6.1 Introduction to the Project Cycle

Earlier chapters of the Roadmap indicate the important policy and operational contexts in which bilateral development assistance is provided. This chapter begins the review of the formal steps of the bilateral program/project cycle.

The cycle starts when Recipient Country/Region development needs, CIDA program objectives and Canadian capabilities are brought together through the preparation, negotiation and approval of a Country/Regional Programming Framework (C/RPF). The cycle continues through the project identification process which leads to further activities as a potential project is analyzed, its feasibility assessed, a design prepared, approval sought, agreements reached, etc.

Although project cycle "steps" are presented in separate, sequential chapters and often have distinct products (screens, project selection memo, Concept Paper, analyses, Logical Framework Analysis [LFA], design, Project Approval Document [PAD], Memorandum of Understanding [MOU], etc.), they are part of a knowledge and action continuum which leads from good ideas to good development results, the first accountability identified for Project Managers in the Agency Accountability Framework.

Knowledge is first gathered during the research, discussions and consultations leading to the preparation or updating of the C/RPF. This and other sources provide project concepts and ideas. As more information is gathered and project concepts are validated through a screening process, the knowledge gained is used as the basis for the Concept Paper (see Chapter 7) and project team decisions on what further information is required to appraise the project, assess its feasibility and produce a credible project design. All of the information, knowledge, lessons learned and documentation produced during these steps are vital to the preparation of a developmentally strong PAD (see Chapter 10) with clearly articulated and achievable results involving the wise and appropriate use of financial and human resources and indicating the contribution to effective policy dialogue, project collaboration and management.

The knowledge gained by CIDA must then be translated into a proposal call and a contract (see Chapter 11 and the Contracting Guide for Managers in CIDA) which will facilitate the achievement of the expected development results and subsequently used to provide appropriate monitoring and guidance during project implementation.

One of the reasons that project hand-overs are so important (when any member of the Project Team is replaced) is that the knowledge gained by CIDA through the various steps of the project cycle must not be lost to the bilateral desk simply due to the transfer of staff to other responsibilities.

The first key steps in the process are presented in this chapter: the Country/Regional Programming Framework (see section 6.2),Project Identification (see section 6.3) and Project Selection (see section 6.4). If these steps are not done well, and if the most appropriate concepts are not chosen for further consideration, CIDA will waste a great deal of time and effort in future steps of the project cycle before the situation is resolved. Perhaps the greatest single error during the project cycle is choosing the wrong project at the start.

The Country/Regional Programming Framework (C/RPF) is developed within the context of the branch programming framework, reflects country development challenges and needs, and provides an analytical basis for Agency programming in a specific country or region and a clear link between the choice of specific projects/programs at the country/region level and corporate priorities. C/RPFs will also be used to satisfy internal and external accountability and reporting requirements.

Project Identification refers to the process by which potential project ideas are gathered, put forward, or identified within the context of CIDA's bilateral directed programming within a country or region.

Project Selection is the process by which the various potential project ideas are filtered through specified screens leading to the choice of the best (or the best two or three) project ideas for formal consideration as a Concept Paper(s) (see Chapter 7).

During project identification and project selection, the desk staff, in consultation with appropriate scientific and technical specialists, the field representative and recipient country officials, as appropriate: review the broad programming directions established in the C/RPF; analyze these directions to identify the most promising areas for CIDA intervention; in relation to a specific C/RPF objective, review possible project interventions; filter the possibilities through a basic screening process; and recommend one or several possible specific project interventions.

The information gathered and decisions taken during the project identification and

project selection processes lead to the preparation of a Concept Paper (see Chapter 7) for the consideration and approval of the Vice-President. This, in turn, leads to more detailed project analyses which are described in Chapter 8.

Note:
Unsolicited proposals submitted under the Bilateral Responsive Mechanism do not follow the project identification and project selection processes described in this chapter.

