Corporate and Financial Governance Project
sector: Finance | country: Nepal
Proper sequencing and project readiness. Proper sequencing of project activities is essential for project success. The project had strong policy, legal, and regulatory content, some of which were addressed through conditions for loan effectiveness and disbursement. However, several more policy, legal, and regulatory reforms were to be supported through the cluster technical assistance (TA) that was approved with the project. Fact-finding for cluster TA was conducted only after project approval. In the absence of an enabling policy and regulatory environment, several project activities were either delayed or had to be cancelled altogether. There were also gaps in terms of project readiness. For instance, the project preparatory TA for assessing the feasibility of component 3 was only approved after project approval. When the project preparatory TA concluded that this component was not financially viable, it had to be cancelled.
Capacity constraints and project complexity. Overly ambitious and complex projects are less likely to be successful. The project, which attempted to tackle a wide range of issues in several subsectors within a short time frame, was too complex given the capacity constraints of the Ministry of Finance (MOF) and the implementing agencies. Although the MOF had effectively executed ADB projects before, those projects were considerably less complex. Several implementing agencies had little or no previous experience in development-partner-funded projects.