsinki, Finland, on the first half of the ADF-11 cycle with regards to the utilization of resources. The Bank’s presentations were favourably received. Discussions toward the 12th Replenishment of the ADF were also initiated. Deputies asked for information on a range of issues including Budget Support Operations, Regional Operations and the Fragile State Facility, among others. Responses will be provided in the next meeting to be held in Cape Town, South Africa in early 2010. 3.2 Bank Group Lending Projections The Bank has become more visible in RMCs, through its on-going decentralization process and other institutional reforms; as well as its role as a key voice for Africa on the international stage. The increased immediate needs from RMCs in the context of the crisis, combined with enhanced capacity of the Bank and closer relationships between the Bank and its clients, has led to an unprecedented demand for the Bank’s attention, including from the private sector. 3.2.1 ADB Projections At the onset of the financial crisis, the Bank revised the MTS lending scenario. A Short-Lived Crisis Scenario (ASLC)4 and a Drawn-out Crisis Scenario (DOC)5 had been developed in the GCI-VI Issues Paper which was presented to the Boards in July 2009. The ASLC which allowed for a sharp increase in lending in 2009 (over UA 6 billion), tapering off in 2010 and returning to the MTS in 2011 and 2012, has been considered as the base case scenario for 3 Canada will provide the equivalent of UA 1.6 billion and Korea UA 190 million. Under this scenario lending levels for 2009 and 2010 were projected at UA 6.984 billion and 3.565 billion, respectively. Projections then converge to the MTS levels of 2.890 billion and 3.292 billion for 2011 and 2012. MTS projections for 2009 and 2010 were UA 2.187 billion and 2.171 billion respectively. 5 This scenario was based on the assumption that the impact of the crisis would be longer and the Bank should thus sustain lending levels higher than the MTS and the ASLC. 4 4 ADB lending projections. The Bank has undertaken interim measures, including (i) restructuring and streamlining of private sector operations; (ii) monitoring the Bank’s portfolio’s risk profile; (iii) postponing some projects; and (iv) tranching large loan commitment. For example, the restructuring of the 2009 lending program resulted in a reduction of some UA 815 million of the sovereign operations6 and UA 460 million of the private sector portfolio. As mentioned earlier, the Bank has also received support in the form of contingent callable capital. These measures will alleviate the pressure on the Bank’s risk capital and create additional lending headroom up to 2010 as highlighted in Table 1 below. In the medium term, the Bank will need a GCI to sustain its commitments to RMCs. 3.2.2 ADF Projections Lending under the ADF will depend on the balance of ADF-11 resources available for 2010 and additional resources that might result from the ADF-12 replenishment. As of end October 2009, the projection for the 2010 balance was estimated at UA 1.441 billion, a significant increase, compared to that projected in July 2009. This is the result of a restructuring of the 2009 ADF lending programme, which led to postponing some operations7 to 2010. The last performance-based allocation exercise for ADF-11 will take place in early 2010 and will likely impact on allocations to individual countries. For 2011 and 2012, it will not be possible to make firm projections before completion of the ADF-12 Replenishment. Given the uncertainty around the level of the 12th Replenishment of the ADF, MTS projections for ADF resources for 2011-2012 are used as proxies8. These figures will be adjusted when the results of the ADF-12 negotiations are known. 3.2.3 2010-2012 Financing Targets The financing targets envisaged by the Bank Group during 2010-2012 are characterized by a higher level of uncertainty than during the previous budget period. Table 1 below summarizes the targets proposed. The ADF figure of UA 1.441 billion for 2010 represents the amount that would be available for commitment. The ADB 2010 financing target of UA 4.145 billion includes the headroom made possible by the adjustments of the 2009 lending program and the contingent callable capital9. Table 1: 2010 – 2012 Financing Targets (UA billion) ADF* ADB* Bank Group 2010 1.441 4.145 5.586 2011 2.450 2.890 5.340 2012 2.750 3.292 6.042 2010-2012 6.641 10.327 16.968 * 2011 and 2012 figures are MTS projections (Refer to Table 2 below) The aggregate 2010-2012 financing target is estimated at UA 16.968 billion, of which UA 5.586 billion in 2010, UA 5.340 billion in 2011, and UA 6.042 billion in 2012. All three yearly lending projections for the period are significantly lower than the projected lending 6 This reduction in sovereign lending is due, among other factors, to the postponement to 2010 of the Egypt UA 645 million loan in support of financial reforms. 7 These include the Ethiopia Gibe III Power Project. 8 These projections were done in 2008, when the MTS was formulated. 9 The Bank has estimated that the callable capital availed by Canada and Korea will create additional headroom of UA 1.8 billion. 5 levels for 200910, which is expected to reach some UA 8 billion. This much higher lending figure in 2009 is explained by the fast-tracking of resources to RMCs and the introduction of new financing instruments in response to the economic and financial crisis. Table 2: 2008 - 2012 Financing Targets showing MTS Projections (UA billion) ADF ADB Bank Group (ADF + ADB) MTS Projections (ADF+ADB) 2008 1.900 1.640 3.540 3.540 2009* 2.300 5.700 8.000 4.090 2010 1.441 4.145 5.586 3.710 2011 2.450 2.890 5.340 5.340 2012 2.750 3.292 6.042 6.042 2008-2012 10.841 17.667 28.508 22.722 2010-2012 6.641 10.327 16.968 15.092 * Projected Commitments (Actual + Planned) 3.3 Operational Areas of Focus Core Priorities - The Bank will strengthen its focus on: (i) scaling up its support to Africa’s own efforts for infrastructure development, including by continuing to exercise leadership in continental initiatives such as NEPAD, ICA, etc.; (ii) supporting good governance, particularly in the management of public resources and initiatives such as ICF, EITI, and MFW4A; (iii) private sector development with particular support to infrastructure, financial intermediation, industries and services; (iv) seeking to increase its support to Higher Education, Science and Technology and Technical and Vocational Training. The Bank will also emphasize its intervention in the area of fragile states, regional integration and agriculture, and in crosscutting issues including adaptation to climate change and gender equality. Response to the Financial and Economic Crisis - The Bank will continue to play a countercyclical role in response to the current economic and financial crisis, with a view to alleviating the negative impact on RMCs. The areas of focus will include trade financing, budget support, policy dialogue and advisory services. 3.4 3.4.1 Proposed Operational Programme Indicative Lending Programme Indicative Lending Programme Versus Financing Target -The 2010 indicative lending programme amounts to UA 5.536 billion comprised of UA 4.09 billion of public operations (ADB, ADF and other miscellaneous technical assistance funds) and UA 1.43 billion of private sector loans (see the list of operations in Annex 2). It is about UA 50 million lower than the financing target of UA 5.586 billion. Distribution by Financing Instrument - Investment operations made up primarily of specific and sector investment loans and grants will remain the major financing vehicle over the period. Figure 1 below presents a breakdown of the indicative lending programme per financing instrument for 2010, Investment operations will represent about 60.1%. Policybased operations (PBOs), representing about 22.8 % of resources. This reflects the continuing significant demand for fast-disbursing assistance as a result of the economic and financial crisis. Lines of credit, equity participation and loan guarantees, processed by the Private Sector Department, will account for about 15.5%. Technical assistance (TA) covering mainly 10 As of end October 2009, the projected commitments to end December 2009 of both ADB and ADF are estimated at UA 5.7 billion and UA 2.3 billion, respectively. 6 institutional support operations and project preparation makes up some 1.6% of the 2010 indicative lending programme. Figure 1 – 2010 IOP Distribution by Financing Instruments Technical Assistance, 1.6% LLC, EQY, GTE; 15.5% Investment Operations, 60.1% Policy-Based Operations, 22.8% Note: LLC, EQY and GTE stand respectively for Lines of Credit, Equity Participation and Loan Guarantee. Distribution by Sector - Figure 2 below presents a breakdown of the 2010 lending WP by sector, based on the sectoral definition currently used in the Bank (see also Annex 3 for the number of operations per sector). Infrastructure retains the top priority and represents, at 48.2%, almost half of all financing. As substantial portions of the Bank’s operations in agriculture and rural development have infrastructure components, the infrastructure share in the 2010 WP is much higher than indicated. The multi-sector loans and grants comprising policy based operations in support of reforms and good governance represent a significant share of 24.7%. This is consistent with the important portion of the PBO previously highlighted and reflects Bank’s response to the adverse impact of the economic and financial crisis. Other sectors receiving sizeable volumes of resources include Finance, Agriculture and Rural Development and Social including Higher Education, with 10.5%, 6.2% and 6.4%, respectively. Industry, Mining and Quarrying accounts for about 3.6%. Figure 2: Distribution of the 2010 Indicative Lending Programme by Sector Industry, Mining and Quarrying , 3.6% Agriculture and Rural Development, 6.2% Environment , 0.4% Infrastructure, 48.2% Multisector, 24.7% Social, 6.4% Finance, 10.5% 7 On the whole, the share of the private sector in the 2010 indicative lending programme is estimated to be about 25%, with projects in almost all the sectors above. Based on the foregoing, it can be concluded that most of the resources will go to the Bank’s areas of focus. 3.4.2 Non-Financing Activities Non-lending activities will continue to complement the Bank’s financing operations in the RMCs. These include ADF resources mobilization and programming activities, economic and sector work (ESW), portfolio management, and policy development. Within the framework of the non-lending work programme, Management will put particular emphasis on leveraging the resources available in the Bank to develop more rigorous analytical work. Resources Mobilization Activities – Negotiations for the ADF-12 Replenishment were initiated in Helsinki in October 2009 and will continue in 2010. As usual, they will require Bank-wide involvement in the preparation of background and discussion papers and in undertaking missions. Similarly, the Bank will undertake analyses, missions and other activities leading to the GCI. Programming & Pipeline Development Activities - The number of CSPs is expected to be at the same level as in 2009. Related activities will include the preparation of Joint Assistance Strategies (JAS), and working closely with other MDBs and development partners. Following the approval of the Regional Integration Strategy, Management will prepare a number of Regional Integration Strategy Papers (RISPs) aimed at guiding Bank Group’s future engagement in the Regional Economic Communities (RECs). Economic and Sector Work - In view of the low level of delivery on ESWs projected by end2009, the number of future ESWs will be limited and concentrated in areas supporting the core business activities of the Bank Group. Management will put particular emphasis on deepening the demand analysis, developing new business models, and dealing with relevant programming issues, as well as preparing flagship knowledge products and policy notes. Management will also accord a high priority to the dissemination of the above-noted products. Portfolio Management - The Bank will continue to build on its Action Plan for Quality and Results (APQR) and the enhanced decentralization process to strengthen portfolio management, as well as making it more results-oriented. Project supervision will continue to be strengthened, to ensure that the annual target of 40% of projects to be supervised twice a year is met and that timely reporting is done. The number of supervision missions undertaken and the completion reports prepared by Field Offices will be scaled up throughout the period. In relation to this, it should be noted that the implementation of the initiative on PCRs has already lifted 2009 performance to more than 90% of the projects exiting in 2008. This initiative will continue during the period. Also, preparatory work is being done for a similar initiative on supervision reporting. The number of Country Portfolio Performance Review will slightly increase from 21 in 2009 to 22 in 2010. The portfolio cleanup will continue with the cancellation of projects that meet the relevant criteria. Furthermore, Management will take measures to ensure consistent measurement of portfolio performance across Countries and Complexes. Policy Development - The preparation of new policies and strategies, as well as the revision of a few others, will be initiated in 2010. These will include: (i) the Policy on Streamlining Loan conditions; (ii) the Energy Policy and the Strategy on Renewable Energy; (iii) the Credit Policy; and (iv) the Environmental and Social Assessment Procedures and Related Safeguard 8 policies. Other key policies and strategies whose preparation are underway and are expected to be approved in 2010 include: i) Natural Resource Management Policy; ii) Sanitation Strategy; and, iii) Agriculture & Agro-Industry Strategy. The dissemination of operational policies/strategies and frameworks approved over the last two years - such as the Regional Integration Strategy approved in March 2009, the Climate Risk Management Strategy approved in April 2009, the Integrated Urban Development Strategy, which is planned to be approved by early 2010, will also be given careful attention. 3.5 Decentralization The Decentralization Programme, as conceptualized in 200411, is nearing completion with the establishment of some 26 Field Offices out of which 23 are already operational. Preparations for opening the remaining three (Angola, Algeria and South Africa) are advanced. Building on the recommendations of the July 2009 Report of the Independent Evaluation Department (OPEV), Management is preparing a comprehensive roadmap which will be presented to the Board of Directors upon its completion. In the meantime, Management is taking action to address the major findings of the OPEV Report, including enhancement of the Field Offices’ control environment and the procurement and fiduciary functions. 