6.2 The Country/Regional Programming Framework (C/RPF)

The Country/Regional Programming Framework:

• serves as a mechanism for consultations with client countries and regions, recipient and Canadian organizations and institutions, and other donors;
• defines the basis for Canadian bilateral development assistance efforts in a specific country or region;
• provides an analytical and planning "bridge" to link CIDA's corporate priorities with its programs and projects;
• provides a coherent framework in which to identify, plan, monitor, and adjust CIDA's bilateral programs and projects;
• is central to the process of reviewing the performance of the country or regional program and its projects; and
• helps to ensure that bilateral programming meets internal and external accountability and reporting requirements.

The Country/Regional Programming Framework is comprised of the following types of information:

C/RPFs are corporate documents which bring together information from all programming channels, as well as from the Human Resources and Corporate Services Branch. Guidelines for Preparing a Programming Framework were developed in 1996.

C/RPFs are prepared and/or updated periodically for each country or regional program where there is significant and long-term Canadian funding. CIDA projects are identified, selected, planned and designed within the overall CIDA strategy and objectives for a country or region as set out in the C/RPF.

6.3 Potential Project Identification

6.3.1 Sources of Project Concepts/Ideas

Under the Bilateral Directed Mechanism (see section 4.3), potential projects are identified through many sources. These ideas are generated within CIDA's networking and consultative process which includes:

• periodic bilateral consultations with recipient governments;
• review of national and sectoral development plans and programs;
• country/region and Canadian consultations;
• sectoral programming missions;
• consultations with other donor agency and International Financial Institutions (IFIs) and at consultative group meetings between CIDA and these other agencies (often annually); and
• consultations with Canadian Executing Agencies (CEAs) and internationally active organizations.

Field staff are usually heavily involved in project identification processes.

6.3.2 CIDA Parameters

Decisions on whether identified initiatives should be given further consideration and screening are based on CIDA parameters which include:

• adherence of potential initiatives to Canada's Official Development Assistance (ODA) priorities and themes (as described in Chapter 2), the relevant C/RPF, local priorities, relationship to other CIDA funded activities, and potential benefits to the country/region and Canada;
• the priorities, needs, potential and demonstrated commitment of the country/region and host organization(s);
• the relationship to cross-cutting themes such as gender equality (GE) and the environment and to areas of CIDA focus such as capacity development and sustainability;
• consideration of the focus of the next generation of CIDA's bilateral projects for the country/region, for example, private sector development or economic competitiveness;
• the Canadian capacity to deliver;
• the intentions/priorities of other donors and IFIs in the country/region and opportunities for Canadian participation in coordinated aid delivery approaches;
• lessons learned from previous or existing initiatives (Canadian or otherwise) in the country/region and otherwise;
• studies and reports on potential initiatives; and
• consideration of existing project commitments, projects already in the planning stage and the funds available for new initiatives.

6.4 Potential Project Screening for Project Selection

Potential project ideas are screened to determine whether to proceed to the next step in the project cycle (the Concept Paper, Chapter 7. Project screening, as a preliminary step in the project cycle, does not require the in-depth analysis used in the project appraisal stage (see Chapter 8).

The purpose of screening is:

• to ensure that the identified initiative is consistent with CIDA's policy framework, the recipient government's development priorities and the goals and objectives of the C/RPF;
• to confirm that the identified initiative is not subject to any apparent undue risks; and
• to provide the necessary data and information to permit the Project Manager (PM):
• to recommend the preparation of a Concept Paper; or
• to recommend rejection of a specific project concept.

The screens are broad sieves that funnel ideas into the development of project concepts and lead to more detailed analyses at the project appraisal stage.

Normally, at this stage, the Program Director (PD), the Chief of Operations and PM¹ identify,

confirm or negotiate the composition of the project team, especially appropriate in-house

scientific and technical specialists.

6.4.1 Reviewing Project Ideas

Consideration of project ideas for selection is a highly consultative process both within CIDA (involving the PM, Chief of Operations, PD, appropriate scientific and technical specialists and the field representative) and externally which should involve a participatory approach including all potential stakeholders and should focus on clearly identified country needs and development plans. CIDA and country or regional partners in development should mutually agree to, and strongly support, the screening of potential projects.

