Municipal Development Program

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The objective of the Municipal Development Program Project for West Bank and Gaza is to improve municipal management practices for better transparency. There are four components to the project: the first component of the project is to provide grant allocations to municipalities for capital investments and service provision. It will cover the costs of goods, works and services. It addresses two key constraints for municipalities: severe municipal deficits, and poor municipal management. MDP will provide eligible municipalities with performance based grants for investments in service delivery, using an allocation formula designed to incentives better management practices. The second component of the project is to support municipal innovations and efficiency by promoting amalgamation, energy savings and responsiveness to citizens. This component will promotes learning and innovation to promote municipal development, including implementation of Ministry of Local Government (MoLG) policy decisions. The component will cover the costs of goods, works, training and services. The two main areas of intervention envisaged are: (a) strengthening amalgamation of local governments; and (b) piloting innovations that promote municipal revenue generation or cost savings. The third component of the project is to provide capacity building to municipalities and Municipal Development and Lending Fund (MDLF). This component will support municipalities to graduate to higher performance categories in the performance ranking system in which they are currently classified. It will cover the costs of goods, works and services. Building on the Local Government Capacity Building Project (LGCBP) that is currently being implemented by the MDLF, administered by the Bank and financed by Denmark, MDP will provide technical assistance to municipalities to improve their: (i) financial management, including revenue enhancement for municipal service delivery, (ii) planning capacities, with a specific focus on community participation, and (iii) technical capabilities, in particular for operations and maintenance. The fourth component of the project is program management, including monitoring and evaluation, audits and technical assistance to municipalities in implementing sub-projects.