Multi-Donor Trust Fund

The Multi-Country Demobilization and Reintegration Program (MDRP) is financed through two separate but complementary windows: World Bank/IDA funds of up to US$150 million and a Multi-Donor Trust Fund (MDTF) of US$350 million. Parallel partner support of individual D&R activities within the MDRP framework is also likely. Whereas World Bank funds only finance national programs, the MDTF finances:

• demobilization of government and irregular forces engaged in the conflict(s);
• temporary reinsertion benefits to ex-combatants;
• social and economic reintegration of ex-combatants, including special target groups;
• special projects for demobilization and/or reintegration implemented by UN Agencies or Non-Governmental Organizations (NGOs);
• special regional activities; and
• management and monitoring of the overall program.

Trust Fund Administration
As is normally the case with multi-donor trust funds, resources from all donors are pooled in a single Trust Fund account. Therefore, no earmarking of funds for specific countries, program activities, or cost categories is possible. Target group size estimates for eligible countries were used to ensure that adequate funding was made available for each country regardless of the date of effectiveness of their respective national programs.

The costs of coordinating the MDRP and administering the MDTF are estimated at 2.1 percent of MDRP program costs and 3.0 percent of the MDTF. All interest and investment income earned on contributions to the MDTF are added to the principal balance. An annual audit of the World Bank's overall management of trust funds is carried out by the World Bank's external auditors at the expense of the World Bank. Independent management reviews specifically of the MDTF will be undertaken at midterm and at program end.

Financing Flexibility
Given the continuing uncertainty concerning the security situation in the greater Great Lakes region, the actual demobilization calendar, and lack of data about the exact numbers of irregular forces and the timing of their repatriation, the MDRP retains considerable implementation and financial flexibility. Therefore, the definition of activities and eligible expenditures under the MDTF are broad to allow substantial variation.

Governance
A Trust Fund committee was established to oversee the utilization of regional MDTF resources. This committee is composed of representatives of all contributing donors.

Program Execution
In general, the program implementation units of the eligible national governments would be responsible for the overall management of national programs and therefore be the recipients of MDTF grants. UN agencies and other organizations would act as executing agencies and grant recipients for special projects. The World Bank would have responsibility to execute regional activities and program management under the trust fund.

Grant agreements are prepared between the World Bank as MDTF administrator and the recipients. These agreements outline the activities, cost categories and level of expenses to be financed, and the standard procurement and financial management procedures to be used for project implementation. The MDTF grants with recipient countries apply the same financial management and procurement guidelines and procedures as the parallel World Bank loans/credits. In the case of special projects, standard World Bank procedures, similar to those of UN agencies, apply with specific thresholds and prior review ceilings adapted to the special nature of the recipient and the emergency nature of D&R operations.