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The Counterpart Fund
| Governing Bodies |
Selection of Projects |
Monitoring of the projects |
List of projects
Origins: the Debt Swap Agreement
“Debt Swap” is shorthand for a transaction in which a government
or organization in a creditor country retires a fraction of a
developing country’s external debt, in exchange for a commitment
by the debtor government to invest local currency in designated
programs. In essence, the debt swap concept can also be viewed
as a form of foreign assistance to a debtor country by its
creditors, whether these creditors are commercial institutions
or simply credit-granting governments.
Italy and Egypt signed the “Debt-for-Development
Swap”
agreement in Rome on February 19, 2001 with the aim of
converting eligible Official Development Assistance (ODA)
bilateral debt owed by the Arab Republic of Egypt to the Italian
Republic into financial resources to implement development
projects in Egypt. The total amount of debt subject to swap
operations under the Agreement is approximately $ 149
million
for a period of
five years
(July
2001 – July 2006).
Egypt
is one of a number of middle-income countries that have taken
advantage of the growing international awareness for the debt
relief of developing nations. Egypt has negotiated four
bilateral Debt Swap agreements, with the governments of France
(1994), Switzerland (1995), Germany and Italy (2001).
In Italy,
debt swap operations are regulated by law no. 449/ 1997 and law
209/2000. The regulation establishes, among other things, that
swaps can be carried out only for the debts of those countries
"for which a multilateral understanding has been reached" and,
in that sense, among the creditor members of the Paris Club
whose juridical/financial effectiveness is obviously bound to
the related Applicative Bilateral Agreement of the multilateral
Understanding on debt restructuring. The Paris Club in general
foresees that, upon the request of the debtor country with which
restructuring is being negotiated, pending examination on a
voluntary and bilateral case by case basis, swaps can be done on
an unlimited amount for assistance loans being restructured by
the Club and for not more than 20%-30% of commercial loans (this
percentage is lower for so-called "higher middle income
countries").
The
Counterpart Fund
According
to Art. 2 of the IEDS Agreement, a Counteraprt Fund (CPF) in
Egyptian pounds was opened within the Central Bank of Egypt (CBE)
and the Egyptian Government deposits into the CPF the
equivalent, in Egyptian Pounds, of each installment of the ODA
debt (principal and interest) due to the Italian Government at
its maturity date, in the period between 9 July 2001 and 8 July
2006.
The Central Bank of Egypt communicates to the Italian
institution the amount deposited into the CPF and after relevant
verification the debt installment is cancelled. The exchange
rate US$/Egyptian Pound is calculated at the due date of each installment.
The
mechanism of the transfer of funds into the CPF is directly
linked to the process of projects selection since the
outstanding amount of the CPF (that is the total amount of the
installments transferred into the CPF) should not exceed the
total budget of selected projects.
Installments of funds are transferred from the CPF to the
projects every six months according to the approved financial
plans. They are dependant on the performance of the projects
reflected in the progress reports and in the related updated
work plan and financial plan.
The Management Committee
The Italian Egyptian Debt for Development Swap
Program is managed by a bilateral Management Committee (MC)
supported by a Technical Support Unit (TSU), acting as a MC
secretariat, to monitor and evaluate the results achieved by
each project.
The Management Committee includes representatives of
both parties: on behalf of the Government of the Italian
Republic, the Ambassador of Italy to Egypt assisted by
experts in the sector of development cooperation and other
specific sectors as the case may be; on behalf of the Government
of the Arab Republic of Egypt, the Minister of International
Cooperation, assisted by representatives of the Ministry of
Foreign Affairs, the Ministry of Finance and the Central Bank of
Egypt as well as representatives of other relevant Ministries
and/or organizations as the case may be.
The major
tasks of the Management Committee are to monitor the correct
implementation of the agreement, to select projects to be
financed by the funds generated by the debt-for-development
swap, to monitor their implementation and verify their
achievements.
The MC
meetings are held normally three times a year.
The Technical Support Unit
According
to art. 4.1 of the Agreement, the Management Committee is
responsible for monitoring projects implementation and verifying
their achievements. To this end, a Technical Support Unit (TSU)
acting as Management Committee Secretariat is appointed under
the direct responsibility of the Heads of the Committee. The TSU
also provides technical support to the Management Committee for
projects selection and for monitoring the implementation of the
whole agreement.
