European Union supports Government of Liberia in Delivering Key Public Services in Energy, Security and Justice, Budget and Aid Management

MONROVIA, Liberia, February 8, 2016

The European Union (EU) has signed two Financing Agreements with the Government of Liberia for projects totalling almost USD 64 million in the key sectors of electricity and institutional capacity in aid management. The EU has also confirmed an additional USD 34 million in grant funding as part of its ongoing budget support programme.

Speaking at the signing ceremony in Monrovia on Monday, 08 February 2016, EU Ambassador to Liberia Tiina Intelmann said "the European Union is committed to working with the Government of Liberia to deliver the Agenda for Transformation. In her recent Annual Address President Sirleaf highlighted the importance of a reliable electricity supply. With the signing of the Financing Agreement for the Monrovia Electricity Grid Consolidation project, the EU, together with the Ministry of Lands, Mines and Energy and the Liberia Electricity Corporation, will be able to take an important step in making mains electricity a reality for Monrovia's residents and businesses".

Ambassador Intelmann also confirmed the European Union's decision to increase its budget support in response to Liberia's request. "The European Union recognises that Liberia's public finances are under severe strain. While this additional support will not prevent the need for budget cuts, we hope it will contribute to achieving the government's agreed objectives under the program: improved economic governance; macro-economic stability; provision and accountability of health, justice and security services, particularly in light of the additional costs associated with the preparations for UNMIL drawdown. I urge the Government to undertake efforts to meet all agreed conditions and sector indicators, so that all of the foreseen amounts can be paid into the budget. I also hope that, where necessary, the Legislature will act swiftly to pass any associated legislation."

Background Information

The Financing Agreements signed today mark the formal commitment between the European Union and the Government of Liberia to take forward the following projects:

Consolidation of Monrovia Electricity Transmission and Distribution

Total Value: Euros 55 million over 5 years

Objectives: To overall objective is to contribute to the reduction of poverty in Monrovia by improving the environmental and socio-economic conditions of the people of Liberia, in line with the Government of Liberia's objective to increase access to renewable energy services and affordable power for community and economic transformation. The specific objective is to increase access to sustainable and affordable energy in the greater Monrovia area.

Results expected: A strengthened Electricity Transmission and Distribution Network in Monrovia including at least 46 000 additional connections (300 - 400 000 beneficiaries) including 23 large industrial or commercial customers. The project will cover the area between Center and Paynesville.

Support to the NAO function, Aid Harmonization and Coordination in Liberia

Total Value: Euros 4, 050 000 over three years, of which Euros 3, 360 000 is from the EU and the rest is from the Government of Liberia.

Objectives: The overall objective is to contribute to the reduction of poverty in Liberia through enhancing the aid harmonization and coordination capacity of the Government of Liberia. The specific objective is to strengthen the EU's counterpart in the Ministry of Finance, the National Authorising Office (NAO) to effectively programme, supervise, manage, monitor implementation and account for EU cooperation development projects and to move towards more ownership by and alignment to national structures.

Expected results: Capacity of the NAO Office to efficiently and effectively programme, supervise, manage, monitor the implementation and account for EU aid increased and sustained; Capacity of Liberian Minsters and Agencies and Non State Actors for results-based management and implementation of EU programmes and projects is strengthened; Strengthened aid effectiveness capacity of the NAO to enhance ownership, alignment, harmonisation of EU programmes and projects to national structures; Enhanced visibility of EU-Liberia Cooperation

Details of the ongoing budget support programme:

State-building Contract for Liberia

Total value: Euros 87, 500 000 over three years, of which Euros 65 000 000 is from the EU. The EU contribution is allocated as follows:

Euros 62,000,000 - General budget support

Euros 2,690,000 - EU contribution to Integrated Public Financial Management Reforms Programme (IPFMRP), implemented by the World Bank

Euros 300,000 - Technical assistance to build capacities within the Ministry of Finance in the implementation of the State Building Contract, implemented by Overseas Development Institute

Objectives: The general objective is to contribute to the Agenda for Transformation's objectives of wealth creation and inclusive growth, in particular as formulated under Pillar I 'Peace and Security' and Pillar IV 'Governance and Public Institutions'. The specific objectives are: Improved economic governance by strengthening public institutions to ensure that public funds are better managed, in particular regarding the effectiveness of budget execution as well as the credibility, transparency and accountability of budget processes; Improved financial capability of Government to ensure macro-economic stability, especially in 2015 in the context of Ebola crisis; Improved efficiency and accountability in the provision of vital state functions and services notably in the area of health (in terms of Ebola response and non-Ebola basic health care), justice and security (including equitable access to justice), particularly for remote or marginalized populations, & on the maintenance of a secure and safe environment to enable sustainable socio-economic growth and development during the process of and after UNMIL withdrawal.

As cross-cutting issues the state-building contract aims to promote in particular gender equality and external oversight in the justice and security sector.

Expected results: Improved budget execution, in particular in the health sector, and management of the investment budget; Improved budget transparency and accountability, in particular in the health sector and on Ebola-related spending; Improved treasury management at county level - fiscal de-concentration - and preparation of fiscal decentralisation; Improved security of the population through strengthened capacity, professionalism and accountability of the police; Improved access to justice through reinforced efficiency, integrity and transparency of the justice institutions.

Specific results under the capacity development are: Strengthened public financial management processes and systems at the Ministry of Justice, Liberia National Police, Bureau of Naturalisation and Immigration and the judiciary, and strengthened demand side of accountability; Strengthened accountability and transparency of the implementation of the Agenda for Transformation and the budget through support to development of the national monitoring and evaluation system.

Additional background: The State-building contract was initially formulated in 2014 to support reforms in the justice and security sector in the context of the drawdown of the UNMIL peace-keeping mission. Due to the unexpected Ebola crisis, it was agreed with the Government of Liberia to modify the project so as to front-load much of the funds for the first payment in 2015, including a health sector related variable tranche of EUR 3 million.

The state-building Contract for Liberia was signed in May 2015. The first payment of Euros 29 million (of a total scheduled of Euros 31 million, as some of the indicators were not met by Government) took place in July 2015.

The European Union has increased the funding available under the State Building Contract in recognition that the combination of falling global commodity prices, the continued effects of the Ebola crisis and additional financial costs associated with the preparations for UNMIL drawdown have placed a severe strain on public finances. Following the recent increase in funding two further budget support payments are foreseen: Euros 20 million in 2016 and Euros 11 million in 2017. Part of the payments is conditional on the Government meeting a series of agreed conditions and sector indicators in the areas of improved public financial management and justice and security.


Delegation of the European Union to Liberia