Municipal Development & Decentralization 2 Project

closed

The Second Municipal Development and Decentralization Project, builds on the successful experience of the first operation, and, aims at increasing the effectiveness of participating Local Government Units (LGUs) in their identification, planning, delivery, and cost recovery of local infrastructure, and utility services. The project's two main components will: 1) provide technical assistance (TA) to expand the program initiated under the first operation, and training, focused particularly in helping LGUs develop the technical, and financial capacity, required for discharging their responsibilities. In parallel, the program will focus on assisting the Government in preparing measures, necessary to ensure that LGUs have the appropriate legal framework to operate, and to fulfill responsibilities. Moreover, as a key development goal, conditions will be created under which the LGUs should be able to satisfy their investment needs, through borrowing from the Municipal Development Fund (MDF). To this end, the component will target specific groups of entities, with the appropriate combination of institutional strengthening activities, and adequate TA, namely, the Ministry of Finance, the LGUs, local utility enterprises, and the Investment Loan Department; and, 2) improve the provision of basic local services, by increasing the availability of financing for investments in capitalized expenditures on local infrastructure, and service equipment to LGUs. Additional capital resources will be provided to the MDF, to finance rehabilitations.