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The LICUS Trust Fund

The LICUS Trust Fund was established through a $25million transfer from IBRD surplus in March 2004, and replenished through a further $25 million transfer in 2006 and another $30 million in January 2007. The Trust Fund assists the most marginalized and fragile states in non-accrual status [1] , and, in exceptional circumstances, funds activities in active IDA status, where the use of IDA funds would be impractical for this purpose. Its initial focus was on Central African Republic, Haiti, Liberia, Myanmar, Somalia, Sudan, Togo and Zimbabwe. The LICUS Trust Fund assists countries that have the most sever conflict and institutional problems by:


1.      Supporting the implementation of early policy and institutional reforms to improve performance and facilitate reengagement with the international community;


2.      Developing resilient systems for social service delivery, including HIV/AIDS programs, that can continue to operate effectively and mobilize multi-donor support even in situations of political instability;


3.      Developing harmonized multi-donor approaches that combine scarce resources behind a selective strategy for reform; and


4.      Promoting the delivery of visible results in support of peace-building efforts.


In Central African Republic, the LICUS Trust Fund supported improving management of the public payroll system which had been a source of political friction.  In Somalia, the Post-Conflict Fund collaborated with the LICUS Trust Fund to prepare a Country Economic Memorandum. It supported health services to combat HIV/AIDS and improve child and maternity care in collaboration with the Red Cross.

Which Countries are Supported by the LICUS Trust Fund
How Does the LICUS Trust Fund Operate
PCF/LICUS TF Grant Database

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Which Countries are Supported by the LICUS Trust Fund
The LICUS Trust Fund, targets primarily countries in non-accrual, allowing the Bank to provide modest support, that would assist them as they initiate the kinds of reforms that would set the stage for arrears clearance and subsequent access to IDA financing and debt relief, on the basis of a robust track record.  As of April 2007, countries in non-accrual included Liberia, Cote d’Ivoire, Myanmar, Somalia, Sudan, Togo, and Zimbabwe.   

Eligible activities include:

·         Capacity building to support governance reform.  This includes supporting dialogue among national stakeholders on economic, social and governance issues; supporting dialogue among national stakeholders and the donor community; technical assistance to design and implement basic civil service, public finance, or judicial reforms; training for leadership[2]  and technical counterparts; data collection and analysis to support key reforms, and information campaigns on key reform areas.

·         Strengthening social service delivery.  This would focus on preparation of capacity needs assessments; supporting reform of policies and institutions; establishing and equipping effective service delivery institutions.  In most cases it is expected that this would involve participating in multi-donor transitional programs for service delivery in the social sectors, through governmental and nongovernmental mechanisms. 

· Visible results to support peacebuilding.  This includes support to high-priority or pilot initiatives in labor-intensive public works especially those which improve community infrastructure (such as access to water, sanitation, or roads); focused interventions to resurrect or expand access to community-based services (including health and education); and improvements in core public functions with visible impact (such as border security or customs posts). In many cases these interventions may be explicitly focused on geographical areas that have been severely affected by conflict.

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How Does the LICUS Trust Fund Operate

The LICUS Trust Fund is financed from the Bank’s surplus. It is administered by the Bank, following the standards of approval for grants and drawing on the Bank's long experience in managing the Post-Conflict Fund.

[1]World Bank (2003): Memorandum of the President of IDA to the Executive Directors on a Proposed LICUS Implementation Trust Fund. Page 5; under certain circumstances, the Post Conflict Fund complements multi-donor efforts in active fragile states.

[2]LICUS Trust Fund grants may be used to support leadership training across a wide range of participant groups and topic areas including touching upon political governance and security, consistent with paragraphs 22, 23, and 24 of the 2005 Board paper on Good Practice in Country Assistance Strategies in Fragile States (IDA/R2005-0252). Country teams are required to take care to maintain the non-partisan nature of Bank engagement in compliance with IDA Articles, ensuring that the identification process for training participants is nonpartisan and apolitical, and that political governance and security-related topics are addressed with appropriate input from other development partners (UN and bilaterals). 

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