Regions and Countries

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p. 3 of 4 BACK | NEXT I. Current Development Trends and Issues II. Implementation of the Country Strategy and Program III. Portfolio Management Issues IV. Country Performance and Assistance Levels

Country Strategy and Program Update 2005–2006: Maldives

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III. Portfolio Management Issues

A. Portfolio Performance

23. As of 31 December 2003, ADB’s total public sector lending to the Maldives comprised $83.7 million for 13 loans and $16.2 million for 48 TAs. ADB current portfolio in the country comprises 7 active loans with a total value of $53.6 million: Third Power System, Postsecondary Education Development, Regional Development, Information Technology Development, Outer Islands Electrification, Strengthening Public Accounting System, and Employment Skills Training. The loan for the Strengthening Public Accounting System Project, signed in September 2002, has yet to be declared effective because one condition–the submission of three draft bills to the People’s Majlis—has to be met. Overall performance on loan projects is generally satisfactory.

24. A country portfolio review mission fielded in early December 2003 reviewed all ongoing loan and TA activities, identified generic as well as project-specific problems, and discussed remedial measures to improve portfolio performance. In terms of implementation progress, 5 of the 7 ongoing loans were rated satisfactory, and one loan as unsatisfactory.⁵ As of 31 December 2003, 14.3% of the portfolio was considered at risk. Contract awards and loan disbursement ratios in 2003 (5.68% and 17.49%, respectively) were below ADB’s averages (17.3% and 20.2%, respectively). This low disbursement rate is a result of the fact that (i) two loans approved in 2001 experienced long delays in initial implementation (nearly 1 year), and (ii) one loan approved in 2002 has not yet been declared effective.

B. Performance Monitoring and Evaluation

25. The portfolio’s risk ratio has improved since 2002, and overall performance is generally satisfactory. Two of the seven ongoing projects have been rated highly satisfactory in terms of development objectives, and the others are satisfactory. Six projects have been satisfactory and one unsatisfactory in terms of implementation progress. The unsatisfactory rating is due to the non-effectiveness of Loan 1915 one year after its approval (para. 14). In comparison with 2002’s indicators of portfolio performance, the number of projects rated highly satisfactory and satisfactory increased in 2003. There was also a reduction in the number of potential problem projects or projects at risk. Slight improvement was also observed in terms of the establishment of project management units (PMUs) and project implementation units (PIUs), the fielding of consultants, and in compliance with audited financial statements (AFS).

26. Project implementation is being monitored through project review and country portfolio review missions (CPRMs) from ADB headquarters. On the Government side, the Ministry of Finance and Treasury, as the executing agency of all ADB-assisted projects, is responsible for ensuring timely project implementation. Projects with the focus of poverty reduction in the atolls usually require a greater effort in terms of monitoring. One such project—also due to its complexity—is being monitored twice annually. Weak institutional capacity of implementing agencies has also been a barrier to smooth project preparation and implementation. An action plan designed to improve project performance was designed during the CPRM in December 2003 and agreed upon with the Government.

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