ANNEX 1. IDTIFICATION Title Total cost Aid method management mode Technical Cooperation Facility 1.5M (2.4% of NIP) Project approach partially decentralised management DAC code 15010 Sector Economic and Development Planning 2. RATIONALE 2.1. Sector Context Timor Leste (TL) is a new ACP country (ratified the Cotonou Agreement in December 2005) and is in the process of developing a comprehensive programme under the EDF and other related instruments in order to tackle its development, political and security problems. It has little knowledge of the European Development Fund (EDF) and its procedures and it has a relatively small human resources base. Therefore, the main problems identified in TL regarding this project are: A need for consultancy services to cover all the steps of the Project Cycle Management, from the identification to the evaluation and audit phases and in accordance with EDF rules and procedures. A need for expert advice in political and security related issues as well as the political dialogue with the country and follow-up of the governance commitment plan. A lack of appropriate human resources within the NAO office, as well as within the line Ministries and the implementing agencies dealing with EC development projects. A lack of visibility of the European Union and the limited knowledge of the European values, principles and standards among the TL citizenship. Besides, there is a need to enhance harmonization among international donors and the EC may play a key role on this. To this end, the project will aim to provide Technical Assistance (TA) and capacity building support to facilitate the implementation of the National Priorities 2008/09 and subsequent plans of the Government of TL (GoTL). The TCF may be also used to finance necessary measures in support of good governance issues linked to the incentive tranche, regional integration and EPA related activities. 2.2. Lessons Learnt The ongoing Capacity Building and Support to NAO office programme has allowed identification of one 9 th EDF project (Rural Development III) and provides a trade adviser to the Ministry in charge of Trade. The main lesson learnt from this ongoing programme is that the Timorese public sector, and in particular the NAO office, suffers from a lack of human resources, therefore ad hoc consultancy services are needed in order to ensure smooth planning, preparation and implementation of donors programs. The NAO office is understaffed and the few human
resources allocated to it are in need of strong support to perform and fulfil its responsibilities as set in the Cotonou Agreement. 2.3. Complementary Actions Implementation of the ongoing Capacity building and Support to NAO office programme began in November 2007 and will continue until 30 June 2010. The ongoing programme provides funding for i) some Short Term TA for the identification of a first tranche of 10 th EDF NIP, ii) training (support to seminars and consciousness-raising activities) and, iii) conferences and seminars (participation of officials/non-state Actors (NSA) in international meetings or seminars). The current programme will ensure continuation of the ongoing programme activities to guarantee the NAO office receives the capacity building required to perform its responsibilities. 2.4. Donor Coordination Under emerging Government leadership, external partners are aligning their assistance with a new national development plan. A new plan is being drafted and is aimed to be finalized at mid 2008. The Ministry of Finance is in charge of external assistance coordination. It holds Development Partners Meetings annually to discuss effective ways to combat poverty. The last Development Partners Meeting which was held from 27 to 29 March 2008, led to a broad consensus among the donor community about the Timor-Leste transitional strategy and appeal for 2008. A coordination mechanism is actually being developed for the six priority areas. Further meetings are scheduled to be held regularly in order to strengthen coordination among donors. 3. DESCRIPTION 3.1. Objectives The overall objective of the project is the implementation of the development plan of the GoTL through the support of sound development programmes financed by the EC, notably through the EDF funds, and fostering of a more coherent and informed approach to development and trade issues. The project purpose is the implementation of actions under the NIP and other EC funds, notably EDF funds, together with the improved awareness among key actors in TL of general issues of development, trade, etc., and of EU policies in these and other areas deemed important for TL progress, by means of training for beneficiaries. An appropriate linkage should be established between current EDF funds, budget financing (e.g. food security) and other EC funding (Instrument for Stability, ECHO ) in order to ensure coherence of the overall EC activities in the country. 3.2. Expected results and main activities The TCF is expected to result in: An enhanced capacity of GoTL and in particular the NAO office, to implement EDF programmes and projects (as well as other EC funded programmes) in accordance with EC rules and procedures; Greater awareness among key stakeholders on the main issues regarding development cooperation and more specifically EC strategies and policies; Expert advice on specific aspects related to the identification and implementation of programmes and projects as well as wider policy areas which form part of the
political dialogue, plus the governance commitments made in the course of the 10 th EDF programming process. The project main activities will be: Technical assistance with the engagement of short and medium-term consultants to assist in the main stages of the Cycle of Operations to ensure the effective implementation of 10 th EDF NIP and other EC programs in favour of TL. Consultants will be engaged, mainly, to assist the government and non-government institutions with specific tasks related to the identification and formulation of new funding initiatives, to prepare the groundwork for budget support operations, to support project/programme implementation where required, to carry out studies including in the political field and to strengthen institutional capacity by providing technical assistance and training, to evaluate effectiveness of on-going and completed projects (evaluation) only in cases where this is impossible as part of the projects themselves or other projects, to perform audits of on-going and completed projects where this cannot be provided for in the projects themselves or in the interests of rationality. Trainings on EC development policy and EDF procedures. This component will finance activities prior to or during the formulation of a project or programme for example a Cycle of Operations workshop of stakeholders in a sector identified in the NIP in accordance with EDF procedures. Conferences and seminars. This component will also fund educational actions including: (a) short-term training activities for TL officials and/or non-state actors on topics related either to the priorities of the ACP-EU Partnership Agreement (democracy and human rights, sustainable development, environment, trade, etc.) or to EDF or other EU administrative and financial procedures and (b) participation by TL officials or non-state actors in international meetings or seminars on development or trade themes.. Communication, visibility and diffusion of European values and standards. The aim of these activities is to strength the communications tools and the visibility of the EC and the EU in TL, while at the same time contributing to the diffusion of European values, as for instance human rights, good governance, environmental sustainability and gender equality, as well as European standards. It covers possible activities of harmonization between Member States that may help to spread European values and/or standards. 3.3. Risks and assumptions One main risk is that capacity building support may be undermined due to the departure of trained staff. This risk will be mitigated by involving as many officials as possible in the capacity building programme and by developing durable systems. Local staff and local NSA will be implicated as deeply as possible in all activities funded on the program in order to ensure ownership and appropriation by national structures. There are good prospects for the sustainability of the project, as the GoTL has demonstrated a genuine interest in working with the EC as well as strong motivation to familiarise with the EDF system.
