Guidelines for Preparing a Design and Monitoring Framework

,

• Publisher: Asian Development Bank
• Year: 2016
• Print ISBN: 9789292573669
• eBook ISBN: 9789292573676
• Topic: Business
• Subtopic: Decision Making
• Index: Business

These guidelines describe how to develop a design and monitoring framework (DMF) for an Asian Development Bank (ADB) project. The DMF communicates the planned performance of a project. As a link between project design, implementation, and evaluation, it provides the basis for the project performance management system. The purpose of these guidelines is to help improve the quality and consistency of DMFs across ADB.

IV. Application of Design and Monitoring Frameworks in ADB

The DMF is used to cascade corporate-level indicators to the project level, classify projects according to corporate themes and priorities, and provide the structure of the project’s economic analysis. The principles of the DMF are the same for different lending modalities, but their application may differ.

A. Link to Corporate Results Framework

The corporate results framework contains indicators measuring quantities of outputs and outcomes delivered by completed projects in priority sectors. Examples include “number of households connected to electricity,” “kilometers of roads built or upgraded,” and “dollar value of trade finance provided.” These indicators are often disaggregated by sex (female, male) or geographic location (rural, urban). The indicators are cascaded down to the DMF. The indicators apply to both sovereign and nonsovereign operations but not to TA projects.

All results framework indicators (RFIs) that apply to the project must be listed in the report and recommendation of the President (RRP) linked document with their target values. ⁵ Indicators and targets are then inputted to e-Operations, tracked, and target achievement reported on at project completion. If an RFI is relevant for a project, it can also be included in the DMF. If the DMF indicators do not measure any corporate-level outputs and outcomes, do not include them in the RRP linked document. If no RFIs are measured through the DMF indicators, then they do not need to be included in the RRP linked document.

There are four scenarios for linking corporate RFIs to DMF indicators:

(i)If the RFI and DMF indicators are worded the same (e.g., “microfinance loan accounts opened or end borrowers reached increased to 5,000, [4,000 female, 1,000 male]”), include the same indicator and target in both the DMF and RRP linked document.

(ii)If a slightly modified version of the RFI is more appropriate for the DMF given the project context (e.g., the DMF output indicator is “railway track constructed from location X to location Y,” and the RFI is “railways constructed or upgraded [kilometers]”), use the modified indicator in the DMF and include target data for the RFI in the RRP linked document.

(iii)In some cases it may be appropriate to aggregate several indicators in the DMF into a single RFI. For example, the DMF may have road construction output indicators with targets specific to each district: “15 km constructed in District A,” “22 km of road rehabilitated in District B,” and “8 km of road constructed in District C.” The DMF does not need to have a single RFI “roads built or upgraded (km).” The DMF indicator targets should be aggregated into a single RFI target in the RRP linked document.

(iv)Occasionally, the DMF indicator and RFI may have different units of measurement, but it may be possible to convert the DMF target into the same unit as the RFI. For example, the DMF indicator could be “domestic water for 900,000 project beneficiaries during dry season increased by 10% (baseline: 2 liters/person/day).” This DMF indicator measures the same data as the RFI (“households with new or improved water supply [number]”). The beneficiary unit of measurement should be kept in the DMF. To determine the RFI target using the unit of households, the 900,000 project beneficiaries would be divided by the average number of people per household in the project area to determine the number of households with an improved supply of water.

B. Integration of ADB Priorities in the Design and Monitoring Framework

The Strategy 2020 drivers of change and other priorities, such as private sector development, gender equality, and climate change mitigation, are identified in part through their inclusion in the DMF. The ADB project classification system and relevant operations manual sections contain up-to-date information on the link between the DMF and the integration of these priorities.⁶ Selected drivers of change and strategic priorities are stated as follows:

(i)Private sector development. Operations classified as contributing to private sector development must have DMF content that involves this driver of change.

(ii)Gender equity. The two thematic classifications of gender equality—gender equity as a theme and effective gender mainstreaming—depend on DMF content at the output and outcome levels.

(iii)Climate change mitigation. To be classified as contributing to climate change mitigation, an operation must include specific DMF content.

(iv)Poverty targeting classification. The determination of whether a project directly targets poverty is based in part on DMF content. Geographic and household targeting will be informed by the results and indicators in the DMF.

C. Link to Economic Analysis

The economic and financial viability of the project and the sustainability of benefits are assessed at the appraisal stage. The assessment is based on the project structure, usually captured in an early draft of the DMF, which provides the identification and quantification, and enables the valuation of sustained benefits based on the working life of the investment. The outcome results statement, indicators, and target values in the DMF should be aligned with the economic analysis. The target amounts and dates should match the annual benefit stream used in the economic analysis. For example, in an urban rail project, the economic analysis may in part be based on the average daily number of passengers in each year of operation. The benefit stream will include many years of operation in line with the working life of the urban rail system. The DMF outcome indicator could have a target date of the first full year of operation. The target value of the “average daily number of passengers in the first full year of operation” should be the same value in both the DMF and the economic analysis. There must be consistency between the DMF and the economic analysis for all output and outcome benefits articulated in results statements, indicators, and targets.

D. Multitranche Financing Facilities

The multitranche financing facility (MFF) is a flexible financing instrument that provides assistance programmatically to support a medium- or long-term client investment plan. The overall facility is composed of a series of separate financing tranches over a fixed period of time. DMFs must be prepared both for the overall MFF and for each tranche.⁷

The main DMF issue to be addressed is the relationship between the results statements in the facility DMF and the tranche DMFs, specifically the link between facility outcome and output, and tranche outcomes and outputs. (The impact[s] should be the same between the facility and the tranches.) The sector road map for the facility will provide guidance for the specification of the facility outcome and outputs. With the facility results developed, there are two options for the results link between facility and tranches: (i) same level; i.e., output = output, outcome = outcome; and (ii) cause and effect; i.e., facility output = tranche outcome.

Each MFF must determine which results link option to use based on the specifics of the facility and tranches. The MFFs approved to date follow one of three models: (i) geographic-slicing, where similar packages of outputs are delivered in different quantities in different locations; (ii) time-slicing, where the facility output is delivered over a series of tranches sliced by phases, components, or contract packages; and (iii) financial intermediation, where the facility output is delivered to beneficiaries via one or more intermediaries. These models can be used to determine the appropriate results link. These models do not limit the design of MFFs, and other models or hybrids of these models may be appropriate. Table 5 shows the typical results relationships for these different types of MFFs.

Table 5: Facility to Tranche DMF Relationships

MFF Model	DMF Relationship
1. Geographic Slicing	Facility output to tranche output
2. Time Slicing
Time Slicing 1. Phased Approach	Facility output to tranche output
Time Slicing 2. Component Approach	Facility output to tranche outcome
Time Slicing 3. Contract Packages Approach	Facility output to tranche outcome
3. Financial Intermediation	Facility output to tranche output

DMF = design and monitoring framework, MFF = multitranche financing facility.

Source: Asian Development Bank, Strategy and Policy Department

Model 1: Geographic slicing. In geographic-slicing MFFs, the output amount is typically determined by adding up tranche outputs in a bottom-up process. Figure 8 shows the output qu...

Table of contents

• Front Cover
• Title Page
• Copyright Page
• Contents
• Abbreviations
• I. The Design and Monitoring Framework: A Tool for Managing for Development Results
• II. Design and Monitoring Framework Structure
• III. Design and Monitoring Framework Formulation Process
• IV. Application of Design and Monitoring Frameworks in ADB
• Appendixes
• Footnotes
• Back Cover