The TSU is
composed of Italian and Egyptian staff and maintains constant
contacts with all the projects financed. The TSU established
procedures for drafting the technical and financial progress
reports to be submitted by the projects and constantly monitors
the progress of each project, both from the technical and
financial side, through reports, meeting and field visits.
The TSU
also monitors the transfer of funds in and out of the CPF and
their utilization in accordance with the plans of the approved
projects, also evaluating requests for adjustments to the
approved plans in order to adapt to the changing conditions
during the life of the project.
Moreover
the TSU implements strategies directed at the capacity building
of the projects’ staff where needed and, in order to strengthen
sustainability and impact, the TSU facilitates also synergies
among projects and links with other development initiatives in
the country.
Funds from
the CPF mainly finance projects in the fields of human
development, poverty alleviation and environmental protection.
The following organizations are entitled to apply to the IEDS
for financing
Funds
collected in the CPF may also be used to finance local costs of
relevant projects and programs undertaken by the Italian
Development Cooperation in Egypt.
The
Management Committee is responsible for project selection.
Project selection is based upon the evaluation of the proposal
presented by the applicant, the details of which are listed
below.
Each
applicant must first submit their logical framework, and submit
a work plan followed by a resource allocation sheet, and finally
a budget.
Upon completion of the project selection process, the budget of
each selected project is allocated and disbursed according to
the relevant annual financial plan. Within three months before
the end of each financial year, the applicant submits to the MC
a financial report for the current year and a proposed work plan
for the following year and the relevant updated annual financial
plan.
Monitoring
of the projects
Financial
and technical monitoring is very important for good management
of the fund and the sustainability of the projects. Every six
months all projects are required to submit a progress report to
the MC. This specifies achievements, activities, results and
expenditure according to the work plan targets. The progress
report, which includes technical and financial data, is drafted
according to a standard format.
The TSU assist the Projects to draft the progress reports correctly,
while at the same time improving the performance of the staff
of the projects on technical and financial management and thus
adding to their skills base.
For
financial monitoring the TSU has adopted the techniques
of “Performance Budget” and “Activity Based Financial Planning”
where expenditures are related to activities implemented.
Assisting the projects to adopt this v ision required full
involvement of the TSU in the area of capacity building, institutional empowerment and knowledge transfer to raise and
upgrade the skills of the projects' staff. The philosophy
behind this is not only to facilitate the monitoring activities
but also to express a strong commitment towards improving
national institutions performance through
capacity building. Within this wide broader vision the
monitoring technique becomes part of the project learning
process which eventually results in enhancing the project
performance in management and reporting.
When
the necessary monitoring is done with an external auditor, this
indicates the financial performance of the implementer, and
avoids any mismanagement of funds.
|
Pr. no. |
Applicant |
Implementing Agency |
Project |
Location |
Duration years |
Project Budget EGP |
|
1 |
MALR |
MARL |
Rural Development Project |
West Nubaria |
4,5 |
150.620.000 |
|
2 |
MISA |
MISA |
