Emergency Services Support Project II -Supplemental

closed

The trust fund (TF) supporting the first Emergency Services Support Project was designed to provide budgetary support to line ministries under the Palestinian Authority (PA), to sustain essential health, education, and social services in response to the widening PA revenue-expenditure gap, and with this Second Emergency Services Support Project (ESSPII) constitutes a program of budgetary support. With both ESSPI and ESSPII, the PA has demonstrated both, its capacity, and commitment to implement quick-disbursing emergency operations. In addition, the willingness of donors to finance non-salary recurrent expenditures, has been demonstrated with ESSPI, and, two donors have formally committed funds to ESSPII. However, because the ESSPII program has still a funding gap, and because neither the utilization of PA's, nor the Bank's resources in preparing a new project would be efficient, it makes sense to process a supplementary grant instead. The proposed operation meets five of the six requirements for supplemental financing, i.e., compliance with covenants; economic viability and capacity to achieve its objectives; inability to finance the additional costs, nor obtain additional funds; timeline compliance; and, commitment to achieve the project's goals, and implementation competence. Regarding the sixth requirement, because of the nature of this operation, management has approved a waiver of the first requirement condition - cost overrun is due to exceptional circumstances, beyond the borrower's control - on an exceptional basis.