Terms and Definitions



Aggregate Project Performance Indicator (APPI)

A single measure of overall project performance constructed from ratings on the core evaluation criteria.


A standard that serves as a point of reference by which performance is measured.


The process by which an IFI's evaluation framework, methodology, policies and practices are judged compliant with the ECG Good Practice Standards.

Borrower performance

The adequacy of the Borrower's assumption of ownership and responsibility during all project phases, including government,  implementing agency, and project company performance in ensuring quality preparation and implementation, compliance with covenants and agreements, establishing the basis for sustainability, and fostering participation by the project's stakeholders.

Broad economic and social goals

Sector-wide and/or economy-wide goals that are not included in the project's statement of objectives but nevertheless are of interest in the evaluation.

Cancelled Guarantee

A cancelled guarantee is one that has been issued, and been active, and then is cancelled prior to its expiry date.  In respect of Political Risk Insurance guarantees, the project company is not party to the cancellation, which is at the unilateral initiative of the guarantee-holder.

Cancelled Investment

An undisbursed, committed balance of an equity investment or loan, cancelled by mutual consent of the IFI and the project company .

Central Evaluation Department (CED)

The corporate unit charged with supporting the self-evaluation system for investment operations and reviewing its main products (e.g., completion reports (CRs),  expanded annual supervision reports (XASRs), or country strategy completion reports ), in addition to producing performance reports (PERs), Annual Reviews of the IFI's evaluation results and other independent evaluation studies, and performing related dissemination responsibilities.

Closed Investment

A disbursed investment that has been fully repaid, sold, or written off.  Guarantees are considered closed when they have expired or been cancelled.


Generally, the legal entity owning and implementing the project; in most cases the IFI's investment counterparty.  For financial markets operations, the company is: (a) the financial intermediary in the case of credit lines, bank equity investments, leasing companies, etc.; or (b) the fund management company (as distinct from the normally separately owned investment fund itself) in the case of funds.  In the case of political risk insurance (PRIs), MIGA's only counterparty is the financier or investor and not the project company.

Completion Report (CR)

A record of a public sector operation's performance at the end of its implementation phase, undertaken as a self-evaluation by an IFI operations unit.

Completion Report validation

A review of Completion Report findings by the Central Evaluation Department, normally as a desk study.

Core Evaluation Criteria

The principal criteria that form the basis for evaluating project performance.  For evaluations of investment/TA loans, the core criteria are Relevance, Effectiveness, Efficiency, and Sustainability.  For evaluations of policy-based lending/loans (PBLs), the core criteria are Relevance, Effectiveness, and Sustainability.

Corporate goals

Areas of special focus of the IFI, such as poverty reduction, rural poverty reduction, transition  to open market economies, implement EU policy objectives, European social cohesion, etc.

Cost-benefit analysis (CBA)

A quantitative analysis performed to establish whether the present value of benefits of a given project exceeds the present value of costs. 

Cost-effectiveness analysis (CEA)

A quantitative analysis that compares the relative costs and outcomes of two or more courses of action.  Cost-effectiveness analysis can be used to show whether the outcomes were delivered at least cost compared to alternative ways of achieving the same outcomes.

Direct Evaluation

Evaluations undertaken directly by the CED (as opposed to indirectly by IFIs), such as Performance Evaluation Reports (PERs). (Otherwise referred to as independent evaluation, this term is used in GPS on Private Sector Operations to acknowledge the different terminologies used in the different IFIs.)


The systematic distribution of evaluation findings through various media (including the CED's website) to the public at large, normally subject to certain restrictions specified in a Board-approved disclosure policy.


The systematic distribution of evaluation findings through various media within the IFI, generally without restriction as to contents, with the aim of promoting awareness and reinforcement of corporate objectives, success standards, accountability, and use of lessons for improved results.

Dropped Investment

A proposed investment in the private sector approved by the IFI's Board of Directors that has failed to become a signed agreement.

Early Operating Maturity

Referring to the point in time at which an investment operation in the private sector is ready for evaluation.

Economic Rate of Return (ERR) or Economic Internal Rate of Return (EIRR)

The internal rate of return of the time series of the project's economic costs and benefits.  The ERR is an absolute measure of project benefits in relation to costs, not a measure of efficiency per se.

