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The Islamic Development Bank Group

Together We Build a Better Future

09-10 February 2011

Star-up WorkshopIDB PNPM Integrated Community Driven

Development (ICDD)Project

Contents IDB and the Vision 1440H (2020)

Structure Products – Modes of Financing Portfolio Activity Highlights Cooperation with Other Institutions

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• Established in 1975 to foster socio-economic development in member countries and Muslim communities in compliance with Shariah.• Authorized capital of ID 30.0 billion (US$ 44

billion)

• Subscribed capital of ID 15.0 billion (US$ 22 billion)

• Paid-up capital of ID 3.1 billion (US$ 5 billion)

Islamic Development Bank (IDB)

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• AAA rating by Moody’s Investors Service, Fitch Ratings, Standard & Poors.

• Zero-Risk Rating by the European Parliament

Islamic Dinar (ID)

• Unit of Account of IDB, which is equivalent to One Special Drawing Rights (SDR) of the International Monetary Fund (IMF)

Islamic Development Bank (IDB)

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VisionVisionMissio

n

Promote health

Universalize education

Empower women

Prosper the people

Islamic financial industry

Integration of IDB MCs

Image of the Muslim world

Alleviate povertyBy the year 1440 Hijrah IDB shall

have become a world-class development bank, inspired by

Islamic principles, that has helped significantly transform the

landscape of comprehensive human development in the Muslim world and helped restore its dignity

The Mission of IDB is to promote comprehensive human development, with a focus on the priority areas of alleviating poverty ,

improving health, promoting education ,improving governance and

prospering the people

Strategic Thrusts

Vision 1440 H

Human Development

Agriculture Development and Food Security

Infrastructure Development

Intra-trade Among Member Countries

Private Sector Development

Research and Development in Islamic Economics, Banking and Finance

IDB: Six Priority Areas

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Contents

Vision 1440H (2020) Structure Products and Services Portfolio Activity Highlights Cooperation with Other Institutions

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IDB Group

PresidentICD

1999

BOARD OF GOVERNORS

BOARD OF EXECUTIVE DIRECTORS

IDB Group Organizati

onal Structure

VP(Fin.)

Chief

Econ.

VP(Opr.)

IRTI1981

ICIEC

1994

ITFC2008

VP(CorpServ.)

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Growth in Membership

• 22 countries in 1975 → 56 countries in 2009

• A Unique Model of South-South Cooperation

• 56 members spread over 4 continents• 22 countries in 1975 → 56 countries in 2009

ME and Africa: 27

Asia: 26

Europe: 2

Latin America: 1

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Shareholders in IDB

(As % of Subscribed Capital)Saudi

Arabia; 24.44

Libya; 9.81

Iran; 8.58

Qatar; 8.61Egypt; 8.48

Turkey; 7.73

UAE; 6.94

Kuwait; 6.54

Algeria; 3.05

Pakistan; 3.05

Indonesia; 2.7

Others; 10.07

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BOG

BED

President

VP (F)

VP (O)

Country Dept.

Agriculture & Rural

Development Dept.

Human Developme

nt Dept.

Infrastructure Dept.

Islamic Solidarity Fund for

Development

Trust Fund Departmen

t

Communities in non-Member

Countries Dept.

Operations Policy & Services

Dept.

4 Regional Offices

VP (CS) CE

IDB Group Organizati

onal StructureOPERATIO

NSCOMPLEX

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Interest-Free Loan Leasing Installment Sale Construction Finance (Istisna’a) Equity Line of Financing Technical Assistance (Loan & Grant) Trade Financing (Murabaha)

Products - Modes of Financing

Contents Vision 1440H (2020) Structure Products and Services Portfolio Activity Highlights Cooperation with Other Institutions

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Approved Financing IDB Group(Since Inception to End 2009)

Type of Operation US$ billion

1 -Development Projects 28.14

2 -Technical Assistance 0.29

3 -Trade Operations 34.78

4 -Special Assistance 0.68

TOTAL 63.90

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A dedicated facility to fight poverty

Launched - IDB BOG Annual Meeting (Dakar 2007)

Target Endowment of US$ 10 billion

Current IDB and MCs contribution of US$ 1.6 billion

Two Pilot Programs already approved: Vocational Literacy (VOLIP) Microfinance Support (MFSP)

Islamic Solidarity Fund for Development (ISFD)

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Integrated Rural Development

Agriculture &Rural Development

Department

Agriculture and Food Security

Water Resources and Environment

Promote sustainable agriculture and food security in member countries, introduce best practices in community-based development, and maintain a

focus on Natural Resource Management

Structure AGR Department (AGRD)

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IDB Operations in Indonesia

• Indonesia joined IDB as a founding member in 1975.

