Dr. Hussain Al-A'araj, Minister of Local Government and the Chairman of the Board of Directors of MDLF, and German Development Bank KfW signed an agreement for a financing contribution of the German Government totaling 40 million Euros for the benefit of the third phase of the Municipal Development Program (MDP III) which is implemented through the Municipal Development and Lending Fund (MDLF). The agreement is in line with the Memorandum of Understanding signed by the Palestinian government with international donors to support Palestinian municipalities through the Municipal Development and Lending Fund. The German government is one of the main contributors to the MDLF.
The agreement was signed in the presence of Mr. Christian Clages, Head of the German Representative Office in Ramallah, and Dr. Tawfiq Al Budeiri, the General Manager of the MDLF.
Minister Al-A'raj stated that the Municipal Development Program is considered the best available effective tool that translates PA’s policies and strategies into a concrete financing mechanism to support municipalities. The program aims to enhance the institutional capacity of municipalities in the West Bank and Gaza for more accountable and sustainable service delivery. The program targets all 144 municipalities and provides municipalities with a combination of technical assistance and annual performance-based grants for priority sub-projects to improve municipal finance and municipal planning. The performance-based grants were designed to create incentives for municipalities to improve their performance. Al-A’araj stressed the importance of the German support which effectively supports the development efforts in Palestine, emphasizing how such support contributes to the state-building and achieves proper development.
Dr. Al-Araj also stressed the importance of MDLF as a distinctive Palestinian initiative in administering international aid including the German support that MDLF received and redistributed in a transparent manner, adding that MDLF has become a unique vehicle in recruiting international assistance from several donors for a number of programs.
For his turn, Mr. Christian Clages, Head of the German Representative Office in Ramallah highlighted the longstanding and fruitful German-Palestinian development cooperation. “There is good reason that the local government sector has been a priority area in our cooperation”, Clages said. “For local infrastructure and local services are key to improve the quality of life of the citizens”, he explained.. So far the German Government has provided approx. 118 million Euro in total through German aid agencies KfW and GIZ in support of MDLF programmes.
Furthermore, Mr. Clages expressed his expectation that the new cooperation will consolidate and further strengthen the capability of local government units to provide the Palestinian population with much needed public services in good quality and in a transparent and accountable manner.
For his part, Dr. Tawfiq al-Budeiri, Director General of the MDLF emphasized the importance of the Municipal Development Program and the role it plays in empowering Local Government Units and enhancing their responsiveness to provide better services for their citizens. He concluded by thanking the German government for the support provided for the Palestinian government, highlighting the role of such contributions in strengthening steadfastness for the Palestinian citizens.
It is worth mentioning that the MDP is a reform and development program that was designed by MDLF on behalf of and under the direct supervision from the Palestinian Government. The program is based on the belief that the corner stone for better municipal services are effective and accountable local government units. The first and second phases of the program were completed, the third phase of the program is funded by the Palestinian government, the French Agency for Development (AFD), the Danish government, the World Bank, Germany (through KfW and GIZ), the Swiss Agency for Development and Cooperation, and the Association of Netherlands Municipalities (VNG), the European Union (EU) with a total value of 116 million Euros.