KfW presents the 12th evaluation report on the effectiveness of Financial Cooperation

Frankfurt (ots) -

- Results are good: around 80% of projects were rated satisfactory
or above
- Financial Cooperation with fragile countries accounted for a
significant part of this success despite the greater risk
exposure

KfW has published the 12th biannual evaluation report on Financial
Cooperation (FC) with emerging and developing countries entitled
"Fragile countries: bringing stability". KfW's independent Financial
Cooperation Evaluation unit examined the impact of 129 projects which
received total funding in excess of EUR 1 billion in 2011 and 2012
from KfW on behalf of the German Federal Ministry for Economic
Cooperation and Development (BMZ). Around 80% of projects qualified
as successful. Commenting on the report presented by Dr Eva
Terberger, the head of the Evaluation unit, Dr Norbert Kloppenburg,
member of the Executive Board of the KfW Group, stated: "The vast
majority of our development projects either provided a long-term
improvement in living standards in our partner countries or increased
environmental and climate protection. This is encouraging news,
particularly for our work in fragile countries: the evaluation report
indicates that Financial Cooperation can create greater stability and
better living standards even in these difficult environments."

"We are of course delighted when a large proportion of evaluation
inspections report positive findings, but that will not always be the
case. Financial Cooperation is designed to promote investment where
other investors refrain because of the particular risk exposure -
poor infrastructure, political instability etc. Consequently there
will always be a few failures and unsatisfactory outcomes. But we can
learn from those failures, which is the primary role of the
evaluation. We need to understand whether innovative approaches can
achieve the stated objectives as well as whether project designs work
in practice and how to improve them. As such, the work done by the
Financial Cooperation Evaluation unit is a vital element in our
quality assurance process," according to Dr Kloppenburg. Transparency
has been a reality for over 20 years, a tradition continued in the
current report, which sets out all the evaluation results. The report
contains Financial Cooperation success stories, such as the creation
of Albania's first sewage treatment plant, KfW's contribution to the
currency exchange fund (TCX) - the first global fund for micro-loans
in local currencies - and the construction of rural infrastructure in
Bangladesh, which has boosted employment and income dramatically. The
report also covers the disappointments, like the failed attempt to
use private operators to supply water in south-eastern Europe. Our
aim of creating a natural park where nature conservation was linked
to increased revenue from tourism also proved unrealistic.

One chapter of the report is dedicated to the results achieved by
projects in fragile countries, which have been evaluated as a group
for the first time. Fragile national conditions did put success rates
a statistically-significant 6 to 7 percentage points lower than in
stable countries. However, in absolute terms, the results were
surprisingly good. "One key to successful FC support is being
sensitive to existing conflicts when selecting target groups," Dr
Terberger explains. "Broad-based support for refugees and host
communities ensures social integration. In contrast, focussing on
specific population groups can actually exacerbate tensions, rather
than reducing conflict, which is not our aim."

"Particularly in fragile countries, Financial Cooperation needs to
offer greater stability and help our project partners to avoid
further poverty and conflict. We have an incredibly important and
very difficult role to play, but the lessons drawn from our
evaluations are very helpful," commented Dr Kloppenburg.

The report is available online at
https://www.kfw.de/evaluierungsbericht.

Contact:
KfW, Palmengartenstr. 5 - 9, 60325 Frankfurt
Kommunikation (KOM), Dr. Charis Pöthig,
Tel. +49 (0)69 7431 4683, Fax: +49 (0)69 7431 3266,
E-Mail: presse@kfw.de, Internet: www.kfw.de