NEX and DEX: Theory NEX and DEX: Theory and Realityand Reality

RBEC Environment and Energy Practice RBEC Environment and Energy Practice Workshop:Workshop:

GEF Training and Kyoto Implementation GEF Training and Kyoto Implementation MechanismsMechanisms

6-9 October 20046-9 October 2004

Almaty, KazakhstanAlmaty, KazakhstanZharas Takenov, Zharas Takenov,

UNDP KyrgyzstanUNDP Kyrgyzstan

UNDP Project Execution:UNDP Project Execution:

Agency ExecutionAgency ExecutionNGO ExecutionNGO ExecutionNational Execution (NEX)National Execution (NEX)Direct Execution (DEXDirect Execution (DEX))

Agency ExecutionAgency ExecutionList of eligible Agencies:List of eligible Agencies:

*FAO, ILO, DESA, UNESCO, UNIDO*FAO, ILO, DESA, UNESCO, UNIDO

* Other UN Specific Organizations (e.g. WHO,WMO, IAEA)* Other UN Specific Organizations (e.g. WHO,WMO, IAEA)

* Regional Economic Commissions* Regional Economic Commissions

* UNOPS, Multilateral Banks (WB, Regional Banks etc.)* UNOPS, Multilateral Banks (WB, Regional Banks etc.)

Recommended, when:Recommended, when:* activities require unique technical sector experience, * activities require unique technical sector experience,

specific management capacity or access to international specific management capacity or access to international networksnetworks

*Govt lacks the required management or substantive *Govt lacks the required management or substantive capacity: orcapacity: or

*the Parties prefer agency execution for other reasons*the Parties prefer agency execution for other reasons

NGO ExecutionNGO Execution

Can be National or International NGOCan be National or International NGO

Recommended when:Recommended when:* project involves close cooperation with local * project involves close cooperation with local

stakeholders at the grassroots/community level;stakeholders at the grassroots/community level;* NGOs under consideration have a comparative * NGOs under consideration have a comparative

advantage in the areas the project targeting advantage in the areas the project targeting (experience, expertise or relations to the targeted (experience, expertise or relations to the targeted beneficiaries);beneficiaries);

* Project calls for a lager number of extensive * Project calls for a lager number of extensive stakeholders consultations and participationstakeholders consultations and participation

NEXNEXDecision by Res. Rep (as AE and NGO)Decision by Res. Rep (as AE and NGO) Considered as a normConsidered as a normEligible institutions:Eligible institutions:

* ministry or department within a ministry;* ministry or department within a ministry;* a semi-autonomous Covt institutions such as central bank, * a semi-autonomous Covt institutions such as central bank,

university, regional or local authority or municipality;university, regional or local authority or municipality;Mechanisms for coordination to be described in Mechanisms for coordination to be described in prodoc, e.g. establishment of PMC prodoc, e.g. establishment of PMCDesignated institutions may contract other Designated institutions may contract other entities to undertake specific tasks as entities to undertake specific tasks as implementing agencies or subcontractors of the implementing agencies or subcontractors of the project.project.

EXPECTATIONSEXPECTATIONS

Better integration with national Better integration with national programsprograms

Strengthening local capacityStrengthening local capacity Improved ownership and Improved ownership and

commitmentcommitment SustainabilitySustainability Lower costsLower costs

NEXNEX

Advantages:Advantages:

VAT exemptionVAT exemption Ensures transparency Ensures transparency

and gives the donors and gives the donors better trust.better trust.

Customs etc easier Customs etc easier when it is UNDPwhen it is UNDP

Can pay higher Can pay higher salaries to staff and salaries to staff and attract better attract better expertise expertise

Disadvantages:Disadvantages:

Capacity constrainsCapacity constrains Influence of implementing Influence of implementing

agency interestsagency interests In-country disputes and In-country disputes and

lack of cooperation lack of cooperation between different Govt between different Govt institutionsinstitutions

In case of low Govt In case of low Govt capacities often ends up capacities often ends up close to DEXclose to DEX

CHALLENGES OF NEX

1.1. Changes in Govt (staff and structure)Changes in Govt (staff and structure)• No ownership (name vs institution)No ownership (name vs institution)• No follow up to signed co-financingNo follow up to signed co-financing• Low capacity (in spate of frequent trainings: CDI, CDW, FPSS)Low capacity (in spate of frequent trainings: CDI, CDW, FPSS)• No substantive commitment from partnersNo substantive commitment from partners• Signature of contracts, financial reportsSignature of contracts, financial reports• Prodoc signing delaysProdoc signing delays• Project implementation delaysProject implementation delays• CorruptionCorruption

CHALLENGES OF NEX

2. Absence of coordination2. Absence of coordination• FP is not functioning properlyFP is not functioning properly• Environmental Ministries the weakest of allEnvironmental Ministries the weakest of all• Govt not able to bring co-financingGovt not able to bring co-financing

3. Place of GEF projects in the CO• Poor understanding of importance of GEF projects for

SD • Seed co-financing from UNDP CO• Uniqueness of the GEF portfolio

DEXDEX

Decision by Associate AdministratorDecision by Associate Administrator Used only in the countries with special Used only in the countries with special development situationsdevelopment situationsMust be temporary by natureMust be temporary by natureNeed to ensure transparency within UNDP by the Need to ensure transparency within UNDP by the division of responsibilities among several staff division of responsibilities among several staff membersmembers DEX evaluated by UNDP Evaluation Office in DEX evaluated by UNDP Evaluation Office in 2000-2001 2000-2001 A key finding - direct implementation A key finding - direct implementation services provided by UNDP are not services provided by UNDP are not detrimental to national ownershipdetrimental to national ownership

DEXDEX

AdvantageAdvantage FlexibilityFlexibility Environment for innovationEnvironment for innovation Clear line of accountabilityClear line of accountability Corruption avoidance and Corruption avoidance and

transparency transparency UNDP commitment UNDP commitment Greater efficiency/effectivenessGreater efficiency/effectiveness UNDP neutrality ensures broader UNDP neutrality ensures broader

stakeholders participationstakeholders participation

DisadvantageDisadvantage Increased cost for DEX start-upIncreased cost for DEX start-up Weak financial system.Weak financial system. DEX approval process somewhat DEX approval process somewhat

centralized.centralized.

UNDP CO Support Service under UNDP CO Support Service under the request of EAthe request of EA

Formulating, monitoring and evaluationFormulating, monitoring and evaluation Provision of assistance for financial reporting and Provision of assistance for financial reporting and

paymentspayments Identification and recruitment of project personnelIdentification and recruitment of project personnel Identification and provision of assistance for the Identification and provision of assistance for the

implementation of training activitiesimplementation of training activities Procurement of goods and servicesProcurement of goods and services Formal agreement for the provision of the support Formal agreement for the provision of the support

service to be signedservice to be signed

WHAT TO DO: INPUTS FOR THE DISCUSSION

At the national level Understanding that GEF is tool for introduction SD principles in

the national policy (MDG7(9)) GEF projects used as an entry point to strengthen national

capacities for NEX. Involvement of CO in the early stages of

formulation/negotiation. Identify constraints at the institutional level and at the CO level. Environment and GEF mainstreamed in the CO programme.

At the regional level Out-sourcing GEF Advisors on country levels

At HQ level

To follow up with DEX Evaluation recommendations