4 THE 2010-2012 INDICATIVE NON-OPERATIONAL PROGRAMME (INOP) 4.1 Areas of Corporate Focus Information and Communication Technology Platform: As outlined in the 2009-2011 PBD, the IT function plays a key role in terms of security and risk management, organizational effectiveness, knowledge production and dissemination and data production and availability. Management is carrying out an extensive review of the Bank’s IT architecture; technical skills capacity and infrastructure audit. The outcome of this review will further inform the ongoing efforts to revamp the IT function. Meanwhile, the incoming IT Chief Architecture Office will help promote the much needed interface between business needs and IT development/alignment in order to leverage ICT to the maximum extent. Finally, the SAP Functional Upgrade Project has been launched and its implementation will allow more efficient and fully integrated processes, paving the way, among other improvements, for a smooth implementation of UA Budgeting framework. Decentralization: The INOP gives priority to activities providing direct support to the development assistance programme as outlined in the IOP, one of the main pillars being decentralization. Non Operational Complexes’ activities have been tailored to give full support to the proposed consolidation of the decentralization programme. Risk Management Function: (Discussion in Section 4.3 below) Enhancing Communication: The Bank’s External Relations and Communication will support the Institution’s strategic objective to earn recognition as the partner of choice in Africa’s development. The Bank will increase its volume of communication activities in order to support the institution’s priorities, in particular decentralization, MTS, ADF–12 Replenishment and the future GCI-VI. In partnership with OPSM communication specialists, ERCU will disseminate major results of key private sector initiatives. In support of these efforts, it is important for the Bank to show the results achieved through the implementation 11 Ref. ADB/BD/WP/2004/72/Rev.1 - ADF/BD/WP/2004/84/Rev.1 9 of Bank Group financed development projects in the RMCs. In order to achieve greater results in communication, a clear distinction has been made between external relations and traditional communication activities, such as media relations and knowledge dissemination. External relations will be emphasized as a mean of increasing awareness of the Bank’s role on the continent. Special attention will be given to networking with major communication platforms. In this regard, Management is finalizing phases II and III of the Bank’s External Relations and Communication Strategy. The implementation of these phases will contain a fine audience mapping, allowing the establishment of necessary partnership with civil society, regional and multilateral organizations, as well as with selected decision-makers (governments, parliamentarians, political representatives at the local level. The following are major planned activities: (i) upgrading the quality of the Bank’s website to international standards, while paying special attention to the revamping of the intranet with a view to ensuring that this platform is user friendly and provides accurate information to users; (ii) building communication capacity in an effort to change internal communication behaviour which will be highly beneficial to the institution’s external image building; (iii) direct assistance to internal clients to ensure timely and quality communication of their efforts. A comprehensive external relations and communication action plan will be finalized early 2010. 4.2 Building Responsive Corporate Services In general, the Corporate Services Complex will consolidate the implementation of its reforms approved by the Board in 2008. The HR Strategy, approved in 2007, is at the centre of an ongoing restructured HR function that: (i) builds capacity by attracting and developing requisite, diverse talent, (ii) manages Performance for Results by rewarding it, (iii) promotes staff health and a conducive workenvironment, and (iv) strengthens HR Management in order to transform the HR department into a client-oriented department supporting managerial accountability across the Bank. In addition, Management will endeavour to increase training activities for all staff. The Skills and Staff Surveys undertaken in 2007 enabled management to have a clearer view of available resources and Staff expectations. In this regard, follow up actions on the 2007 Staff Survey continue. An overall review of developments will be undertaken in the first quarter of 2010 and the next Staff Survey will start in the second quarter of 2010. In addition, the Career Development Framework, which is planned to be launched in the first quarter of 2010, will provide a clear, transparent and objective process for personal development, promotion and mobility across the Bank, and selection and recruitment. The framework will ensure linkages to the new performance management system and will provide a common language to help both individuals and managers to identify current performance levels, inform personal development, and enable each staff member to realize their future potential. Within the more general context of enhancing Corporate Services Delivery, ongoing HR Department Reforms will move from the centralized HR administration model to a more client and partnership-focused model, thus enabling the Department to provide a wider range of services such as strategic planning and career development. The General Services and Corporate Procurement Department will, on top of the business as usual functions, engage itself to: (i) assist the Decentralization process, buying or leasing office spaces as best suits different geographical locations (ii) a need for an up-to-date working environment, (iii) accommodate an expanded work force, and (iv) to start the medium-term project of refurbishing the Bank Headquarters. 10 4.3 Reinforcing Financial, Risk Management and Fiduciary Responsibilities The strategic priorities of the Finance Complex will continue to centre on adding value to Bank Group clients, ensure optimal utilization of the Bank’s risk bearing capacity and assist in the development of Africa Bond Markets. The Africa Bond Markets will harmonize data for market participants through the creation of comprehensive and dynamic database. FNVP will, during 2010, assist the African Domestic Bond Fund determine its size and mandate; create an African Domestic Bond Index; host regional Stakeholder Workshops, African Bond Market Seminar and the first ever Pan-Africa Domestic Bond Market Conference. All these efforts will contribute to build an enabling environment for the development of domestic bond markets. During 2010-2012, the main areas of focus of the FNVP Complex will include: ongoing support for the decentralization programme, implementation and enhancement of capital adequacy framework, improving financial capacity of the Bank through streamlining net income allocation process and capital replenishment, enhancing commercial credit risk assessment to ensure sustainable growth of private sector operations; enhancing treasury risk assessment, monitoring and reporting to ensure financial soundness; and providing adequate response to exogenous shocks. In this regard, an outside review of the Bank’s Risk Management systems is ongoing and the procurement process of an Independent Firm is well advanced. In addition to Financial Risk Management outlined above, the risk management function also involves other departments and units in the Bank as discussed below. The current global financial turmoil has generated new opportunities and challenges in terms of expansion and diversification of operations and financial instruments. The main pressure to respond to demands and the increased associated risks affect, in particular, private sector operations. The Bank will have to enhance its Risk Management function and the control environment to ensure the integrity of its processes and assets. In this regard, a number of key units will be strengthened in order to mitigate risks associated with our operating environment. In terms of security, Management will continue to bolster its efforts in providing security to the Bank’s assets through field security assessments, training programmes and the Information Security Protection Programme. In addition, the Business Continuity Plan launched in 2009 will, in 2010, focus on functional tests covering the remaining Field Offices, i.e. Northern (Morocco, Algeria, Egypt and Sudan) and Southern Africa countries (Angola, Mozambique, Madagascar, and South Africa). The General Counsel and Legal Services Department (GECL) will continue to provide legal services to all units of the Bank, including its decision–making organs and Senior Management. Among the critical areas of focus during the Medium Term Strategy, GECL will guarantee proper legal due diligence in enabling the Bank to preserve its financial soundness and integrity, as well as ensure that its operations are financially sustainable. It will play an important role in risk management initiatives; advise on the borrowing programmes; participate fully in work on the sixth general capital increase (GCI-VI), and the ADF-12 negotiations during 2010. In order to increase GECL responsiveness to the needs of its clients in the significantly changing institutional and operational environment of the Bank, the Board recently approved a restructuring of the GECL12. The revamped Security Unit (SECU) is expected to offer quality security support with a focus 12 ADB/BD/WP/2009/139/Rev.1 11 on strengthening the decentralization process and protect Bank’s property, information, reputation and human resources. The Security Unit will pay special attention to: (i) security risk assessment for all Bank locations; (ii) crisis management training, linked to BCP; (iii) specialized risk assessment and mitigation methodology to guard against special security risks to our core business, and (iv) Bank’s IT systems & data monitoring and securing. The Compliance Review Mechanism Unit (CRMU) will focus on raising awareness and review the performance of the Independent Review Mechanism (IRM) and monitoring the implementation of decisions on action plans for 2009 requests. The review of the mechanism itself is underway. This reassessment will provide an opportunity to appraise the IRM in order to achieve a system of stronger accountability for any negative impact on the population resulting from Bank financed projects. The Office of the Auditor General (OAGL) will continue to deliver its institutional mandate in terms of internal auditing and combating corruption and fraud. However, the coverage of its activities will expand due to increased risks inherent in the growing and diversification of Bank’s operations, financing instruments and Field Offices. Concomitantly, the Board has asked for increased coverage of operations in the light of the financial and food crises and the risks associated with the instruments that the Bank has been using (i.e. fast disbursing instruments such as budget support) in response. Concerning auditing, OAGL is currently covering an average of 5 to 6 FOs per year, which means visiting each FO every 4 - 5 years. This coverage is considered low. It is, therefore, planned to reduce it to a coverage frequency of 2 -3 years during the current planning period. In the long run, it is intended to stabilise it at 1-2 years. Finally, there are also additional auditing needs related to the expansion of private sector operations which have been factored into the Work Programme. For combating corruption and investigating fraud, OAGL plans a greater involvement in the following activities: (i) development of technology to minimize risks of fraud and corruption in procurement and operations (procurement red flagging aspects have begun with the hiring of a consulting firm); (ii) detailed fraud/corruption exposure reviews of selected sectors and Bank-financed procurements; (iii) prevention and sensitization within and outside the Bank; (iv) increasing importance of the whistle-blowing policy within and outside the Bank. 4.4 Improving Board Relations The General Secretariat (SEGL) intends to reinforce and re-profile its internal capacity with the aim of improving delivery. Key activities in 2010 would include the transfer of Elected Officers related activities presently performed by CHRM, and strengthening of Protocol Services in all countries where the Bank has offices13. An enhanced team in SEGL will positively affect institutional governance, document processing and shareholder relations. Increased resources would also be devoted towards anticipated discussions with countries on membership of the Bank and participation in the Fund, as well as to: (i) enhance the value of Annual Meetings; (ii) strengthen support for Board proceedings and administrative activities; (iii) improve the functioning of the E-Board and other information facilities; (iv) implement web-based centralized meeting/conference management system; (v) staff training; and (vi) lead the Bank centralized indexation and archiving initiative. In addition, SEGL anticipates increase in Boards of Governors and Committees meetings as a result of the GCI-VI, ADF-XII, the Contact Group on Board composition, and election of the President. Finally, SEGL will also host the 2010 MDBs’ Secretary Generals/Corporate Secretaries’ Forum. 13 No specific position is planned in the Field Offices as everything will be handled through outreach efforts from Head Office. 12 4.5 Consolidating Budget Reforms The Board of Directors approved a set of Budget Reforms on 15 June 200714. Implementation of these Reforms has: (i) strengthened the link between institutional priorities and resource allocation; (ii) enhanced institutional budget flexibility through increased fungibility and devolved authority; (iii) resulted in establishing a new accountability and performance framework by linking deliverables to Key Performance Indicators (KPIs); and (iv) introduced a consolidated multi-year programming and budgeting framework. The end objective of these reforms is the transition to a fully decentralized resource management framework through a strategy-driven Unit of Account (UA) Budgeting system which will go live in January 2010. Among the measures to be introduced in January (subject to Board approval), will be the removal of the staff headcount control and the introduction of rigorous staff planning and Fixed Cost Ratios for Complexes as compensating controls. Time Recording System, which will help improve the quality of cost data, will be re-introduced. Overall, UA Budgeting will bolster institution wide efforts for better delivery of results on the ground. Annex 4 recaps progress made to date on the approved budget reforms agenda and highlights future plans for completion. 5 PERFORMANCE AND MONITORING FRAMEWORK 5.1 2010–2012 Monitoring Framework Delivery of the 2010-2012 Work Programmes will be assessed at Complex level (monthly) and at Institutional level (quarterly) against an agreed set of KPIs. Progress made by the PMG will improve the quality of quarterly reports by integrating a number of tools aimed at shifting attention from “reporting” to “monitoring” time-frames. To this end the PMG has developed an Intranet page with monthly updates of Institutional and Complexes performances, and dynamic maps linked to DARMS for the Knowledge Management Products (RBCSP and CPRs). For completeness the COBS Intranet page publishes, every fortnight, updates on budget implementation, for both the Administrative and Capital Expenditures. Final evolution of this effort would be the creation of a dashboard for Management use (software function part of the SAP Functional Upgrade Project). The historical quarterly budget implementation 20002009 is provided in annex 5. Annex 6 provides the list of Institutional KPIs and yearly targets for the period 2010-2012. The KPIs monitor Bank performance in terms of the effectiveness of internal processes and the delivery of financial and knowledge products. They also serve as an input to the lower tier of the Bank’s overall results measurement framework, which underpins Bank reporting on ADF-11 commitments. To facilitate regular and timely improvement of the monitoring framework, information about Regional Integration, MICs and Fragile States operations will integrate the historical lending volume KPIs. Some new KPIs have also been introduced at Complex level. However, Management is keen to establish trend analysis and hence will maintain, for historical benchmarking, previous years indicators over time. Management is also working to establish reliable external benchmarking with other MDBs. (see Annex 7 for more details). A trend comparison analysis offers some information: (i) average size of projects in the AfDB is much smaller than in the other MDBs, (ii) AfDB lending growth is similar in pattern to experiences in the other MDBs, (iii) AfDB disbursement volume is growing at a lower pace than in the 14 Ref. ADB/BD/WP/2006/129/Rev.1/add.2 -- ADF/BD/WP/2006/150/Rev.1/add.2 13 other MDBs - consequently, this will increase the ageing of the Bank portfolio, and (iv) AfDB efficiency gains, both for the Lending and the Disbursement processes, are comparable with the others. Further analysis is necessary to enable Management make conclusive judgments on these findings. 