Every year multilateral organizations publish more than 20,000 public tenders for 120,000 million euros. The market for international tenders has great advantages which include:

  • 1. They offer a business opportunity already committed by financial institutions and beneficiary countries under standardized bidding rules for all countries both in its process and languages.
  • 2. The International Financial Institutions (IFIs) monitor contract compliance and proper implementation of the project.
  • 3. There is a wide market not only for engineering or construction companies but also supply companies, consultants, architects and individual experts.

The company size affects only the strategy that the company should follow rather than in the access to the markets. Many small and micro projects are being implemented internationally funded within the framework of public tenders.

50% of the budget is managed by the European Union through the European Commission in the following areas:

  • 1. Rural development and food security
  • 2. Transport and infrastructure
  • 3. Telecommunications and Information Technology
  • 4. Energy and nuclear safety
  • 5. Conferences
  • 6. Environment
  • 7. Culture, governance and home affairs
  • 8. Health
  • 9. Education, employment and social affairs
  • 10. Business support: industry, trade and services
  • 11. Macroeconomics, public finance and market regulation
  • 12. Standardization and quality certifications
  • 13. Humanitarian aid, crisis management and post-crisis assistance

The other 50% is managed by multilateral banks and other institutions like the United Nations

Multilateral organizations and cooperation agencies employ three types of projects: Contracts for the supply of goods and equipment. Through these goods, materials and equipment of all kinds are bought, such as: industrial products, water treatment plants, generators, medical and educational equipment, heavy machinery, etc. and its services.

Technical Assistance contracts or services. Through these activities are performed:

  • advisory
  • Technical Assistance
  • studies
  • training
  • strategic plans
  • diagnostics
  • analysis
  • Sectoral studies and market
  • Design and evaluation reports
  • Modernization of the State
  • institutional Strengthening
  • In addition to the financing of a project to third party beneficiaries, the agencies themselves recruit for themselves, consultancy services for the identification and formulation of projects,
  • technical cooperation, project evaluation and feasibility studies.

Turnkey contracts (Turn-key projects). Through this type of contract the bidder agrees to design, construct and operate a particular work, assuming overall responsibility for the client. The obligations that are usually present in these contracts are, for example, the supply and transport of materials, machinery, or other post-execution of the work as staff training and technical assistance obligations.

The generic procedure for approval of a development program of a country has an internal phase and external phase:

Internal approval of the project:

The aid recipient country makes a request for a grant or loan. Once the project is approved it is included in a multiannual scheme. From here, any company can pursue an opportunity. Usually it is announced two years in advance.

External phase:

The Agency publishes various opportunities through one of these formulas:

  1. Public invitation to submit proposals directed to all interested parties. Here we must distinguish between:
    1. Notice periods and General Procurement Notices. They report that a project has been approved and shortly will begin the bidding process. There is usually a minimum of one month.
    2. Recruitment announcement or Specific Procurement Notices. The beneficiary agency officially announces its plans to conduct a bidding process. In these cases a deadline and a set of instructions for the submission of offers is set.
  2. Pre-selection of bidders.
  3. Evaluation and comparison of offers.
  4. Award and signature of the contract.

There are business opportunities in each stage of the project cycle. However, the types of opportunities, the amount, the contracting of goods and services, and how they are acquired vary depending on the phase of the project. The phases are:

1. Preliminary phase

Before initiation of the projects, the Multilateral conducted a series of studies on the development of strategic sectors and countries. These studies are used to improve the perception of the multilateral organizations on the challenges of development and promote good practice.

2. Identification

Based on previous studies, the Multilateral and the borrower country jointly identify projects that support their development objectives. The identification step can take up to a year and a half.

3. Preparation

The borrowing country is responsible for the project preparation. During this phase, which can last up to two years, the borrowing country continues to conduct more studies and impact assessments that refine the objectives, components, timing, accountability and the implementation plan of the project. The Multilateral Agency, meanwhile, begins to determine the conditions necessary for the project to succeed and to guarantee that the economic, financial, social and environmental impacts are positive.

4. Evaluation

The multilateral agency is responsible for the evaluation. All studies conducted in earlier stages will be reviewed, and the types and amounts of equipment, goods, civil works and services that can be purchased are checked. The evaluation stage usually lasts 3-6 months

5. Negotiation and Approval

During negotiations, the MULTILATERAL ORGANIZATION and the borrower country agree on the conditions of the loan to support the project. In general, the negotiations last for 1-2 months. A Prior Information Notice (PIN) is sometimes issued by the borrower country at this stage.

6. Implementation and Supervision

Once the loan or credit is approved, the borrower country can use the funds to buy the goods and services needed to meet the project objectives. The borrowing country is responsible for implementing the project. This phase can last several years. The role of MULTILATERAL at this stage is to monitor project implementation. The General Procurement Notices (GPN) and specific procurement notices (SPN) are issued by the borrowing countries during implementation.

7. Evaluation

After the project is completed, an audit of the project is carried out, where the results are measured against its original objectives. The audit involves a review of the final project report and preparation of a separate report. Both reports are submitted to the executive directors and the borrower.
The following table provides an overview of business opportunities during the project cycle. For each phase of the project that describes the types of opportunities, contracting agencies and the estimated duration of the cycle.

Phases of a project Contracting agencies Types of opportunities Duration
Identification Multilateral Consulting services under 18 months
Preparación Multilateral and the borrower country Agencies Consulting services up to 24 months
Análisis y evaluación Multilateral Consulting services between 3 and 6 months
Negociación Multilateral and the borrower country Agencies 1-2 meses
Implementación y Supervisión Multilaterals and the borrower country Agencies Consulting, supply of goods and equipment, public works, etc. (execution by bidding companies) Variable, from a few months to years
Post-evaluación Multilateral Consulting services under 6 months

a) The International Financial Institutions (IFIs) mainly include:

  • The European Union, through Europeaid
  • United Nations (includes agencies like IAPSO, UNICEF, FAO, WHO and UNOPS among others)
  • The World Bank and regional banks like the African Development Bank or the Inter-American Development Bank
  • Millennium Challenge Corporation (United States)

b) There are also projects that are directly funded by the authorities of one country to another, bilateral aid in Spain, which grants aid through the Ministry of Foreign Affairs and Cooperation and through the Ministry of Economy. The same model goes for Portugal, France, Sweden, Luxembourg, United States (USAID) and Japan, among others.

c) Finally, there are projects that are launched by the beneficiary country of the project, but they do not offer the same guarantees as those organized by the multilateral agencies or bilateral aid.