2.1. The Provincial Government Strengthening Programme (PGSP) is a program of the Government of the Solomon Islands that aims to develop the capacity of provincial governments in the Solomon Islands to deliver services and promote local development. 2.2. The first phase of PGSP will focus on building the capacity of the provincial governments in public expenditure management (PEM), so that they are able to program, produce and execute credible budgets, through appropriate participatory and transparent procedures. To provide incentives for the adoption of improved governance, PGSP will set up a ‘Provincial Capacity Development Fund’ (PCDF), to provide provincial governments with a limited, but meaningful, amount of discretionary resources for development spending. The program will also focus on building the capacity of the central administration (particularly the Ministries of Provincial Government and Institutional Strengthening and Finance and Treasury) to effectively support and supervise the performance of the provincial governments.