The “Bilateral Delegated Cooperation” – a State of play – Work in progress 19th of April 2012 Practitioners’ Network Annual Meeting Luxembourg AFD – Brussels

2 Background of the data collection - Methodology The ‘BDC’ and cofinancing arrangements are a significant « outcome » of our collaboration. However, except some studies carried out by Nordic Plus ’ countries, no data collection (at the EU level) has been made. It has been agreed to collect the data on BDC (PN Thematic Group, April 7th 2011) The ‘data collection’ includes the Members of the Practitioners’ Network only (plus MFA Finland that also participates in the open Group). The DCA signed with the EC are excluded. The excel table has been sent to ADA, AECID, AFD, BTC-CTB, CZDA, DfID, GIZ, KfW, LuxDev, SlovakAid and Finland MFA. Limitations : (i) AFD does not receive figures from all partners (probably due to inefficient reporting/monitoring systems). (ii) agencies and ministries have encountered difficulties in gathering data before 2005.

3 What is « Delegated Cooperation »? Definition (DAC/OECD) : “Delegated cooperation is a practical arrangement where one donor (a “lead” donor) acts with authority on behalf of one or more other donors (the “delegating” donors or “silent partners”). The practical implementation modalities including those related to the issue of visibility need to be defined between leading and delegating authorities. The level and form of delegation vary, ranging from responsibility for one element of the project cycle (e.g. a particular review) to a complete sector programme or even a country programme”. Delegated cooperation (DC) takes place in the framework of the Aid Effectiveness Agenda. Since 2007 the concept of Delegated cooperation has experienced major developments. The EC has developed a new approach (based on delegation and transfer) and has put in place the necessary legal and administrative framework (e.g. templates for delegation and transfer agreements).

4 Examples of bilateral agreements What are we talking about? Programme d’Alimentation en Eau potable (Kinshasa & Bas-Congo) : AFD  CTB-BTC (lead/delegatee) Investment fund for SME (Bosnia and Herz) : BCD-DANIDA  KfW (lead/delegatee) Support for Public Defender’s Office (Peru) : CTB-BTC  AECID (lead/delegatee)

5 Facts and figures ( ) The « Bilateral Delegated Cooperation » (BDC) has emerged in the late 1990’s with agreements initiated by Nordic Plus’ donors, Germany and France. Which are the entities involved? Over the period : almost all the PN members are involved. The agencies the most implicated are : GIZ, DfID, MFA Finl., BTC-CTB, and KfW [Northern countries] ‘Some entities lead, some delegate, some do both’. The majority of agencies operate both as “lead” and as “delegating” partner. Several PN’ members have signed agreements with non EU countries : Canada, Switzerland, Monaco, Liechtenstein, Turkey, etc.

6 Facts and Figures ( ) 60 agreements have been signed for an amount of € 195 M. In 2011, there was a total of 18 Agreements signed. The average amount of a delegat. agreemt. is € 2.5 M. (min: € M / max : € 20 M) On average agencies/ministries implement 7.6 projects/programs on behalf of others donors. The state of play concerning the “DC” between the EC and the Bilateral Agencies reveals that the amounts delegated or transferred are more important : Delegation Agreement (since 2008/2009) 95 DA ; € 493 Mill. DA average : € 5.2 Mill / Transfer Agreement average : € 4.4 Mill.

7 Facts and Figures ( ) How is the BDC evolving? Over the period few agreements have been signed and the practice seems not to be particularly widespread. [9 agreements; for a total of € 39.2 M] Over the period there has been a significant increase in delegated cooperation among Europ. donors. [50 agreements; for a total of € M ]  The BDC has been influenced by the EU Code of conduct (2007) 9 agreements € 39.2 M 50 agreements € M

8 Facts and Figures ( ) 2007 EU Code of Conduct

9 Facts and Figures ( ) Which activities are concerned? Project, sector programs, regional program ; budget support, Investment fund, etc. Funds can either contribute directly to the project (investment) or finance soft activities (technical assistance, feasibility studies) No predominant aid modality Which sectors and regions are covered? Human Development, Gender, Infrastructures, W&S, Governance and Peace building, Private sector and SME Support, etc. Priority is given to : Human Development, W&S Regions: BDC agreements are primarily used in Africa (48%), Asia (20%), South America (15%)

10 Why Delegated Cooperation? ‘BDC’ and the Aid Effectiveness Agenda : reducing transaction costs ; exploiting the respective comparative advantage; enhancing development impact Case studies  The delegating partner sees an opportunity to mobilize resources for others projects [“phasing-out”, “exit strategy”]  The delegating partner lacks field office capacity to take the lead [or Fragile context]  The delegatee partner has a significant experience and expertise in the country and in the sector  “Leverage effect” : blending instruments

11 Discussion What are your experience with BDC? How do you see BDC evolving in the next years? Joint Implementation and BDC BDC : the only tool for Aid Agenda and DoL ? (BDC vs. cofinancing) What needs to be further done to improve BDC? Procedures alignment : the “Mutual reliance initiative” experience