Poverty Alleviation & Employment gener. |
Assyut, Qena, Sohag |
3 |
37.500.000 |
|
3 |
MOHP |
MOHP |
Family Health Rural Data Base |
Behera, Kalubia |
3 y3 m |
34.093.000 |
|
4 |
CAIRO GOV. |
UNESCO |
Traditional Arts and Crafts |
Old Cairo - El Fustat |
- |
suspended |
|
5 |
MALR |
MALR / COSPE |
Sustainable Rural Development |
Wadi Rayan, Fayoum |
4 |
12.613.000 |
|
6 |
MOHP |
MOHP |
Risk of chemical poisoning |
Menia, Dakhalya, Cairo |
3 y 2 m |
1.983.150 |
|
7 |
COSPE |
COSPE |
Marketing Link Program |
national |
17 m |
1.261.020 |
|
8 |
NCW |
NCW |
Multi-faceted Micro-credit for women |
Mynia |
3,5 |
6.807.400 |
|
9 |
MOT |
MOT |
Completion of Pottery village |
Old Cairo - El Fustat |
2,5 |
5.985.414 |
|
10 |
MCIT |
UNDP |
ICT for sustainable human development
|
National |
4 y 8 m |
48.434.754 |
|
11 |
MALR |
MALR |
Support to agricultural cooperatives |
Upper Egypt |
3 |
25.968.820 |
|
12 |
NCCM |
NCCM |
Protection of working children |
Manshiet Nasser |
3 |
4.190.709 |
|
13 |
WFP |
MALR / WFP |
School Feeding |
Fayoum, BeniSuef, Minya |
3 y 3 m |
42.489.905 |
|
14 |
NWRC |
NWRC / CLEQM |
Instream wetland treatment of drain water |
Gharbya, Dakhalya |
3 y 2 m |
1.375.000 |
|
15 |
NWRC |
NWRC / CLEQM |
Environmental Impact for hand pumps water |
Gharbya, Kalyubya |
3 y 2 m |
1.425.000 |
|
16 |
CARITAS |
CARITAS/ SETI |
Directory for special needs services |
Greater Cairo |
22 m |
275.440 |
|
17 |
NCCM |
UNDP |
FGM Free Village mod. |
Upper Egypt |
3 |
2.079.000 |
|
18 |
NCCM |
NCCM / UNODC |
Campaign to reduce drug abuse |
national |
3 |
8.005.000 |
|
19 |
GAEB |
GAEB |
Schools construction |
Minya, Sharkia, Sohag |
3,5 |
42.768.683 |
|
20 |
NCCM |
UNDP |
Think Twice social campaigns for youth |
National |
3 |
14.584.416 |
|
21 |
MOHP |
MOHP |
School Health program |
National |
3 |
2.225.000 |
|
22 |
EEAA |
UNDP |
Environmental program phase 2 |
National |
3 |
19.900.060 |
|
23 |
EEAA |
UNDP |
Inventory of national bio-diversity |
National |
3 |
6.841.410 |
|
24 |
NWRC |
NWRC/WRRI |
Flash Floods Protection works |
South Sinai |
3 |
13.000.000 |
|
25 |
NWRC |
NWRC |
Agricultural Development in Southern Valley
|
Thoska |
3,5 |
11.412.000 |
|
26 |
MOHP |
MOHP |
Leprosy elimination program |
National |
2,5 |
1.032.000 |
|
27 |
ISMAILIYA Gv |
UNDP |
Participatory Slum upgrading |
Ismailya |
3 |
18.744.300 |
|
28 |
MRI |
MRI |
Extension of Medical Research Institute |
Alexandria |
1 y 10 m |
1.735.000 |
|
29 |
CARITAS |
CARITAS |
Food for work - leprosarium village |
national |
3 |
1.450.440 |
|
30 |
NWRC |
NWRC |
Assessment of Water Users Associat. |
National |
14 m |
200.000 |
|
31 |
NWRC |
NWRC |
Water based Food security |
National |
14 m |
200.000 |
|
32 |
ICED |
ICED |
Community Waste management |
Cairo |
3 |
1.916.000 |
|
33 |
MOHP |
MOHP |
HIV/AIDS Prevention |
National |
2 y 9 m |
2.165.675 |
|
34 |
ALEX UNIV. |
ALEX UNIV. |
Water Desalination |
Alexandria |
3 |
5.483.840 |
|
35 |
MOHP |
MOHP |
Improving Health of working children |
Menoufeia, Assiut, Cairo |
2,5 |
1.900.000 |
|
36 |
FAO |
FAO |
Rural Developm. Communication Network |
National |
3 |
9.240.000 |
|
37 |
MOFTI |
UNIDO/MOFTI |
Traceability agro-indust. Prod. Europ.mark. |
National |
3 |
45.672.060 |
|
38 |
TOFULTY |
TOFULTY |
Street Children protection |
Cairo |
3 |
4.648.652 |
|
39 |
MOFTI |
MOFTI |
Relocation of Old Cairo Tanneries |
Cairo, Robaiki |
3 |
162.030.000 |
|
40 |
ADEW |
ADEW |
Empowerment of Female heads household |
Cairo -Mansh Nassser |
3 |
9.430.550 |
|
41 |
NCCM |
NCCM |
Environmental Development Awareness |
North Cairo |
2,5 |
4.250.000 |
|
42 |
BEHEIRA Gv. |
BWADC |
Rehabilitation of water supply system |
Beheira |
3,5 |
50.000.000 |
|
43 |
SCA |
SCA |
Yashback Palace restoration training |
Cairo |
2 |
1.600.000 |
|
44 |
APS/MAIS |
APS/MAIS |
Literacy and vocational training for children |
Sohag |
2 y 3 m |
