African Development Bank
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*The following content has been prepared by the Office of Liaison with the African Development Bank, located at our Embassy of Canada to Tunisia.
The African Development Bank (AfDB) is a multilateral development bank whose shareholders consist of 54 regional member countries in Africa, and 26 countries elsewhere in the world. The Bank is headquartered in Abidjan, Ivory Coast.
The AfDB's authorized capital as of December 31, 2013 was 66.99 billion UA (Units of Account), or approximately C$108 billion. Bank group operations at the end of December 2013, amounted to UA 4.39 billion, an increase of about 3 percent compared to 2012. During the year, the Bank explored a number of options to boost business development, including whether to amend the Bank?s credit policy to allow low-income Regional Member Countries (RMCs) direct access to the ADB sovereign window under well stipulated conditions; scaling up public-private partnerships and co-financing opportunities; and exploring new financing sources, including equity, pension funds and the emerging economies.
Most of the Bank's support is in the form of loans and grants for specific development projects and investment programs in the agriculture, energy, transport, water, sanitation, health, education and environment sectors. The AfDB also participates in the financing of private-sector projects in the region. Please visit our AfDB Fact Sheet.
Canadian firms have been most successful in providing consultancy services. This has included pre-investment studies, including feasibility and pre-feasibility studies; detailed design studies; environmental and social impact assessments; the control and supervision of the construction of works; and technical assistance.
The AfDB Group includes the African Development Bank (non-concessional) and the African Development Fund (concessional).
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- Country Strategies
- Project Cycle
- Procurement Process
- Private Sector Lending
- Trust Funds
- Business Approach
AfDB Country Strategy Papers (CSPs) contain a detailed analysis of a country's recent economic performance, growth prospects, resource requirements and medium-term development strategy, together with a review of the Bank's assistance strategy for the country and its operations there. CSPs generally cover three to four years, though some are updated more often if local conditions warrant it. Some recent CSPs are available on the AfDB website; others can be obtained from the Office of Liaison with International Financial Institutions (OLIFI) at the Canadian Embassy in Tunis.
Identification: Project identification usually begins with proposals from the borrowing country, requesting funds for a specific project that will help achieve the development objectives outlined in the country's development plans. The Bank also takes an active role in searching for potential projects, which must be in line with its assistance strategy as set out in the Country Strategy Paper.
Project identification and early planning are the responsibility of staff from the borrowing country, the AfDB and other donors. Possible projects are subject to various pre-investment studies by the Bank and other organisations, such as economic feasibility and preliminary engineering.
If the project is potentially interesting to the AfDB, at least one identification mission is undertaken to the country to discuss goals, assess potential problems and begin defining the required studies and preparatory work. Feasibility and detailed engineering studies often begin at this time.
Several donors are often competing for project participation at this stage, so the financing for consulting work can come from a variety of sources. These may include grants and loans, provided by the AfDB and other IFIs, for technical assistance or preparation. Other possible sources are bilateral grants such as consultant trust funds.
Identifying opportunities in AfDB projects is not a simple matter: different donors may be involved, consulting needs change over time and public information on projects is often lacking. Opportunities to provide services for larger assignments are usually advertised, but information on short-term consulting requirements can often be obtained only from AfDB or donor agency staff, or from government officials.
Preparation: Preparation begins when the Bank shows definite interest in financing a project, and involves collecting the information and data needed to evaluate it. This stage can take several years to complete and delays are frequent. Note that the lines between the identification and preparation stages are often blurred.
Project preparation is the primary responsibility of the borrower, but is usually done by Bank staff with the participation of government personnel. The major aspects of the project are prepared during this phase, including plans, feasibility studies and detailed engineering design work. Consultants (both individuals and firms) are frequently needed for these activities, with either the borrower or the Bank hiring them.
The AfDB Business Bulletin provides information on projects in which the Bank is interested; these are listed under "Projects in the pipeline," although there is a lag of several months between the time a project enters preparation and the time it appears in the Bulletin. Consultants interested in feasibility and other studies should therefore contact AfDB staff and executing agency personnel as early as possible, and not wait for a Bulletin announcement.
Note that the AfDB has recently launched a project preparation fund to help borrowing countries take a lead role in preparation activities, so the predominant role of the Bank in this area may diminish as the new approach takes effect.
Appraisal: Appraisal is the sole responsibility of the Bank. During this phase, project staff conduct in-depth reviews of the preparatory work, and assess the technical, developmental, environmental, financial and economic elements of the project. The Bank sometimes hires individual consultants to assist with the appraisal.
One key document that comes out of this stage is the Project Appraisal Report, which is a comprehensive description and analysis of the project, along with recommendations for either proceeding with it or rejecting it. The Project Appraisal Report and the actual loan proposal are then submitted to the AfDB Board of Directors for review and approval.
