About evaluation

Accountability is central to good corporate governance. To ensure that the Bank invests responsibly, the EBRD continually reviews its operations to assess their effectiveness, to learn from past experience and to improve the development of future projects.

The Evaluation Department (EvD) is responsible for reviewing Bank operations. EvD evaluates Bank projects and policies, establishing how well they meet their objectives and the extent to which they comply with the Bank’s mandate. EvD also draws lessons from past experience which helps the Bank to improve the design of new operations.

The department evaluates Bank investments as well as donor funded activities. Special studies related to particular sectors and countries are also prepared by EvD.

In addition, EvD looks at the practices of other international financial institutions and utilises the lessons they have learned from their operations to improve the potential of EBRD projects.

EvD participates in the Evaluation Cooperation Group (ECG), a working group which brings together the heads of evalution departments of the multilateral development banks. The ECG aims at harmonisation of evaluation practices and procedures among multilateral development banks and provides a forum for them to share experiences.

Through evaluation, the EBRD demonstrates three key elements of good governance:

• Accountability – assessing the effectiveness of Bank operations.
• Transparency – independently reviewing operations and openly reporting findings.
• Improved performance – learning from past experience to improve future operations.

Independent evaluation

EvD is fully independent of EBRD management and reports directly to the Bank’s Board of Directors. This line of reporting, which was established in 2005, has enhanced the Bank’s accountability and enables EvD to assess the performance of the Bank impartially. The department is managed by the Chief Evaluator and its staff are bound by the Bank’s relevant staff policies.

EvD has been allocated its own budget, which is separate from the Bank’s overall budget. The budget is determined by EvD’s work programme, which sets out the department’s planned activities for the year. The Chief Evaluator regularly reports to the Board of Directors on the implementation of EvD’s work programme. The main line of communication with the Board is through the Audit Committee, which consists of seven Board representatives.

EvD evaluates EBRD operations against a range of objectives, identifies lessons learned and ensures that these are taken into account in new projects and strategies. The evaluation process is illustrated in the table below.

Selecting projects for evaluation

To select projects, EvD follows the guidelines established by the Evaluation Cooperation Group (ECG), which aim to standardise evaluation methods in multilateral development banks. The ECG consists of the evaluation department heads from the African Development Bank, the Asian Development Bank, the EBRD, the European Investment Bank, the Inter American Development Bank, the International Monetary Fund and the World Bank.

The selection takes account of:

• The project’s potential for generating lessons learned.
• The country or sector in which the project was undertaken.
• The visibility of the project.
• The size of the Bank’s investment.
• The project risk.
• The likelihood of the project being replicated.
• The project’s financial performance.

About 30% of completed projects are selected for evaluation using these criteria. An additional 40% are selected at random. This ensures a cross section of projects in the Bank’s portfolio is evaluated.