5.2 Productivity, Savings and Efficiency Gains Indicators to monitor efficiency gains, some of them already in use, have been further refined. The Table below shows an example of productivity indicators’ evolution since 2008 baseline. The introduction of the TRS will facilitate the development of a baseline for the Bank’s Knowledge Products. In a complementary development, the introduction of the WBS element in the Bank’s ERP system will allow for those indicators to reflect actual costing of products, thereby enabling Management to identify high value/low cost or low value/high cost activities. Such information will inform efforts for better prioritization of the Work Programme and scheduling of the various deliverables. As shown in the Table 3 below, there is evidence that the Bank is utilizing resources in a more optimal manner. Unit costs for the delivery of core products are coming down. Table 3: Bank Group productivity indicators Bank Group Indicators Total Administrative Costs Operational Costs Staff Costs Consultancy Costs Per Million UA Lending (in UA ‘000) 2008 70 37.1 43.71 5.16 2009 61.92 34.49 38.1 3.67 2010 57.18 31.61 36.18 3.16 Per Million UA Disbursed (in UA ‘000) 2008 122.12 65.17 76.4 8.88 2009 120.85 67.32 74.36 7.34 2010 75.43 41.69 47.72 4.17 Further analysis of the average budgeted costs for the lending and disbursement processes for the period since 2006 confirms there has been persistent improvement. For every UA million lent, administrative expenses have been declining and will further drop from UA 73,130 over 2006-2008 to UA 52,780 during 2010-2012. The same analysis for every UA million disbursed shows a decline from UA 124,450 in 2006-2008 to UA 67,800 in 2010-2012 as shown in figure 3 below. 14 Figure 3: Productivity Indicators (3 years average rolling series in Thousand UA) It is expected that, during the period 2010–2012, the Bank will continue to gain efficiencies from process re-engineering in the following areas: (i) implementation of the automated performance evaluations and HR strategy; (ii) leveraging bilateral and multilateral resources; (iii) ICT investments as recommended by the Enterprise Architecture Study. Savings will be obtained through (i) closer monitoring of Operations costs and the execution of capital projects; and (ii) cost avoidance from effective management, prudent procurement and cost containment of general expenses. To sustain zero real budget growth for 2010, Management will consolidate on recent budget growth and build upon the gains expected to be realized by the measures discussed in this document. These measures relate to Work Programme delivery; performance evaluations and sustainable HR strategy; increasing the value for money on IT and telecommunications investments; and management of general expenses. Work Programmes: Complexes have identified, in their 2010-12 Work Programmes, potential redeployment and trade-offs, e.g: (i) a more cohesive approach in planning for ESWs with the objective of producing one flagship report per country; and, (ii) integration of portfolio reviews in CSP completion reports for strategically focused knowledge products. Such steps will have an immediate positive impact on the mission and consulting budgets. Expenditure Line Items: Under UA Budgeting, spending caps on line items will be removed but enforced on total envelopes. Management will also strengthen fiscal discipline on missions (through compliance with flight booking guidelines); consultants (by effective negotiation); Annual Meetings (further reductions in number of staff participants and timely bookings); clean-up of outstanding commitments; procurement (streamlined procurement processes through effective use of e-procurement tools); staff compensation (benchmarking), and office rent (through market reference point and decisions to buy or construct for cost effectiveness). 15 Streamlining Business Processes: External and internal benchmarking mechanisms will be employed to determine cost efficiency of services; and Management will initiate plans to continually review the functional arrangements within Complexes for realignment to business needs. Actions would be put in place to ensure that; (i) services remain cost-efficient; (ii) no duplicated functions; (iii) services are relevant to core-business; (iv) service levels justify their costs; and (v) economies of scale are achieved. Mutually Agreed Staff Separation Programme (MASSP): As discussed in the 2009 – 2011 PBD, this Programme will be used for purposes of staff performance monitoring and workforce management and will offer appropriate incentives to reduce overall long-term spending. It will be continuously reviewed and applied to ensure effectiveness and efficiency by eliminating any identified staff surpluses in a timely manner. In 2010, Management will consider a voluntary separation package for grandfathered GS staff, to address issues around diminishing motivation for this group of staff. In addition, individual departments will undertake, with the facilitation of CHRM, skills assessment exercises to ensure that the skills retained are appropriate for the MTS priority areas. The reallocation of budget resources towards priority areas will probably require the separation of staff whose skills are no longer needed. A specific request for funds for the implementation of a MASSP will be made in the 2011 Budget. This programme will support the separation of staff due to poor fit; skills mismatch; skills erosion, as well as special cases where separation from the service is in the best interest of both parties. Leveraging on Decentralization: Within the decentralization framework, FOs are increasingly involved in all aspects of the operational activities and they have been programmed to lead more supervision missions and preparation of PCRs. Additional professionals will either be transferred from Head Office or locally hired to ensure that the active portfolios managed by FO based Task Managers will progressively increase from 14% in 2010 to 20% in 2012. Recruitment functions have also been delegated to FOs, thereby avoiding travel costs of TRA based staff to FOs. IT and Telecommunication: Building on continued user confidence, video conferencing facilities will be put to increasing use for interviews and meetings. Already, this has resulted in 2009 year-to-date savings of approximately UA 580,000 through avoided travel and perdiem expenses. Capital Budget: Building on the comprehensive clean up carried out in 2008, Management will, through the ISSC and CIPSC, tighten the management of Capital Projects to ensure that projects; (i) add value; (ii) life cycles are monitored for timely closure; and (iii) balances are clawed back and redeployed elsewhere after completion or closure. Capital portfolio performance is now monitored through KPIs and cost/benefit analysis will continue to guide investment priorities. 5.3 Quality Assurance and Results Reporting Strengthening quality assurance and results is also necessary to improve products and services. To this end the Quality Assurance and Results Department is coordinating the implementation of the Action Plan for Quality and Results (APQR). Work will continue in several aspect of the APQR: (i) a Readiness Review tool to enhance Quality at Entry; (ii) building the capacity of Field Offices’ staff for greater responsibility; (iii) strengthening the results culture of the Bank; (iv) revamping policy, procedures and formats for timely projects’ completion; (v) automated results reporting system; and, (vi) output and outcome indicators for operations to permit more effective evaluation and reporting. Management is aware of the 16 fact that the Performance Monitoring function, with its focus on performance, outputs and outcomes; and the Quality and Results function, focused on results and impact; are looking at different time-frames of the Bank activities and they complement each other. It is also recognized that further effort is required to create a continuum within the monitoring framework with the goal of covering the whole time-frame, i.e. activities/outputs/outcomes/ results/impacts and moving to a set of Indicators with more qualitative content. 6 ESTIMATE OF THE 2010-2012 BUDGETS This section presents Management’s proposals for the 2010 administrative expenses budget to fund the Bank’s overall Work Programme. As indicated in the Framework Paper, Management has kept the budget flat in real terms (i.e. UA 253 million in 2009 prices). However, after a price adjustment of 4.32% to cater for: (i) the impact of increased mission travel and consultants costs; (ii) inflation on other costs such as employee related costs (resettlement, recruitment), training and general expenses (rental, electricity, repair, maintenance and communication); and, (ii) a full year budget for all authorised positions15, the budget is proposed to increase to UA 264 million in 2010. At the centre of the proposal is Management’s objective to make 2010 a year of consolidation of the gains realized in 2008 and 2009, a period over which real budget and staffing level cumulatively grew by 14.31% and 202 respectively (Annex 8). Hence, on the basis of the 2008-2012 MTS projections, which anticipated an average budget increase of 5% in real terms every year (i.e. 25% over 2008-2012), a zero real growth in 2010 would leave 10.69% for 2011 and 2012. It should, however, be noted that, despite the overall zero real growth in 2010, there would be some areas which will require scaling up. Work is still underway on the Decentralization Roadmap, the Bank’s IT network and IT skills profile and salary adjustment. Once ready, Management will discuss the findings and way forward with the Board. No salary increase is envisaged in 2010. Instead, the ongoing salary review has been expanded to address a number of issues which have been pending for some time, among them: i) competitive entry grades for PL staff; ii) dichotomy of salaries for new staff joining compared to staff already on board, with new staff earning much higher salaries for equal experience and qualifications than staff on board; and, iii) impact of inflation and exchange rate variations in the various locations which the Bank now has staff. For the Field Office staff, this is the 1st year of the new framework; hence further work is being carried out in terms of selected comparators and new salary grids. Furthermore, this exercise will enable Management, starting with the 2011 Budget, to ensure that proposals for staff salary adjustments are approved by the Board prior to inclusion in the PBD. 6.1 Proposed Allocation Criteria With a zero real budget for 2010, the proposed administrative budget envelope has been allocated based on the following criteria: - Funding of Current Staff Positions - all existing authorised positions have been budgeted for the full year. However, as is the case in 2009, the 2010 YP intake has 15 In the 2009 Budget, existing vacant positions (i.e. carried over from 2008) were funded for nine instead of twelve months; requested new positions for 2009 were budgeted for 6 months. The YPs were budgeted for three months. 17 been budgeted for the last quarter of the year only; - Priority To Strategic Areas - funding levels are planned to be consistent with the degree of priority proposed for the operational and institutional areas of focus. At the same time, the indicative budget allocations to the Complexes also reflects achieved performance, resources availability, and tradeoffs; - Availability Of External Funding - Bilateral and Multilateral Funds continue to leverage Bank resources in supporting various aspects of the Work Programme, in particular for Consultancy Services. - Historical Budget Utilization Rates - consideration has also been given to demonstrated absorptive capacity of Complexes and delivery on the KPIs. 6.2 2010-2012 Administrative Expenses Budget and Major Cost Drivers a) Areas requiring additional capacity The zero real growth objective notwithstanding, additional capacity, including in Human Capital (see Annex 9), is anticipated in selected areas of focus such as: (i) Communication, (ii) Risk Management, (iii) Decentralization, and (iv) Information and Technology Platform. As described in sections 3 and 4 (IOP and INOP), the planned activities of these sectors will enable the Bank to: i) deliver more efficiently; ii) enhance the control environment and compliance to its fiduciary obligations; iii) scale up internal and external communication; and, iv) strengthen the knowledge management platform. b) Cost drivers The major cost drivers for the 2010 nominal budget increase by Category of Expenses are the following (see Annex 10): - Staff Expenses: UA 15.02 million due to the full year budgeting of all the authorised positions; - Facility Management: UA 1.84 million related to accommodation & office occupancy (UA 0.88 million); and equipment/rental and maintenance (UA 0.96 million). Renting of the Berges du Lac Building (Zahrabed) generated additional costs for equipment rental, repairs and maintenance, staff transportation between the 3 sites, office equipment and supplies. Furthermore, prices for some commodities such as electricity have gone up. - Meetings & Bank Business: UA 1.70 million - This amount is requested for the Governors’ meetings i.e. the GCC (UA 0.47 million); the ADF replenishment (UA 0.59 million) and the Annual Meeting (UA 0.64 million). - RMC Training, Public Relations and Membership Fees & Contribution: UA 0.97 million. - IT, Treasury Information Systems Management and Indirect Borrowing Expenses: UA 0.39 million. - Representation Expenses: UA 0.17 million. 18 Part of the above budget increases will be absorbed through tradeoffs, efficiency gains and cost savings generated in several areas of the Bank, such as: - containment of consultants costs: UA 6.88 million: Most of Bilateral and Multilateral Funds cover selected Operational activities. Consequently, taking advantage of available Bilateral/Multilateral Funds, Departments and Units, especially from Operations Complexes, have been encouraged to use Trust Funds for at least 55% of their Consultants costs in 2010 (up from the planned 53% in 2009). - cost reduction for human resource management: UA 1.00 million – resulting from the combined effect of: (i) the projected decline of the Recruitment & Assumption of duty expenses (UA 2.02 million) – the number of vacancies has considerably reduced and the Human Resource Management has improved its recruitment process by using web-based tools. In addition, most of planned recruitment relates to FOs in 2010 – and (ii) the increase in the Resettlement/Termination costs (UA 0.61 million) due to Departures of an important number of Executive Directors, the Personnel residences security at HQ and TRA (UA 0.25 million) and the Social welfare expenses (UA 0.1 million). - rationalization of the use of Temporary Staff/Short Term Staff (STS): UA 0.57 million – The use of Temporary staff/STS will be rationalized and reduced to a minimum. - rationalization of missions and increased delegation of tasks to Staff in FOs: UA 0.48 million - the missions budget has gone down as a result of better planning by the various HQ Units and increased use of FOs-based staff. - cost reduction of Publishing, Reproduction; External Audit Expenses and Legal & Advisory Services Fees: UA 0.23 million. The remaining part of the budget increase is compensated by the UA 10.93 million corresponding to the 2010 nominal increase (4.32% over the 2009 budget). 6.3 6.3.1 Budgetary implications of the Indicative Work programme Work Programme Adjustments The original Complexes’ submissions were prepared in the context of a possible real budget growth for 2010 as proposed in the 2009-2011 Programme and Budget Document. However, following the decision on a zero real budget growth for 2010, Management adjusted the Work Programmes and the budget allocation accordingly. More importantly, budget allocations have been adjusted to ensure that resources are deployed towards programmes with the highest impact and in strict alignment with the MTS. To fit within the proposed budget envelop, the additional resources to support the scale up programmes will come from efficiency gains and internal redeployments. In particular, Management plans to re-prioritize planned deliverables and consolidate programs: - for instance, Economic and Sector Work activities, where clustering is important for maximizing synergies and results. In some cases, Management will constrain resources availability in some Departments, in particular those which have seen significant growth in the recent past, 19 or whose contribution to the MTS objectives can still be achieved through internal redeployments, or whose activities can be postponed to 2011 and 2012. 