The absence of a country strategy poses challenges to project performance, Muthoo said in an interview with ET, even after expressing satisfaction over the execution of the first project his office evaluated in India.
The New Development Bank, earlier called BRICS Development Bank, was set up in 2015 to finance public and private projects through loans, guarantees and equity participation.
“Projects in India are showing promising progress, thanks to the dedicated commitment and support from the department of economic affairs,” Muthoo said. “State-level authorities are also actively engaged and enthusiastic about securing NDB financing for various projects.”
However, he outlined a few areas which require attention to optimise project outcomes.
“Despite its success, certain areas posed challenges to project performance. These included the absence of a comprehensive country strategy to guide the India-NDB partnership, insufficient analytical work to inform decision-making during the design phase, weak supervision, implementation support, monitoring, and evaluation, and limited attention to knowledge management, policy engagement, and innovation,” he said.
The independent evaluation office (IEO) is a new structure within NDB to promote accountability and drive quality and development impact of the multilateral bank. The IEO is independent of the management of the NDB and reports directly and exclusively to the board of directors.India, the founding member of NDB, is the second largest recipient of NDB’s financial support ($7.5 billion) after China. NDB approved 20 projects in India while seven more proposals are being reviewed.
Overall, NDB supported 96 projects across the globe with $33 billion of financing commitment till December 2022.
The first project evaluation by IEO in India was that of the Madhya Pradesh Major District Roads Project, which was approved in November 2016 with the objective of improving the state’s connectivity of the rural regions and achieving a larger coverage of the national and state highways.
The project not only achieved its original targets but surpassed them. Over 1,551 km of major district roads were upgraded, exceeding the initial design target of 1,500 km, according to official records.
“The road connectivity project in Madhya Pradesh has significantly improved livelihoods and strengthened regional connectivity,” Muthoo said. “By focusing on access to roads and working closely with federal and state governments, the project has positively impacted the local communities.”
This year, the IEO is evaluating another two loans, amounting to $2 billion, provided to India for Covid-19 emergency response and socio-economic recovery after the pandemic.
It is also evaluating NDB’s financial architecture. “This is a very strategic evaluation to assess NDB’s capacity to mobilise resources to advance its mandate and activities,” he said.
NDB has nine members, including the inaugural members Brazil, Russia China and South Africa, and the new members–United Arab Emirates, Uruguay, Bangladesh, and Egypt.