From the World Bank’s mobilization of $160 billion in funding to the Asian Development Bank’s $20 billion COVID-19 pandemic response, multilateral development banks — or MDBs — acted promptly and accelerated their processes in disbursing COVID-19 funding, which was either new or reallocated from existing projects.
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But the funding activity and procurement notices are increasingly difficult to track since the situation is uncertain and numbers are constantly changing, with MDBs also having to navigate the effects of market disruption — high global demands and broken supply chains — brought about by the crisis.
Devex Analytics digs into its funding platform to explore whether the top MDBs have changed how they procure goods and services amid the pandemic, with the aim of helping business developers and fundraisers understand the dynamics and procurement methods being used.
What are the challenges in fast-tracking procurement?
As donors changed their methods to fast-track project approvals amid the crisis, procurement processes also needed to speed up to meet the pace of demand through the use of direct contracting and streamlined competitive procedures, including under national procedures and existing framework contracts.
Analysts say there needs to be a balance between transparency and speed, but the small amount of data available on COVID-19 procurement shows that agencies are having a hard time striking this balance.
Unregulated prices, substandard materials, and contracting suppliers with little to no history of delivering top-notch medical supplies are just some of the potential repercussions of unchecked processes. As a result, donor agencies have taken some steps to avoid irregularities, such as creating tools to monitor purchasing, mapping supply chains, and subjecting streamlined procurements to ex post reviews.
How are the banks getting on with fast-tracking efforts?
International assistance, both from multilateral development banks and other institutions, has increased significantly and may continue to rise in the near future.
Devex has tracked an estimated $24 trillion worldwide to combat COVID-19 as of June, and MDBs are on top of these responses. We explored how the top MDBs — the World Bank, African Development Bank, Inter-American Development Bank, and Asian Development Bank — are coping with COVID-19 funding and procurement information.
At the onset of the pandemic, the World Bank pledged $160 billion to support countries in their emergency response — with $50 billion from the International Development Association and $8 billion from the International Finance Corporation, which is part of the initial $14 billion fast-track funding package.
To date, the bank has committed $21 billion for 193 COVID-19 projects in 105 countries, data available through its projects map shows. The largest chunk went to South Asia at $5.05 billion, followed by Africa at $3.96 billion and Latin America and the Caribbean at $3.59 billion. By sector, health was the most funded at $5.92 billion, followed by public administration at $1.52 billion and social protection at $1.34 billion. Devex captures these projects through the bank’s monthly operational summaries.
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What is notable, however, is that while there is a high volume of COVID-19 programs, only a handful — fewer than 20 — have resulted in general procurement notices, or GPNs, so far.
These are early announcements on future procurements with information that could help potential bidders. It usually takes months before actual tender notices get advertised, but with time-sensitive procurements needed for the response, bidders are now encouraged to get in touch directly with the implementing agency — as in the case of this COVID-19 Emergency Response Project GPN in the Philippines. This, among others, is one of the several fast-track procurement frameworks that the bank allows countries to take during this time of emergency.
The outbreak adversely affected the health care supply chain, which prompted the World Bank to adapt by setting simplified methods so borrower countries can expedite the procurement of essential goods and services for their COVID-19 emergency response. Aside from existing methods such as requests for quotation and consultants selections, the bank made available other procurement options. Borrower countries may now use the most efficient option, either through direct contracting or streamlined competitive procedures.
They may also ask for assistance from the bank with processes such as supplier selection, bidding, negotiation, and monitoring of implementation through “hands-on expanded implementation support.” In addition, countries may procure directly through United Nations agencies, which is fast-tracked by procedures and templates set by the bank.
Another option is bank-facilitated procurement, by which a borrower country would allow the World Bank to access its global suppliers and negotiate prices on its behalf — a method that is limited to procurement of coronavirus-related medical equipment and goods.
In the span of two weeks, AfDB tapped different methods to assist member countries in their fight against the pandemic. Its first response was launching a three-year Fight Covid-19 Social bond worth $3 billion, which targets the economic and social impact of the outbreak in Africa.
After a few days, it also approved a $2 million emergency assistance package to the World Health Organization for its COVID-19 response in Africa. AfDB then created a $10 billion COVID-19 Response Facility — with $5.5 billion for sovereign operations in member countries, $3.1 billion for sovereign and regional operations under the African Development Fund, and $1.35 billion to help the private sector.