6.3.2 Estimates of Complexes’ Budgets The section describes the budgetary implications emerging from the Work Programme adjustments discussed in the preceding section. Figure 4 shows the consequent budget evolution by Complex grouping. The detailed estimates of Complexes’ Budgets are given in Annex 11. Operational Complexes and OPEV: Overall funding to the four Operational Complexes and OPEV is estimated at UA 137.20 million. ORVP will receive the largest share, UA 51.49 million, partly in reflection of the resource needs of the decentralization programme16. Proposed allocation for OIVP amounts to UA 35.31 million, to support the Complex as it manages the key MTS’ areas of focus. OSVP’s funding totals UA 32.63 million, to give the Complex flexibility to increase funding for programmes relating to Fragile States and Governance. Finally, ECON’s budget is projected at UA 13.7 million, with ADOA and efforts to build capacity in RMCs receiving special attention. It should be noted that, given budget fungibility, the SMCC will, throughout the year, review allocations in the light of performance; resource pressures and unforeseen institutional mandates. Corporate Services, Units Reporting to the Presidency (UPRST), and the Boards: Total funding for Corporate Services, Units Reporting to the Presidency and the Boards is expected to increase by about UA 9.17 million. One source of budgetary pressure is a heavier workload of Corporate Services that support the Board and priority operational areas. Whereas the Budget for the Office of the President is projected to decrease by 5%, the budget for UPRST is anticipated to increase, due to the enhancement of communication, security and risk management functions; as well as expanded legal services. Furthermore, the Boards’ budget will grow due to expanded activities foreseen for the 2010 Annual Meetings, rotation of Members and the ADF-XII Replenishment and GCI-VI negotiations. Finance Complex: In 2010, projected budget for Finance Complex will increase by UA 0.35 million (or 1.80% over the 2009 budget). Necessary internal budgetary adjustments through reducing activities in non-priority areas and adopting cost saving and efficiency measures such as those discussed in section 5.2 will be addressed. 16 However, it should be noted that the Decentralisation burden is distributed across several Cost Centres as Staff in Field Offices are mapped to their respective Head Office Departments. For example, IT Technicians are mapped to CIMM, Country Economists to Regional Departments, Investment Officers to OPSM, Disbursement Officers to FFCO, Procurement and Financial Management Specialists to ORPF, etc. 20 Figure 4: 2010 Proposed Budget Allocations by Complex Grouping Corp. Services & UPRST UA 58 million Finance UA 20 million Others ** UA 31 million Operational Complexes & OPEV UA 137 million BGOV & BDIR UA 18 million ** Includes Institutional Budget plus allocations for CBKHQ and SCOU 7 THE 2010-2012 CAPITAL BUDGET 7.1 Current Status of Implementation Management has continued with the clean-up exercise for Capital Budget which started in 2008. This has led to the release of a total of UA 13 million as of 30 June 2009 (Ref: 2009 Mid Year Budget and Performance Report)17 out of which UA 11 million has been earmarked to partly finance the Headquarters rehabilitation project. The overall implementation rate on 30th September 2009 amounts to 73 % compared to 69% in 2008. 7.2 Status of 2010-2012 Capital Budgets The proposed Capital Expenditure Budget for the 2010-2012 period is expected to amount to UA 83.2918 million – UA 28.78 million in 2010, UA 35.22 million in 2011 and UA 19.29 million in 2012 (see Table 4 below and details in Annex 12). Within the total envelope of the proposed capital investment projects, UA 18.00 million (22%) relates to the IT upgrades in areas of infrastructure improvement, storage area network and SAP upgrade, telecom enhancement, and new equipment deployment. UA 22.52 million (27%) is for Field Offices’ upgrade, out of which UA 20.65 million is earmarked for the implementation of the Buy/Construct (Bank owned premises) Project19. UA 2.87 million (3%) will be spent at the TRA, and the balance, UA 39.90 million (48%) is for HQ Building, 17 ADB/BD/WP/2009/137/Rev.1 - ADF/BD/WP/2009/102/Rev.1 18 UA93.54 million in 2010-12 Programme and Budget Proposals (Ref: ADB/BD/WP/2009/187 – ADF/BD/WP/2009/134 discussed by the Committee of the Whole on 2nd November 2009. UA 10.25 million difference is due to the reduction in amount earmarked for Buy or Construct Bank owned premises from UA 30.90 million to UA 20.65 million for the 2010-2012 budgeting periods. 19 Implementation is subject to the Board’s approval of ADB/BD/WP/2009/156/Rev.1-ADF/BD/WP/2009/116/Rev.1 and Corrigendum on Lapse of Time basis. 21 Villas and Cité BAD renovation and rehabilitation in Abidjan. The proposed Capital Budget has been subject to arbitration through the Information Systems Steering Committee (ISSC) and Capital Investment Program Steering Committee (CIPSC). Table 4: 2010-2012 Proposed Capital Investment Program (Amounts in UA Thousand) Investment Type Section 16 -- Office Equipment Section 17 -- Office Furniture Section 19 -- IT & Communications equipment 2009 approve d Budget 2009 Revised Budget 2010 2011 2012 (a) (b) (c) (d) (e) 180 180 Proposed Budgets 100 150 Total Proposed Budget 2010-2012 FOs (f) (g) 100 350 TRA HQ (h) (i) IT (j) - 350 - 820 820 400 300 250 950 - 950 10,678 10,678 3,701 8,909 5,394 18,004 - - 18,004 Section 20 -- Buildings & Civil Works 5,788 5,788 13,750* 24,800 13,200 61,750 20,650 1,200 Section 23 -- Other Projects 1,067 1,067 825 1,060 350 2,235 1,865 370 - 18,533 18,533 28,776 35,219 19,294 83,289 22,515 2,870 39,900 18,004 27% 3% 48% 22% Total Percentages 39,900 *Includes building/buying premises for Nigeria and Angola Field Offices IT Capital Budget: Within the UA 18.00 million earmarked for IT upgrades, the following major allocations apply; 50% has been earmarked for organizational effectiveness, including enterprise architecture study, upgrading IT architecture and deployment of new equipment, infrastructure improvements, and SAP functional upgrade; 16% is associated with knowledge management, which includes enhancement of the Data Development Platform for ESTA and the corporate data warehouse software systems; 20% will support decentralization efforts through BITS extension and provision of additional equipment to Field Offices; and 13% is intended for the enhancement of IT security and risk management through the acquisition of analytical and modelling software (calculation engines) for the Summit System, project risk and rating systems, enhancement of network cabling and monitoring systems. Also included in the proposed IT capital budget for effective communication and secured connectivity are requirements for corporate conference services, server consolidation, PABX & VSAT, and INTERNET/INTRANET enhancement. 8 REHABILITATION OF THE HEADQUARTERS IN ABIDJAN The Capital budget approved by the Board in June 2009 for the Headquarters rehabilitation amounted to UA 47 million. Of this amount, UA 11 millions is from approved redeployment from existing capital projects and is available for immediate use. The balance of UA 36 million is programmed as follows (in UA): 2010 2011 2012 15 million 15 million 6 million The rehabilitation is scheduled to last for two years, starting from May 2010, and will require the relocation of Abidjan based staff to a temporary location at an estimated cost of UA 150,000 per year. However this operation is estimated to be cost-neutral because the savings (estimated at UA 200,000) to be generated from terminating some services and maintenance contracts, and reduction in the usage of some public utilities will be used to finance the rent of the temporary premises. 22 9 RESOURCE ESTIMATES 9.1 Internally generated resources Operational and Net Income Estimates 9.1.1 Assumptions The Bank Group’s net income estimates for 2010-2012 are based on assumptions summarised in Annex 13(a). The 2010–2012 projections in Annex 13(b) assumed lending levels for the Bank Group (see para 3.2.3) and also took into account the Bank Group’s responses to the financial crisis. ADB approvals for 2010 are projected to be around UA 4.145 billion, while ADF and NTF are UA 1.441 billion and UA 20.0 million respectively. 9.1.2 Sharing of Administrative Expenses by Institution The Bank Group’s total administrative expenditures are shared among the three institutions forming the Bank Group20. The Bank Group’s budgeted administrative expenses amount to UA 253.1 million, UA 264.0 million, UA 280.5 million and UA 293.7 million for 2009, 2010, 2011 and 2012 respectively. In 2010, UA 179.1 million shall be classified as operational expenses, UA 78.8 million as non-operational expenses and UA 6.1 million as direct expenses. Based on projections of each institution’s operational activities and relative size, the costsharing formula for joint expenditures is contained in Annex 13(c). The allocation of the 2010 Bank Group Administrative Expenses by institution is provided in Annex 13(d). 9.1.3 Operational and Net Income Estimates for 2010-2012 Period Based on the assumptions in Annex 13(a), total operational income of the Bank Group will vary between UA 448.2 million and UA 452.6 million over the next three years (Annex 13(e)). After providing for administrative expenditures, estimated net income is UA 183.4 million in 2010 and expected to decrease to UA 149.3 million in 2012, mainly due to the expected deficit of the ADF resulting from a lower interest environment. The projected net income for the Bank of UA 207.6 million in 2010, UA 197.3 million in 2011 and UA 177.4 million in 2012 compares favourably with the indicative planning range of UA 80 million to UA 120 million. This places the Bank in a good position to continue to strengthen its risk bearing capacity as well as maintain its net income transfers to the ADF and for other developmental initiatives. 20 This is in accordance with an agreed pre-determined cost-sharing formula provided in an information note (ADB/BD/IF/99/330) distributed to the Boards in November 1999. Management noted that loans cancelled as a result of MDRI will require continued management, thereby leaving the volume of administered loans unaffected by MDRI. 23 The Net Operational & Net Income projections for 2009-2012 are summarized in Annex 13(e). 9.2 Bilateral and Multilateral Resources Closer cooperation with the donor community and more transparent internal processes for fund allocation will yield greater efficiency in the use of trust funds resources and help reduce pressure on the Bank’s incomes. As a result, all available resources (internal, external, cofinancing, donor-funded Technical Assistants and Secondees) will be more readily available to address additional financing needs. To mobilize additional resources and expertise, the Bank had, as of April 2009, signed 65 cooperation agreements with 56 institutions and organizations. By September 2009, the Bank has committed UA 7.2 million of Bilateral Trust Funds (approvals by donors) for use by the different Complexes (see details in Annex 14). These funds will provide significant assistance levels to regional member countries. The Bank will focus on increasing its resource mobilization capacity by liaising with members of the donor community and progressively securing their agreement to untie those bilateral Funds which still have restrictions. The Bank will also champion the shift from bilateral funds to Multi-Donor Trust Funds. This will be achieved through introducing new Thematic Funds – such as the Micro-finance Fund, the Migration and Development Fund, the Governance Fund (2nd phase), the Science and Technology Fund, and the South/South Cooperation Fund – and promoting the funding of existing Thematic Funds, including the Fund for African Private Sector Assistance (FAPA), Water Funds, NEPAD IPPF, Congo Basin Forest Fund and the African Fertilizer Financing Mechanism. The new SAP-based Trust Funds Management System, recently rolled-out across the Bank (including Field Offices) and whose completion is expected by end of 2009, will help to streamline the process and enable stricter monitoring of implementation progress, oversight and fiduciary control. The Bank will also reinforce its strategic cooperation with key stakeholders. In this regard, it is envisaged from 2010 to move from an ad-hoc to a more structured Joint Secretariat between AfDB, ECA and AUC. This Joint Secretariat Support Office (JSSO) will be established according to the decision made by the Heads of the three institutions in June 2008 and will be hosted by the ECA in Addis Ababa, Ethiopia. The JSSO will: i) service the meetings of the Joint Secretariat; ii) serve as the focal point for coordinating the projects and programmes between the three institutions; iii) facilitate consensus building, help determine the nature of joint partnerships in which the three institutions would be involved; and, iv) take on responsibility for knowledge sharing. The JSSO will also help to determine new and emerging issues requiring strategic intervention by the three institutions. This last role is fundamental given the close and growing working relations. 10 CONCLUSION AND RECOMMENDATIONS Management invites the Board of Directors to consider the proposed 2010-2012 Work Programmes; the associated resource requirements; and the indicative budget allocations. Management considers 2010 as a year of consolidation of the acquired capacity and has opted for a zero real growth budget. This leads to a nominal increase of 4.32 % for price adjustment over the 2009 budget. However, in case of exceptional circumstances and based on 24 demonstrated capacity to deliver, Management might propose an adjustment of the Programme and Budget Document during the mid-year review in July 2010. Nevertheless, any additional resource request will remain within the MTS projections for 2008-2012. As part of the transition to UA Budgeting and increased flexibility in resource management, the Board is requested to approve the removal of the staff headcount control. By way of compensatory control mechanism, rigorous staff planning and the principle of Fixed Cost Ratio will be introduced. Management’s proposals for 2010 for Board’s approvals consist of: • Administrative Expenses Budget of UA 264 million; • Capital Expenditure Budget of UA 28.78 million; • Contingency Budget of UA 2.64 million The Boards of Directors are also invited to take note of (i) the indicative administrative Budgets of UA 280.56 million and UA 293.68 million for 2011 and 2012 respectively and (ii) projected capital budgets amounting to UA 35.22 million and UA 19.29 million for 2011 and 2012. The Bank Group’s projected operational income of UA 452.6 million, UA 450.3 million and UA 448.2 million for each of the three years, respectively, is adequate to sustain the proposed Budget. 