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

716.3 Financing MechanismsEarly 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 theGovernment’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 fullsatisfaction of the Government and donors alike for earmarked funding to specific programs and projects. The soundness of theGovernment’s public financial management system and the CTA has been applauded by the International Finance Institutionsin past reports to the Ad Hoc Liaison Committee (AHLC).However, recognizing the constraints of international organizations, the Government accepts that other financing mechanismmay 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 externalfunding to the limited number of existing mechanisms that have been shown as effective and are believed to be sufficient foran effective reconstruction effort. These are:1. UN Agencies: Direct funding can be provided to established UN agencies already working on the ground, including UNRWAand 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 Unioncan be used to enable support for the Palestinian Administration and Services, including salaries to staff; support to theSocial 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 bechanneled for budget support to drive the reform and institution building agenda; and via the Partnership for InfrastructureDevelopment 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 financingchannels. 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 abovefinancing mechanisms to deliver its support.The use of alternative funding mechanisms should not undermine the Government’s leadership role on the reconstructioneffort. 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 financialmanagement of the Recovery and Reconstruction Plan.