Finance-based scheduling: optimization of results-based funded multiple projects

Abstract

Development lending institutions are exploring solutions that can ensure the effectiveness of funds. Results-based financing (RBF) considers this goal by linking desired outputs to the disbursement of funds. This may require borrowers to prefinance programs and then receive allocated disbursements after achieving results, which forms cash flow gaps. This paper presents a framework for the simulation and optimization of RBF programs using genetic algorithms (GA). It applies finance-based scheduling on RBF multiple projects to obtaining an improved benefit from borrowed funds. The Program-for-Results (P4R) mechanism offered by the World Bank (WB) was used as one of the RBF mechanisms for verification. It was validated using the Sustainable Rural Sanitation Services Program (SRSSP) in Egypt and improved the overall financial standing of the government. This model introduces an enhanced financing environment for RBF mega-programs, enabling borrowers to apply for the RBF mechanism.