Economic Return on Invested Capital (EROIC)

The internal rate of return on the economic costs and benefits on a before-after, rather than a with-without, basis but taking into consideration also other material, documented costs and benefits to customers, employees, government, suppliers, competitors, local residents, etc.


The extent to which the project achieved (or is expected to achieve) its stated objectives, taking into account their relative importance.


The extent to which the project has converted its resources economically into results.


The extent to which the value generated or the expected results of a project are verifiable in a reliable and credible fashion.


A measure of how well a proposed strategy or program sets out criteria and metrics to be used in its subsequent evaluation.

Evaluation Principle (EP)

A key unit of the Good Practice Standards, which together form the framework that IFIs  should follow if they are to be deemed to have a satisfactory evaluation system.  Each Evaluation Principle is defined by a set of elements.

Expanded Annual Supervision Report - Assessment (XASR-A)

The CED's instrument for conveying the findings of its desk review of each XASR.  Its scope includes a judgment of the XASR's quality (responsiveness to scope guidelines, research depth, application of guideline-prescribed standards, and objectivity), appropriateness of assigned performance ratings, appropriateness and completeness of identified lessons, and issues for discussion in a Management-led review meeting (if the CED recommends the XASR for such a review).

Expanded Annual Supervision Report (XASR)

Otherwise referred to as an Indirect Evaluation.  A standard, one-time supervision report undertaken once the project reaches early operating maturity with an attached evaluative addendum (expanded refers to the evaluative addendum), prepared on investments selected for evaluation by the CED.  The addendum is a concise document, executed in a standard template according to a set of instructions prepared by the CED.  It features analysis of specified performance dimensions with rated indicators and lessons learned.  CED-verified XASR findings and performance ratings form the core of the CED's annual synthesis report (the Annual Review).

Financial Rate of Return (FRR or Financial Internal Rate of Return (FIRR))

The internal rate of return of a time series of cash flows describing the project's or company's financial investments and returns.

Financial Rate of Return (FRR)

The internal rate of return of a series of cashflows describing the project's financial investments and returns over time.

Fund Weighted Average Cost of Capital (FWACC)

The cost of capital for a private equity or listed fund, estimated by calculating the average cost of debt based on the country composition of the fund, and then levying a premium for the combined equity instrument and project risk.

Gross Profit Contribution

The gross revenues generated for an IFI by an investment after deducting financing costs and loss provisions but before deducting administrative costs.

IFI Performance

The quality of services provided by the IFI during all project phases, including the IFI's performance in ensuring project quality at entry, satisfactory implementation, and future operation.


Higher level of outcomes of projects or strategy.

[GPS on Evaluation of Public Sector Operations avoids the use of the term because of the multiple and conflicting meanings of the term, instead the GPS calls for project objectives to focus on outcomes for which the project can reasonably be held accountable, avoiding objectives beyond the purview of the project. To the extent that higher-level social and economic objectives and corporate goals are included, they should be targeted at segments of the population that can reasonably be expected to be affected by the project, directly or indirectly. – GPS Annex on Impact and Impact.

Impact evaluation

An impact evaluation quantifies the net change in outcomes that can be attributed to a specific project or program, usually by the construction of a plausible counterfactual.  (See the annexed note on Impact.)

Independent Evaluation

Otherwise referred to as Direct Evaluation.  Evaluations undertaken by the IFI's CED, including Performance Evaluation Reports (PERs), XASR Assessments (XASR-As ‚Äì assessments of expanded annual supervision reports), special studies and Annual Reviews, the latter based largely or in part upon the findings of CED-verified XASRs, PERs and relevant portfolio performance data. 

Indirect Evaluation

Evaluations undertaken by staff of the IFI (as opposed to directly by the CED), such as XASRs.  Indirect Evaluations are accompanied by independent verification of findings by the CED, such as in XASR-As. (Otherwise referred to as Self-Evaluation; term is used in GPS Private Sector to acknowledge the different terminology in the different IFIs.).

