Corporate-Policy Project Rating- GPR
GPR is the corporate-policy steering and monitoring tool of DEG and is applied to demonstrate the corporate-policy quality of the projects financed by DEG.
The tool was developed by DEG and is applied throughout the entire project cycle. It enables both ex-ante (at the time a project is passed) and ex-post (actual figures after a project has been in operation for several years) portfolio evaluations.
GPR is an index point system combining four benchmarks:
- Long-term profitability. This is the indicator of the financial sustainability of a project company in the country of investment. Without sustainability in this sense the other developmental effects of a project cannot be assured either.
- Developmental effects/sustainability. This is subdivided into sectors: In case of productive enterprises of the manufacturing industry, these are quantitative effects like governmental revenues, net currency effects, contributions to employment and qualitative effects such as, for instance, technology and know-how transfer, qualification and advanced training, environmental standards, social benefits. In case of finance sector projects and private equity funds, it is particularly the contribution to finance sector development which plays a major role (e.g. mobilisation of savings, diversification of credit allocation, indirect promotion of small and medium-sized enterprises). In infrastructure projects, the contribution to closing supply bottlenecks or performance increases (e.g. tariff reductions) is particularly relevant.
- The strategic role of DEG. This is to assess to which degree DEG fulfils its role as a development finance and consultancy institution in the respective project. It is assessed whether DEG acts according to the principle of additionality, whether it mobilises additional funds for a private-sector enterprise (e.g. arranging of a parallel financing as part of a finance package) or whether it acts as a consultant (project development).
- Return on equity of DEG. This criterion assesses the degree to which a project reaches the goal of an adequate return on equity, which is also necessary for the sustainability of DEG's growth.
To assess a project the four benchmarks are combined in a GPR total index. The total index values are allocated to six quality groups, which allow for the categorisation of the projects from 'very good' to 'obviously insufficient' (grades from 1 to 6.) Since the developmental effects play a major role in the DEG business, an analogous quality categorisation is made for benchmark 2 (EPOL grade 1-6).