25 ANNEXES Annex 1 - Implementation of the 2009 Programme Annex 2 - Proposed 2010 Lending Programme Annex 3 - Detailed Sector Distribution of the Proposed 2010 Indicative Lending Programme Annex 4 - Progress made on approved budget reforms Annex 5 - Historical Quarterly Budget Implementation 2000 - 2009 Annex 6 - List of Institutional KPIs and Targets for 2010-2012 Annex 7 - Comparison with other MDBs Annex 8 - Staffing Level by Complex Annex 9 - Staff Allocation by Complex Annex 10 - 2010 -2012 Budget Proposals by Category of expenses Annex 11 - 2010 - 2012 Budget Proposals by Complex Annex 12 - Proposed Capital Budget Annex 13 - Operational and Net Income Estimates Annex 14 - Trust Funds Utilization 25 ANNEX 1 Implementation of the 2009 Programme Annex 1(a): Corporate KPIs and Performance as at End of November 2009 Key Performance Indicators (KPIs) Unit 2009 Target Achievement November 2009 Implementation Rate November 2009 Development Financing Operations Total Bank Group Financing UA million 4087 5316.17 130% ADB Public Lending* UA million 1347 2591.88 192% ADB Private Lending UA million 840 1074.25 128% ADF Financing UA million 1900 1650.04 87% UA million NA 7910.45 NA UA million UA million UA million NA NA NA 4271.30 1157.54 2481.61 NA NA NA Number Number Number 10 15 21 16 7 19 160% 47% 90% Number 92 47 51% Total Bank Group Financing (Including All Financial Instruments – 9 Dec 2009) ADB Public Lending ADB Private Lending ADF Financing Knowledge Management Products New RBCSPs (1) CSPs Related Documents (2) CPRs ESWs and Related Papers Disbursements Bank Group Disbursement Amount UA million 3558 3464.40 97% ADB Public Amount UA million 593 1199.10 202% ADB Private Amount UA million 1883 686.37 36% ADF Amount UA million 1082 1574.52 146% UA million % % NA 30% 20% 4.41 26% 30% % % 50% 20% 64% 16% % % 40% 40% 35% 50% % % 5% 5% 11% 1.34% Months Months % 12 13 40% 12.1 12.9 96% % % 100% 100% 63% 84% % % % % 30% 26% 35% 11% 27% 26% 42% 15% % % % % % 95% 17% 60% 70% 33% 73% 12% 54% 64% 65% NTF Amount Bank Group Disbursement Ratio (Investment only) ADB Public Disbursement Ratio ADB Private Disbursement Ratio ADF Disbursement Ratio Portfolio Management Projects at Risk Operations Supervised Twice a Year Projects Managed by Field Offices Impaired Loan Ratio (Non-Sovereign only) Process Efficiency Lapse of time between approval and first disbursement Lapse of Time for Bidding Completion (3) Timely PCR Coverage Cross-cutting Areas Gender Mainstreaming in Operations (4) Climate Proofed Projects (5) Human Resources (PL) Field Based (6) Gender Balance Staff Age Diversity (7) Staff Premature Attrition Rate (8) Budget and Expenses Administrative Budget Implementation Field Offices Expenses Operations Expenses (9) Fixed Staff Costs (10) Capital Budget Implementation** * Botswana - The Economic Diversification Support Programme: UA 969 Million The Competitiveness and Public Sector Efficiency Programme (CPSE): UA 437 Million are excluded ** HQ renovation included and Mauritius - 1/5 (1) New RBCSPs includes: RBCSPs, Joint Assessment Strategy Papers and Interim Review Strategy Papers. (2) CSPs related Documents are: Mid-Term Review CSPs, Updated CSPs and Completion Reports. (3) This KPI will not be measured in the near future. ORPF department will refine the definition and collect the relevant data. (4) % of new projects and new RBCSPs which identify at least 1 gender equality outcome indicator in the logframe. (5) Percentage of Projects classified as climate sensitive which become climate proofed (their climate resilience is increased by reducing their climate vulnerability). (6) Considered as % of Operational PL staff (PL staff in the 3 Operations Complexes + ECON PL staff + PL staff in 100% Operational Units outside Operations Complexes (ADB/BD/IF/99/330)). (7) % of PL staff under 45 years of age (excluding Board Officers) (8) % of PL leaving the Bank within the first 3 years of Contract in comparison to total PL leaving the Bank in the same period. (9) Operations defined as ORVP, OIVP, OSVP, ECON, and 100% Operational Units outside Operations Complexes (OPEV, GECL.1, FFMA.2, FTRY.4 and FFCO.3) (10) Fixed Staff Cost comprises salaries and benefits expenses. 2/5 Annex 1(b): Operations Complexes KPIs and Performance as at end of November 2009 Unit 2009 Target Achievement Nov. 2009 Implementation Rate Nov. 2009 Number Number 10 15 16 7 160% 47% Number of CPRs Number 21 19 90% Number of ESWs and Flagship Reports Sector Operations (OSVP) ADB Public Lending Number 27 23 85% UA million 670 384.49 57% ADF Financing UA million 754 470.25 62% ADB Public Disbursement Ratio % 25% 30% ADF Disbursement Ratio % 20% 18% % 50% 56% Number 20 17 Indicator Regional and Country Programs (ORVP) New RBCSPs CSPs Related Documents Disbursement ratio for Policy Based Operations ESWs and Flagship Reports Projects Managed by Field Offices % 7% 12% Timely PCR Coverage % 40% 77% PCRs Backlog % 75% 136% Gender Mainstreaming in Operations Climate Proofed Projects % % 15% 5% 84% 100% Operations Supervised Twice a Year % 40% 54% % of Ageing projects (=> 8years) % 10% 11.6% Months 12 9.5 Lapse of time between approval and first disbursement 85% Problematic Projects % 8% 7% Fragile States Assistance-Supplemental Support Window % 33% 42% Fragile States Assistance-Arrears Clearance Window % 33% 83% Fragile States Assistance-Targeted Support Window % 33% 59% UA million 747 2207.39 296% Infrastructure, Private Sector and Regional Integration (OIVP) ADB Public Lending Private Sector Lending UA million 840 1074.25 128% ADF Financing UA million 1703 1179.79 69% 15% ESWs and Related Papers Number 45 7 ADB Public Disbursement Ratio % 25% 31% ADB Private Disbursement Ratio % 50% 64% ADF Disbursement Ratio % 17% 17% Operations Supervised Twice a Year % 40% 55% Projects Managed by Field Offices % 7% 25% Impaired Loan Ratio (Non-Sovereign only) % >5% >5% Timely PCR Coverage % 40% 100% Gender Mainstreaming in Operations % 15% 81% Climate Proofed Projects* % 5% 56% Problematic Projects % 7% 10% Months 6 9.3 Months 12 18.5 Lapse of time between approval and first disbursement (for Private Sector Projects) Lapse of time between approval and first disbursement (for Public Sector Projects) * Projects as supplementary loans, rural electrification and transmission line categories are NON-RESILIENT, therefore not applicable to this indicator. 3/5 Annex 1(c ): ECON and Support Complexes KPIs and Performance as at end of November 2009 Unit 2009 Target Achievement November 2009 Implementation Rate November 2009 Knowledge Management and Research (ECON) Lead in the assessment of economic performance and development challenges Number of countries covered Number 143 100 70% Participation by RMC's and other stakeholders in production Number 31 25 81% Partnership with RMC's and other stakeholders in dissemination Number 12 12 100% Enhancing knowledge sharing, dissemination and policy support Number of seminars/conferences Participation of Policy Makers and other stakeholders from RMC's Number Number 41 620 53 936 129% 151% Benchmarking development outcomes ( N° of evaluated projects) Number 30 29 97% Mainstreaming results measurement and knowledge in Bank operations (CSPs, ESW, Projects with results framework) Number 19 17 89% Number Number Number 12 5 10 18 13 7 150 260% 70% Financial crisis weekly & quarterly reports Number 52 97 187% Briefs on financial crisis Number 13 13 100% Number 3 3 100% Number 52 49 94% Number 52 49 94% Number 300 500 167% Number of workshops Number 20 18 90% Number of RMC's personnel trained 95% Indicator Improving quality at entry; operational and development effectiveness (ADOA/CSP/ESW) Generate knowledge to assist the RMCs and the Bank in policy and strategic planning Measurement and knowledge in Bank Operations ( CSP and ESW supported) Number of studies, books and WPS Policy briefs Number of RMC statistical strategies & profiles prepared Providing deeper understanding on issues surrounding global economic and financial crisis Primary source of key development data on RMCs (number of primary databases developed and maintained in national accounts, purchasing power parities, infrastructure statistics etc) Number of new primary databases developed and maintained in national accounts, purchasing power parities, infrastructure statistics etc Provide leadership for statistical development work in RMCs Number of RMCs requesting and receiving AfDB technical assistance in various statistical domains Number of RMCs adopting ADB methodological approaches Enhance data dissemination within the Bank (intranet) and for external clients (internet) via the web-based Data Platform Number of users per month accessing Platform Enhance quality of Bank Group operations And sensitization of RMC's members on economic development issues Number 755 715 Financial Management (FNVP) Process loan applications received without any defect within 10 working days Process and send loan bills 6 to 8 weeks before their due dates % 80% 67.85% % 85% 100% Settlement failure rate % 1% Cost of funds – base on US$ 6 Month Libor % Timely preparation of monthly financial highlights % 0.32% $Libor +5.75 bps Base Rate+10bps Euribor -5 bps CHF Libor +29.75bps 95% 95% 4/5 Achievement November 2009 1.34% Implementation Rate November 2009 Unit 2009 Target % 5% Gender Balance Index (PL staff) % 26% 26% Vacancy Rate (PL staff at post only) Vacancy Rate (PL at post excluding elected personnel and staff attached to the Board) Vacancy Rate (PL staff at post and offers made and positions committed) % 5% 13% % 5% 13% % 5% 4% Field Based PL Staff % 30% 27% Operational PL Staff % 60% 66% HR Costs Per Capita UA Thousand 10 9 90% IT Costs Per Capita UA Thousand 9 7.2 80% Facility Management Costs Per Capita UA Thousand 12 8.9 74% Indicator Impaired Loan Ratio (Non-Sovereign only) Corporate Services (CSVP) 5/5 ANNEX 2 PROPOSED 2010 LENDING PROGRAMME (Amounts in UA million) Item Country Name Sector Dept REGIO NAL DEPT Project Title Sector Code Sector Description ADB Public ADB Private MIC SRF ADF Loan ADF Grant NTF FSF CoFinancing Other Trust Funds Total Cost Fin. Instruments I - PUBLIC SECTOR OPERATIONS - COUNTRIES 1 Algeria ORNB Assistance technique 1 KF0 Institutional Support 0.6 0.6 2 Algeria ORNB Assistance technique 2 KF0 Institutional Support 0.6 0.6 3 Angola OINF ORSB Economic Infrastructure Management Support Program KF0 Institutional Support 10 10 LGA 4 Angola OWAS ORSB RWSSI E00 Water supply and Sanitation 14 14 LLP 5 Benin OINF ORWA Projet Ouidah-allada ndali nikki chikandou DB0 Transport 33.68 33.68 LLP 6 Benin OSGE ORWA APPUI INSTITUTIONNEL KF0 Institutional Support 5 GGI 7 Botswana OSAN ORSA Agriculture Infrastructure project AA0 Agriculture 30 LLP 8 Botswana OSGE ORSA Institutional Support to NBFIRA KF0 Institutional Support 1 1 MIC 9 Botswana OSHD ORSA SUPPORT TO TVET AND TERTIARY SCIENCE EDUCATION (MIC) IAE Technical / Vocational Education 0.6 0.6 MIC 10 Burkina Faso OSAN ORWA PPF-PAGERN-MOCOP AA0 Agriculture 1 PPF PROGRAMME D'APPUI A LA STRATEGIE DE REDUCTION DE LA PAUVRETE (PSRP V) K00 Multi-Sector 35 LSL 33 GLP 5 30 1 LGA 11 Burkina Faso OSGE ORWA 12 Burundi OINF OREA Gitega-Ngozi road project DB0 Transport K00 Multi-Sector 10 10 LSL 26 26 LSI 7 7 LSL 13.3 LLP 1 GGS 13 Burundi OSGE OREA PROGRAMME D'APPUI AUX REFORMES ECONOMIQUES PARE III 14 Cameroon OINF ORCE Programme d'électrification FA0 Power Supply Electricity 15 Cameroon OSGE ORCE PROJET DE MODERNISATION DU CADASTRE KA0 Multi-Sector OINF ORWB Extension Aéroport de Praia DA0 Transport OSAN ORWB Etudes Bassin Versant II AA0 Agriculture 16 17 Cape Verde Cape Verde 35 3 30 13.3 1 1/11 ANNEX 2 PROPOSED 2010 LENDING PROGRAMME (Amounts in UA million) Item Country Name Sector Dept REGIO NAL DEPT Project Title Sector Code Sector Description 18 Centrafriq ue OSAN ORCE Projet d'appui à la réhabilitation des infrastructures rurales AA0 Agriculture 19 Centrafriq ue OSGE ORCE Projet d'Appui Institutionnel Multisecteur KF0 Institutional Support 20 Chad OSGE ORCE PROJET D'APPUI A LA BALANCE DES PAIEMENTS KA0 Public Sector Management 21 Comoros OSHD OREB TRAINING FOR PRIVATE SECTOR EMPLOYEES IAE Technical / Vocational Education 22 Congo OSGE ORCE Projet à l'amélioration du Climat des affaires KF0 Institutional Support 23 Côte d'Ivoire OSHD ORWA PROJET DE DEVELOPPEMENT DES RESSOURCES HUMAINES IAD Higher Education 24 Dem Rep Congo OINF ORCE Projet d'electricité FA0 Power Supply Electricity 25 Dem Rep Congo OWAS ORCE RWSSI E00 Water supply and Sanitation 26 Dem Rep Congo OSGE ORCE K00 27 Dem Rep Congo OSGE ORCE 28 Egypt OINF ORNA 29 Egypt OWAS 30 Egypt 31 ADB Public ADB Private MIC SRF ADF Loan ADF Grant NTF FSF Other Trust Funds Total Cost Fin. Instruments 3.85 GLP 2.4 2.448 GGI 10 10 GSL 1 1 GLP 3.3 3.3 GGI 18.2 LLP 68.84 GLP 69 69 LLP Multi-Sector 20 20 GSL KF0 Institutional Support 10 10 GGI Power Project 2010 FA0 Power Supply Electricity 200 LLP ORNA WSS Study E00 Water supply and Sanitation 0.6 MIC OSAN ORNA West Delta Project - Phase II AAC Irrigation And Drainage 20 20 LLP Egypt OSAN ORNA Costal Protection Project C00 Environment 20 20 LLP 32 Egypt OSAN ORNA Pumping Stations Rehabilitation Project AAC Agriculture and Rural Development 100 100 LLP 33 Egypt OSGE ORNA ECONOMIC POLICY REVIEW- MIC KA0 Public Sector Management 1 MIC 34 Egypt OSHD ORNA NURSING TRAINING IB0 Health 50 LLP Projet d'Urgence de Renforcement des Ressources Humaines APPUI INSTITUTIONNEL A LA DECENTRALIZATION 3.85 CoFinancing 18.2 8.84 200 0.6 1 50 60 2/11 ANNEX 2 PROPOSED 2010 LENDING PROGRAMME (Amounts in UA million) Item Country Name Sector Dept REGIO NAL DEPT Project Title Sector Code Sector Description K00 Multi-Sector 35 Egypt OSGE OREB Financial Sector Reform Support 36 Eq Guinea OWAS ORCE RWSSI E00 37 Eq Guinea OSAN ORCE Support to Rural Infrastructure Development Project 38 Eritrea OSHD OREB OINF 39 Ethiopia ADB Public ADB Private MIC SRF ADF Loan ADF Grant NTF FSF CoFinancing Other Trust Funds Total Cost Fin. Instruments 645 645 LSL Water supply and Sanitation 30 30 LLP A00 Agriculture and Rural Development 30 30 LLP Support to Higher Education Development Project IAD Higher Education 14 14 GLP OREB Project Gilgel-Gibe Hydro F00 Energy 61 232.5 LLP K00 Multi-Sector 2 2 GGI DB0 Transport 140 LSI 0.6 MIC 20 LSL 1 GGI 40 Ethiopia OSGE OREB FINANCIAL SECTOR TECHNICAL ASSISTANCE PROJECT 41 Gabon OINF ORCE Programme Routier - phase 2 42 Gabon OWAS ORCE WSS Study E00 Water supply and Sanitation 43 Gabon OSGE ORCE PARCI K00 Multi-Sector KF0 Institutional Support 171.5 140 0.6 20 44 Gambia OSGE ORWB INSTITUTIONAL SUPPORT PROJECT ADDITIONAL 45 Ghana OINF ORWA Reconstruction of the Fulfuso Juntion - Sawla Road) DB0 Transport 65 65 LLP 46 Ghana OINF ORWA GEDAP II FA0 Power Supply Electricity 38 38 LLP 47 Kenya OINF OREA Nairobi Light-Rail Transit System DC0 Transport 35 35 LLP 48 Kenya OWAS OREA Nairobi River E00 Water supply and Sanitation 35 35 LLP 49 Liberia OSAN ORWB Rice Value chain AA0 Agriculture 5.72 GLP KA0 Public Sector Management 0.5 0.5 MIC 0.5 0.5 MIC 50 50 LSI 13.2 13.2 LLP 50 Libya OSGE ORNA TECHNICAL ASSISTANCE PROGRAM FOR ECON AND FINANCIAL MANAGEMENT 51 Libya OSHD ORNA MIC- Technical Skills Development for Competitiveness IAD Higher Education 52 Madagasca r OINF ORSB Programme Routier 1 DB0 Transport ORSB PROJET DES JEUNES ENTREPRENEURS RUREAUX II AA0 Agriculture 53 Madagasca r OSAN 1 5.72 3/11 ANNEX 2 PROPOSED 2010 LENDING PROGRAMME (Amounts in UA million) Item Country Name Sector Dept REGIO NAL DEPT Project Title APPUI INSTITUTIONNEL PRIBG II KF0 Sector Code Sector Description 54 Madagasca r OSGE ORSB 55 Malawi OINF ORSB Nkhata Bay-Muzuzu Rehab DB0 Transport A00 Agriculture and Rural Development ADB Public ADB Private MIC Institutional Support SRF ADF Loan ADF Grant NTF FSF CoFinancing Other Trust Funds Total Cost Fin. Instruments 11.5 11.5 GGI 14 14 LLP 5 5 LGS 20 20 GLP 8 8 LLP 20 20 LLP 56 Malawi OSAN ORSB Shire Valley Irrigation ProjectFeasibility Study 57 Malawi OSGE ORSB Poverty Reduction Support Grant II (PRSG II) KA0 Public Sector Management 58 Mali OINF ORWB Projet Carrefour de la Paix point Y DB0 Transport 59 Mali OSAN ORWB Projet Sucrier de Markala A00 Agriculture and Rural Development 60 Mauritius OSGE ORSB CAPACITY BUILDING PROGRAMME FOR ADSL K00 Multi-Sector 0.5 0.5 MIC 61 Mauritius OSHD ORSB MIC - Regional Multidisciplinary Centre of Excellence IAD Higher Education 0.2 0.2 MIC 62 Mauritius OSHD ORSB Health Sector Project IB0 Health 63 Morocco OINF ORNB Projet Extension Port DD0 Transport 64 Morocco OINF ORNB Référentiel des emplois et compétences logistique & transport DZ0 Transport 65 Morocco OWAS ORNB Projet de renforcement de l'AEP de l'axe Rabat-Casa E00 Water supply and Sanitation 66 Morocco OSGE ORNB PARAP IV K00 Multi-Sector 67 Morocco OSHD ORNB MIC- Etude 1 Strategique sur le Secteur Education IAD Higher Education 68 Mozambiq ue OWAS ORSB RWSSI EA0 Water Supply 69 Namibia OSAN ORSA TANDJIESKOPPE GREEN SCHEME PROJECT A00 Agriculture and Rural Development 70 Namibia OSAN ORSA Acquaculture Development Project AA0 Agriculture 71 Namibia OSGE ORSA MIC - Private Sector Development Project KB0 Private Sector Management 72 Namibia OSGE ORSA Budget Support K00 Multi-Sector ORSA Support to ICT Skills Development IAD Higher Education 73 Namibia OSHD 20 20 LLP 100 100 LLP 0.6 MIC 180 180 LLP 90 90 LSL 0.6 MIC 5.7 LLP 30 30 LLP 10 10 LLP 1 MIC 400 400 LSL 15 15 LLP 0.6 0.6 5.7 1 4/11 ANNEX 2 PROPOSED 2010 LENDING PROGRAMME (Amounts in UA million) Item Country Name Sector Dept REGIO NAL DEPT Project Title APPUI A L'ENSEIGNEMENT TECHNIQUE ET A LA FORMATION