National Public Investment System of Paraguay
Statutory Governing Body:
The Ministry of Finance, in coordination with the Technical Planning Secretariat for Economic and Social Development (STP), in accordance with the Law on Public Investment, is the steering entity of the National Public Investment System (SNIP). Its main functions include formulating administrative stipulations, regulating the system’s operation and verifying the connection between the investment projects and national planning. This same law indicates as the operative entity the General Public Investment Directorate (DGIP), whose functions include preparing investment project formulation and ex-ante assessment methodologies, preparing the Pluriannual Public Investment Program with a 3-year horizon articulated with the Pluriannual Tax Program, designing training programs and disseminating the SNIP. According to the effective regulations, all these activities are to be performed in coordination with the STP. Additionally, the DGIP issues the project viability opinion, manages the SNIP Information System, monitors the physical-financial progress of the investment projects and carries out the ex-post assessments once the projects have been concluded.
The General Budget Directorate (DGP) of the Ministry of Finance establishes and communicates the budget limits to the State Bodies and Entities. The DGP prepares the General Budget of the Nation and has the legal faculty to assign resources, such as those destined for national public investment. It is also in charge of the monitoring and assessment of budget execution.
The State Bodies and Entities and other institutions are considered entities incorporated into the SNIP, as they participate during the entire life cycle of the investment projects. Their main responsibilities include the formulation and ex-ante assessment of investment projects, addressing the observations issued by the DGIP, managing the funding of the projects and reporting on their physical-financial progress through the SNIP Information System.
The SNIP in Paraguay is mainly ruled by the Law on Public Investment (6490) published in January 2020, supported by its respective regulations and standards. The SNIP is related to other laws such as the Budget Law (annually updated), Law N° 5567/16 which modifies Article N° 52 of Law 5102/13 “PPP”, the Law on the National Fund for Public Investment and Development and Law 5102 on Promotion of public infrastructure investment and extension and improvement of the goods and services the State is in charge of, among others. There are also several Decrees that facilitate interaction between the steering entity and other stakeholders related to the SNIP. See the complete legal framework.
The DGIP has developed a set of methodologies for the formulation and ex-ante assessment of investment projects. There are the general methodologies, the “Guide for the Formulation of Investment Projects at Profile Level” and the “General Methodology for Investment Project Preparation and Assessment". The latter has annexes to guide the calculation of the Net Present Value (NPV), Internal Return Rate (IRR), Present Cost Value (PCV) and Equivalent Annual Cost (EAC). In order to address the characteristics that are specific for certain sectors, specific methodologies have been developed for the sectors of road infrastructure, educational infrastructure, projects for investment in human capital and knowledge creation. Recently the “Social Prices Update” and the “Manual for Public-Private Partnerships (PPP)” were added. Ir al listado completo de metodologías de Paraguay.
Public Investment Plans
As part of the new Law on Public Investment, an investment plan is projected to be prepared by the STP and the Ministry of Finance, based on the policies, goals and strategies of the national, departmental, sectoral, and local economic and social development plans and programs, outlining all projects registered by the OEE, detailing targets, costs, expenses, execution chronogram, sources of financing and expected results.
Investment Project Bank
The Public Investment Project Bank (BPIP) and the Paraguay Investment Map are managed by the DGIP. The Public Investment Law establishes that all projects and studies must be registered in the BPIP to receive state financing and/or external government-supported financing. The BPIP and the Paraguay Investment Map show relevant and updated information on the public investment projects, such as the project profile (problem identification, goal, verification indicators, logical framework matrix, geographical location, pluriannual investment amounts, etc.). Thanks to the link to other systems such as the Financial Administration System (SIAF) and the system of the National Directorate of Public Contracting, information can be read on the updated physical-financial progress and the tender processes and contracts related to investment projects. Another particular functionality of the Investment Map is the possibility to know the georeferenced location of the projects, associated photos and a citizen-participation mechanism so users can interact with the public institutions on how the projects are being executed. This mechanism is included into the individual profile of each project and shows the level of satisfaction of each user on the execution of the projects and provides space to give comments and upload photos to better monitor the projects.
The DGIP, as the entity responsible for executing the SNIP, has the task to give pieces of training to the OEE officers (Public Investment Law). La información disponible más reciente es del año 2020.
Project Management Cycle
The first phase in the life cycle of the investment projects in Paraguay starts with the formulation of the projects of the State bodies and entities. The projects formulated at the profile level must be presented to the Single Public Investment Window (VIUP) of the Technical Planning Secretariat (STP). The STP analyzes the project formulation to see whether it is in line with the Government Plan’s strategic pillars and goals. Then, once the project has received a favorable opinion, it is presented to the General Directorate for Public Investment (DGIP) to perform the economic-financial assessment and verify whether it has a social return in accordance with the NPV and IRR indicators contained in the general and specific methodologies (see methodologies). When the projects do not submit all the required information, the DGIP will request the missing information and, if necessary, will give technical support to the formulating entity. Finally, when the DGIP gives a favorable opinion, the project receives a SNIP code. Then, the project can be included in the budget and receive funding to be executed.
During the execution stage, the DGIP is responsible for monitoring the physical-financial progress. For some projects of great importance, this monitoring will be complemented with field visits by DGIP officers, and the rest of the projects are monitored based on information that the entities, in accordance with the Budget Law and Public Investment Law, report in the SIAF systems and the Public Investment Project Bank. This information must be reported by the OEE until the projects are finished once the projects have been finalized, in accordance with the effective regulations, the DGIP has the faculty to do the ex-post assessments (of results, impact or other) it deems convenient.
The DGIP has driven transparency mechanisms to monitor public investment projects throughout the different phases of their life cycles. For that purpose, the SNIP has the Project Bank and the Mapa Inversiones Paraguay. Both platforms show the project profile, the current phase and information on the physical-financial progress. Mapa Inversiones Paraguay gives the georeferenced location of the project, photos, space for comments, and information on tenders and contracts linked to the investment project.
Public Investment Policy Cycle
Public investment planning in Paraguay is projected on a pluriannual (3-year) horizon. For that purpose, the OEE, departmental and local governments submit their investment projects for revision (with state resources, external finance, and PPA) to obtain admissibility from the STP and the Viability Opinion and SNIP Code by the DGIP. To register the projects, they must be submitted physically (paper) or digitally (magnetic devices) to the DGIP, and simultaneously the same information is to be registered in the Information System (Project Bank) of the SNIP.
Once the projects have favorable opinions from the STP and the DGIP, the OEE submit their preliminary budget project to the General Budget Directorate (DGP). According to the regulations in force, no projects can be included that have not been endorsed by the STP and DGIP and that is not duly registered in the Project Bank of the SNIP. Afterward, the DGP will communicate the budget limits to the OEE in view of the submitted projects and the availability of the resources. Knowing the budget limits, the OEE proceed to prepare the Pluriannual Execution Plan (PEP), to be registered in the Project Bank of the SNIP. Once the PEP has been registered, the DGIP transfers it to the DGP to be incorporated into the General Budget Bill of the Nation, which then is sent to Congress for analysis and approval.
As part of the new Public Investment Law, the preparation of an Investment Plan prepared by the STP and the Ministry of Finance is projected based on the policies, goals and strategies of the national, departmental, sectoral and local economic and social development plans and programs, outlining all projects registered by the OEE, with details on the targets, costs, expenses, execution schedule, sources of financing and expected results. Once the projects have finalized the execution stage, the new law also establishes that a selection will be made of the projects that will be submitted to ex-post (result and impact) assessments. Publication of the regulations determining the details of these new projects that will be part of the SNIP tasks is pending.
Latest update: July 9, 2021