Evaluation

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Country Assistance Program Evaluation for Nepal
2004

This evaluation was designed to evaluate the success of lending and nonlending programs in contributing to the socioeconomic development of Nepal, as well as the success of projects and technical assistance (TA) in meeting country operational strategy (COS) objectives.

In evaluating the country assistance program as a whole during the study period, a series of analyses was undertaken comprising of

• the overall appropriateness of the three COSs, in view of prevailing conditions in Nepal, government development plans, and ADB strategic priorities;
• how well the COSs were reflected in annual lending programs;
• the consistency of the program reflected in approved loans with the COSs;
• the effectiveness of the approved lending program in implementing the COSs; and
• the nonlending program for capacity building and institutional strengthening.

  Lessons

• a CSP can only be successful when the strategy and country program are consistent;
• a clear and well-defined country program can be developed within the Nepalese context, according to experience over the study period;
• the analysis indicates that projects that actively consider the crosscutting priorities of ADB and the Government in their design have a greater chance of success than projects that do not;
• a sound institutional base is generally required for effective projects;
• a sector approach and long-term assistance are needed for institution building;
• a project's success is most likely if the project design is based on a proven development model;
• the executing agency, the Government, and ADB must show sound governance and commitment to ensure effectiveness of project implementation and ultimate project success for difficult and complex projects;
• the conditions for disbursement in either project or program loans should be reasonable and attainable to avoid stalled implementation; and
• a range of benefits can be generated from large-scale projects, concomitant with the size of investment, but these projects can also generate challenges of a similar size.

  Implications for Future ADB Strategies and Programs in Nepal

• Need for a Well-Focused Program: The CSP should be sharply focused and be easily understood and acted upon by ADB.
  
  
• Need for Flexibility: Notwithstanding the need for a well-defined sharply focused strategy, the situation in Nepal calls for a large degree of flexibility in the strategy.
  
  
• Sector Focus: The next strategy is strongly recommended to be clearly focused on sectors and investments that are already proven to be successful and that will, additionally, contribute directly to the improvement of incomes of socially and regionally disadvantaged groups.
  
  
• Modality Focus: The analysis undertaken during the evaluation shows a higher rate of success than average for sector loans and a lower rate of success than average for program and project loans that contain a large number of conditions. On this basis, it is recommended that sector loans and sector development programs should be preferable to simple investment loans and program loans, respectively.
  
  
• Large-Scale Projects: It will be important to ensure that possible large-scale projects are in conformity with the future strategy.

• Ownership of and Direction for the Future Country Strategy and Program. The Government must take ownership of the CSP and the CSP preparation process.
  
  
• Clear Presentation of Priorities, Policies, Issues, and Procedures. During consultations on the next CSP, government representatives should ensure that their concerns, as expressed during the Participatory Stakeholders' Workshop, are raised and communicated to ADB's CSP preparation team in a constructive manner.
  
  
• Enhanced Monitoring of Ongoing and Completed Projects. Consideration should be given to establishing a small monitoring unit in one of the key ministries, to monitor the implementation and operation of development partner-financed projects.
  
  
• Operation and Maintenance Financing. Sustainability should be an issue and consideration on the part of the Government from the time that a project is identified and should continue to be such after a project has been physically completed.