AfDB has a dedicated page listing all of its COVID-19 funding, much of which has already translated into programs. But while the bank provides information regarding projects and allocations, there is still no data available that shows the procurements or awards made under them, nor is there any press release that pertains to new procurement guidelines amid the outbreak.
So far, AfDB has announced more than 20 coronavirus-related projects with common objectives of addressing the health, social, and economic consequences of the pandemic. Among these, the largest allocation is for the Covid-19 Response Support Programme in Morocco at $298 million. The project’s main components are supporting the health and social response and building resilience in the private sector.
From the initial $2 billion COVID-19 response four months ago, the bank ramped up its available resources for the Latin American region to $12 billion, including a $3.2 billion boost for the 2020 lending program. On top of this, governments can request the redirection of resources from current projects to meet coronavirus response needs, which can total up to $1.35 billion, and there is an additional $5 billion from IDB Invest focusing on affected companies.
Use Devex's monthly analysis and interactive visualization to anticipate upcoming opportunities with the Inter-American Development Bank.
To avoid mismanagement of funding amid the pandemic, the bank selected priority areas, including projects catering to the public health response, safety nets for vulnerable populations, fiscal policies, and economic productivity and employment. In addition to its financial aid, IDB offers knowledge transfer and technical advice to its member countries in designing effective coronavirus-related policies and has created a centralized platform for COVID-19 information and the bank’s initiatives.
Among its seven targeted responses, the fiduciary response aims to streamline the financial management intervention and procurement process for expedient delivery of goods and services. This is done by directly contracting the Pan American Health Organization and WHO as procurement agents and through the interactive supply georeferencing map, which is similar to ADB’s supply chain map.
The bank upholds its International Aid Transparency Initiative standard and continually releases up-to-date COVID-19 funding activities, procurement notices, and contract awards. In June, eight new coronavirus-related projects with a combined worth of $1.6 billion were added to its monthly operational summary, with the Dominican Republic and Argentina receiving most of the funding at $500 million each.
Earlier, 94 COVID-19 programs worth $6 billion were made public at the start of April, with Brazil receiving the biggest allocation at $1 billion, followed by Argentina at $970 million and Bolivia at $580 million. In line with the focus on strengthening the financial management of the bank’s member countries, public administration reform was the most common sector for projects and had the highest allocation at $2.3 billion. Since these programs were released recently, only a few tenders and contract awards have been published on the bank’s procurement platform.
ADB announced an initial package of $6.5 billion in March, which was then tripled to $20 billion due to the scale of the pandemic. This includes $13 billion in regular ordinary capital resources, for countercyclical support financing. This is the bank-wide ceiling for the COVID-19 Pandemic Response Option, which consists of policy-based loans. The bank does not take part in the procurement process for these.
To help expedite the delivery of goods and services the bank streamlined its internal business processes, generated an open form for market research for goods and equipment suppliers, and created a supply chain map.
As countries in Asia slip into a pandemic-induced recession, multilateral institutions have proven crucial in mobilizing and channeling funds to support the COVID-19 response. Devex Analytics takes a deep dive into recent funding.
Even though the process has been fast-tracked, the bank shares some COVID-19 procurement information — such as plans, programs, and tenders. Looking at the bank's procurement funding, there are a total of 55 coronavirus-related programs with a combined worth of $15.82 billion. Among the top-funded are the COVID-19 Active Response and Expenditure Support Program at $12.8 billion, the COVID-19 Emergency Response project at $1.8 billion, and the COVID-19 Rapid Response Program at $220 million. The top-funded countries are the Philippines with 16% of the total $15 billion, Indonesia with 14%, and Thailand with 12%.
Of the 55 released programs, there were only seven procurement plans provided for bidders, and most of the direct contracting was with U.N. agencies — specifically WHO and UNICEF — and private companies. Despite the amount of programs released, there was only one linked tender for companies to purchase personal protective equipment in Bangladesh, while the rest of the procurements were looking for individual consultants that can easily be accessed through ADB CMS. This is due to the creation of the supply chain maps that the bank provided to governments and investors for streamlined transactions of medical goods and equipment.
Update, July 16: This article was updated to clarify details of ADB’s pandemic response funding.
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