IFC in Ukraine: 1993–2006 an Independent Country Impact Review
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IEG 40132 IEG Independent Evaluation Group Public Disclosure Authorized IFC in Ukraine: 1993–2006 An Independent Country Impact Review IEG Independent Evaluation Group Public Disclosure Authorized IFC in Ukraine: 1993–2006IFC in Ukraine: Public Disclosure Authorized Independent Evaluation Group-IFC E-mail: [email protected] Telephone: 202-458-2299 Facsimile: 202-974-4302 Public Disclosure Authorized IFC THE WORLD BANK GROUP WORKING FOR A WORLD FREE OF POVERTY The World Bank Group consists of five institutions – the International Bank for Reconstruction and Development (IBRD); International Finance Corporation (IFC); the International Development Association (IDA); the Multilateral Investment Guarantee Agency (MIGA); and the International Center for the Settlement of Investment Disputes (ICSID). Its mission is to fight poverty for lasting results and to help people help themselves and their environment by providing resources, sharing knowledge, building capacity, and forging partnerships in the public and private sectors. THE INDEPENDENT EVALUATION GROUP ENHANCING DEVELOPMENT EFFECTIVENESS THROUGH EXCELLENCE AND INDEPENDENCE IN EVALUATION The Independent Evaluation Group (IEG) is an independent, three-part unit within the World Bank Group. IEG-IFC independently evaluates IFC’s investment projects and Advisory Services operations that support private sector development. IEG-World Bank is charged with evaluating the activities of the IBRD (The World Bank) and IDA, and IEG-MIGA evaluates the contributions of MIGA guarantee projects and services. IEG reports directly to World Bank Group’s Boards of Directors through the Director-General, Evaluation. The goals of evaluation are to learn from experience, to provide an objective basis for assessing the results of the World Bank Group’s work, and to provide accountability in achieving its objectives. IEG seeks to improve World Bank Group work by identifying and disseminating lessons learned from experience and by framing recommendations drawn from evaluation findings. 40132 IFC in Ukraine: 1993 – 2006 An Independent Country Impact Review http://www.ifc.org/ieg 2008 Washington D.C 2008 © International Finance Corporation (IFC) 2121 Pennsylvania Avenue NW Washington, D.C. 20433, USA Telephone: 202-473-1000 Internet: http://www.ifc.org All rights reserved This volume, except for the “IFC Management Response to IEG-IFC” and “Chairperson’s Summary” is a product of the Independent Evaluation Group (IEG) and the findings, interpretations, and conclusions expressed herein do not necessarily reflect the views of IFC Management, the Executive Directors of the World Bank Group, or the govern- ments they represent. This volume does not support any general inferences beyond the scope of the evaluation, in- cluding any inferences about IFC’s past, current, or prospective overall performance. 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ISBN: 978-1-60244-085-2 World Bank Infoshop Independent Evaluation Group – IFC Email: [email protected] Email: [email protected] Telephone: 202-458-4500 Telephone: 202-458-2200 Facsimile: 202-522-1500 Facsimile: 202-974-4302 CONTENTS Contents Abbreviations.........................................................................................................................................................i Acknowledgments...............................................................................................................................................iii Foreword ...............................................................................................................................................................v Executive Summary ...........................................................................................................................................vii Основні положення..........................................................................................................................................xi IFC Management Response to IEG-IFC.................................................................................................... xvii Chairperson’s Summary: Committee on Development Effectiveness .................................................. xxiii 1. Introduction ...................................................................................................................................................1 Study Objectives and Scope ...................................................................................................................................1 Study Methodology, Sources, and Limitations .......................................................................................................2 Report Organization.............................................................................................................................................3 2. IFC’s Strategy in Ukraine: Its Context, Content, and Relevance...........................................................5 Ukraine’s difficult and lengthy transition impaired the business environment, resulted in a deeper recession, and hindered foreign direct investment...........................................................................................................................5 IFC’s strategy concentrated on building a relatively new private sector and addressing business environment deficiencies.............................................................................................................................................................7 Recent business climate improvements imply a longer-term, more targeted IFC approach than before. ......................9 3. IFC’s Pursuit of Its Strategy in Ukraine...................................................................................................11 In line with strategy, IFC has had a substantial advisory services presence in Ukraine, but channeled a small portion of total official development assistance funding to the country.....................................................................11 Realizing higher volumes of investments has until recently been problematic, not least because of the leading presence of EBRD..............................................................................................................................................14 4. The Ratings, Success Drivers, and Outcomes of IFC Operations in Ukraine ..................................19 IFC’s advisory operations had mostly satisfactory performance ratings, with better results from larger and longer operations. ..........................................................................................................................................................19 IFC played a strong role in and contributed to sustainable outcomes and impacts of most of its programmatic advisory projects and some of its smaller advisory projects. ....................................................................................24 Performance of advisory projects could nonetheless be improved by applying lessons from completed and ongoing operations. ..........................................................................................................................................................25 To the extent they are evaluable, IFC investment operations perform relatively well. .............................................28 IFC adds value in investment operations centered on supporting emerging strong local players in the real sector......32 5. Recommendations.......................................................................................................................................35 Appendixes..........................................................................................................................................................39 Appendix A: IEG-IFC Methodology for Evaluating IFC Investment Operations ................................41 Appendix B: IEG-IFC Methodology for Evaluating IFC Advisory Operations.....................................47 IFC IN UKRAINE:1993 – 2006. AN INDEPENDENT COUNTRY IMPACT REVIEW Appendix C: List of IFC Investment Operations in Ukraine.....................................................................55 Appendix D: Evaluation Ratings for IFC Advisory