PROFESSIONNELLE PROJET DE DEVELOPPEMENT DES INFRASTRUCTURES DE SANTE Sector Code Sector Description ADB Public ADB Private MIC SRF ADF Loan IAE Technical / Vocational Education IB0 Health Capacity Building PPP FA0 Power Supply Electricity 10 ORWB RWSSI PROGRAMME E00 Water supply and Sanitation 3.5 OWAS ORWB TOWNS WATER & SANITATION PROJECT E00 Water supply and Sanitation Swaziland OWAS ORSA Lavumisa Corridor Rural Water Supply and Sanitation Project E00 Water supply and Sanitation Swaziland OSHD ORSA Youth Employment Creation I00 74 Niger OSHD ORWA 75 Niger OSHD ORWA 76 Nigeria OINF ORWA 77 Sao Tome OWAS 78 Sierra Leone 79 80 ADF Grant NTF FSF CoFinancing Other Trust Funds Total Cost Fin. Instruments 15.83 6.17 22 LLP 5.63 5 10.63 LLP 10 LLP 2.5 6 LSI 4.2 19 GLP 20 20 LLP Social 6 6 LLP IB0 Health 2 2 LLP 45.5 45.5 LLP 14.8 81 Swaziland OSHD ORSA Health Sector Development Project 82 Tanzania OINF OREA TRANSMISSION LINES FAC Power Supply Electricity 83 Tanzania OWAS OREA RWSSI Phase II E00 Water supply and Sanitation 60 60 LLP 84 Tanzania OSGE OREA KF0 Institutional Support 5.2 5.2 LGI 85 Tanzania OSHD OREA I00 Social 20 20 GLP KF0 Institutional Support 4.4 GGI 86 Togo OSGE ORWA INSTITUTIONAL SUPPORT TO GOOD GOVERNANCE II Small Entrepreneurs Loan Facility Phase II APPUI INSTITUTIONNEL POUR LES REFORMES ECONOMIQUES ET DE LA GOUVERNANCE 4.4 87 Tunisia OINF ORNA Etude TGV Nord Sud DC0 Transport 1.2 MIC 88 Tunisia OINF ORNA Railway Modernisation III DC0 Transport 60 1.2 60 LLP 89 Tunisia OINF ORNA Etude Electrification Ligne de Borg Cedria-Gabes DC0 Transport 4 4 MIC 90 Tunisia OINF ORNA Etude Desserte Ferroviaire Kairouan DC0 Transport 0.6 MIC 91 Tunisia OINF ORNA Road Project VI DB0 Transport 175 LLP 0.6 175 5/11 ANNEX 2 PROPOSED 2010 LENDING PROGRAMME (Amounts in UA million) Item Country Name Sector Dept REGIO NAL DEPT Project Title 92 Tunisia OINF ORNA CENTRE D'EXCELLENCE GD0 Information and Communica-tion Technologies 20 20 LLP 93 Tunisia OWAS ORNA Projet de Renforcement des Capacités des Eaux de Sfax E00 Water supply and Sanitation 50 50 LLP 94 Tunisia OSAN ORNA PDAI II AA0 Agriculture 15 15 LLP IAD Higher Education 0.2 MIC IB0 Health 50 50 LSI I00 Social 20 20 LLP I00 Social 20 20 LLP MIC-Etude Strategique sur le developpement des industries culturelles Appui aux Réformes du Secteur de la Santé Lutte contre les Maladies Emergentes Sector Code Sector Description ADB Public ADB Private MIC ADF Loan SRF ADF Grant NTF CoFinancing FSF Other Trust Funds Fin. Instruments 95 Tunisia OSHD ORNA 96 Tunisia OSHD ORNA 97 Tunisia OSHD ORNA 98 Tunisia OSHD ORNA 99 Uganda OSHD OREA Support to Mulago Hospital IB0 Health 40 40 LLP 100 Zambia OINF ORSB Nacala Corridor Phase II DB0 Transport 18 18 LLP FAC Power Supply Electricity 19 19 LLP 23 23 GSL 10 10 LLP 2 2 LGA Promotion Exportation des Services de Santé 101 Zambia OINF ORSB Ithesi-Thezi transmission Lines 102 Zambia OSGE ORSB POVERTY REDUCTION BUDGET SUPPORT III K00 Multi-Sector 103 Zimbabwe OINF ORSA Road Support Project DB0 Transport E00 Water supply and Sanitation 104 Zimbabwe OWAS ORSA RWSSI/ Power Studies SUB-TOTAL I 0.2 Total Cost 2585 0 10.9 0 911.4 247.7 0 105.9 0 7.7 3869 I I - PUBLIC SECTOR OPERATIONS - MULTINATIONAL 105 Multinational OINF ORWB Construction Pont / fleuve senegal a Rosso 106 Multinational OINF ORSB Nacala Corridor Project (Mozambique/Malawi) DB0 Transport 107 Multinational _ORCE OINF ORCE Etude du projet Routier Ouesso-Bangui-Ndamena DB0 Transport 108 Multinational _ORCE OINF ORCE Etude Navigation fluviale Oubangui-Congo-Sangha DD0 Transport DB0 Transport 30 30 GLP 100 LLP 4 4 GGS 4 4 GGS 100 6/11 ANNEX 2 PROPOSED 2010 LENDING PROGRAMME (Amounts in UA million) Item Country Name Sector Dept REGIO NAL DEPT Project Title Sector Code Sector Description 109 Multinational _OREA OWAS OREA Lake Victoria Water and Sanitation Program E00 Water supply and Sanitation 110 Multinational _OREA OSHD OREA SUPPORT TO REGIONAL ICT CENTERS OF EXCELLENCE IAD Higher Education 111 Multinational _ORNA OINF ORNA Center of ExcellenceTunisie GD0 Information and Communica-tion Technologies 112 Multinational _ORNA OINF ORNA North Africa Backbone GD0 Information and Communica-tion Technologies SUB-TOTAL II ADB Public ADB Private MIC SRF ADF Loan ADF Grant 50 NTF FSF CoFinancing Other Trust Funds Total Cost Fin. Instruments 50 LLP 15 GLP 15 15 LLP 10 10 LLP 15 25 150 53 228 III - PRIVATE SECTOR OPERTIONS 113 114 115 116 117 118 119 120 Africa Low Income Countries Africa Low Income Countries Africa Low Income Countries Africa Low Income Countries Africa Low Income Countries Africa Low Income Countries Africa Low Income Countries Africa Low Income Countries OPSM2 Social / Education IA0 Education 14 14 LLP OPSM2 Social / Health IB0 Health 14 14 LLP OPSM2 Agriculture and Rural Development A00 Agriculture and Rural Development 10 10 LLP OPSM2 Agriculture and Rural Development A00 Agriculture and Rural Development 10 10 LLP OPSM2 Agriculture and Rural Development A00 Agriculture and Rural Development 10 10 LLP OPSM2 Agriculture and Rural Development A00 Agriculture and Rural Development 10 10 LLP OPSM2 Agriculture and Rural Development A00 Agriculture and Rural Development 10 10 LLP OPSM2 Agriculture and Rural Development A00 Agriculture and Rural Development 10 10 LLP 7/11 ANNEX 2 PROPOSED 2010 LENDING PROGRAMME (Amounts in UA million) Item 121 122 123 124 125 126 127 128 129 130 131 132 133 Country Name Africa Middle Income Countries Africa Middle Income Countries Africa Middle Income Countries Africa Middle Income Countries Africa Middle Income Countries Africa Middle Income Countries Africa Middle Income Countries Africa Middle Income Countries Africa Low Income Countries Africa Low Income Countries Africa Low Income Countries Africa Low Income Countries Africa Low Income Countries Sector Dept REGIO NAL DEPT ADB Public ADB Private OPSM2 Industry, Mining & Quarrying B00 Industry, Mining & Quarrying 25 25 LLP OPSM2 Industry, Mining & Quarrying B00 Industry, Mining & Quarrying 25 25 LLP OPSM2 Industry, Mining & Quarrying B00 Industry, Mining & Quarrying 25 25 LLP OPSM2 Industry, Mining & Quarrying B00 Industry, Mining & Quarrying 25 25 LLP OPSM2 Industry, Mining & Quarrying B00 Industry, Mining & Quarrying 25 25 LLP OPSM2 Industry, Mining & Quarrying B00 Industry, Mining & Quarrying 25 25 LLP OPSM2 Industry, Mining & Quarrying B00 Industry, Mining & Quarrying 25 25 LLP OPSM2 Industry, Mining & Quarrying B00 Industry, Mining & Quarrying 25 25 LLP OPSM3 Infrastructure/ Transport D00 Transport 25 25 LLP OPSM3 Infrastructure/ Transport D00 Transport 25 25 LLP OPSM3 Infrastructure/ Transport D00 Transport 25 25 EQY OPSM3 Infrastructure/ Transport D00 Transport 25 25 EQY OPSM3 Infrastructure/ Transport D00 Transport 25 25 EQY NTF FSF Total Cost Fin. Instruments Sector Description SRF ADF Grant Other Trust Funds Sector Code MIC ADF Loan CoFinancing Project Title 8/11 ANNEX 2 PROPOSED 2010 LENDING PROGRAMME (Amounts in UA million) Item 134 135 136 137 138 139 140 141 142 143 144 145 146 Country Name Africa Low Income Countries Africa Middle Income Countries Africa Middle Income Countries Africa Middle Income Countries Africa Middle Income Countries Africa Middle Income Countries Africa Middle Income Countries Africa Middle Income Countries Africa Middle Income Countries Africa Middle Income Countries Africa Middle Income Countries Africa Low Income Countries Africa Low Income Countries Sector Dept REGIO NAL DEPT ADB Public ADB Private OPSM3 Infrastructure/ Transport D00 Transport 25 25 EQY OPSM3 Infrastructure/ water supply and sanitation E00 Water supply and Sanitation 15 15 LLP OPSM3 Infrastructure/ water supply and sanitation E00 Water supply and Sanitation 15 15 LLP OPSM3 Infrastructure/ Power supply F00 Energy 30 30 EQY OPSM3 Infrastructure/ Power supply F00 Energy 30 30 EQY OPSM3 Infrastructure/ Power supply FA0 Power Supply Electricity 30 30 LLP OPSM3 Infrastructure/ Power supply F00 Energy 30 30 LLP OPSM3 Infrastructure/ Power supply FA0 Power Supply Electricity 30 30 LLP OPSM3 Infrastructure/ Power supply FA0 Power Supply Electricity 30 30 LLP OPSM3 Infrastructure/ Power supply FA0 Power Supply Electricity 30 30 LLP OPSM3 Infrastructure/ Power supply KB0 Private Sector Management 30 30 LLP OPSM3 Infrastructure/ Power supply FA0 Power Supply Electricity 30 30 LLP OPSM3 Infrastructure / Communications G00 Communications 20 20 EQY NTF FSF Total Cost Fin. Instruments Sector Description SRF ADF Grant Other Trust Funds Sector Code MIC ADF Loan CoFinancing Project Title 9/11 ANNEX 2 PROPOSED 2010 LENDING PROGRAMME (Amounts in UA million) Item Country Name 147 Afrique OPSM3 148 Afrique OPSM3 149 Afrique OPSM3 150 Afrique OPSM3 151 Afrique OPSM3 152 153 154 155 156 157 158 Africa Low Income Countries Africa Low Income Countries Africa Low Income Countries Africa Low Income Countries Africa Low Income Countries Africa Low Income Countries Africa Low Income Countries Sector Dept REGIO NAL DEPT Project Title Infrastructure / Communications Infrastructure / Communications Infrastructure / Communications Infrastructure / Communications Infrastructure / Communications ADB Public ADB Private Communications 20 20 EQY G00 Communications 20 20 EQY G00 Communications 20 20 EQY G00 Communications 20 20 EQY G00 Communications 20 20 EQY NTF FSF Total Cost Fin. Instruments G00 SRF ADF Grant Other Trust Funds Sector Description MIC ADF Loan CoFinancing Sector Code OPSM4 Finance H00 Finance 18 18 LLC OPSM4 Finance H00 Finance 18 18 LLC OPSM4 Finance H00 Finance 18 18 GTE OPSM4 Finance H00 Finance 18 18 EQY OPSM4 Finance H00 Finance 18 18 LLC OPSM4 Finance H00 Finance 18 18 LLC OPSM4 Finance H00 Finance 18 18 LLC 159 Afrique OPSM4 Finance H00 Finance 18 23 LLC 160 Afrique OPSM4 Finance H00 Finance 18 5 18 LLC 161 Afrique OPSM4 Finance H00 Finance 18 18 LLC 162 Afrique OPSM4 Finance H00 Finance 18 18 EQY 163 Afrique OPSM4 Finance H00 Finance 18 18 LLC 164 Afrique OPSM4 Finance H00 Finance 18 18 LLC 165 Afrique OPSM4 Finance H00 Finance 18 18 LLC 166 Afrique OPSM4 Finance H00 Finance 18 18 LLC 10/11 ANNEX 2 PROPOSED 2010 LENDING PROGRAMME (Amounts in UA million) Item Country Name Sector Dept REGIO NAL DEPT Project Title Sector Code Sector Description ADB Public ADB Private MIC ADF Loan SRF ADF Grant NTF FSF CoFinancing Other Trust Funds Total Cost Fin. Instruments 167 Afrique OPSM4 Finance H00 Finance 18 18 EQY 168 Afrique OPSM4 Finance H00 Finance 18 18 LLC 169 Afrique OPSM4 Finance H00 Finance 18 18 LLC 170 Afrique OPSM4 Finance H00 Finance 18 18 LLC 171 Afrique OPSM4 Finance H00 Finance 18 18 LLC 172 Afrique OPSM4 Finance H00 Finance 18 18 LLC 173 Afrique OPSM4 Finance H00 Finance 18 18 GTE 174 Afrique OPSM4 Finance H00 Finance 18 18 GTE 175 Afrique OPSM4 Finance H00 Finance 18 18 GTE 176 Afrique OPSM4 Finance H00 Finance 18 18 EQY 177 Afrique OPSM4 Finance H00 Finance 18 18 EQY 178 Afrique OPSM4 Finance H00 Finance 18 18 EQY 179 Afrique OPSM4 Finance H00 Finance 18 18 EQY 180 Afrique OPSM4 Finance H00 Finance 18 18 EQY 181 Afrique OPSM4 Finance H00 Finance 18 18 GTE 182 Afrique OPSM4 Finance H00 Finance 18 18 LLC 183 Afrique OPSM4 Finance H00 Finance 18 18 LLC SUB-TOTAL III GRAND TOTAL 1,434 2,610 1,434 11 - 1,061 301 - 106 - 5 1,439 13 5,536 11/11 ANNEX 3 Detailed Sector Distribution of the Proposed 2010 Indicative Lending Programme (Amounts in UA million) ADB Public Sector Infrastructure Transport Water Supply and Sanitation Power Communications Finance Social Higher Education and Vocational Training** Primary and Secondary Education Health** Other Social Multisector (Including Budget support, Support to reforms and Governance Support Projects) Industry, Mining and Quarrying Agriculture and Rural Development Environment Nbr Amount 14 6 4 1 3 1,017 492 280 200 45 8 1 183 15 5 2 142 26 4 1,155 7 1 235 20 ADB Private Nbr Total ADB Amount 22 6 2 8 6 32 2 540 150 30 240 120 576 28 1 1 14 14 1 8 6 Nbr Amount Other ADF Nbr Grand Total Amount Nbr Amount Nbr* Amount Percent 73 29 18 17 9 33 25 12 1 9 3 2,666 1,049 572 880 165 581 354 87 14 207 46 48.2% 19.0% 10.3% 15.9% 3.0% 10.5% 6.4% 1.6% 0.3% 3.7% 0.8% 36 12 6 9 9 32 10 1 1 6 2 1,557 642 310 440 165 576 211 15 14 156 26 26 12 7 7 997 365 252 380 11 5 5 1 112 42 10 60 10 6 141 70 1 5 5 5 2 2 3 1 51 20 30 5 1,185 17 180 7 5 29 1,370 24.7% 200 60 8 13 1 200 295 20 5 45 2 5 8 20 1 200 345 20 3.6% 6.2% 0.4% 4,044 58 1,362 26 129 189 5,536 100.0% TOTAL 34 2,610 71 1,434 105 * The number of loans and grants is higher than the real number of operations, due to some co-financing schemes. ** In the social sectors, Health appears to be favoured in 2010 as compared to Higher Education and Vocational Training. This is due to relatively important requests submitted by ADB countries such as Tunisia and ADF countries such as Uganda. There is also one business opportunity in Health for the Private Sector Window. One should also note that, although Higher Education is a priority under the MTS, it is not among the top priorities of ADF-11. Nonetheless, efforts are underway to prepare more Higher Education projects in both ADB and ADF countries and this will certainly result in an increased demand further down the road. 1/1 ANNEX 4 Progress Made on Approved Budget Reforms UA Budgeting and Fungibility: The key objective of the UA Budgeting framework is to introduce greater efficiency, transparency and flexibility in the allocation and management of resources. Presently, fungible budget expenditures include; staff salaries, mission, consultancy, hospitality – bank staff, entertainment – non employees, and short term staff expenses. However, till end of 2009, validation by COBS is a prerequisite for transfers within these budget categories. With the introduction of UA budgeting from January 2010, COBS will no longer validate transfers; instead, COBS will concentrate its attention on monitoring efficiency and cost effectiveness of resources utilization. Given broader responsibilities, VPUs are required to sharpen their resource management and monitoring skills. Headcount Control: As outlined in Management’s last update to the Board on UA Budgeting in July 200921 , the Board is requested to approve the elimination of headcount control from January 2010. In its place; staff planning will be reinforced and fixed cost ratio (FCR) introduced as compensating controls. These instruments will enable VPUs determine their staffing needs and actions required to meet those needs, and, at the same time, mitigate the potential risk of overspending on staff costs. The SMCC will provide oversight at the institutional level. Staff Planning: Undue restrictive controls (over authorized positions and expenditure lineitem budgets) will be removed so that Management can have more flexibility to decide on the best use and mix of resources within allocated budget envelope. However, VPUs will be able to hire staff subject to: (i) adherence with their staffing plans; (ii) availability of funds within their allocated budget; and (iii) compliance with established FCR over the duration of a fiscal year. Effective from January 2010, VPUs’ staffing plans will be updated monthly to cover the next 12 months on a rolling basis, in order to determine budget availability and compliance with FCR.22 In preparing and updating a staffing plan, VPUs will take the following into account: (i) staffing needs of Work Programmes, in terms of the number, skills, experience, and grade levels; (ii) expected turnover of staff on board arising from normal departures and retirement; (iii) timing of expected turnover, and planned promotions and hires, taking into account the expected time needed to complete hiring process; and (iv) CHRM guidelines on average salaries for planned new hires and promotions. In the unexpected circumstance of a request for unplanned additional staffing, the following steps will be taken (before deciding on recruitment action): a. update the VPU’s Staffing Plan; b. recalculate the VPU’s FCR to confirm whether or not there is any change; c. in case of change in the VPU’s FCR, recalculate Bank-wide FCR to ensure that there is no change as shown in Annex 8(b); and d. obtain SMCC approval. 21 Ref: ADB/BD/WP/2009/138 and ADF/BD/WP/2009/103 22 VPUs will be expected to prepare staffing plans covering 36 months, to support their strategic staffing objectives and the 3-year rolling budget framework. 