Implementation: Once the AfDB Board of Directors has approved the project loan, and has negotiated its terms and conditions with the borrower, project implementation begins. The executing agency - usually a government ministry or agency designated by the borrowing country - is wholly responsible for this phase, although the Bank plays a supervisory role.
Most of the procurement of goods, equipment, civil works and consulting services for the project occurs during this stage. It is managed by the executing agency, which must follow the Bank's procurement rules. These require the publication and advertising of all procurement opportunities in order to ensure maximum competition.
The AfDB requires that a General Procurement Notice (GPN) be published on the United Nations Development Business (UNDB) website shortly after the project loans have been approved. The GPN provides the name and coordinates of the executing agency, describes the project in broad terms and outlines the general categories of goods, equipment and services that will be procured. Following this, the executing agency publishes a series of Specific Procurement Notices (SPNs) for specific goods and works, or requests Expressions of Interest (EOI) from consulting firms for specific services.
During implementation, the Bank may directly hire individual consultants to help with supervision. In these cases, it uses simplified procedures designed for recruiting individual consultants.
Post-Evaluation: An assessment of the project's impact is carried out. This includes suggestions for improving similar AfDB projects in the future. The Bank sometimes recruits consultants directly for these activities.
Under AfDB rules, bidding on AfDB-funded projects is restricted to firms from AfDB Group member countries, or to state participants in the African Development Fund.
The responsibility for managing procurement rests with the borrower. However, the AfDB does review the procurement process at various stages. If it is satisfied with the way the procurement is being carried out, it issues a "non-objection," which allows the borrower to proceed.
Project and Procurement Information
The best source of commercial information for an AfDB project is the Project Appraisal Report. Prepared by the AfDB staff involved in a project, this is a comprehensive document that contains information on all aspects of a project, and is the document presented to the AfDB Board of Directors to secure project and loan approvals.
Much of the information in the Report eventually appears in the terms of reference used to procure consulting services, so the document can provide useful advance information to consulting firms that wish to be involved in a project's implementation phase. Suppliers and contractors will also find provisional procurement lists of goods and works in the Report. Copies of appraisal reports can be found on the AfDB website, or through OLIFI in Tunis after the project has been approved.
Information on AfDB procurement opportunities is available from numerous sources. The monthly AfDB Business Bulletin contains information on projects in the pipeline, recently approved projects and general and specific procurement notices. As mentioned earlier, though, this information may already out of date by the time of publication, so the Bulletin should not be used as the sole source of market intelligence.
Interested firms may also register at the AfDB's website to receive procurement notices and project appraisal documents via email or, RSS feed. Subscribing to the United Nations' UNDB website is also a good way to obtain procurement notices.
Suppliers of Goods, Works, and Non-Consulting Services
International Competitive Bidding (ICB) is the primary method of procuring goods and works for AfDB-financed projects. The Bank may also authorize other methods of procurement when necessary, such as National Competitive Bidding (NCB), Limited International Competition, International or Local Shopping, and Directly Negotiated Purchase. NCB is generally used for smaller goods or works contracts in which international firms are unlikely to be interested. International or National Shopping is used to procure readily available, off-the-shelf goods or commodities with standard specifications.
Consultants and Consulting Services
Most procurement opportunities are for the goods and works used in AfDB-financed projects. Canadian firms, however, have tended to focus on supplying consulting services to borrowing countries.
Borrowers require a wide range of these services when preparing or implementing a project. The Bank subdivides them into the following categories:
- pre-investment studies, such as macro-economic and sectoral studies, master plans, pre-feasibility and feasibility studies, preliminary engineering, environmental impact assessments and policy analysis;
- detailed design studies, including cost estimates, detailed engineering, preparation of specifications and tender documents, and bid evaluation;
- supervision and control of the implementation of works, comprising construction supervision, project management, inspection, procurement assistance and start-up; and
- technical assistance, which may include a wide range of advisory and support services related to development and sector planning, institution building and strengthening, organizational and management studies, monitoring and evaluation, research and development, training, investigation, technical advice, auditing and project reporting.
Consulting services are procured by means of shortlists compiled by the project's executing agency. Services can be contracted either to a consulting firm or, for smaller assignments, to an individual consultant.
Procurement procedures must follow the Bank's rules as described in the Rules and Procedures for the Use of Consultants. Selection procedures for larger assignments are detailed and time-consuming; they require an average of 14 months, although this duration has been growing shorter. Procedures for individual consultants are simpler and faster, especially for short-term assignments.
Corporate and Institutional Procurement
Every year, the AfDB purchases approximately 40 million Euros, of goods, works and services for its internal requirements. Most of the Bank's procurement is conducted by the Institutional Procurement and Logistics Division. In addition, other purchases may be made directly by Field Offices and Managers of various Cost Centers.
Depending on the Bank's needs, the General Services and Procurement Department issues Requests for Proposals or Invitations for Bids. The vendor kiosk is dedicated for vendors interested in supplying goods, works and services for the Bank's internal requirements.
