The Grants of the European Development Fund

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1. ESTABLISHMENT AND PURPOSE

Created in 1957 by the Treaty of Rome and launched in 1959, the European Development Fund (EDF) is until 2020 the EU’s main instrument for providing development aid to African, Caribbean and Pacific (ACP) countries and to overseas countries and territories (OCTs). The 11th EDF, which amounts to EUR 30.5 billion, supports policy objectives and priorities embedded in the Cotonou agreement and in line with the overarching international commitments such as Agenda 2030 and Addis Ababa Agenda, and the European Consensus. The 11th EDF is a Multiannual Financial Framework for 2014-2020 created by an Intergovernmental Agreement between the 28 Member States (off EU budget).

The Programming Principles:

  • ownership (National Authorising Officer/Regional Authorising Officer)
  • concentration at national level of implementation
  • donor coordination
  • parallel programming for bilateral, multi-lateral and theme-based programmes
  • Complementarity with other instruments
  • National allocations calculated on the basis of analysis and performance

2. AID DELIVERY METHODS

Management mode = the legal arrangement to channel the funds

Commission contract with the final beneficiary (direct) or with intermediary
(indirect) that could be:

  • Partner country
  • Agency of a Member State or an EFTA country or a third donor country
  • International organisation
  • European Investment Bank and European Investment Fund
  • EU specialised agency
  • Implementation modality = type of financing & management mode

Type of financing = captures the legal relationship between the EU and the financial recipient

These are:

  • Budget support
  • Grants
  • Public procurement
  • Financial instruments

3. GRANTS

Grants for actions: Aim to achieve an objective that is part of an external aid programme.

Operating grants: Finance the operating expenditure of an EU body pursuing an aim of general European interest or an objective that is part of an EU policy.

Grants are based on the reimbursement of the eligible costs (actually incurred for the action or simplified cost options). The results of the action remain the property of the beneficiaries.

Grants are subject to a written agreement. They require co-financing by the grant beneficiary. The specific conditions that need to be fulfilled may vary from one area of activity to another.

Application: To be done through PROSPECT by registering in PADOR.

 

4. DIFFERENCE BETWEEN A GRANT AND A CONTRACT

Procurement
«Buying things»

Grants

«Giving money»

Pruchase of services, supplies or works

Object

Proposal from an applicant to contribute to the achievement of a policy objective though:

  a project (i.e an action grant) or

  the functionning costs of the applicant

Contracting Authority

Owner of results

Grant beneficiary

100% of the cost

Financial contribution

The Union finances a part of the costs, wich are eligible for
Union-financing. The grant beneficiary (or another donor) finance the other part

Allowed

Profit

Not allowed

 

5. GRANT PROCEDURE STEPS

The grant procedure follows the following steps:

Publication – PROSPECT
Open or restricted call for proposals

* Direct award

  • exceptional and duly substantiated emergencies (urgency)
  • for the purposes of humanitarian aid and civil protection operations or for crisis management aid
  • where the grant is awarded to a body with a de jure or de facto monopoly
  • where the grant is to be awarded to a body identified by the relevant basic act
  • in case of research and technological development
  • for actions with specific characteristics that require a particular type of body on account of its technical competence, its high degree of specialisation or its administrative power

 
Evaluation – consist of selection and award criteria, defined in the evaluation grid.

  • Eligibility criteria – for action and participants
  • Selection criteria are used to assess the lead applicant’s financial capacity as well as the lead applicant’s and the co-applicant(s)’s operational capacity to complete the proposed action
  • Award criteria – relevance of the action and its compatibility with the objectives of the grant programme – quality, expected impact and sustainability of the action, and its cost-effectiveness

 
Information and grant agreement signature

 

6. GRANT AGREEMENT

Annexed to the Special Conditions and is an integral part of the contract.

 

7. RULES TO KNOW

Special attention to be paid to rules of exclusion (e.g. bankrupt, corruption, participation in criminal organisation, etc.), rules of nationality, rules of origin and amendments while applying for grants.

It is highly recommended to carefully study the «Terms of Reference» for the selection procedures.

 

8. BUDGET SUPPORT

Budget support policy

  • Stronger link with the fundamental values of human rights, democracy and rule of law through systematic review of adherence to fundamental values
  • 3 types of contracts: SDG contracts; State Building Contract (SBC); Sector Reform Contract (SRC)
  • Comprehensive risk management framework for each country with BS

In 2016, total budget support disbursement was at 30% of total EU annual disbursements

 

9. BLENDING

EU grants to unlock additional public and private financing to meet development challenges:

  • The EU Blending Framework now covers all 8 regions of EU external cooperation and it is expected to mobilise over EUR 100 billion by 2020 through more than 500 new projects
  • On the 2015 decisions, it is expected that for each euro granted by the EU, the financial institutions concerned will invest EUR 9.5. The mobilisation of private financing reached a leverage of 2.2
  • Importance of Blending will increase with the new European External Investment Plan, which was approved in 2017

10. USEFUL LINKS

Practical Guide: http://urlz.fr/7dYd

Open selection procedures: (tenders and grants): http://urlz.fr/5ott

 

Alexander Herring
Vice President CBL-ACP
PSLO World Bank Group

Manon Kizizé
Adivsor Financing Division CBL-ACP