Multilateral Aid Review summary - European Development Fund (EDF)

The European Development Fund (EDF) is the main instrument for European Union aid to African, Caribbean and Pacific (ACP) countries. It is managed by the European Commission, and supports the implementation of the EU’s Cotonou Partnership Agreement. Cotonou governs relations between 78 ACP countries and 27 EU Member States. DFID’s contribution to the EDF was £397m in 2009/10.

	comment
Contribution to UK development objectives	Strong
	+	EDF’s activities and mission fit closely with DFID’s objectives and structural reform pillars.
	+	Sheer size (€3.6 bn pa) and strong poverty focus (approximately 85% of funds spent in LICs) make the EDF critical for progress on the MDGs and poverty reduction.
	+	EDF gives crucial support to Commonwealth countries and UK Overseas Territories.
	+	EDF demonstrates delivery against challenging development objectives.
	+	Impact of wider EU policies in trade, agriculture, fisheries. migration, climate change and security are key to ACP economies
	+	Strong mandate and policy framework for dealing with fragile and conflict sensitive situations, and increasing work on climate change
	_	Rules can be inflexible/cumbersome, hampering strive for results.
	_	Gender strategy is adequate on policy but weak on implementation
Organisational strengths	Strong
	+	Built on a unique partnership model that is highly appreciated in country and accompanied by political dialogue.
	+	Strong monitoring and financial management systems, with moderate administration costs.
	+	Predictable funding, allocated according to needs and performance
	+	Strong transparency and accountability practice: Commission has signed up to the International Aid Transparency Guarantee.
	+	Funds are only drawn from Member States when needed, and are generally released on schedule.
	+	High levels of budget support with results based tranches encourage partner countries to look at value for money issues.
	_	Non-budget-support assistance has less of a focus on value for money.
	_	No clear overall results-framework is in place.
	_	Limited flexibility after funds have been programmed and cliff edge issue at the end of the funding cycle.
	_	Broadly meritocratic recruitment practices but continued challenge in recruiting development-specific expertise.
Capacity for positive change	Likely
	+	Proven capacity for change. Substantial scope for reform with new institutional set-up and commitment from Member States