Portfolio Performance

The performance of ADB sovereign lending and grant operations is assessed through project/program completion reports (PCRs) prepared by the regional departments, and through PCR validation reports (PVRs) and project/program performance evaluation reports (PPERs) prepared by the Independent Evaluation Department (IED).

PCRs are prepared for all sovereign projects and programs 1–2 years after their completion, but have contained performance ratings only since 1995. PVRs, which IED initiated in 2007, are prepared after PCR circulation. PPERs are typically prepared 3 years after project/program completion. A four-category rating system—highly successful, successful, less than successful (previously partly successful), and unsuccessful—was used to assess performance since 2000. The overall project rating is derived on the basis of four evaluation criteria: relevance, effectiveness, efficiency, and sustainability.

Projects and programs are considered “successful” when their rating is highly successful, successful, or generally successful. Projects and programs rated unsuccessful are failures, while those rated less than successful (formerly partly successful) achieve some development results, but fall short of their objectives.

Trends in Project Ratings by Year of Approval and Source of Funding

The success rates of Asian Development Fund (ADF)-funded projects approved before the 1990s tended to be considerably lower than those funded by ordinary capital resources (OCR), and average ADF ratings were much more volatile. In the 2000s, however, the OCR and ADF ratings converged, and both improved.

Project Performance by Sector

Sector performance in sovereign operations seems to have mostly improved over the years. Improvements were significant in the agriculture and natural resources, health and social protection, and public sector management during 2001–2010 as compared with 1991–2000. None of these sectors are in the core operational areas in Strategy 2020. On the other hand, education and water supply and other municipal services, areas designated as core, registered a significant decline over the two periods, which is of concern.

Project Success by Country

Performance by country varies significantly, though a common trend is evident—that results in most countries were considerably better in the 2000s than in the previous decades. Countries with strong institutional capacity performed well. Other country factors, such as economic performance, development priorities, and quality of governance also contributed to project success.