International Financial Institutions (IFIs)

Collectively refers to the Bretton Woods institutions, regional and bilateral development banks and financial institutions that are members of the ECG which provides financing and advisory services for projects and programs in member countries. It does not include internationally-operating commercial banks.


The IFI's financial instrument specific to the operation being evaluated.  Investments mainly consist of loans, loan guarantees, quasi-equity and equity investments.  In the case of MIGA, the investment refers to MIGA's PRI instrument (see below).

MIGA Political Risk Insurance (PRI)

MIGA's PRI guarantees typically involve a bilateral contractual relationship between the insurer (MIGA) and the guarantee holder and do not involve the project company.  There is therefore no project agreement, and MIGA does not have a relationship with, or recourse to, the project company.  Other forms of guarantee (e.g., financial or partial risk guarantees), by contrast, involve a three-way contractual relationship between the guarantor, the project company and the guarantee holder.  There is both a project agreement and a guarantee agreement.

Net present value

The sum of the present values of the time series of project costs and benefits.

Net Profit Contribution

The net profit earned by an IFI on an investment in the private sector after deducting financing costs, loss provisions and administrative costs.


The IFI's objectives, activities and results in making and administering its investment as part of the overall financing / support of the borrower's project.

Operational Practice (OP)

Operational Practices describe the policies and procedures that the CED / IFI would typically need to adopt in order to be deemed compliant with the respective Evaluation Principle and its elements.


Refers to levels in the results chain beyond "outputs”.


The tangible goods and services that the project activities produce, generally under the direct control of the implementing agency.

Performance Evaluation Report (PER)

A CED report prepared from an independent/direct evaluation of an individual investment operation and normally includes field work

Project (Public Sector)

A public sector investment, technical assistance activities, or program that is supported by an IFI loan.  Note that under this definition, a PBL-supported program is called a "project‚Äù.


(Private Sector)

Generally, the company's capital project or program and related business activity that have been partially financed or otherwise supported by the IFI's investment selected for evaluation.  In financial markets operations, the project generally refers to the financial intermediary's lending or investment program that is partially financed or otherwise supported by the IFI.


Consistency of the  development interventions objectives with beneficiary needs, the country's development or policy priorities and strategy, and the  IFI's assistance strategy and corporate goals; and the adequacy and coherence of the project's components (design) to achieve those objectives.

Results chain

A model that sets out the sequence of inputs, activities, and outputs that are expected to lead to the project's intended outcomes.  Describes the causal relationships, indicators, and the assumptions or risks that may influence project success and failure.  Alternatively called a "results framework‚Äù, "causal chain‚Äù, or "logical framework (log frame)‚Äù.

Return on Invested Capital (ROIC)

The internal rate of return on invested capital in real terms i.e., the financial rate of return (FRR) on the costs and benefits to the company as a whole on a before-after, rather than a with-without, basis.


Evaluation undertaken by IFI operations departments. [Otherwise referred to as indirect evaluation in the private sector.]


Refers to the project(s) undertaken by sub-borrowers under an IFI credit line (or guarantee of such) to a Financial Intermediary, or by investee companies within a Fund subscribed to (or guaranteed) by the IFI.


The likelihood of continued long-term benefits, and the resilience to risk of net benefit flows over time.

Theory-based evaluation

An analysis that establishes a plausible association between the various links in the project's results chain, using quantitative and qualitative evidence as well as evidence from other evaluations and academic literature.

Weighted Average Cost of Capital (WACC)

The weighted average after-tax cost to the company of the yields it must provide on its borrowings and the equity investors' minimally acceptable returns, all adjusted for inflation.


An attempt to gauge what would have occurred in the absence of the intervention with what has occurred with the intervention implemented

 Ex-post Evaluation

Evaluation of a development intervention after it has been completed.

(Note: It may be undertaken directly after or long after completion. The intention is to identify the factors of success or failure, to assess the sustainability of results and impacts, and to draw conclusions that may inform other interventions.)


Refers to evidences collected in an evaluation.


Source: DAC Glossary of Terms, and ECG-approved GPS on (i) Independence of IFIs' CED, June 2010, (ii) Evaluation of Public Sector, February 2012, (iii) Evaluation of Private Sector Operations, November 2011, and (iv) Country Strategy and Program Evaluation, 2008.