Catalog

	Table of Contents
p. 15 of 203 BACK | NEXT Foreword 1. Introduction to the Guidelines 2. User Instructions 2.1. Overview 2.2. ADB Lending and Technical Assistance 2.3. Applying these Guidelines 2.4. Project Types and General Treatments 2.5. Overview of Project Processing Steps 2.6. Step 1: Identification and Early Preparation 2.7. Step 2: Loan Preparation 2.8. Step 3: Project Examination 2.9. Step 4: Loan Negotiations 2.10. Step 5: Project Implementation 2.11. Step 6: Project Completion 3. Preparing and Appraising Investment Project 4. Financial Management of Executing Agencies 5. Reporting and Auditing 6. Financial Institutions 7. Knowledge Management

Financial Management and Analysis of Projects : 2. User Instructions

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2.5. Overview of Project Processing Steps

2.5.1. Once a project is identified by agreement between a government and ADB, it is processed and implemented. The various steps from project identification to completion comprise what is known as the project cycle. Further details and indicative timetables for the project cycle are available from www.adb.org/Projects/cycle.asp. The steps in a typical ADB-financed project include (i) project identification, (ii) fact-finding to establish project feasibility, (iii) appraisal to assess project soundness and viability, (iv) consideration and approval by ADB's Board of Directors, and (v) project implementation, within the guiding framework of ADB's loan administration procedures. Many ADB-financed projects are also subject to operations evaluation when completed.

2.5.2. The first step of project identification is generally undertaken during the preparation of the Country Strategy and Programs (CSPs). CSPs are usually prepared every 5 years for each DMC and are updated annually, in consultation with member governments.

2.5.3. In appraising a project, its technical, financial, economic, social, environmental, production, marketing, management aspects, and loan conditionalities are closely examined. This helps to pinpoint specific steps necessary to ensure its smooth and efficient implementation and operation. ADB loans are often channeled through (i) existing agencies, (ii) government departments, (iii) semigovernment and public enterprises, (iv) and to the private sector, often through national development banks.

2.5.4. Loan approval by ADB does not mean that the amount of the loan is immediately transferred to the borrower in a lump sum. The loan is disbursed to meet expenditures under the loan agreement, as and when they are incurred. Specific procedures are laid down in the loan documents and in ADB's Loan Disbursement Handbook.

2.5.5. Normally, the loan documents allow 90 days for the loan to become effective. The preparatory work for construction (including recruitment of consultants, preparation of tender documents and detailed designs, procurement of equipment, and selection of contractors for construction) may take from 12 to 18 months or longer. Usually, these activities cannot begin until the loan becomes effective. However, certain preliminary steps in the procurement of goods and selection of consultants may begin at an earlier stage to speed up project implementation. Implementation time generally ranges from 2 to 5 years and depends on the type and nature of the project. The progress of project implementation is assessed by ADB review missions, which visit the project about twice a year throughout the implementation period.

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