Second Emergency Municipal Services and Rehabilitation Project

The World Bank is actively contributing to developing the local government sector, with particular emphasis on municipalities. In close coordination with other key donors, the World Bank is financing the Municipal Development and Lending Fund (MDLF) to provide services, capital investments and capacity building to Palestinian municipalities. The MDLF has successfully established mechanisms for project implementation in municipalities such as criteria for fund allocation, financial management, procurement, and others that allow donors to harmonize their funding approaches.

 

The MDLF’s Emergency Municipal Services and Rehabilitation Project II (EMSRPII), scoping USD $10 million, supports all 132 municipalities in the West Bank and Gaza in making capital investments such as upgrading internal roads and rehabilitating public facilities (classrooms, green spaces, community centers etc). In addition, the project finances operating costs for essential municipal services like solid waste collection, street lighting, and water pumping. This assistance is vital in ensuring there is little deterioration of municipal services. The MDLF also provides technical assistance to municipalities as they implement their projects, thereby enhancing their ability to prepare, plan, implement and monitor services.

 

In Gaza, where infrastructure development has come to a grinding halt as a result of the continuing blockade, the EMSRPII finances operating costs for the provision of services like solid waste collection, water network maintenance, and public lighting. The EMSRPII is one of the few sources of donor finance for service provision in Gaza and is making a significant contribution to sustaining a minimal level of municipal service.

 

MDLF has raised the bar on municipality operating standards in the West Bank and Gaza. As its fund allocations to municipalities are based on a specific set of standards, municipalities must submit their prior year’s executed budget, a budget plan for the current fiscal year, and a statement of year end financial accounts conforming to the Municipal Unified Chart of Accounts to be eligible for funding. These requirements have so improved municipal budgeting and financial reporting that all 132 municipalities are today compliant with the law.

 

The MDLF has effectively tested its systems through the implementation of the EMSRPII and has successfully managed to align and harmonize donor support. The EMSRPII is set to close at the end of June 2009, and has already disbursed about 80% of its funds. Drawing on the lessons learned from the EMSRPII and MDLF’s technical assistance program to municipalities, the World Bank is now working to design a new sector-wide program. Working closely with all key PA entities – the Ministries of Local Government, Finance and Planning – as well as key donors in the sector, the World Bank is designing a project in which donors will finance a sector wide approach to municipality assistance, consistent with the priorities identified in the PRDP. Such an approach will be the first successful example of full donor alignment and could become a model for other sectors.