Project Cycle Management Manual

2. Project Preparation

2. Project Preparation
2.1 Two Types of Projects
2.2 Project Identification
2.3 Project Preparation for Tendered Projects
2.4 Project Preparation for Application Projects
2.4.1 Submission of Ideas
2.4.2 The Formal Application
2.4.3 Approval of Application

2. Project Preparation

2.1 Two Types of Projects

A project by tender is identified by DANCEE in cooperation with MoE, and awarded to the project holder in the form of a contract to a tenderer.

Below the project preparation cycles are described for tendered projects and for projects by application.

2.2 Project Identification

The project identification procedure is shown in Figure 2.1.

Country programme
Denmark co-operates a number of CEECs - please refer to Section 1.3. In each country, a cooperation agreement and a country programme have been drawn up by DEPA and MoE.

The country programme is an agreement between MoE and DEPA describing sector priority areas in the individual country (e.g. water pollution, hazardous waste, air pollution, EU approximation) and project proposal procedures. The country programme is the basis upon which both projects by tendering and projects by application are prepared.

The country programmes are presented in the publication "Danish Environmental Support Fund for Eastern Europe", DEPA 1998. This publication will be updated regularly. Lists of all on-going and completed projects for each partner country will be available on DEPA's homepage http://www.mst.dk

Figure 2.1: Project Identification Procedure

Project long-list
A project long-list is prepared by DANCEE and MoE for all partner countries and is continuously updated. The list contains project ideas and project documents formulated by DANCEE and MoE, as well as project ideas and project documents submitted by applicants. The project long-list is not prioritised.

The project long-list is gradually reduced to a prioritised project short-list when DANCEE and MoE assess project ideas and project documents.

The project long-list is jointly assessed by DANCEE and MoE at least twice annually. The assessment includes an analysis of how the projects comply with the current priorities of the partner country, DANCEE's criteria for support, and the sector priority areas agreed in the country programme.

Project short-list
Based on the assessment of project ideas and project documents from the project long-list, DANCEE and MoE agree on a project short-list. This list constitutes the prioritised project pipeline which DANCEE and MoE intend to initiate during the following year.

Both the project long and short-lists are internal working papers for DANCEE and MoE.

The process for the gradual reduction of the project long-list into the project short-list is shown in Figure 2.2.

Figure 2.2.: Preparing the Prioritised Project Pipeline

2.3 Project Preparation for Tendered Projects

DANCEE is responsible for turning the project idea into a project document for tendered projects.

Project preparation mission
DANCEE may contract external consultants to prepare project documents, but also to participate in project preparation missions and project identification missions. DANCEE may also use external consultants for preparing appraisals. Opportunities for consultants to provide assistance are published on DEPA's home page (http://www.mst.dk). Interested consultants may contact DANCEE for registration of their interest.

The project document will normally be designed by a team of national and international experts with relevant expertise. The team will work according to Terms of Reference (ToR) worked out by DANCEE. The country coordinator or a Danish Ministry of Environment and Energy (MoEE) specialist will meet the project identification team to discuss the ToR. An ToR outline of the different project preparation missions is attached as Enclosure C.

Project document
The experts will prepare the project document using the LFA and the result will be presented in the format shown in Table 2.1. The project document can also be prepared as part of the feasibility study. For further explanation of the LFA please refer to the publications "Logical Framework Approach - A Flexible Tool for Participatory Development", Danida 1995, and "The Logical Framework Approach", Norad 1996.

Stakeholder analysis
The project document must include a stakeholder analysis. The stakeholder analysis will list stakeholders and beneficiaries and will describe their main interests in the project. Special attention should be given to the identification of possible conflicting interests among different stakeholders. The project document will describe how the project strategy will address conflicting interests.

Feasibility study
In connection with large and comprehensive projects, DANCEE may require that a feasibility study is carried out. The scope and level of detail of a feasibility study will depend on the complexity and size of the project. The task of undertaking feasibility studies will normally be competitively tendered.

Appraisal
Before a project document is finally approved, it is appraised internally by DANCEE, a MoEE specialist or by independent external specialists. Depending on the size and complexity of the project, DANCEE will decide whether a desk or a field appraisal should be applied. Representatives from the partner country may participate in the appraisal. The outline for ToR in Enclosure C is also used for appraisal missions.

Table 2.1
Project Document Format (identical with Application Format)

For further information, please refer to Enclosure B

The appraisal will focus on the relevance, feasibility and sustainability of the project, on its concurrence with national, EU and Danish policies, and on its compliance with priority areas and programme criteria. A format for appraisal reports is included as Enclosure D.

Final approval
Before the final approval, DANCEE must obtain a letter of confirmation from the beneficiary - please refer to Enclosure G.

Assuming a positive appraisal, the project document will be approved by DANCEE and MoE. Procedures for tendering and contracting are dealt with in Section 3.

2.4 Project Preparation for Application Projects

2.4.1 Submission of Ideas

Interested enterprises, consultants, organisations, NGOs and others are welcome to submit ideas for projects at any time. DANCEE recommends applicants to outline a project idea - using the format shown in Table 2.2. - to DANCEE in order to obtain DANCEE's comments. In this way, applicants can spare the cost of elaborating a full-blown application in form of a project document, if the project idea is not within DANCEE's scope or has already been carried out, etc.

The description of the project idea should as a minimum be one to two pages, including the underlined sections of Table 2.2 above. The idea must be formulated jointly with the project beneficiary.

DANCEE will give its initial assessment and comments on the project idea. The applicant can use the assessment and comments to decide whether or not the applicant wishes to elaborate on the idea and submit a formal application. The positive reception of a project idea at this stage by DANCEE does not imply that funding will eventually be made available.

Table 2.2:
Project Idea Format

For further information, please refer to Enclosure A.

2.4.2 The Formal Application

Letter of confirmation
The application will be made by the applicant and the beneficiary in common. A Letter of Confirmation signed by the beneficiary must be enclosed with the application. DANCEE's format for a Letter of Confirmation must be used - please refer to Enclosure G. If possible, the idea should also have been discussed with the country coordinator and the local project coordinator (LPC).

The application must be prepared using LFA and the result must be presented in the format shown in Table 2.3 and further elaborated as shown in Enclosure B. The application format is identical with the project document format shown in Table 2.1. For further explanation on the LFA, please refer to the publications "Logical Framework Approach - A flexible Tool for Participatory Development", Danida 1995, and "The Logical Framework Approach", Norad 1996.

Following receipt of the application by DANCEE, the applicant will receive a letter giving DANCEE's reference number for the application and indicating the DANCEE person responsible for the assessment. DANCEE will normally decide on the merits of the application within four months of receipt. If this is not possible, the applicant will be informed in writing with a new date for the decision.

2.4.3 Approval of Application

Approval and rejection of applications
Applications are jointly assessed by the country coordinator or other DANCEE specialists, other MoEE specialists, the LPC and the contact person in MoE. The assessment is based on the project's compatibility with the country programme, the DANCEE criteria for support described in Section 1, and the partner country's current priorities.

When the assessment process has been completed, a document of recommendation will be drafted and submitted to DEPA's management for final approval and signature.

DANCEE will inform applicants by letter indicating approval or non-approval of the submission. In the case of successful applicants this will be a letter of grant.


Table 2.3:
Application Format (identical with Project Document Format)

For further information, please refer to Enclosure B.

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