OCT MidTerm Review: Interim Findings

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OCT Mid-Term Review Interim Findings
EU-OCT Forum, Nuuk4-8 September, 2006

• Seán Burke
• Michael Kirosingh 5 Sept. 2006

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OVERVIEW

• Part I About the Evaluation
• Part II Interim Findings
• Part III Interim Recommendations
• Part IV Discussion

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Part I About the Mid-Term Review (MTR)
4
MTR Todays Presentation

• Present interim findings
• Present for discussion preliminary
  recommendations
• Focus is more general, less OCT-specific, to best
  use the limited time
• Feedback from all stakeholders is important

5
MTR Objectives (Terms of Reference)

• Provide independent assessment of EDF assistance
  of each OCT
• Report RAL/RAC
• Assess
• coherence of SPD and OAD
• continued relevance of SPD
• regional programmes
• C-Reserve operations.
• Provide recommendations to what extent
• strategies need to be reviewed
• financial allocations adjusted.

6
MTR Scope (Terms of Reference)

• To review
• relevance of strategies,
• current state of implementation,
• planned activities and
• to assess the absorption capacity of the OCT
  concerned.
• To review
• the coordination and monitoring mechanisms
• the use of the 9th EDF regional funds and the
  non-allocated C-reserve.
• To assess the level of coordination and
  consistency between
• activities financed under the 9th EDF and the EIB
  operations
• other international institutions and the Member
  States concerned.

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MTR Evaluation Approach
Desk Research Programme
Reporting
A N A L Y S I S
European Stakeholder Interviews
OCT-Level Findings
TAO ECD Survey Programmes
General Findings
TAO Tel. Interview Programme
Field Visit (New Caledonia)
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MTR Constraints and Challenges

• Short timescales of the MTR
• 3 month duration of the MTR
• Interim findings within 8 weeks
• Field visit exposure to only one OCT
• Understanding diversity across individual OCTs
  and complexity of the situations

9
MTR Next Steps (September 2006)

• Stakeholder feedback on the interim findings
• - Comments requested by Sept 15
• Verification of information on financial
  commitments (RAL/RAC)
• Sept 11 Sept 22
• Verification of OCT Draft Country Reports with
  each OCT
• Each 9th EDF OCT will be sent a draft 'Country
  Report
• 9th EDF OCTs 6-10 Page Report
• Non-9th EDF OCTs 1 Page Report
• Further Stakeholder Meetings
• Sept 11 Sept 22
• Development of Draft Final Report
• Analysis and Conclusions
• Final Recommendations

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Part II - Interim Findings

• Interim Findings
• State of Play
• Relevance
• Programming and Implementation
• Absorption Capacity
• Regional
• Non-EDF Community Programmes
• C-Reserve
• EIB
• Challenges

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9th EDF - Current State of Progress (August 2006)
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9th EDF SPDs Relevance

• At time of signature
• SPDs in general were highly relevant to
• National policies, and
• development needs
• SPDs relevant to OAD objectives
• Relevance Today
• SPDs remain highly relevant
• Some usually minor changes suggested

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9th EDF SPDs Adequacy of Financial Allocations

• Most OCTs consider that an increase in the
  financial allocation is needed
• No OCT asks for change in priority ( NL Antilles
  suggest expansion)

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OCT Performance OCT and Delegation Views

• OCT Views
• Reasonably satisfied with their performance in
  Programming, Identification and Appraisal
• Recognise that improvements needed in
  Implementation
• ECD Views
• Share satisfaction with Programming,
  Identification and Appraisal in OCTs.
• And the need to improve Implementation

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OCT Monitoring Arrangements

• Most OCTs confident that appropriate
  implementation arrangements will be put in place
• And with their monitoring and control,
• However, not many Monitoring Committees set up
• Delegations have a more mixed view

16
Programming Implementation Impact of Delays

• Main costs of delays in programming,
  identification and appraisal
• Unavailability of outcomes
• Cost inflation
• Uncertainty for OCTs
• Pressure to commit funds before end 2007

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9th EDF Results To-Date

• Significant disbursements in New Caledonia
• Significant resources put into EDF
• Intense dialogue with EU possible
• Several OCTs have pre-financed EDF Projects
• Loans
• Front loading counterpart funding

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Current Situation Stakeholder Perspectives