Consulting opportunities are more open. AfDB staff often engages individual consultants or consulting firms directly, without borrower involvement, especially when they need particular specializations or the workload of permanent staff is heavy. For example, consultants are often hired to accompany AfDB staff on missions related to project preparation, review or appraisal.
Most such assignments are for individual consultants; consulting firms are rarely required, but when they are, the Bank follows its standard procurement rules. The assignments for individuals are usually short-term and last for five to 10 weeks. The type of work varies widely, but can include activities such as:
- general and sectoral identification;
- pre-investment studies;
- preparation of terms of reference;
- technical supervision;
- problem project review and supervision;
- completion reports; and
- post-evaluation reports.
Broader economic and sectoral studies and preparation of policy documents are also occasionally needed.
Bank staff hires consultants through procedures similar to those used by borrowers. It is up to the user unit (usually an Operations Division of the Bank), in cooperation with the Bank's Procurement Unit, to develop a shortlist of consultants for the assignment. Selection is based on the user unit's own experience and the Procurement Unit's database of registered consultants. For this reason, it is essential that consultants be registered on the AfDB DACON, a database used by AfDB and AfDB borrowers to identify people or companies that may be suitable for consulting work on an AfDB project.
Private Sector Lending
The African Development Bank addresses private sector development (PSD) at two primary levels:
- Assists African governments to improve the enabling environment for the private sector by:
- Improving essential physical infrastructure (e.g. power, information and communication technology, transportation)
- Improving “soft infrastructure” (e.g. regulatory and legal frameworks, financial sector, trade liberalization)
- Direct lending to the private sector for:
- Infrastructure (e.g. power, transportation, telecoms, water)
- Industries and Services (e.g. mining, cement, agribusiness, hotels)
- Financial Intermediation (e.g. banks, MFIs, insurance, leasing).
The mandate of the Private Sector Operations (PSO) unit is to ensure the Bank Group's support to private sector development in Regional Member Countries (RMCs), by means of financial and technical assistance to private sector-led projects and programs. Private sector approvals in 2009, represented 14.3% of the AfDB's total approvals.
The PSO unit identifies, formulates, organizes and carries out activities related to private sector development. It also conducts studies on the investment climate of RMCs as well as other private sector related dimensions, with a view to identifying and supporting specific investment opportunities and programs contributing to private sector development.
Several untied AfDB development funds enhance the consulting opportunities for Canadian firms. These include the C$5 million fund created by the 2008 Technical Cooperation Agreement between Canada and the AfDB, the expanded NEPAD Infrastructure Project Preparation Facility, the African Water Facility, and the Fund for African Private Sector Assistance. The Bank uses these bilateral and multilateral trust funds to fund studies and capacity-building exercises.
Before pursuing a contract financed by the AfDB, one should understand the division of responsibilities between the Bank and the borrowing country's executing agency. When the Bank lends funds to a developing country for a project, the project's executing agency is usually a branch of the borrowing country's government. While the AfDB and the executing agency share aspects of project preparation, it is the executing agency, not the AfDB, that is responsible for virtually every element of project execution, particularly the hiring of consultants and the procurement of goods and works.
However, although the borrowing country is a contractor's primary client, Bank staff often approve shortlists of companies submitted by executing agencies for consulting work. Therefore, when meeting with Bank experts, a firm should provide brief and specific information on its relevant experience, expertise and technical capabilities, and on its knowledge of the borrowing country and its language. From the contractor's point of view, a meeting with Bank officials should be viewed as an opportunity to obtain valuable project intelligence, as well as confirmation that a project might eventually require the firm's services.
The official languages of the AfDB are French and English, and most AfDB staff are bilingual.
Before any meeting at the AfDB, consult all the information available on the project involved. In particular, consider the questions outlined below:
Scope of the project
- What will the project require in terms of goods, equipment and consulting services? The AfDB's various information documents can provide initial information in this area, and should be reviewed before meeting Bank staff.
- What level of expertise will be required, and in what sector(s)?
- What portion of the Bank loan has been set aside for a task of specific interest to the company?
Timing of the project
- When will the pre-feasibility or feasibility studies be conducted for the project, and who will conduct them?
- When will the project be appraised by Bank staff, and will the Bank require external assistance with this procedure?
- When is the project proposal going to the Bank's Board of Directors? Is this a priority for the Board?
- If the project has been approved by the Bank, when will it come into effect in the recipient country?
- When will the required goods or services be contracted for implementing the project?
Identification and evaluation of project participants
- Who are the AfDB Project Officer's key contacts in the recipient country and its executing agency?
- What other firms are involved in the project? Is there a strong local capability? (These two questions will provide information on the competition and on the potential for subcontracts or local partners.)
- Are other countries contributing to financing the project's preparation phase?
- Is there any bilateral funding from Canada?
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