National Early Recovery and Reconstruction Plan for Gaza 2014-2017_FINAL...

71
6.3 Financing Mechanisms
Early recovery and reconstruction efforts must be guided by two pivotal principles: national ownership and rapid implementation.
Consideration for these two principles is also central to the financing mechanism proposed for the implementation of the Plan.
In line with the principle of ownership, the National Consensus Government has a strong preference for the utilization of the
Government’s Central Treasury Account (CTA) as the primary financing mechanism for the Recovery and Reconstruction of Gaza.
The CTA not only allows for implementing budget programs and receiving budget support, but has also been used to the full
satisfaction of the Government and donors alike for earmarked funding to specific programs and projects. The soundness of the
Government’s public financial management system and the CTA has been applauded by the International Finance Institutions
in past reports to the Ad Hoc Liaison Committee (AHLC).
However, recognizing the constraints of international organizations, the Government accepts that other financing mechanism
may be necessary to complement funding through Government channels in order to allow for rapid implementation.
Nevertheless, to serve the aim of efficiency and effective co-ordination, the Government urges donors to restrict this external
funding to the limited number of existing mechanisms that have been shown as effective and are believed to be sufficient for
an effective reconstruction effort. These are:
1. UN Agencies: Direct funding can be provided to established UN agencies already working on the ground, including UNRWA
and UNDP, for a range of issues including support to the refugee population, ERW removal, and infrastructure development.
2. PEGASE: The “MécanismePalestino-Européen de Gestion et d’Aide Socio-économique” established by the European Union
can be used to enable support for the Palestinian Administration and Services, including salaries to staff; support to the
Social Protection System via cash transfers and other mechanisms, and support to private sector enterprises.
3. World Bank: Funding via the Palestinian Reform and Development Plan Multi-Donor Trust Fund (PRDP-MDTF) can be
channeled for budget support to drive the reform and institution building agenda; and via the Partnership for Infrastructure
Development Multi-Donor Trust Fund (PID-MDTF) for energy, water, sanitation, and urban development investments.
The private sector and NGOs are important implementing partners who are expected to receive funding via the above financing
channels. A more detailed mapping of the applicability of the different mechanisms to different subsectors is shown in Annex 1.
As for the Arab States, they can channel their support through the Islamic Development Bank, which in turn will utilize the above
financing mechanisms to deliver its support.
The use of alternative funding mechanisms should not undermine the Government’s leadership role on the reconstruction
effort. Therefore, the Inter-Ministerial Committee will serve as a Steering Committee for the recovery and reconstruction effort,
approving the allocation of funding for intervention programs, and ensuring coordinated implementation and overall financial
management of the Recovery and Reconstruction Plan.