Project Delivery Competencies

Module 2: Project Concept and Origination

Project Concept Development

Every project begins with an idea – the project concept. In IFIs, project origination can occur via solicited proposals (e.g. a government proposes a project identified through national planning or an open call) or unsolicited proposals (e.g. a private entity initiates a project idea outside formal requests).

For sovereign projects, the borrowing government usually identifies and proposes projects to the IFI based on development needs and the agreed CPF priorities. The IFI and borrower then jointly develop an initial Project Concept Note (PCN) outlining the project's development objectives, initial scope, potential beneficiaries, and preliminary assessment of risks and alternatives.

This PCN is a critical document that establishes the project's rationale and sets a roadmap for further preparation. It typically includes early thinking on financing needs, expected outcomes, and alignment with both country priorities and the IFI's mission (e.g. poverty reduction or climate action).

Non-Sovereign Project Origination

In non-sovereign operations (e.g. IFC or national DFIs financing private sector projects), origination may start with a sponsor or company approaching the IFI with an investment proposal. IFC, for instance, has no standard application form – companies can directly approach IFC with a venture proposal for financing.

IFI investment officers engage in business development to identify viable projects that fit strategic goals. Early conversations with the client clarify their needs and the possible role of the IFI.

At this concept stage, whether sovereign or private, the IFI team performs an initial screening: Does the idea align with the institution's mandate (e.g. does it contribute to development and is it additional to what markets can provide)? Are there any "deal-breakers" such as policy non-compliance or unsustainable aspects? Lessons from past projects are also recalled to avoid repeating mistakes. This early review helps decide if the project should proceed to fuller assessment.

Stakeholder Engagement in Origination

Early buy-in is crucial. For sovereign projects, this means engaging the relevant government ministries and possibly donors who might co-fund or provide technical assistance. Donor partners often join at concept stage by offering project preparation grants or co-financing indications if the project aligns with their priorities.

For private projects, the sponsor must ensure host government support (licenses, permits) especially if it's an infrastructure project requiring government concession – many Public-Private Partnership (PPP) projects start as unsolicited proposals to governments, which then need to be vetted for viability and public interest. IFIs encourage governments to have clear policies for handling unsolicited proposals to ensure transparency and competition.

Internally, the IFI's country teams and sector specialists are key stakeholders at concept stage; they ensure the project fits country context and sector strategies. For example, an energy specialist might assess if a proposed power project aligns with the country's energy mix plan, and a country economist might verify it addresses a CPF objective.

Real Case – Unsolicited to Structured

In Latin America, a private firm once proposed an unsolicited highway PPP to a government. The government, with World Bank advisory support, opened the idea to competition and structured it under transparent PPP laws. The project concept was refined to ensure value-for-money for the public. This example shows how IFIs can guide an unsolicited concept into a bankable, well-structured project by the book.

Tools and Templates for Project Concept Stage

At this stage, teams use a Concept Note Template to ensure all key points are covered (objectives, preliminary cost estimate, expected outcomes, initial risk flags, etc.). A stakeholder mapping template is also useful now to identify who must be consulted or informed about this emerging project.

Additionally, IFIs often have an initial environmental and social screening checklist to categorize the project's risk (e.g. Category A, B, C in many MDB systems) right at concept. For instance, if a project concept involves building a large dam, it would likely be categorized as high-risk (requiring extensive assessment), which influences the preparation plan.

Assessment