GZ-Third Municipal Development Project

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The objective of the Third Municipal Development Project is to enhance the institutional capacity of municipalities in the West Bank and Gaza for more accountable and sustainable service delivery. There are four components to the project, the first component being municipal performance and service delivery. The project will finance municipal infrastructure for improved service delivery. The project’s block grants will provide the basic funding for eligible municipalities for infrastructure development based on needs and equity, while the performance grants will provide an incentive for eligible municipalities to improve their performance. Half of the total component one financing will be allocated for the block grants and another half for the performance-based grants. The block grants will be allocated based on population (40 percent) and needs (60 percent). Gaza municipalities will be allowed to use 20 percent of their grants for recurrent expenditures13 to reflect the special circumstances they face. The eligible expenditures will be defined in the project’s operations manual. The second component is the capacity development to municipalities and Palestinian institutions. This component will provide capacity development support to municipalities and national level institutions, namely, the MDLF and the MoLG. The MDLF will prepare a capacity development plan at the start of the project in consultation with all stakeholders, which will provide a detailed description of the priorities, activities and their inter-linkages for this component. The third component is the municipal partnership projects. This component will provide technical assistance and project financing to municipalities to: (a) engage more effectively with the private sector, and (b) work across administrative boundaries to develop joint and/or innovative investments for municipal service delivery and local economic development. Only the technical assistance portion under sub-component A will be financed by TFGWB. Finally, the fourth component is the project implementation support and management costs. This component will finance goods and consultants’ services for monitoring and evaluation, outreach and communication and local technical consultants for the engineering supervision of component one, and the MDLF management cost.