Role of Program-for-Results Financing System in Infrastructure Sector: Evidence from Egypt and Ethiopia

Abstract

This study aims are two folds: First is to investigate the role of the World Bank funding through using a novel financing instrument called Program-for- Results (P for R) to strengthen the government programs and second is to assess the P for R programs adopted in countries focusing on the direct effects and the results. The Bank currently has three integral financing options to offer client countries: Investment Project Financing supports specific projects and disburses against specific expenditures and transactions, Development Policy Lending supports policy and institutional reforms and provides general budget support, and P for R Financing supports government programs and disburses against results. Results for the P for R reflect on the new level because disbursements are directly linked to the achievement of measurable and verifiable outcome. As well, the Disbursement-Linked Indicators (DLIs) are used to provide governments with incentives to achieve critical program milestones and enhance the performance of programs. This study structured based on descriptive and observed the behavior of two countries’ government (Egypt and Ethiopia) for using P for R financing loan in a national project. On the ground, the field of practices was the main indicator in this stage of the investigation, then one of the P for R programs was compared to observe the effectiveness of this kind of financing system in these two countries specifically in the infrastructure sector, and classifications of DLIs were the main parameter in this comparison. The outcome and the existing literature are analyzed to develop a multibeneficial for country adopting P for R collaborative programs, as they should be applied to mitigate the same challenges and solve the institutional complications for the beneficial countries homogeneously. Furthermore, enhance the profit generated from this kind of program targeting via sustainable management tools.