Government and CIDA policies and guidelines (outlined in Chapter 2) include important themes, such as sustainable development, poverty reduction, capacity development, gender equality, and environmental considerations, which provide the context for consideration of country specific criteria and needs. One of the other key aspects of the screening process is the early identification of potential risks on a project proposal.

Project selection relies on a thorough knowledge and understanding of the applicable C/RPF or update which will provide:

• the accepted development context for CIDA project interventions;
• the policy objectives/priorities and the expected results to which all projects are to contribute; and
• a strategy for implementing the C/RPF, including program implementation directions and/or areas of interest.

Two tools which may be helpful in a preliminary manner when determining the appropriateness of pursuing a project idea are the Framework of Results and Key Success Factors (which provides a set of common factors considered essential to successful project delivery and

management and against which all projects will be evaluated, seesection 3.3) and

the principles of effective programming (which are designed to improve the effectiveness of Canadian ODA, see section 2.2.1).

Officers should also review existing literature on development trends and issues in general and/or for the relevant country or region in particular.

6.4.2 Screening Potential Projects

The three broad project selection "screens" are:

• Enabling Environment Screening;
• Target Group Screening;
• Technical and Capacity Screening.

The first two screens address the effect that the context and environment may have on achieving project developmental results. The last screen is more specific to the possible project intervention. It should be noted that these screens involve preliminary analyses of the potential project initiatives: they are not checklists; and, they are not the project analyses described in Chapter 8.

Whenever possible, field and headquarters staff should use existing knowledge including the lessons learned by CIDA and other donors. PMs should consult with appropriate Agency scientific and technical specialists (senior sector advisors, economists, gender equality specialists, etc.) who are responsible for, or cognizant of, much of the existing CIDA "technical" information and will have access to additional information. Input from recipient country stakeholders is critical. These screens, therefore, build on existing information, but also add to the bilateral desk's knowledge of the relevant country needs and the proposed project idea.

Significant funding and external resources are generally not required for the screening process. If funding and outside resources are needed, such requirements should be discussed with the Chief of Operations and PD to ensure that either or both are available (see section 4.3.4 on Special Program and Project Expenses).

a) Enabling Environment Screening

The term "enabling environment," as used in the screening process, refers to the policy environment and priorities as well as the state of economic development and financial viability context within the partner country. This screening deals with the relationship of the above factors to in-country development needs, Canada's ODA policies and interests, and with the potential impact, opportunities, constraints and risks of a CIDA cooperative developmental initiative.

A screening of the enabling environment considers:

• the extent to which the project idea would/could support national and/or sectoral development objectives, priorities, plans and/or actions;
• the legislative and regulatory environment and the bureaucratic constraints;
• the potential for donor collaboration;
• the potential policy impact on the country/region and a preliminary assessment of the potential differential impact on women, men and children by urban/rural, class, race, and ethnic group;
• the region/country needs, commitment and capacity to absorb and support the initiative;
• the extent to which appropriate institutions and infrastructure are available to support the project idea;
• the potential for the project to promote good governance/democratic reform;
• the position of the initiative in the political, cultural and economic structure; and
• the potential of the project to improve the capacity in the country/region to promote environmentally sustainable development.

The relationship to economic development and financial viability considers:

• the economic conditions and factors (e.g., structural adjustment program, balance of payments, international indebtedness), potential impact of the project on the economic well-being of the region/country and its people (women, men and children);
• the financial conditions surrounding the project, such as the potential contribution by the host organization, the ability of the partner organization(s) to sustain the initiative, the sensitivity of the project cash flow to economic and political changes; and
• the economic and financial risks.

b) Target Group Screening

This screening starts based on information and priorities from the C/RPF. The Target Group Screen confirms/clarifies the important social dimensions in which development activities take place within the region/country. It considers:

