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Project Supervision

1. Special case monitoring: Intensive monitoring may be required, (possibly through "in-country" supervision by local staff), where:

  • the economy, financial markets or the company are volatile;
  • mediation is required between stakeholders;
  • project costs need to be re-assessed/checked;
  • IFC is attempting to turn around companies which are in trouble; or
  • there is a need to communicate frequently with the government, to protect the independence of a newly privatized company.
     
    2. IFC specialists: IFC should play an active role in project implementation (particularly in projects with high risk profiles), with annual supervision visits by appropriate technical staff, even for equity-only projects. Early-year annual supervision reports should always address issues raised at project approval.  Technical staff involvement is particularly important where the field office has project supervision responsibility.
     
    3. Supervision and monitoring: Environmental supervision is particularly important at the early stages of a project and where there are environmental concerns.  Supervision should be regularly carried out by IFC staff to:
  • ensure compliance with covenants or guidelines; and
  • verify results, particularly where local staff may not have appropriate technical skills.
     
    4. Reporting requirements: Timely and complete reporting, particularly about material adverse changes and environmental compliance, is extremely important in anticipating and responding to emerging problems. Failure to supply status reports can be an early sign of trouble. IFC should validate the reports by site reviews and provide assistance, if necessary, to improve timeliness and accuracy. (IFC should rely on its own assessment to ensure that there have been no material changes).
     
    5. Staff changes: As IFC staff changes are inevitable, a formal hand-over process should be observed to ensure project continuity and to avoid important supervision issues from being overlooked.
     
    6. Management changes: Any shift in the planned management and control of an IFC project should be carefully analyzed and monitored to ensure that it will not have an adverse effect on the project.
     
    7. Loan agreements: Monitoring and supervision can be simplified and more effective if certain aspects are specified in the loan agreement or covenants:
  • performance targets;
  • access to detailed information (including for subsidiaries) in equity-only investments.


    The above lessons are based on 39 lessons from past IFC investments.
    Last updated December 1998    .

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