3.4. Crosscutting issues Environmental sustainability, gender equality, good governance and human rights issues will be considered in the various actions realized by the project, either in identification and formulation of new funding initiatives or in providing resources for training, communication and visibility actions dealing with these issues. Regarding training, conferences and seminars, a gender-friendly approach will be implemented to identify participants. Terms of references of short and medium term consultant will specifically mention crosscutting issues as important points to be addressed. 3.5. Stakeholders The stakeholders in this TCF project are those relevant to the EC cooperation program in TL, in particular the NAO, government institutions, target groups according to EC programs for which the TCF will be used, and the TL citizenship in general, including media group. 4. IMPLEMTATION ISSUES 4.1. Implementation method The project will be implemented by direct partially management through the signature of a financing agreement with the National Authorising Officer (NAO) of TL. The overall responsibility for the implementation of the programme lies with the NAO, who may request the Commission to implement service contracts under Article 23.6 of Annex IV to the Cotonou Agreement. For procurement undertaken by the NAO the Commission will control ex ante the contracting procedures for contracts > 50,000 and ex post for procurement 50,000. Through the signing of programme estimates, payments may be partially decentralised for operating costs and contracts up to the following ceilings: Works Supplies Services Grants < 300,000 < 150,000 < 200,000 < 100,000 Taking into consideration the post-emergency situation of Timor Leste and the necessity for appropriate fast interventions adapted to the country s instability, the action foreseen in the Program will be implemented in accordance with article 72.6 and 73.1 of the Cotonou Agreement and with article 25 of its annex IV. The operation envisaged will be managed and implemented through quick, flexible and effective procedures, in order to ensure swift implementation on the ground. In certain well motivated cases, negotiated procedures will be authorized to award service contract instead of framework contract. Direct award of grants can also be envisaged. Nevertheless, calls for proposal and framework contract should be used whenever feasible. 4.2. Procurement award procedures All contracts implementing the action must be awarded and implemented in accordance with the EDF procedures and standard documents laid down and published by the Commission for implementation of external operations, in force at the time of the launch of the procedure in question. All programme estimates must respect the procedures and standard documents laid down by the Commission, in force at the time of the adoption of the programme estimate in question.
4.3. Budget and calendar The estimated cost of these activities, including provisions for contingencies, broken down as follows: Activity Cost ( ) Technical assistance facility - (Expertise required including: fees, living allowances and reimbursable expenses) 1,080,000 Training on EC development policy and EDF procedures - (including supplies and equipment, rental of premises and incidental expenditures) 200,000 Conferences and seminars - (including incidental expenditures, flights, registration, per diem) 100,000 Communication, visibility and diffusion of European values and 50,000 standards Audit (of this project) 20,000 Evaluation (of this project) 20,000 Contingencies* 30,000 TOTAL 1,500,000 * Contingencies may only be used with prior written approval of the Commission. Where a financing agreement is not concluded (signed by the two parties) at the latest on 31 December of the year N+1 (N being the year in which the global financial commitment was adopted), the funds earmarked must be de-committed in full Timetable: The implementation phase that starts from the entry into force of the Financing Agreement will have a duration of 36 months. The closure phase starting from the end of the implementation phase will have a duration of 24 months. The end of the period of execution of the Financing Agreement is set at 31/12/2013. Any balance of funds remaining available under the EC grant shall be automatically cancelled 6 months after the end of the period of execution of the Financing Agreement. The contracts and programme estimates through which the Financing Agreement is implemented must be signed by both parties no later than three years from the date of the corresponding global financial commitment. This deadline cannot be extended. This restriction does not apply to contracts for audit or evaluation of this facility, which may be signed later. 4.4. Performance monitoring The main indicator will be the commitment and disbursement of resources available under the NIP. This will involve the successful identification, formulation, implementation and evaluation of actions in the Project. Evaluation reports of participants on training activities attended, records of attendance at seminars and conferences. 4.5. Evaluation and audit Progress in the implementation of the studies will be monitored by the NAO. An evaluation of this TCF will be conducted at the end of the project. A provision for Audit is included in the budget. Under the 10 th EDF Financial Regulation, the Chief Authorising Officer can use this provision to organise an independent audit of expenditure under this Agreement. 4.6. Communication and visibility All studies, reports, conferences and seminars supported under this initiative will highlight the EU s financial support. Press releases with information on the EU s funding
support to the development programmes in TL will be issued to coincide with significant events in the project cycle such as the signing of Finance Agreements, launching of programmes, reviews and evaluations. Banners and advertising will also be used as appropriate at conferences, seminars and training events.