• European Commission Perspectives
• AB Envelopes identification, appraised
  completed and commitments completed by end 2007
• C-Envelope Re-allocated, programmed and
  committed by end 2007 (not an OCT entitlement)
• OCTs Perspective
• Acknowledge contribution of past EDFs and their
  impact on OCT development goals (and future
  potential)
• Real disappointment among many OCTs with 9th EDF
  experience to-date
• Acknowledgement that things have improved during
  last 6 months
• All parties (the Commission in particular)
  learns from past problems
• OCTs are not punished by loss of EDF funds
  because of these problems
• A clear road map for future actions agreed
  involving performance commitments from both sides

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Programming Implementation - Issues

• EC SYSTEM-RELATED ISSUES
• Lack of clear and consistent rules
• e.g. Sudden requirement for PIFs and FPS after
  SPDs developed
• Differing interpretations or programme
  rules/requirements among EC services
• Lack of clear ownership of OCT Dossiers
• Too many administrative levels/loops (e.g.
  approval processes)
• Approval and turnaround/reaction times taking far
  too long

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Programming Implementation - Issues (ctd.)

• OCT ISSUES
• Some unfamiliarity with EDF rules and complexity
  of same
• Sometimes a lack of technical capacity
• Sometimes a lack of institutional capacity
• For some OCTs, there may be issues with current
  governance structures and the needs of EDF
  development assistance

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Absorption Capacity

• Absorption Capacity
• Not an issue for a number of OCTs
• e.g. OCTs where implementation is broadly on
  track (N.C.)
• e.g. OCTs that have used national treasury
  financing to pre-finance 9th EDF work (e.g.
  Anguilla, Falklands Islands)
• For a small number of OCTs, this will have to be
  monitored closely
• ECDs generally identify few challenges with
  absorption capacity
• A key absorption factor will be implementation
  system capacity and speed within the EC

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Regional Programmes

• OCTs generally consider that Regional Programmes
  represent a useful concept
• Provided there is a clear common need and
  value-add in co-operating
• Concept is however seen as offering (much) less
  potential for more isolated OCTs
• However, development and implementation or
  Regional Programmes has also been constrained by
  a number of challenges
• Communication of the Programme guidelines
  (insufficient communication)
• Programme Procedures (too complex) and approval
  times (too long)
• E.g. Aquaculture Programme
• Other OCT-related challenges have also
  contributed to a difficult programming and
  implementation experience
• consultation levels during programme design
• communication and transparency during
  implementation
• Overall OCT message is that
• the concept offers value for most OCTs
• However, some improvements needed to translate
  the concept into a more effective programme tool

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OCT Involvement in Selected EU Programmes

• Provided for in the Overseas Decision
• Generally, limited success has been experienced
  here
• Some successes (e.g. St Pierre Miquelon
  Erasmus Programme)
• OCTs face a number of challenges
• Significant lead time and costs for preparing
  winning proposals
• Little awareness across other EU DGs
  credibility issues?
• OCTs lack of significant networks in Europe
• Finding partners

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C-Reserve

• One demand in place from Cayman Islands for
  funding under existing C-Reserve
• OCTs invited by consultants to suggest possible
  projects for consideration in an eventual
  C-Reserve re-allocation
• Significant number of candidate projects have
  been volunteered by OCTs
• OCTs have proposed 20 Projects with an indicative
  value of 270 million
• Existing Projects 37 million
• Possible New Projects 233 million
• Sectoral focus reflects SPDs

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EIB Envelope

• The profile of EIB is relatively low (although in
  the process of changing)
• Little activity to report
• Some OCT feedback suggests a need to clarify what
  projects are eligible for receiving EIB lending
• Likely that there are significant opportunities
  to be explore for assessment of suitability for
  EIB lending (20million), pending EIB
  clarifications of valid candidate projects for
  EIB loans
• Examples
• OCT-Specific e.g. mining project lending in New
  Caledonia
• Regional
• Development of fibre-optic infrastructure
• Development of satellite communications
  infrastructure

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OCTs Challenges as Small Island Economies

• CHALLENGES AND NEEDS ARE WIDE-RANGING. TYPICAL
  CHALLENGES INCLUDE
• Reduce degree of dependence on 1-2 sectors
• e.g. Aruba, TCI etc. dependence on (an
  increasingly competitive) tourism sector)
• Exposure to forces outside their control
• e.g. Falklands vulnerability to fishing season
• Environmental protection and conservation
• Provide adequate education, training and health
  care
• Expand and improve the quality of government and
  social services
• Promote entrepreneurial development to enable
  local population to be more active participants
  in the economy
• Social safety net programs to provide assistance
  and empowerment to vulnerable groups in society.
• Sustainable financial management to finance
  recurrent and developmental needs while limited
  debt service obligations.

