Measuring impact – an overview of IFC’s new approach to measuring development impact
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Article summary
IFC’s new Vice President for Economics and Private Sector Development, Mr. Hans Peter Lankes, provides an overview of the new Anticipated Impact Measurement and Monitoring (AIMM), which is meant to better enable IFC to define, measure and articulate the development impact of each project and to focus incentives on the delivery of economic impact. Lankes explained how AIMM will better allow IFC to judge and communicate results not only from an operational and financial perspective, but also from a development and portfolio perspective.
Tuesday 10 October
Sponsored by the International Finance Corporation (IFC)
Presentation: Hans Peter (VP, Economics and Private Sector Development, IFC)
Notes:
- Focus on creating markets and to look beyond individual projects.
- Also focus on ‘line of sight’ linkage to SDGs and Twin Goals.
- Objective is to better inform financial sustainability and development impact.
- Need to reflect the implementation of 3.0 in project operationalisation.
- The Anticipated Impact Measurement and Monitoring (AIMM) as the new model is called will replace the development outcome tracking system (DOTS) currently being used.
- DOTS to capture a variety of impacts. From 3rd year after project beginning. downstream. However does not feed into decisions upstream – that is- beginning with project viability/ selection. AIMM will rectify this.
- Will also aim to assess project’s impact in the sector more broadly. This recognises that IFC is too small to ‘solve challenges’ in sectors by itself.
- Impacts – key dimensions of DOTS will be maintained. Market analysis – integration, sustainability – line of sight SDG. DOTS systems but much further upstream. Indirect impacts will also be examined.
- Will create market typology assessments of sectors to identify characteristics of a ‘well-functioning’ sector. Will contrast this with the reality on the ground.
- Will look to create a model to determine ‘likelihood assessment’ of project potential. Will produce project rating based on projected development impact.
Implementation plan:
- Have begun to assess projects and provide project AIMM score since July. 80 projects have received assessment using AIMM framework and an additional 10 projects not streamlined (i.e., projects that must be reviewed by the Board).
- Will begin to work on more upstream projects. FY 2017 will be used to roll out the process. AIMM starts further upstream but continues upon implementation and will begin from the 1st year vs. current third year. Therefore rating ex ante and portfolio investment.
- The board has expressed some concern about the subjectivity of the new system, which integrates qualitative measurements to current quantitative approach. Response is that many development impacts are not easily quantifiable. Will continue to measure those things that are measurable. Recognition that development impact is multi-dimensional. Art as much as science.
Q: What tools will be used to assess sustainability?
A: Direct impacts are more straightforward – impact on markets is more difficult to assess.
Q: How will existing projects be analysed?
A: Will be retrofitting some of the existing projects. Sizeable task – looking to finalise this by the end of 2017 FY.
Q: Will civil society have an opportunity to provide input into the process at the country level?
A: IFC will pull in expertise and analysis from IFC departments. There are no plans to formally engage with civil society at the moment.
