Project identification

Through consultations and cooperation with partner countries and/or international financial institutions (including multilateral development banks), the Bank identifies potential projects that meet development needs and strategic priorities of partner countries.

Project selection

The Bank selects a candidate project to support, based on its preliminary review of multi-year development plans and priorities of partner countries, expected impacts on economic growth and welfare, valid basis for support, etc.

Developing a project concept

Partner countries' governments (or their agency) create a project concept for the selected project and submit a project concept paper (PCP) to the Bank. (If necessary, the Bank may dispatch PCP mission to provide technical support to partner countries.)

The PCP should contain the project overview including backgrounds, project objectives and targets, scope, and cost estimates.

Conducting a feasibility study (F/S)

Partner countries are required to conduct a feasibility study to validate the project concept they have outlined in the PCP is viable, and to determine whether the proposed project can be proceeded as planned, etc.

If reasonably requested by the partner countries, the Bank may offer grants or technical assistance to help them conduct or amend/supplement a feasibility study.

The Bank may provide grants for partner countries' feasibility study and environmental-social impact assessment through EDPF if the lack of government budget or know-how, etc. Stands in the way of proceeding with preparation of the candidate project to the next steps.

Project appraisal

Following receiving loan application, the Bank undertakes comprehensive due diligence on the project, which includes but not limited to, the borrower's (or the guarantor's) credit status and operating abilities, project implementation plan, project feasibility, and environmental-social impacts. (If necessary, the Bank may dispatch an appraisal mission for on-site surveys, information gathering and discussions with the borrower.)

The borrower (or its government) and the Bank jointly create a Minutes of Discussion (MOD) based on the results of the due diligence and discussions between the two parties.

Loan negotiation

During and after the project appraisal, both parties negotiate major terms including loan amount, interest rate, fees and disbursement method.

Loan approval

The Bank submits a loan approval report, which includes due diligence results and terms/conditions agreed, to the Operations Committee for approval. The committee is the top-level decision-making body of the Bank, comprised of its chairperson as well as governmental officials and civilian experts.

Signing a Loan Agreement

The borrower ought to submit to the Bank a plan for the employment of consultants and the procurement of goods and services and receive "no-objection." Then, after a round of negotiations on terms and conditions, the borrower and the Bank may sign a loan agreement, and if deemed necessary, a sovereign guarantee agreement can be signed in parallel.

Once all of the documents and evidences required are furnished and all the conditions precedent are satisfied, the loan agreement becomes effective, enabling the borrower to draw down the loan.

General Procedures

1. Preparing bidding documents : The borrower (or its agency) prepares and submits bidding documents to the Bank, and if they are considered in conformity with the relevant guidelines, the Bank declares "no objection."

2. Bid announcement : The borrower (or its agency) invites prospective bidders to the bidding process in accordance with the procedures specified in the relevant guidelines.

3. Bid evaluation and award : The borrower (or its agency) evaluates bids according to the terms and conditions set forth in the bidding documents and relevant guidelines, and submits the bid evaluation report to the Bank, and if it is considered in conformity with the relevant guidelines, the Bank declares "no objection."

Note : Any bidder who is (i) convicted by a court in the partner country or the Republic of Korea for fraud, corruption, etc.,(ii) listed for sanctions by the United Nations or the United States,(iii) debarred by multilateral development banks, or (iv) determined ineligible by EDCF may be disqualified to further participate in the bidding process.

Guidelines

Separate guidelines of the Bank apply to the employment of consultants and procurement for the EDPF-funded projects.

EDPF loans are disbursed on demand by the borrower in line with the progress of construction of the project, within the commitment amount mutually agreed between the parties, in accordance with the relevant guideline of the Bank.

• Before the project completion, the Bank monitors if the project has been implemented in accordance with its timeline and objectives, based on quarterly progress reports issued by the borrower (or its agency) or third-party experts.
• After the project completion, the Bank carries out "completion evaluation" to check the consistency between the original plan and the outcome of projects, based on the project completion report issued by the borrower (or its agency) or third-party experts.
• Two years after the completion evaluation, the Bank performs "ex-post evaluation" to assess the outcomes and achievements of the project.
• Over the course of evaluation, the Bank keeps track on whether the project's objectives have been achieved and the extent of socio-economic impacts on partner countries, while taking the lessons learned into account to improve the performance of the on-going and subsequent projects.