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Part III - Recommendations

• Short Term
• Completing EDF Commitments
• C-Reserve
• Regional Programmes
• OCTA
• EC Management System
• Participation in EU Programmes
• EIB Lending
• Technical Assistance
• Medium Term
• OCT Needs
• EU-OCT Programme
• Technical Assistance

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Recommendations

• About the MTR Interim Recommendations
• The Recommendations are interim we want your
  feedback
• The Recommendations try to distinguish between
• Short-term priorities
• Committing funds
• Addressing issues that need to be addressed to
  ensure this is successful
• Medium-term issues

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Interim Recommendations Short-Term

• Whats Needed
• A focussed and efficient implementation and
  management effort to
• Commit 9th EDF Funds
• Pursue decision to re-allocate C-Reserve and
  commit the funds
• Time Pressure
• 15 Months to end of 9th EDF deadline for
  completing commitments
• Some OCTs are 3-6 months away from signing a
  Financing Decision
• Significant time pressure
• There is NO room for errors/confusion in
  completing programming and implementation work (
  and for programming new document)

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Interim Recommendations Short Term

• Completing 9th EDF Commitments (ctd.)
• EC needs to set a clear roadmap for completing
  OCT Programming and Commitments and stick to it
• This will help OCTs in budgetary and
  implementation planning
• Can number of commitment tranches be reduced?
• What should be the target date to complete all
  commitments?
• In order to ensure no further confusion and
  delays develop a short and simple EDF operations
  manual setting clearly EC rules
• develop urgently a clear description of the EDF
  rules understood and agreed by all actors
• Include commitments for approval times and
  turnaround periods

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Interim Recommendations C-Reserve

• C-Reserve Allocation
• Work to bring closure to Cayman Islands
  application as a matter of priority
• C-Reserve Re-Allocation
• Findings to-date show that there is likely a
  plentiful supply of candidate projects for
  re-allocated C-Reserve Funds
• Need for rapid development of OCT Candidate
  Projects
• Detailed appraisal of OCT candidate projects to
  ensure high quality, winning projects
• Can a small part of C-Reserve be used to
  compensate OCTs that have incurred commercial
  loan interest servicing costs?

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Interim Recommendations C-Reserve

• C-Reserve Re-Allocation Possible Selection
  Considerations
• First come, first served or Pro rata
  re-allocation will not be used (EC)
• Project Relevance
• Consistency with SPD,
• Consistency with OCT development policy EU
  development objectives
• Project Level Considerations
• Problem analysis carried out
• Linkages with other projects
• Lessons from past experience
• NSA/stakeholder consultation,
• Equity, gender, environment considerations
• Impact and sustainability prospects
• OCT SPD Impact Potential?
• Capacity to continue momentum during transition
  to 10th EDF?
• Linkages and critical path connections to SPD and
  other projects (risk exposure to non-project
  factors?

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Interim Recommendations Short Term

• C-Reserve Re-Allocation Possible Selection
  Considerations (ctd.)
• Implementation Prospects
• Implementation mechanism, monitoring indicators
• Implementability (complexity, prospects for
  rapid implementation)?
• Absorption Considerations
• OCT absorption capacity?
• EC System disbursement and implementation
  capacity?
• EU-OCT Programme Level Considerations
• Existence /non-existence of OCT co-financing
  and/or private sector co-financing
• Potential for mixing or using EIB loan financing

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Interim Recommendations C-Reserve
 

• C-Reserve Re-Allocation Process Considerations
• GENERAL
• OCTs need clear framework from EC
• MTR re-allocation of C-Reserve needs to be
  finalised by end 2006
• PROCESS
• Most C-Reserve Programming Project Appraisal is
  completed during Oct-December 2006 to help OCTs
  with budgetary planning for 2007 onwards
• EC chooses programming option with least work
  burden on OCTs
• Clear and detailed roadmap (project appraisal
  criteria, required inputs, approval times,
  commitment target dates)
• MTR Consultants endorse possibility to use
  rider approach to C-Reserve programming
• Programming work likely to be higher for OCTs
  operating under Project Approach regime
• Could use of TCF to make TA available to work
  with OCTs if/as needed?