1/3 Fixed Cost Ratio (FCR): Fixed costs are staff salaries and benefits, with overhead (i.e. rent, occupancy, IT equipment, office furniture) that have direct correlation to staffing level. Fixed costs, unlike variable costs (such as mission, consultancy and representation) do not, in the short run, vary with Work Programme delivery. Fixed Cost Ratio (FCR) will, therefore, determine the proportion of fixed costs to total budget (i.e. salary, benefits, overhead, consultancy, mission, representation and STS). It is calculated as follows: The FCR will be used as the primary tool, together with staff planning, to ensure that VPUs maintain close oversight on staffing changes and total staff costs, and will also serve as a forecasting tool to enable VPUs maintain flexibility and a reasonable balance between staff related costs and other costs in utilizing their budget. As a control mechanism, FCR will be calculated and managed annually at VPU levels and will not be changed during 2010 unless there are exceptional changes in Work Programmes and business conditions approved by the Board of Directors. Management will, therefore, ensure that intra-VPU changes (if any) are compensated for within the VPU; and inter-VPU changes compensated for in a manner that the Bank-wide FCR (as shown in Annex 8(b)) remains unchanged. Time Recording System (TRS): Time recording system will be reintroduced with effect from 2010 to assist Management obtain more credible data on the cost of outputs, (i.e. products and processes). To succeed, there is need for staff buy-in whilst the tool itself must be user friendly and web enabled, and will record staff time against output codes. As a start, the TRS will be implemented for PL staff in Operations Departments (including those in the Field Offices). Once stabilized in this area, it will be extended to other staff and the NonOperations Departments. The intention is not to control or monitor how staff spend their time, but to have reasonable costing data on Bank outputs and non-output-related activities. With meaningful costing data, Cost Centre Managers will be assisted to; i) reasonably plan and monitor costs of activities and outputs; ii) better understand spending patterns; and, iii) facilitate identification of opportunities for efficiency improvements. It will also provide support for budget management and as well as serve as an important tool for managerial accountability. Outstanding Deliverables As we move towards the completion of the Budget Reforms approved by the Board in June 2007, the following are still outstanding, including highlights of issues that will be addressed to ensure timely delivery: Expansion of budget fungibility: Decentralize benefits – Management is still reviewing the possibility of decentralizing, in the future, part of staff benefits to the VPUs. Prior to this, Management will ensure there is strong evidence of: (i) discipline on staff planning & recruitment procedures; and (ii) VPU budget and resource management capacity. 2/3 Charge back system – This system will decentralize budget for some centrally managed expenses to VPUs. This will require: (i) further cost/benefit analysis; and (ii) a more robust information management system. As above, this is also subject to ongoing review by Management. Country budget management: Under this arrangement, Country Work Programme related budgets will be managed by the Regional Directors. This is conditional to: (i) further changes to the business processes; (ii) significant restructuring of the delegation of authority matrix; (iii) better coordination across Operations Complexes; and, (iv) strong resource management capacity Bank-wide. 3/3 ANNEX 5 Historical Quarterly Budget Implementation 2000 – 2009 (UA Million) *2009 Q4 Forecast 1/1 ANNEX 6 List of Institutional KPIs and Targets for 2010-2012 Indicators Unit Baseline UA million Targets 2010-2012 2010 2011 2012 4087 4617 5340 6042 UA million UA million UA million 1347 840 1900 2500 1000 1117 1840 1050 2450 2202 1090 2750 Number Number Number Number 10 15 21 92 21 25 22 42 16 11 28 34 9 26 14 29 Bank Group Amount (provisional targets) UA million 3558 3500 4200 4800 ADB Public Amount ADB Private Amount ADF Amount Bank Group Ratio (Investment only) UA million UA million UA million 593 1883 1082 1300 700 1500 1600 800 1800 1900 800 2100 % % % 20% 50% 20% 20% 50% 20% 20% 50% 20% 25% 50% 25% % % % % 40% 40% 5% <5% 40% 40% 14% <5% 35% 40% 15% <5% 30% 40% 20% <5% Months Months % 12 13 96% 12 10 75% 12 10 75% 12 10 75% % % 100% 100% 100% 100% 100% 100% 100% 100% % % % % 30% 26% 35% 11% 30% 27% 40% 11% 32% 28% 45% 11% 35% 30% 45% 10% % % % % UA Million % % 95% 17% 60% 70% 95% 17% 60% 70% 100 55% 33% 95% 18% 60% 70% 125 55% 33% 95% 20% 60% 70% 150 55% 33% I - Development Financing Operations Total Bank Group Financing (1) ADB Public Lending ADB Private Lending ADF Financing II - Knowledge Management Products New RBCSPs (2) CSPs Related Documents (3) CPRs ESWs and Related Papers III - Disbursements ADB Public Disbursement Ratio ADB Private Disbursement Ratio ADF Disbursement Ratio IV - Portfolio Management Projects at Risk Operations Supervised Twice a Year Projects Managed by Field Offices Impaired Loan Ratio (Non-Sovereign only) V - Process Efficiency Lapse of time between approval and first disbursement Lapse of Time for Procurement Timely PCR Coverage VI - Cross-cutting Areas Gender Mainstreaming in Operations (4) Climate Proofed Projects (5) VII - Human Resources (PL) Field Based (6) Gender Balance Staff Age Diversity (7) Staff Attrition Rate (8) VIII - Budget and Expenses Administrative Budget Implementation Field Offices Expenses Operations (9) Expenses Fixed Staff Costs (10) New untied trust funds (bilateral/multilateral) % of Bank Operational consultancy committed by Trust Funds Capital Budget Implementation 53% 33% 1/2 (1) Excluding HIPC and ADB special assistance SRF& Other Grants. (2) New RBCSPs includes: RBCSPs, Joint Assessment Strategy Papers and Interim Review Strategy Papers. (3) CSPs related Documents are: Mid-Term Review CSPs, Updated CSPs and Completion Reports. (4) % of new projects and new RBCSPs which identify at least 1 gender equality outcome indicator in the log-frame. (5) % of new projects classified as climate sensitive which become climate proofed (their climate resilience is increased by reducing their climate vulnerability). (6) Considered as % of Operational PL staff (PL staff in the 3 Operations Complexes + ECON PL staff + PL staff in 100% Operational Units outside Operations Complexes (ADB/BD/IF/99/330)). (7) % of PL staff under 45 years of age (excluding Board Officers) (8) % of PL leaving the Bank within the first 3 years of Contract in comparison to total PL leaving the Bank in the same period. (9) Operations defined as ORVP, OIVP, OSVP, ECON, and 100% Operational Units outside Operations Complexes (OPEV, GECL.1, FFMA.2, FTRY.4 and FFCO.3) (10) Fixed Staff Cost comprises salaries and benefits expenses. 2/2 ANNEX 7 Comparison with Other MDBs 2007 Data Table 1.1 2008 Data Table 2.1 MDB No of Staff AsDB 2,443 No. in Field Offices 479 No of Field Offices 26 Field Office Percent Female Percent 19.60% 29% PL EBRD 1,349 297 32 22% 37% IADB 1,745 516 26 29.60% 41.6% PL AfDB 1,142 252 23 16.63% 23% PL MDB No of Staff No. in Field Offices AsDB EBRD IADB AfDB 2,412 1,407 1,755 1,491 519 308 520 269 No of Field Offices 26 34 26 23 Field Office Percent 21.52% 21.89% 29.63% 18.04% Female Percent Loans value (‘000UA) Disbursement (‘000UA) Administrative cost ('000 UA) per UA 1 Mill. Loan Administr a-tive cost ('000 UA) per UA 1 Mill. Disbursed 28% 33% 41 24% PL Table 2.2 MDB Table 1.2 MDB Administrative Expenses (‘000UA) No. of New Projects AsDB 205 82 6,352* 4,276 EBRD 233 353 12,818 IADB 355 127 5,596 AfDB 176 100 Loans value (‘000UA) 3,100 57 15 571 WBMENA Exchange rate: US $ and Euro to UA as at 12/2007 *Excluding bilateral and multilateral Trust Funds loans Disbursement (‘000UA) Administrative cost ('000 UA) per UA 1 Mill. Loan Administrative Expenses (‘000UA) No. of New Projects AsDB 234 86 7,052 5,914 33.18 39.57 32.27 Administrative cost ('000 UA) per UA 1 Mill. Disbursed 47.94 EBRD 194 302 11,024 4,277 17.60 45.36 3,650 18.18 63.84 IADB 306 131 7,460 4,772 41.02 64.12 4,464 63.44 79.53 AfDB 186 133 3,528 1,861 52.72 99.95 69 17 1,008 492 68.45 140.24 1,616 63.65 108.91 409 99.82 139.36 WB-MENA Exchange rate: US $ and Euro to UA as at 12/2007 *Excluding bilateral and multilateral Trust Funds loans 2008 Increased efficency* in Lending and Disbursing (2007 = 0) WB‐MENA AfDB IADB EBRD AsDB ‐35.00 Administrative cost ('000 UA) x UA 1 Mill. Disbursed ‐30.00 ‐25.00 ‐20.00 ‐15.00 ‐10.00 ‐5.00 0.00 5.00 AsDB EBRD IADB AfDB WB‐MENA ‐8.37 ‐18.48 ‐15.41 ‐8.96 0.88 * Measured as reduced costs x million Disbursed and Loaned between 2007 and 2008 1/1 ANNEX 8 STAFFING LEVEL BY COMPLEX Annex 8(a): Charts of 2009 Staffing Level by Complex Chart 2: Staffing Levels ‐ By Location Chart 1: Staffing Levels ‐ Bank‐wide 1,914 1,776 1,914 1,776 1,593 MTS Line 1,479 1,492 1,376 1,186 1,086 728 690 400 422 2008 2008 2009 PL GS Total Staffing 2009 TRA/HQ Field Office Total Staffing MTS Trajectory Chart 4: Staffing levels - Operational Complexes Chart 3: Staffing Level (Bankwide) ‐ By Grade and Location 430 1,914 1,776 234 248 213 986 235 73 222 79 506 477 OIVP 2008 HQ/TRA Based 213 200 187 899 433 2009 Field Based Total Staffing ORVP 2008 OSVP ECON 2009 1/3 Chart 5: Staffing Levels - Other Complexes 342 285 306 283 188 CSVP 199 FNVP 2008 OTHERS ** 220 200 180 160 140 120 100 80 60 40 20 0 Chart 6: PL Staffing by Operational Priority Areas 78 82 73 32 79 39 14 13 2008 2009 Infrastructure Higher Education Knowledge Management Governance Private Sector 2009 Footnote: '** Includes all other complexes except BDIR 166 156 Chart 8: Operational PL Staff by Location 755 687 606MTS Line 567 556 503 199 184 2008 2009 TRA/HQ Field Office Total Operational PL MTS Trajectory ** These include ORVP, OSVP, OIVP, ECON, and units and divisions of non-operational Complexes whose work programmes are fully operational namely: (i) OPEV, (ii) CRMU, (iii) GECL1, (iv) FFMA2, (v) FFCO3, and (vi) FTRY4. 2/3 Annex 8(b): Fixed Cost Ratios by Complex COMPLEX As of November 2009 2010 BDIR 92% 90% CSVP 86% 86% ECON 78% 84% FNVP 90% 93% OIVP 72% 80% ORVP 82% 86% OSVP 74% 77% OTHERS 87% 99% PRST & UPRST 82% 89% URBD 63% 71% BANK WIDE 80% 85% 3/3 ANNEX 9 Staff Allocation by Complex HQ GS PL Boards of Governors Boards of Directors Operation Evaluation Sub-Total Special Appropriations 2009 Staffing (05/11/2009) FO PL GS HQ Total PL 2010 Projected Staffing FO GS PL GS Total 54 17 71 18 9 27 - - 72 26 98 54 19 73 18 10 28 - - Regional & Country Programs Regional Departments Policy and compliance Procurement and Fiduciary Services Sector Operations Infrastructure, PS & Regional Integration Sub-Total Operations Knowledge Management & Research Sub-Total Operations and Office of Chief Economist 118 66 31 21 152 166 436 52 488 37 26 6 5 40 32 109 27 136 104 84 20 43 50 197 197 174 153 21 174 174 433 329 37 67 235 248 916 79 995 123 69 33 21 157 172 452 55 507 41 27 7 7 40 33 114 28 142 133 98 35 46 55 234 234 179 157 22 179 179 Financial Management Corporate Services Institutional Governance & Corporate Management Presidency Communication Unit Legal & Advisory Services Other Units Reporting to PRST & the Board* Sub-Total Complexes staffing 88 137 131 8 11 36 85 149 103 9 8 12 5 - 21 25 - 199 311 234 17 19 48 92 138 152 8 15 41 88 150 108 9 8 13 5 - 21 25 - 72 29 101 476 351 40 85 243 260 979 83 1,062 206 313 260 17 23 54 76 74 - - 150 88 78 - - 166 356 337 5 46 744 382 346 5 46 70 6 - 1 77 91 6 - 1 985 506 202 221 1,914 1,053 522 239 226 779 98 2,040 Others (Incl.YPP,SCOU...) Total * Office of the COO, SEGL, OAGL, CRMU, SECU, TRIB, OPEV, COEO, COBS, OMBU 1/2 ANNEX 9 Staff Allocation by Complex 2011 Projected Staffing HQ FO PL GS PL Boards of Governors Boards of Directors Operation Evaluation Sub-Total Special Appropriations FO GS 2012 Projected Staffing HQ FO PL GS PL Total 54 22 76 18 15 33 - - Regional & Country Programs Regional Departments Policy and compliance Procurement and Fiduciary Services Sector Operations Infrastructure, PS & Regional Integration Sub-Total Operations Knowledge Management & Research Sub-Total Operations and Office of Chief Economist 156 88 47 21 166 181 503 61 564 49 31 9 9 41 34 124 29 153 206 171 35 46 55 307 307 194 172 22 194 194 Financial Management Corporate Services Institutional Governance & Corporate Management Presidency Communication Unit Legal & Advisory Services 100 146 192 8 22 47 90 158 120 9 10 14 5 - 21 25 - 72 37 109 605 462 56 87 253 270 1,128 90 1,218 216 329 312 17 32 61 115 87 - - Sub-Total Complexes staffing 438 368 5 46 Others (Incl.YPP,SCOU...) 112 6 - 1 1,190 560 312 241 Other Units Reporting to PRST & the Board* Total FO GS Total 54 25 79 18 20 38 - - 191 109 61 21 175 184 550 67 617 59 37 11 11 42 35 136 30 166 285 250 35 46 55 386 386 212 190 22 212 212 107 154 235 8 33 53 92 166 133 9 12 15 5 - 21 25 - 72 45 117 747 586 72 89 263 274 1,284 97 1,381 225 345 368 17 45 68 202 141 97 - - 238 857 119 2,303 496 391 5 46 133 6 - 1 1,325 601 391 259 938 140 2,576 * Office of the COO, SEGL, OAGL, CRMU, SECU, TRIB, OPEV, COEO, COBS, OMBU 2/2 ANNEX 10 2010-2012 Budget Proposals by Category of Expenses (in UA Million) Major Components Direct Operating Expenses Staff Related Cost of Which 2009. Adjusted Budget 2010 Budget Increase Over 2009 Increase % Contribution to the Increase 2011 Budget Increase Over 2010 Increase % Contribution to the Increase 2012 Budget Increase Over 2011 Increase % Contribution to the Increase (a) (b ) (c=b-a) (d=c/a) (e=c/∑a) (f ) (g=f-b) (h=g/b) (i=g/∑b) (j ) (k=j-f) (l=k/g) (m=k/∑f) 196.95 204.20 7.26 3.68% 2.87% 220.26 16.06 7.87% 6.08% 224.93 4.66 2.12% 1.66% 5.93% 179.75 12.62 7.55% 4.78% 180.06 0.31 0.17% 0.11% 107.29 7.96 8.02% 107.47 0.18 0.17% 72.47 4.65 6.86% 72.59 0.13 0.17% 40.51 3.45 9.30% 44.87 4.36 10.75% 152.12 167.14 15.02 9.87% Salaries 87.83 99.32 11.50 13.09% Benefits 64.29 67.81 3.52 5.47% Workload 44.83 37.07 (7.76) -17.31% 21.35 14.55 (6.81) -31.87% 14.26 (0.22) -1.51% 19.62 5.36 37.61% Short Term Staff 1.31 0.74 (0.57) -43.57% 1.20 0.46 62.63% 1.20 (0.01) -0.73% Business Travel 20.92 20.36 (0.55) -2.64% 23.53 3.10 15.16% 22.28 (1.25) -5.31% 1.24 1.41 0.17 13.56% 1.52 0.10 7.42% 1.77 0.25 16.58% 44.80 45.87 1.07 2.39% 46.42 0.56 1.21% 53.95 7.53 16.21% Human Resource Management 16.87 15.87 (1.00) -5.90% 14.58 (1.29) -8.12% 18.98 4.39 30.13% Facility Management 17.26 19.11 1.84 10.68% 20.47 1.36 7.14% 23.49 3.02 14.73% IT & Treasury Information System Mgt. 7.32 7.71 0.38 5.22% 8.08 0.37 4.79% 8.17 0.10 1.23% Other Overhead (Publishing, Reproduction, etc) 3.34 3.18 (0.16) -4.85% 3.29 0.11 3.46% 3.31 0.02 0.50% 11.33 13.94 2.60 22.96% 13.88 -0.06 -0.44% 14.80 0.93 6.67% Meeting Bank Business 5.00 6.70 1.70 33.95% 6.35 (0.35) -5.19% 6.80 0.45 7.09% Audit, Legal & Advisory Service Fees 1.28 1.21 (0.07) -5.56% 1.19 (0.02) -1.94% 1.22 0.03 2.86% Indirect Borrowing Expenses & Hedging Premium 1.01 1.02 0.01 0.99% 0.98 (0.03) -3.19% 0.98 0.00 0.06% RMC Training & Other Institutional Expenses 4.04 5.01 0.97 23.90% 5.35 0.34 6.83% 5.79 0.44 8.24% 253.08 264.00 10.93 4.32% 280.56 16.56 6.27% 293.68 13.11 4.67% Consultants Other Direct Expenses Support Cost Other Institutional General Expenses TOTAL BUDGET -3.07% 0.42% 1.03% 4.32% 1.31% 0.21% -0.02% 6.27% 1.55% 2.68% 0.33% 4.67% 1/1 ANNEX 11 2010 – 2012 Budget Proposals by Complex (in UA Million) 2009 Adjusted Budget Staff Costs Workload Overhead Total Staff Costs Workload 2010 Proposed Budget Increase in Overhead Total amount Increase % Boards of Governors Boards of Directors Operation Evaluation Staff Retirement Plan Sub-Total Special Appropriations 9.95 1.82 17.65 29.41 1.37 1.69 3.06 3.54 0.86 0.57 4.98 3.54 12.18 4.08 17.65 37.45 10.57 2.36 19.76 32.69 1.35 1.16 2.50 5.20 0.82 0.56 6.57 5.20 12.74 4.07 19.76 41.77 1.65 0.55 (0.00) 2.11 4.32 47% 5% 0% 12% 12% Regional & Country Programs Regional Departments Policy and compliance Procurement and Fiduciary Services Sector Operations Infrastructure, PS & Regional Integration Sub-Total Operations Knowledge Management & Research Sub-Total Operations and Office of Chief Economist 30.18 22.66 3.38 4.14 18.06 21.33 69.56 6.26 75.82 7.35 5.79 1.08 0.47 9.59 9.40 26.33 2.10 28.43 13.43 11.38 0.81 1.24 4.66 4.36 22.45 5.01 27.46 50.95 39.83 5.27 5.85 32.31 