An Independent Country Impact Review
 |  | This country review, the first one disclosed by the Independent Evaluation Group of IFC (IEG) covers IFC’s assistance to Ukraine from fiscal year (FY)1993, when Ukraine became a member of IFC, through FY2006. The study evaluates the results and analyzes the performance drivers of IFC’s investment and advisory operations in the country.
In these past 14 years Ukraine has emerged as an independent state and has undergone a dramatic transition from a centralized planned economy to a nation with a thriving private sector. |
| Yet, given the length and depth of Ukraine’s recession in the 1990s and the tenuous political commitment to reforms, the country remained relatively unattractive to private investors for much of the period under review. IFC gave much needed assistance to Ukraine in this period, initially focusing on advisory operations and further boosting its investment portfolio. By FY2006, Ukraine was IFC’s ninth largest investment portfolio with a total outstanding balance of more than US$600 million in commitments. |
Main Findings
The study used standard IEG-IFC evaluation guidelines as a basis for rating investment and advisory operations and compares their ratings with those of relevant peer groups. IEG-IFC's methodology is based on a combination of metrics and carefully informed judgements, which represent the very best evaluation practices and standards agreed on by major Multilateral Development banks with private sector operations. The study reviews investment and advisory projects in Ukraine evaluated in FY 1999–2006. The core study population consisted of 11 investment and 35 advisory services operations.
The main findings of this review are:
- IFC’s advisory services-centric strategy was appropriate given country conditions, but the expected increase in IFC’s investment operations to follow advisory services efforts did not materialize until recently;
- IFC’s advisory services and investment operations in Ukraine outperformed IFC's operations in other countries in the Europe and Central Asia (ECA) region largely due to the strong performance of IFC's larger programmatic assignments;
- The outcomes of IFC’s operations going forward can be further improved by expanding IFC’s strategic horizon to respond to changing country conditions; by increasing coordination between IFC and the World Bank to address remaining privatization challenges; and by replicating the design of successful advisory services operations and learning from past lessons.
See the
full report for further details.
Recommendations
Based on the study findings, IEG recommends that IFC:
- Focus its strategies on medium-term (three-to-five-year horizon) priorities and follow a more systematic approach to identifying investment opportunities;
- Coordinate with IBRD to ensure that both institutions work sequentially and/or in parallel (as circumstance may require) to address remaining privatization challenges among larger companies, as well as in infrastructure and municipal utilities;
- Replicate the strong design of its successful large advisory projects, promote greater donor coordination and cohesion in its areas of engagement, and exploit synergy models between programmatic advisory and investment operations.
To see the full recommendations, please see
Chapter 5 of the report.
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