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Interim Recommendations Short Term

• Short-Term Changes in Management System (not
  Programme Procedures)
• Simplify and Concentrate OCT implementation
  responsibilities
• EC staff working full time on OCTs
• A specialised small OCT unit/sub-unit sections
  (within DG AIDCO DG DEV) to build and manage
  SIE knowledge and develop an OCT competence
  centre
• 1 clear staff member with overall responsibility
  for each OCT (OCT Brussels Contact Point)
• Regular visits from EC Brussels staff to OCTs to
  see the situation on the ground
• Increased opportunity for EC Staff to make a
  bigger contribution
• Increased ownership and OCT expertise among EC
  staff
• If staff constraints an issue, could Member
  States second expert(s)?
• EDF Implementation System - Procedures
• Is it possible to simplify/reduce layers of
  approval in the short-term?
• e.g. Can regional delegations have formal
  contracting and decision power?

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Interim Recommendations Short Term

• Regional Co-operational Programmes
• Explore possibilities for a greater focus on
  regional-level co-operation
• Where there are common problems and added value
  in common solutions
• Most likely appropriate for OCTs in the same
  geographic region
• Need to ensure co-ordinating OCT has the
  requisite technical and institutional capacity
• May facilitate in some aspects OCT access to
  other EU Programmes
• Should not disadvantage more isolated OCTs nor
  reduce EU capacity to address differing
  OCT-specific needs
• OCTA
• Greater financial support from EC
• Management of technical assistance fund for OCTs
  at own discretion
• Greater capacity to dialogue with OCTs and
  identify new challenges
• Faster decisions to provide TA to solve
  short-term problems (troubleshooting)
• Faster decisions to provide TA to go after
  medium-term opportunities
• New roles/activities?

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Interim Recommendations Short Term

• Participation in EU Programmes
• EU Programmes can offer important benefits to
  OCTs and should be pursued more vigorously
• Support the development of OCT capacity and
  know-how
• Help put the OCTs on the map with EU and within
  Europe
• Support specific OCT territorial priorities
• e.g. New Caledonia EU non-energy mining policy
• Support development of centres of expertise
• Create a centralised support facility to help
  interested OCTs bid successfully for EU
  Programmes?
• Made available via Technical Assistance Facility
  ? (e.g. OCTA/other?)
• Respond to capacity limitations of many OCTs
• Offer a Brussels presence for OCTs to raise their
  profile at EC
• Advice and support for all stages (needs
  identification, matching to EU Programmes,
  partner search, contract management support).
• Would be easier than each OCT trying to do its
  own thing
• Exploit possibilities that do exist for common
  OCT proposals

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Interim Recommendations Medium Term

• Medium-Term does not mean that it is not
  important..
• OCT Needs from EU Assistance
• The relevance of current EDF assistance to OCTs
  is generally satisfactory no major changes are
  necessary
• Important that 10th EDF provides programme
  flexibility in terms of choice of sectors for
  individual OCTs to choose their respect sectors
  of focus for their assistance
• OCTs have differing sectoral foci
• OCTS are using the EDF for varying rationales
• OCTs are at differing stages of development
• Greater emphasis on addressing strategic
  threats/vulnerabilities of OCTs
• Review the current eligibility criteria

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Interim Recommendations Medium Term

• EU OCT Programme
• Can the ambition of the programme be increased?
• Is there sufficient emphasis on
• The effects of globalisation?
• Increasing competence in and uptake of ICT
  technologies?

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Interim Recommendations Technical Assistance
(Short Medium Term)

• Terms or Reference invites suggestions for future
  TA
• Can technical assistance be made available on a
  more rapid-response basis to OCTs for future
  needs ?
• EIB Lending Likely that significant pressure
  exists to absorb this funding envelope
• If useful to EIB, could TA be used to help in
  some of earlier stages of project identification
  and appraisal
• C-Reserve TA available to OCTs if needed to
• Assist/accelerate this process if needed?
• Develop criteria for allocation?
• General Programme Implementation Support
• To OCTs and/or EC if/as needed (e.g. faster
  verification and approval of AIRs?)
• Support development of monitoring and control
  procedures
• Strategic Support
• institutional support/development of OCTA
  (address resources constraint)
• Help OCTs address national strategy development
  questions and 10th EDF pre-programming needs?

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Part IV - Discussion

• These have been our interim thoughts on from the
  MTR work
• What is your perspective on the above
• Findings?
• Recommendations?

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Part IV Stakeholder Feedback