• the potential impact on the social roles, including a preliminary assessment of the differentiated roles, needs and priorities of women, men and children in the target group(s), and the cultural context of the region/country;
• a preliminary assessment of the potential differential impact of project ideas on women and men and possible entry points for reducing gender gaps and promoting gender equality;
• the increased capacity for self-reliance and the potential impact on the built and natural environment in which the target group(s) live and work; and
• the potential benefits and risks of possible interventions on potential target groups, such as children, the poor, minority groups and other disadvantaged groups, disaggregated by sex.

c) Technical and Capacity Screening

This broad screen addresses technical issues relating to the general feasibility of a specific possible project, the potential opportunities and problems, and sectoral and thematic implications. It also addresses the possible project's potential to contribute to capacity development in the country/region.

The technical part of this screening relies heavily on CIDA's scientific and technical specialists and provides preliminary information on various factors which could affect the implementation of a possible project including:

• the appropriateness of the sector/thematic focus of the project to the sector or cross-sectoral needs and priorities of the country/region as identified in the C/RPF;
• an assessment of the potential support or opposition to the possible initiative by concerned parties (i.e., stakeholders: government, administrators, advisors, donors and other groups with a "stake" in the initiative). "Stakeholder analysis" is a process that assesses the relative power, influence and interests of stakeholders and the importance of the different stakeholders to the potential project and vice versa (the Guidance Note on How to do Stakeholder Analysis of Aid Projects and Programmes has been made available to staff as a reference document);
• the feasibility of the project from the logistical and management perspectives as well as the potential for achieving the expected results;
• relevant Canadian capacity and Canada's comparative advantage in the theme/sector and/or local capacity if untied funds (see Tied/Untied Aid Policy) are to be utilized; and
• the potential opportunities and risks associated with the possible undertaking.

Since a key factor in sustainability of initiatives is institutional capacity and development, the capacity and performance of the potential or proposed partner(s) and related institutions must be initially assessed at this stage. Partner institutions do not operate in a vacuum and institutions that might impact on the project should be taken into account.

Factors which come into play in capacity development include:

• the conduciveness of the external environment (administrative and legal, political and economic, social and cultural) as they relate to the institutions' development;
• internal factors (history and mission, culture, leadership, structures, human and financial resources, financial and project management systems, performance, capacity to address gender equality both within decision-making structures and through programming, opportunities and constraints to capacity development);
• the institutions' position/influence in the country (champions, links to stakeholders, legitimacy, relationship to government, etc.);
• the institutions' general capabilities, capacity, commitment to change, current workload and relationship with other donors or external organizations; and
• the network or array of other institutions/organizations that impact on the performance and inter-organizational relationships of the potential partner(s).

The above screening helps to identify the strengths and weaknesses of, and opportunities for, potential partners, as well as their potential role in the development process. It can also help identify networks of organizations and institutions that may have a significant impact on CIDA programming.

6.5 CIDA Policy Check

Both the Enabling Environment Screen and the Target Group Screen call for a review of potential project initiatives against the context defined by the ODA Policy Framework and CIDA's Development Policy base and strategies (section 2.2, section 2.3 and section 2.4) for bilateral programming and project delivery.

Even at this early stage in the project cycle, staff should verify that the potential project meets these policy requirements. The following questions can guide the review of possible projects:

• Will the project contribute to sustainable development within the country or region? (Sustainable development involves five pillars - social, political, cultural, economic, environmental.);
• Does the project respond to CIDA's mandate for poverty reduction?
• Is there a clear link with the specific objectives of the C/RPF?
• Is the project clearly situated within one or more of the six ODA Program Priorities? (Refer to the document ODA Priorities: CIDA Operational Definitions in which the six ODA priorities are defined.) Does the project address the Social Development Priorities?
• Does the potential project incorporate CIDA's cross-cutting issues of GE and the Environment, as well as other areas of CIDA focus, such as children?
• Does the potential project involve capacity development which is considered a basic purpose of CIDA's programs and projects?