• Cumulative IDB Group Approvals to-date US$ 2.012 billion

• There have been 100 Development operations

• 56 completed operations

34.9%

18.7%13.8%

12.3%

8.7%11% Education

Agriculture

Transportation

Health

Energy

Other

Integrated Community Driven Development (ICDD)

Rationale Continuing the partnership with a

successful national flagship poverty alleviation

Multi-sector, multi-pronged approach to poverty reduction Significantly assist in the

achievement of the MDG targets.

Phase-II will build on the existing, solid platform created in the ICDD project Add enhancements to areas

requiring enhancement

Provide further development support to Kelurahan which have benefitted from the core PNPM program

Aim: Achieve sustainable improvement

in the welfare of poor communities(aim of PNPM-Mandiri)

Objectives: Improve the socio-economic

conditions of communities, through: improving community

infrastructure, social activities aimed at the

dependent/ vulnerable segments of the communities

facilitating economic growth and livelihood development

Build capacities & skills of communities and their local institutions

Expectations

What are your expectations from PNPM? Personal Level & Programme Level Something that you need to work out in

your respective teams - Vision, Mission, Values, Targets etc.

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Conceptual Framework(Sustainable Livelihood Framework-SLF)

Community(Poorer

Segments)

Social

Human

PhysicalNatural

Financial

• Health• Education• WATSAN• Community Group formation

• Skill/ vocational Training• Entrepreneurship

Training

• Infrastructure (e.g. Roads, Irrigation, Schools, PHUs)

• Agriculture • Environment

• Microfinance• Capacity

Building

Lessons Learnt from CDD Types of Intervention

Need for Effective Facilitation

Need for Improvement of Local Organisations e.g. KSMs (BKMs) - Moving from Simple to more

Developed

Token vs Representative vs Transformative Participation

Elite Capture (Inclusion-Exclusion Criteria)

Lessons Learnt from CDD Types of Intervention

Access to Micro-Finance & It’s Distribution & Capacity Building

Integrated Value Chain – From Community to Markets

Need for Close Monitoring & Supervision Quality Control & Systems

“Learning Environment”, Mentoring & Coaching

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0-6 Months

6-12 Months

12-24 Months

24-36 Months

Above 36 Months

‘The Quality of SHG depends upon the Quality of Inputs’

Socialization Inputs

Implementation Arrangements

Project Management Units (PMUs)

•Existing Phase-I Set-up to remain

Consultancy Services

•Existing Phase-I Set-up to be extended, if satisfactory

Project Management Units (PMUs)

•36 months

Disbursement Arrangement

•Same as Phase - I•One Special Account

EFFECTIVENESS OF THE FINANCI

NG AGREEM

ENT

EVIDENCE OF AUTHORITY

FOR SIGNING WITHDRAWA

L APPLICATION

S• Specimen Signature(s)

• SUPPORTING

DOCUMENTS:

• Original Invoice,

Progress Report,

Evidence Of Payment,

Guarantees, etc.

EFFECTIVENESS OF THE

FINANCING AGREEMENT

EVIDENCE OF AUTHORITY FOR SIGNING WITHDRAWAL APPLICATIONS• Specimen Signature(s)

• SUPPORTING DOCUMENTS:• Original Invoice, Progress

Report, Evidence Of Payment, Guarantees, etc.

DESIGNED TO FACILITATE PAYMENT FOR NUMEROUS SMALL CONTRACTS

STIPULATED IN THE AGREEMENT

ORIGINAL WITHDRAWAL APPLICATION,

AUTHORIZED SIGNATURE(S)

SUMMARY SHEETS, AUTHORIZED

SIGNATURE(S)

SPECIAL ACCOUNT

REPLENISHMENT

RECONCILED BANK STATEMENT STATEMENT OF EXPENDITURE (SOE) EXPECTED EXPENDITURE FOR NEXT THREE (3)

MONTHS CLEARANCE FROM THE AUDITORS

SPECIAL ACCOUNT

Procurement

Need to pay careful attention to procurement Especially at the ground-level (KSMs, Faskel,

Korkot)

Maintain procurement records (evaluation reports, etc)

Contracts should be maintained and followed

Follow IDB and GOI procurement guidelines

Procurement

Report and record any mis-procurements and non-compliance

Regular progress reports

Caution: Mis-procurement is a serious issue Violation of Agreed procedures of FA Terms and Conditions of the contract are not

satisfactory to IDB Action: Cancellation of portion of the funds

allocated to the goods and works that have been misprocured

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Thank you