1.840.800 |
|
45 |
MOVIMONDO |
MOVIMONDO |
Women entrepreneurship |
Giza |
3 |
1.997.686 |
|
46 |
MAIS |
MAIS |
Improving quality of life of children and famil. |
Old Cairo |
2 |
1.999.900 |
|
47 |
CKSL |
CKSL |
Enhancement of NGOs kindergartens serv. |
National |
1 y 11 m |
1.889.250 |
|
48 |
AAE |
AAE-COSPE |
Improvement of Education |
Siwa |
2,5 |
1.986.715 |
|
49 |
NVD |
NVD-COSPE |
Improvement of job opportunities |
Minya |
2 |
1.999.475 |
|
50 |
MOVIMONDO |
MOVIMONDO |
Children with special needs |
Giza |
2 |
1.998.050 |
|
51 |
MME |
IOM |
Support to External Employment Dpt |
national |
0,5 |
311.000 |
|
52 |
ABU SALAMA |
ABU SALAMA |
Protecting Dolphin habitat |
Marsa Alam |
1 |
1.327.350 |
|
53 |
MOFTI |
ACC |
Green Corridor Pilot Project |
West Nubaria |
1,5 |
1.902.250 |
|
54 |
IDS - TSU |
IDS -TSU |
Support to TSU running costs |
national |
1 |
495.000 |
|
|
|
|
|
|
TOT |
835.284.174 |
|
Applicants and
Implementing Agencies
The share of the total budget among the
projects according to type of applicant is the following: 

The share of the total budget according to
the type of implementing agency is the following:

The difference between the two distributions
is due to the fact that some projects approved to Egyptian institutions or
ministries are implemented with the support of UN agencies or NGOs.
Geographic coverage
The projects financed cover
almost the entire country: 22 projects are underway in the Delta, 22 in Greater
Cairo and Giza, 2 in Sinai, 5 in Siwa, 15 in Fayoum, Minya and Sohag, 13 in Qena
and Aswan, 2 in the Red Sea area.
The total budget of the projects approved is
shared among the main areas of the country as shown in the following chart.
Sectors of interventions
Obviously, there is going
to be some overlap between the various areas of development and the results of
one project may be applicable in more than one sector. However, a simplistic
break down of the total budget according to sector of intervention is shown in
the following chart. The large shares for the sectors of Rural development and
of Micro-enterprises and SMEs are due to the relative weight of the two biggest
projects financed namely IDS/1 “West Nubaria Rural Development Project” and
IDS/39 “Relocation of Old Cairo Tanneries”.
Projects size
The share of the total
amount of funds, EGP 835.284.174, among the projects according to their budget
size is the following:
v
Micro projects (budget EGP 0-500.000): 5 projects with a total budget of EGP
1,481,440, representing 0.18% of the funds.
v
Small projects (EGP 500,001-2,000,000): 19 projects with a total budget of EGP
32,619,086, representing 3.91% of the funds.
v
Medium projects (EGP 2,000,001-20,000,000): 19 projects with a total budget of
EGP 161,606,426, representing 19.35% of the funds.
v
Big projects (EGP 20,000,001-50,000,000): 8 projects with a total budget of EGP
326,927,222, representing 39.14% of the funds.
v
Mega projects (EGP over 50,000,000): 2 projects with a total budget of EGP
312,650,000, representing 37.43% of the funds.
Financial figures
The total amount credited
by the Government of Egypt in the Counterpart Fund account on 30/04/06 amounts
to EGP 789,244,948 corresponding to the amount of US$ 143,750,811 which
represents about 96 % of the total debt which should be converted during the
five years period of conversion of the Agreement (July 2001 – July 2006)
amounting to US$ 149,097,996.
At 30/04/06 the total
funds transferred from the CPF to the accounts of the projects amount to EGP
543,211,205 representing about 68% of the amount credited until now to the CPF
by the Egyptian Government, leaving a balance of EGP 249,822,557.
The total expenditures
reported by the projects at 30/04/06 amount to EGP 378,928,083 representing
about the 70% of the related funds transferred to those projects.
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