6.6 Verifying Canadian Capacity

When reviewing potential projects (prior to project selection), it is critical to have a basic understanding of whether Canadian individuals, firms and/or organizations could deliver the potential project (both from the technical and management point of view) and, if not, if untied funds are available and appropriate for the possible intervention. (Refer to the Tied/Untied Aid Policy and consult your Financial Management Advisor).

In addition to the capability of Canadian resources, the issues of the availability and cost-effectiveness of Canadian resources should also be reviewed.

There are many sources of information about potential Canadian partners with relevant expertise - some formal, some informal. In addition to program staff knowledge developed "on-the-job" from working with relevant projects, information on Canadian capacity is available from a number of sources, including:

• CIDA's scientific and technical specialists and/or officers with specific responsibilities related to thematic or sectoral issues - for example, gender equality, human rights, capacity development, social dimensions, forestry, agriculture, fisheries and oceans, water, health, etc. Ideally, the Country Desk already includes appropriate specialized staff based on the C/RPF;
• contacts established over the course of preparing the C/RPF (many Canadian "stakeholders" have project delivery potential);
• CIDA staff in the Canadian Partnership Branch who may have dealt with potential partners in the past;
• other government departments, such as Environment Canada, Industry Canada, Agriculture Canada and Justice Canada with particular sectoral knowledge;
• Standing Offer Arrangements (see List of CIDA's Standing Offers) currently in place in CIDA;
• databases maintained by CIDA, other development agencies (i.e. the International Development Research Centre [IDRC]), CIDA's development partners and professional associations;
• Internet websites;
• CIDA publications, such as the Lines of Credit, Service Contracts and Executing Agencies publications, and lists of projects compiled by Policy Branch divisions; and
• a range of events, including trade shows, exhibits and conferences, that bring together potential partners on a regional or sectoral basis.

6.7 Project Selection

All of the above activities lead to a short memo from the Project Manager (PM) to the Program Director (PD) recommending either:

• rejection of a specific potential project (in which case the reasons for the rejection should be recorded); or
• for projects over $500,000 - the preparation of a Concept Paper (see Chapter 7) on a specific potential project (in which case the results of the preliminary screening will become the basis of the Concept Paper); or
• for projects up to $500,000 - further assessment of available information in relation to project appraisal requirements (see section 8.3.2 ) leading to the preparation of a PAD (see section 10.3).

The Project Selection memo should identify the members of the project team who have been involved in the project screening process and upon whose recommendations the Project Selection memo has been prepared.

Note:
For projects over $500,000, if the screening process has led to suggestions on the analytical framework required for project appraisal, the Project Selection memo to the PD could be used as a vehicle to confirm the Desk's agreement on the analytical framework, which would then be incorporated into the Concept Paper for the approval of the required planning funds by the Vice-President.

The PD's approval of a recommendation to proceed with the preparation of a Concept Paper (for projects over $500,000) or a PAD (for projects up to $500,000) constitutes Project Selection.

6.8 Recipient Government Official Request

On most bilateral programs, the recipient government must officially request a project before it is submitted to the Vice-President as a Concept Paper.

The project identification and project selection processes described above are based on a review of a number of potential project ideas which may have originated from various sources. Therefore, although the recipient government would have been involved in discussions at the project identification stage and in the subsequent screenings (preferably within a broader participatory approach involving all recipient country stakeholders), the bilateral desk may, or may not, have an official request for the project which it wants to pursue to the Concept Paper stage.

The bilateral desk, in consultation with the field representative, must therefore decide when and how it should seek recipient government agreement to proceed with a specific project proposal, since project planning activity (appraisal, feasibility and design) should not start before the recipient government is in full agreement and is committed to providing the necessary support to the planning activities.

---

¹ At times, there can be a division of labour so that the planning work on a project is the responsibility of an analyst while a project/development officer takes over at the design or approval stage. According to the Agency Accountability Framework, either the analyst or the project/development officer would be considered the Project Manager (PM) when that person has responsibility/accountability for the project.