This Project is conceived as a follow on of the UNDP and UNCDF funded Woreda Development Fund (WDF) (1997-2004) implemented in six woredas of the same zone, with the difference of working in only 3 Woredas in the same Zone. The major difference is that this is a kind of pilot in testing mechanisms for Decentralised Infrastructure Investment Block Funding, funds earmarked for purposes of responding to community identified needs for infrastructure. Replicating this approach in infrastructure funding for Woredas in addition to the government Block Grant system helps consolidate decentralised infrastructure development for many woredas not only in North Gondar Zone but in the Amhara National Regional State (ANRS) and other Regions in Federal Democratic Republic of Ethiopia (FDRE). Improved infrastructure provision will contribute remarkably to poverty eradication in the three woredas and in North Gondar Zone (NGZ).

The project pilots in the three woredas and their kebeles a system of infrastructure provision using block grants earmarked from Regional level for the specific purpose of meeting expressed needs and demands for infrastructure by lower tier local governments and their constituents in a participatory manner. The system promotes woreda inclusive and responsive strategic planning and budgeting for infrastructure investment, their execution as well as improve revenue mobilisation and utilisation at the local level. The long-term goal is to encourage systems of decentralised infrastructure funding through specific block grants that include both locally and externally generated resources. Many bilateral and multilateral agencies are involved in funding infrastructure for a number of woredas in ANRS but these are not coordinated and some woredas and zones are benefiting more than others whilst the Region has no specific mechanisms for infrastructure block grants.

The project provides both technical and capital assistance for the three woredas. The Technical Assistance is largely local personnel with backstopping from UNCDF in close collaboration with UNDP . The support will result in systems for decentralised infrastructure funding, operational guidelines, performance measures as well as minimum conditions for participation is such systems. High quality demanded infrastructure will be provided for each of the woreda constituents over the project period.

The main features of the LDP approach are:

• A sub-national focus: Supporting sub-national governments and community organizations and promoting relations between them.
• An emphasis on local-level institutional development: Improving procedures and practices for local-level resource mobilization and public expenditure management (including strategic planning, investment programming, annual budgeting, procurement, implementation, asset management and internal controls) to enhance the effectiveness, efficiency and accountability of local bodies in poverty reduction-related activities;
• A performance-linked funding facility: Providing local governments with general-purpose development budget support for sustainable local investments in social and economic infrastructure. This support is linked to agreed measures of local performance and serves as an incentive for local capacity building;
• A national policy relevance: Piloting national decentralization policy changes (of political, fiscal and administrative nature), demonstrating their feasibility and promoting the “scaling-up” of their adoption country-wide.

• Ministry of Finance and Economic Development and the Amhara Regional Bureau of Finance and Economic Development.
• North Gondar Zonal Administration and woreda and kebele governments of Adi Arkay, Metema and Quara.

• Three woredas of Metema, Quara and Adi Arkay in North Gonder Zone of Amhara National Regional State.
• 292,672 people

• Final Evaluation May 2007

The LDP has the expressed support of Government of Ethiopia (GoE)/ANRS as it is closely aligned to the governments own strategy and systems. This creates better institutional capacities at all levels. This project is likely to have significant impact on systems building at local level. At woreda level they accept the PRA as a very improtant tool for planning, and at community level. The main achievements of the programme have been:

Alleviating programme-relevant dimensions of poverty

• 4000-5000 people will have easier access to water;
• Irrigation schemes reportedly increase income of farmers. (1000 Birr a season);
• They have also formed 1 cooperative (25 members).

Improving access to infrastructure and services

• 46 schemes (school classroom buildings, health posts, access road project and veterinary health post and especially water boreholes) have the potential to improved services and infrastructure facilities in all three woredas.

Achieving more equitable participation and distribution of benefits across gender, ethnic and socio-economic groups

• LDP has focused on training woreda staff and communities on issues such as: environmental protection, HIV/AIDS, gender mainstreaming, almost 30% of trained artisans are women. Most of the interventions (water, health post) are women's priority;
• Women are part of the woreda PSC but are not yet seen in leadership positions at kebele levels.

Improving management of natural resources

• LDP has facilitated woreda experts to train kabele administrations and community representatives in environmental protection issues;
• However, the intended output of developing natural resource management guidelines has not taken place.

Influencing policy reforms and implementation that support effective decentralisation

• LDP certainly supports effective decentralisation. LDP has tried to influence policy reforms at ANRS level by organising regional workshop and presenting UNCDF approach, systems, planning and budgeting guidelines for local infrastructure investment.

Replication and up scaling of the approach by Government and/or other donors

• Indication that GoE/ANRS are positive towards LDP but still no decision on replication/up scaling. Other donors (bilateral) express interest but have own approach. WB has shown interest.

• Capacity is still vey low at woreda levels but the community driven approach creates push-pull effect to benefit of communities and woredas in terms of acccountability and transparency;
• In terms of sustainability of these types of projects maybe future piloting or systems development should focus on building up capacities at kebele level for FM and procurement, so that they handle these smaller funds at that level;
• The LDP/PSU should facilitate the dialogue between woreda and kebeles to introduce a simple MOU as an agreement between woredas and kebeles spelling out duties and responsibilities between the various parties.

• Resource Mobilization