35.08 118.34 13.38 131.72 31.55 22.61 3.93 5.00 20.37 22.79 74.70 6.84 81.54 6.19 4.69 1.06 0.44 7.75 7.85 21.79 1.82 23.62 13.75 11.44 0.79 1.52 4.51 4.67 22.92 5.04 27.97 51.49 38.74 5.78 6.97 32.63 35.31 119.42 13.70 133.13 0.54 (1.09) 0.51 1.12 0.32 0.23 1.08 0.33 1.41 1% -3% 10% 19% 1% 1% 1% 2% 1% Financial Management Corporate Services Institutional Governance & Corporate Management Presidency Legal & Advisory Services Communication Unit 12.23 19.44 16.73 1.85 3.87 1.20 9.82 48.39 1.54 3.63 5.75 1.01 1.59 0.83 2.32 10.92 5.77 5.29 5.40 0.50 1.44 0.36 3.10 16.46 19.54 28.36 27.87 3.36 6.90 2.38 15.23 75.77 13.28 20.14 20.27 2.10 4.79 1.71 11.68 53.70 1.30 3.54 3.88 0.64 0.79 0.73 1.73 8.73 5.31 4.88 5.61 0.46 1.38 0.69 3.09 15.80 19.89 28.57 29.77 3.19 6.96 3.13 16.49 78.23 0.35 0.21 1.90 (0.17) 0.06 0.74 1.26 2.46 2% 1% 7% -5% 1% 31% 8% 3% 6.35 - 0.45 - 1.34 - 8.14 - 8.34 - 0.00 - 2.55 - 10.89 - 2.75 - 34% - 159.99 42.85 50.24 253.08 176.27 34.85 52.89 264.01 10.93 4% Other Units Reporting to PRST & the Board* Sub-Total Complexes Budget Institutional Cost (Incl. YPP, SCOU, Study Leaves,...) Separation Package Total Reference Budget * Office of the COO, SEGL, OAGL, CRMU, SECU, TRIB, OPEV, COEO, COBS, OMBU 1/3 ANNEX 11 2010 – 2012 Budget Proposals by Complex (in UA Million) 2010 Proposed Budget Staff Costs Workload Overhead 2011 Proposed Budget Total Staff Costs Workload Overhead Total Increase in amount Increase % Boards of Governors Boards of Directors Operation Evaluation Staff Retirement Plan Sub-Total Special Appropriations 10.57 2.36 19.76 32.69 1.35 1.09 2.43 5.20 0.82 0.56 6.57 5.20 12.74 4.00 19.76 41.70 9.78 2.52 20.99 33.30 1.35 2.20 3.55 4.61 0.76 0.61 5.98 4.61 11.89 5.33 20.99 42.83 (0.59) (0.84) 1.33 1.23 1.13 -11% -7% 33% 6% 3% Regional & Country Programs Regional Departments Policy and compliance Procurement and Fiduciary Services Sector Operations Infrastructure, PS & Regional Integration Sub-Total Operations Knowledge Management & Research Sub-Total Operations and Office of Chief Economist 31.55 22.61 3.93 5.00 20.37 22.79 74.70 6.84 81.54 6.19 4.69 1.06 0.44 8.27 7.40 21.86 1.82 23.69 13.75 11.44 0.79 1.52 4.51 4.67 22.92 5.04 27.97 51.49 38.74 5.78 6.97 33.15 34.86 119.49 13.70 133.20 36.18 24.89 5.07 6.22 20.57 22.81 79.56 7.08 86.64 7.27 5.43 1.34 0.51 6.64 9.32 23.23 2.09 25.32 15.38 12.37 1.05 1.96 4.17 4.49 24.04 5.36 29.40 58.83 42.69 7.46 8.68 31.38 36.62 126.83 14.53 141.36 7.34 3.95 1.68 1.71 (1.76) 1.76 7.34 0.82 8.16 14% 10% 29% 25% -5% 5% 6% 6% 6% Financial Management Corporate Services Institutional Governance & Corporate Management Presidency Legal & Advisory Services Communication Unit Other Units Reporting to PRST & the Board* Sub-Total Complexes Budget 13.28 20.14 20.27 2.10 4.79 1.71 11.68 53.70 1.30 3.54 3.88 0.64 0.79 0.73 1.73 8.73 5.31 4.88 5.61 0.46 1.38 0.69 3.09 15.80 19.89 28.57 29.77 3.19 6.96 3.13 16.49 78.23 13.48 20.74 21.98 2.07 4.83 2.02 13.06 56.21 1.65 2.26 4.76 0.70 1.35 0.47 2.24 8.66 5.17 4.90 6.11 0.44 1.32 0.96 3.39 16.17 20.30 27.90 32.85 3.21 7.50 3.46 18.69 81.05 0.41 (0.67) 3.08 0.02 0.54 0.33 2.19 2.82 2% -2% 10% 1% 8% 11% 13% 4% 8.34 - 0.00 - 2.55 - 10.89 - 12.94 - 0.05 - 2.34 - 15.33 - 4.44 - 41% - 176.27 34.85 52.89 264.01 189.09 37.58 53.89 280.56 16.55 6% Institutional Cost (Incl. YPP, SCOU, Study Leaves,...) Separation Package Total Reference Budget * Office of the COO, SEGL, OAGL, CRMU, SECU, TRIB, OPEV, COEO, COBS, OMBU 2/3 ANNEX 11 2010 – 2012 Budget Proposals by Complex (in UA Million) 2011 Proposed Budget Staff Costs Workload Overhead 2012 Proposed Budget Total Staff Costs Workload Overhead Total Increase in amount Increase % Boards of Governors Boards of Directors Operation Evaluation Staff Retirement Plan Sub-Total Special Appropriations 9.78 2.52 20.99 33.30 1.35 2.20 3.55 4.61 0.76 0.61 5.98 4.61 11.89 5.33 20.99 42.83 9.88 2.54 21.03 33.45 1.35 2.86 4.21 4.97 0.83 0.75 6.55 4.97 12.06 6.15 21.03 44.21 0.36 0.17 0.81 0.04 1.38 8% 1% 15% 0% 3% Regional & Country Programs Regional Departments Policy and compliance Procurement and Fiduciary Services Sector Operations Infrastructure, PS & Regional Integration Sub-Total Operations Knowledge Management & Research Sub-Total Operations and Office of Chief Economist 36.18 24.89 5.07 6.22 20.57 22.81 79.56 7.08 86.64 7.27 5.43 1.34 0.51 6.64 9.32 23.23 2.09 25.32 15.38 12.37 1.05 1.96 4.17 4.49 24.04 5.36 29.40 58.83 42.69 7.46 8.68 31.38 36.62 126.83 14.53 141.36 37.51 25.78 5.09 6.63 20.70 22.30 80.51 7.12 87.64 7.80 5.74 1.99 0.07 8.66 8.19 24.65 2.50 27.15 17.58 13.78 1.25 2.54 4.82 4.97 27.37 5.85 33.22 62.89 45.30 8.34 9.25 34.17 35.47 132.53 15.47 148.00 4.05 2.61 0.88 0.57 2.79 (1.15) 5.70 0.95 6.64 7% 6% 12% 7% 9% -3% 4% 7% 5% Financial Management Corporate Services Institutional Governance & Corporate Management Presidency Legal & Advisory Services Communication Unit Other Units Reporting to PRST & the Board* Sub-Total Complexes Budget 13.48 20.74 21.98 2.07 4.83 2.02 13.06 56.21 1.65 2.26 4.76 0.70 1.35 0.47 2.24 8.66 5.17 4.90 6.11 0.44 1.32 0.96 3.39 16.17 20.30 27.90 32.85 3.21 7.50 3.46 18.69 81.05 13.47 20.89 22.49 2.08 4.87 2.41 13.13 56.85 1.94 2.58 5.59 0.80 1.58 0.57 2.64 10.11 5.74 5.69 7.20 0.50 1.52 1.20 3.99 18.63 21.15 29.16 35.28 3.38 7.96 4.18 19.76 85.59 0.85 1.26 2.43 0.17 0.46 0.72 1.07 4.54 4% 5% 7% 5% 6% 21% 6% 6% Institutional Cost (Incl. YPP, SCOU, Study Leaves,...) Separation Package 12.94 - 0.05 - 2.34 - 15.33 - 13.22 - 0.05 - 2.61 - 15.87 - 0.54 - 4% - 189.09 37.58 53.89 280.56 191.16 41.51 61.00 293.68 13.11 5% Total Reference Budget * Office of the COO, SEGL, OAGL, CRMU, SECU, TRIB, OPEV, COEO, COBS, OMBU 3/3 ANNEX 12 Proposed Capital Budget 2010-2012 Bank Proposed Capital Investment Program (UA Thousand) 2010 TRA HQ FO 2011 IT Total 2010 TRA HQ FO 2012 IT Total 2011 TRA HQ FO Total IT Total 2012 TRA HQ FO IT Proposed (20102012) IO Section 16 OFFICE EQUIPMENT 100 - - 100 150 - - 150 100 - - 100 350 - - 350 100921 CGSP1-TRA Office Equipment 100 - - 100 150 - - 150 100 - - 100 350 - - 350 - - - 100916 Section 17 OFFICE FURNITURE 400 - - 400 300 - - 300 250 - - 250 950 - - 950 CGSP1-TRA Office Furniture 400 - - 400 300 - - 300 250 - - 250 950 - - 950 - - - Section 19 IT & COMMUNICATIONS EQUIPMENT - - - 3,701 3,701 - - - 8,909 8,909 - - - 5,394 5,394 - - - 18,004 100945 P8 FILENET Plateform DARMS Migration - - - 50 50 - - - - - - - - - - - - - 50 18,004 50 100946 SERVER CONSOLIDATION PROJECT - - - - - - - - 378 378 - - - 100 100 - - - 478 478 100947 ADB CLIENT DESKTOP AUTOMATIC BACKUP - - - 175 175 - - - 50 50 - - - - - - - - 225 225 100942 ADB CORPORATE CONFERENCE SERVICES - - - - - - - - 291 291 - - - 111 111 - - - 402 402 100944 DEPLOYMENT OF IT EQUIPMENT - - - - - - - - 800 800 - - - 800 800 - - - 1,600 1,600 100934 Security Enhancement - - - - - - - - 64 64 - - - 64 64 - - - 129 129 100939 Telecom (PABX & VSAT) Enhancement - - - 780 780 - - - 400 400 - - - 450 450 - - - 1,630 1,630 100940 Special Depts Hardware & Software acq - - - 161 161 - - - 129 129 - - - 150 150 - - - 440 440 100935 KNOWLEDGE Mangt &Datawarehouse - - - - - - - - 225 225 - - - 258 258 - - - 483 483 100931 INTERNET/INTRANET - - - - - - - - 161 161 - - - 225 225 - - - 387 387 100932 CIMM0 - Enhancmnt of E-Recruitment & NPO - - - 137 137 - - - 100 100 - - - - - - - - 237 237 100933 GENERAL BANK SOFTWARE - - - - - - - - 64 64 - - - 64 64 - - - 129 129 100941 BROADBAND INTEGRATED TELECOMMUNICATIONS - - - - - - - - 900 900 - - - 400 400 - - - 1,300 1,300 100954 INTEX / ADCO - - - 322 322 - - - - - - - - - - - - - 322 322 100951 Project Risk & Rating Assessment - - - - - - - - 150 150 - - - 150 150 - - - 300 300 100928 SAP FONCTIONNAL UPGRADE - - - - - - - - 500 500 - - - 934 934 - - - 1,434 1,434 100929 SURVEILLANCE &VERIFICATION SOFTWARE-OAGL - - - - - - - - 54 54 - - - - - - - - 54 54 100938 NETWORK CABLING AND MONITORING - - - - - - - - 500 500 - - - 546 546 - - - 1,046 1,046 100930 ENHANCEMENT TO THE DDP System for ESTA - - - - - - - - 91 91 - - - 91 91 - - - 182 182 1N0023 Server for grid computing - - - 26 26 - - - - - - - - - - - - - 26 26 1N0029 ABD IT Enterprise Architecture five prio - - - - - - - - 2,000 2,000 - - - - - - - - 2,000 2,000 1N0030 IMPLEMENTATION OF OUTSOURCING - - - 250 250 - - - 250 250 - - - 250 250 - - - 750 750 1N0026 INFRASTRUCTURE IMPROVEMENTS - - - 800 800 - - - 1,000 1,000 - - - 300 300 - - - 2,100 2,100 1N0022 STORAGE AREA NETWORKING - - - 1,000 1,000 - - - 800 800 - - - 500 500 - - - 2,300 2,300 1/2 2010 TRA Section 20 BUILDINGS & CIVIL WORKS 2011 IT Total 2010 TRA HQ FO 500 15,200 8,050 23,750 - 15,000 - 15,000 2012 IT Total 2011 TRA HQ FO 400 16,500 7,900 24,800 - 15,000 - 15,000 Total IT Total 2012 TRA HQ FO 300 8,200 4,700 13,200 - 6,000 - 6,000 IT Proposed (20102012) HQ FO 1,200 39,900 20,650 61,750 - 36,000 - 36,000 1N0020 HQ - Renovation 100920 CGSP1-TRA Heating and AC systems 200 - - 200 100 - - 100 - - - - 300 - - 300 100918 CGSP1-TRA Office Building Outfitting 200 - - 200 200 - - 200 200 - - 200 600 - - 600 100913 CGSP1-TRA Electrical Works and Cabling 100 - - 100 100 - - 100 100 - - 100 300 - - 300 100925 Construction of NGFO Office - - 3,000 3,000 - - - - - - - - - 3,000 3,000 1N0032 Construction of AOFO Office - - 5,050 5,050 - - - - - - - 1N0018 FO-Buidling Acquis./construction-Phase2 - - - - - - 7,900 7,900 - - 4,700 4,700 1N0028 HQ-Rehabilitation Villas and Cité BAD - 200 - 200 - 1,500 - 1,500 - 2,200 - 2,200 Section 23 OTHER PROJECTS - - 5,005 5,050 - - 12,600 12,600 3,900 - 3,900 - - - - 190 - 635 825 130 - 930 1,060 50 - 300 350 370 - 1,865 2,235 100958 SECU0-Security Warden/Cores System 90 - - 90 80 - - 80 50 - - 50 220 - - 220 100959 SECU0-FO Security equipment Batch 5 - - 150 150 - - 80 80 - - 150 150 - - 380 380 100917 CGSP1-TRA Building Fire Security 100 - - 100 50 - - 50 - - - - 150 - - 150 100912 CGSP1-FO Vehicles - - 100 100 - - 600 600 - - - - - - 700 700 1N0024 SECU0 ATR Security Equipment - - 185 185 - - 100 100 - - 50 50 - - 335 335 1N0025 Information Security Protection Program - - 200 200 - - 150 150 - - 100 100 - - 450 450 700 8,200 5,000 19,294 2,870 39,900 22,515 1,190 15,200 8,685 3,701 28,776 980 16,500 8,830 8,909 35,219 5,394 18,004 83,289 2/2 ANNEX 13: OPERATIONAL AND NET INCOME ESTIMATES Annex 13(a): Assumption for Bank Group’s Net Income Estimates The rate of return on ADB and ADF investments for each year is the weighted average return on the held to maturity investment portfolio and the liquid investment portfolio. The projected investment income for the Bank Group reflects future prospects based on current volatile market conditions. For 2009, valuation gains were estimated taking into account the September year to date valuation gains on the trading portfolio which were estimated to be maintained until the end of 2009. Regarding the HTM portfolio, impairment estimate of approximately UA 23 million was taken into account to reflect the credit deterioration of some securities. This estimated impairment is subject to continuous review to reflect ongoing changes in market conditions. Fair value gains or losses on borrowings and associated derivatives were not taken into account in these projections. The financial projections for ADF incorporate the estimated foregone income effect of the MDRI debt cancellation initiative, but assume continued special purpose reporting. The share of grants in ADF operations is assumed to remain at 30% through the period. Future loan disbursements will be based on the historical disbursement profiles. All borrowers in default status as at 30 September 2009 are assumed to remain in that status throughout the period 2009-2012. Provisioning for loan losses for ADB and NTF shall be calculated according to the revised IAS 39 implemented as at January 1, 2005. ADF presents special purpose financial statements and is not subject to provisioning. 1/4 Annex 13(b): Projected Bank Group Lending (UA millions) 2010 2011 2012 ADB Public Sector Private Sector Total 2 645 1 500 4 145 1 780 1 110 2 890 2 016 1 276 3 292 ADF 1 441 2 450 2 750 NTF 20 20 20 Annex 13(c): Bank Group Cost Sharing Formula 2009 2010 2011 2012 ADB ADF 26.89 71.60 27.03 71.48 26.97 71.54 26.97 71.55 NTF 1.51 1.49 1.49 1.48 Annex 13(d): Allocation of Bank Group Administrative Expenses for 2010 (UA million) Total Budget BUDGET PART Total Bank Group Administrative Expenses Budget Less Direct Administrative Expenses ADB ADF NTF(*) 264.00 6.13 257.87 69.70 184.33 3.84 4.83 1.31 3.46 0.06 262.70 71.01 187.79 3.90 Direct Administrative Expenses 6.13 5.98 0.15 0.00 Non Shareable Depreciation (ADB only) 0.37 0.37 - - 269.20 77.36 187.94 3.90 Sub-Total Shared Depreciation Total Shareable Expenses Plus Direct Expenses: Total Administrative Expenses (*) In the event that the share of actual Bank Group Administrative expenditure attributable to NTF exceeds 20% of NTF gross income, the excess over such percentage is borne by ADB. 2/4 Annex 13 (e) Projected Net Operational & Net Income 2009-2012 (UA Million) 2009 ADB ADF 2010 NTF Total ADB ADF 2011 NTF Total ADB ADF 2012 NTF Total Loan Income 325.1 67.1 0.9 393.1 363.3 85.7 1.2 450.2 391.8 93.6 1.6 487 Interest Inc. On Investments 1.1 264.2 182.2 71.1 1.1 254.4 - - - - - - 194.3 142.4 2 338.7 186.4 76.7 Net Loss/Gain from Investment & Macro Hedge Swap 29.8 4.4 - 34.2 - - - Impairment on HTM Portfolio -21.5 -10 - -31.5 - - 12 - - Other Income Total Income 539.7 203.9 Financial Charges Provision for Loan Losses 0 - 0.5 - 0.5 Operational Income 296.1 203.9 Total Admin. Expenditures Net Income 9 243.6 Depreciation 2.9 234.6 Total Operational Expenses Share of Administrative Expenses 2.4 12 - 12 746.5 561.7 162.4 - 12 - 12 726.4 586.0 164.7 2.7 - - 12 ADF 404.9 108.5 191 70 Total 2.1 515.5 1 262 - - - - - - - 12 3.1 789.5 0 331.6 12 753.4 607.9 178.5 NTF - - 262.2 292.2 292.2 331.6 11.1 - 0.5 11.6 10.4 - 0.5 10.9 - 0.5 9.7 244.1 273.3 - 0.5 273.8 302.6 - 0.5 303.1 340.8 - 0.5 341.3 234.6 262.2 9.5 2.3 - ADB 502.4 288.4 162.4 0 1.8 452.6 283.4 164.7 0 2.2 9.2 450.3 267.1 178.5 2.6 448.2 72.1 180.6 0.6 253.3 75.6 187.9 0.5 264 80.9 199 0.6 280.5 84.5 208.5 0.7 293.7 5.2 - 5.2 5.2 - 5.2 5.2 - 5.2 5.2 - 5.2 77.3 180.6 0.6 258.5 80.8 187.9 0.5 269.2 86.1 199 0.6 285.7 89.7 208.5 0.7 298.9 218.8 23.3 1.8 -25.5 1.3 -34.3 1.6 -30 1.9 149.3 243.9 207.6 183.4 197.3 164.6 177.4 3/4 4/4 ANNEX 14 Trust Fund Utilization Annex 14(a): Approvals by Donors 01 January - 4 November 2009 N° 1 2 3 4 5 6 7 8 9 10 11 12 13 14 DONOR Denmark Sweden Nigeria Canada China Spain India France United Kingdom Korea Portugal Japan Finland Switzerland TOTAL AMOUNT (UA) 95,213 137,321 286,485 666,966 246,453 211,373 485,429 796,503 1,014,545 1,094,010 669,833 1,237,728 1,386,246 118,323 8,446,427 PERCENTAGE 1.13% 1.63% 3.39% 7.90% 2.92% 2.50% 5.75% 9.43% 12.01% 12.95% 7.93% 14.65% 16.41% 1.40% 100% NUMBER OF REQUESTS 1 2 4 8 3 1 3 5 5 7 6 5 6 1 57 Annex 14 (b): Commitments by Organizational Units 01 January - 4 November 2009 N° 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 User Department EADI EDRE ERCU ESTA ICT4D OINF OPSM OREA ORCE ORPC ORPF ORQR ORRU ORSB OSAN OSGE OSHD OSUS OWAS TBD ORVP TOTAL Approved Amount (UA) 705,199 700,707 149,866 10,520 401,319 1,388,676 433,787 520,147 651,992 134,554 142,521 290,673 224,447 136,149 874,517 534,335 64,158 742,210 118,323 190,400 31,927 8,446,427 Percentage 8.35% 8.30% 1.77% 0.12% 4.75% 16.44% 5.14% 6.16% 7.72% 1.59% 1.69% 3.44% 2.66% 1.61% 10.35% 6.33% 0.76% 8.79% 1.40% 2.25% 0.38% 100% Number of Approved Requests 5 5 1 1 2 6 4 2 3 2 2 3 2 1 4 5 1 4 1 2 1 57 1/2 Annex 14(c ): Approvals by Thematic Funds (as of November 04th, 2009) DONOR N° 1 AWF (African Water facility) Fund 2 3 AMOUNT (UA) Percentage Number of Requests 11,168 030 45.89% 8 NEPAD IPPF (Infrastructure Project Preparation Fund) 2,948,301 12.12% 9 FAPA (Fund For African Private Sector Assistance) 3,619,795 14.87% 7 4 RWSSI (Rural water Supply and Sanitation Initiative) 6,358,595 26.13% 1 5 MDWPP (Multidonor Water Partnership Programme) 240,044 0.99% 1 24,334,765 100% 26 TOTAL Annex 14(d): Breakdown of the Above Approvals by Coordinating Technical Department (As of November 4th, 2009) Coordinating Department N° AMOUNT (UA) Percentage Number of Requests 1 OWAS 17,766,669 73.01% 10 2 ONRI 2,948,301 12.12% 9 3 OPSM 3,619,795 14.87% 7 24,334,765 100% 26 TOTAL 2/2

THE 2010‐2012 PROGRAMME AND BUDGET

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