IFAD’s operating model comprises a project cycle with two main components. Project development includes the project concept note, detailed project design and design completion. Project implementation includes supervision, the mid-term review and project completion.

Results-based country strategic opportunities programme

A results-based country strategic opportunities programme (COSOP) is a framework for making strategic choices about IFAD operations in a country, identifying opportunities for IFAD financing and related partnerships, and facilitating management for results.

The central objective of a COSOP is to ensure that IFAD country operations produce a positive impact on poverty. The document reviews the specific rural poverty situation as a basis for determining geographic sites where IFAD will operate, and identifying related thematic areas of focus. It also highlights the innovation that IFAD intends to promote in the country programme.

The COSOP covers policy and institutional factors that affect the outcome of IFAD operations and their impact on the poor. These include, inter alia, local governance and the participation and empowerment of the poor as the main determinants of an enabling environment for the success of pro-poor projects. In addition, the COSOP includes an overview of IFAD's previous operations in the country and the lessons learned (particularly from evaluation studies), and integrates these lessons into future operational directions.

To ensure strong country ownership, COSOP design and implementation is based on wide stakeholder consultation. The COSOP is also aligned with the country's poverty reduction or national development strategy, and with other relevant planning frameworks at the country level. It  clearly indicates potential strategic partners among multilateral and bilateral donors, taking into account the comparative advantage of IFAD and the synergies among the various actors.

Project design process

Project design is the operational process for creating high-quality development projects that respond to realities in the field and the needs and aspirations of the project's partners – especially poor rural women and men, themselves. It is the process by which the host country's strategies for rural poverty reduction, combined with IFAD’s Strategic Framework 2011-2015 and its other linked strategies and policies, shape IFAD-supported projects. The objective of the process is to deliver designs that enhance the relevance, effectiveness, efficiency and sustainability of IFAD-supported projects.

The project design process typically involves the following sequence of activities.

Project concept

The project concept will initially be elaborated as part of the COSOP’s formulation, establishing the framework for project processing. For countries without a COSOP, the project concept will be derived from consultation with the government and relevant stakeholders, followed by the project design. A project life file will be initiated at the concept stage.

Detailed project design and quality enhancement

The detailed project design will be reflected in a project design report (PDR). Conceived as a "living document," the PDR will be the main project document throughout the design process, although the content of relevant sections may be updated as the project design evolves through consultations with the government and other partners. The PDR will cover:

• Strategic context and rationale for IFAD's involvement, commitment and partnership
• Poverty, social capital and targeting
• Project description
• Implementation and institutional arrangements
• Project benefits, costs and financing
• Project risks and sustainability
• Innovative features, learning and knowledge management.

The project design stage also provides for systematic improvements to project quality, in light of IFAD's own quality enhancement process. This process includes a self-assessment by the initiating IFAD unit – based on a set of key success factors – complemented by substantive observations and suggestions through a technical analysis by internal and external peer reviewers.

Design completion and quality assurance

Once the PDR has reached its design completion point, the final step in the process will be independent quality assurance. Following a satisfactory review of the final PDR, the President's Report and the draft loan agreement are finalized.

Negotiation and approval

Negotiations then take place between IFAD and the borrower, using the design completion report as the basis for the financing agreement. Finally, IFAD's Executive Board reviews and, if it deems the project worthwhile, approves the loan or grant. Subsequent to Board approval, IFAD and the borrower sign the financing agreement.

Implementation

Implementation starts once the borrower has fulfilled specified conditions allowing IFAD to declare the loan or grant effective. IFAD-financed projects are implemented by national staff with support and guidance from IFAD staff at headquarters and in the country, as applicable.

The IFAD Policy on Supervision and Implementation Support provides for two supervision modalities – IFAD supervision and cooperating institution supervision – and a range of approaches that respond to concrete country and programme realities. At the end of the implementation period, the government, in collaboration with IFAD, prepares a completion report, with special emphasis on the operation’s impact on rural poverty.

Evaluation

The Office of Evaluation is responsible for evaluating IFAD's operations and policies. It is independent and reports directly to the Executive Board.