Author: ilukacova
Company: MF SR

WESTERN BALKANS INVESTMENT FRAMEWORK

JOINT GRANT FACILITY

TERMS OF REFERENCE
(Consolidated Version – 8 December 2009)

Preamble

The Western Balkans Investment Framework (hereinafter the „WBIF”) is a joint initiative of the European Commission (hereinafter the “Commission”), the European Investment Bank (hereinafter the „EIB”), the European Bank for Reconstruction and Development (hereinafter the „EBRD”), and the Council of Europe Development Bank (hereinafter the „CEB”) (collectively referred to as the “partner IFIs”), endorsed by the European Council, to enhance harmonisation and co-operation in investments for socio-economic development of the Western Balkans. These Terms of Reference set out the principles, objectives and mechanism of the Joint Grant Facility (hereinafter the „JGF”).

1. Aims and general principles

1.1.	The WBIF aims at streamlining existing facilities and pooling resources from the Commission, the partner IFIs, the Member States and other donors, so as to enhance support to the Western Balkans Beneficiaries (as defined in Section 3.1.1 below).

1.2. The JGF provides grant resources to projects supported by loans from the partner IFIs and other financing intermediaries in order to offer to the Beneficiaries an integrated financial package for investment projects in priority infrastructure and other socio-economic development areas in the Western Balkans. Priority projects are defined and proposed by Beneficiaries and the allocation of JGF resources is subject to screening and approval of the JGF governance bodies.

1.3. The JGF is governed by a Steering Committee and a Project Financiers’ Group. The Steering Committee provides strategic guidance and advice on the operations of the WBIF; approves Grant operations (as defined in Section 3.5 below) to be supported by the JGF; and monitors the implementation of the JGF. The Project Financiers’ Group is the single entry point for grant support requests from the JGF and is responsible for screening and assessing requests for financial support from the JGF and submitting its proposals to the Steering Committee for approval.
1.4. Beneficiary ownership and long-term sustainability are the guiding principles of the JGF, including a clear financing perspective for the implementation of the supported investments. Beneficiaries shall be involved from the earliest stages throughout the entire life cycle of the investment implementation. For this, the JGF allows upstream and downstream cooperation and coordination among all concerned supporters of investment projects.

1.5. The JGF resources are intended to be used principally to support operations for which loans are jointly provided by the Financial Institutions cooperating in the framework of the Joint Lending Facility (hereinafter the „JLF”).

The JLF is an informal arrangement between the partner IFIs, whose key principles are set out in a separate document agreed between the partner IFIs and made available to all the JGF members.

2. Resources

The resources of the JGF originate from:

a)	Grant resources allocated from the EC Instrument for Pre-Accession (hereinafter the „IPA”).

In 2007, the Infrastructure Projects Facility was set up by the European Commission, EIB, EBRD and CEB. The IPF has channelled IPA multi-beneficiary grants for infrastructure investments in the Western Balkans. The IPF consisted of two windows: a) the Technical Assistance window, whose grants are used for helping preparing infrastructure investments to be financed through IFIs loans and b) the Municipal Window, whose grants are used to co-finance, together with IFIs loans, infrastructure investments at municipal level. The IPF technical assistance will remain as an implementing mechanism under the WBIF, while the JGF will replace the IPF for project selection with IPA funds made available for this purpose. IPF has given priority to the Potential Candidates for accession since the Candidate Countries have access to component III of IPA, and this approach will apply also to future allocation to the JGF from IPA.

b)	Grant contributions from the EIB, the EBRD and the CEB.

The EIB’s contribution would be used for technical assistance activities.

c)	Bilateral grant contributions from Member States and other donors through the European Western Balkans Joint Fund (hereinafter the „EWBJF”).

The EWBJF will be set up building upon the existing EBRD Western Balkans Fund, to be enhanced for new contributions to the WBIF.

3. Eligibility rules

To be eligible for support from the JGF, investment projects shall comply with the following criteria:

3.1. Geographical coverage

3.1.1. Eligible investment projects must be on the territory of one or more of the following Beneficiaries in the Western Balkans: Albania, Bosnia and Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, Montenegro, Serbia and Kosovo under UNSCR 1244 (hereinafter the "Beneficiaries").

3.1.2. For trans-national and/or regional projects involving one or more of the eligible Beneficiaries but also other non eligible countries, the JGF support will only cover the investment part pertaining to the eligible Beneficiary.

3.1.3. The place of registration of the legal entity benefiting from the grant shall be within a Beneficiary. For regional projects involving also non-Beneficiary countries, the institution or body in charge of the investment could also be based in a non-Beneficiary country, but the JGF support will only cover the part of the investment taking place in any of the Beneficiaries.

3.2. Eligible sectors

3.2.1. Investment projects should support any sector that contributes to the economic, social and environmental development of the Western Balkans, including:

1)	Environment: water supply, waste water treatment, sewage systems, solid waste and hazardous waste management, emission control, etc.
2)	Energy: renewable energy, interconnection systems, transmission, co-generation, hydro, gas pipelines, etc.
3)	Energy Efficiency and savings.
4)	Transport: railways and inland waterways including river ports, roads, seaports, airports, border facilities, inter modal terminals and urban transport.
5)	Social: schools and education centres, hospitals and health centres, social housing, reclusion centres and other public buildings.
6)	SMEs, private and financial sector support.
7)	Other sectors supporting socio-economic development as agreed by the Project Financiers' Group and the Steering Committee.

3.2.2. Within these sectors, IPA funds of the JGF will be used only for the purpose defined in each relevant Commission Decision (e.g. for IPF TA and Municipal window) following EU Member States approval in the IPA Committee. The IPA Funds cannot be used for activities already supported by or eligible for the Regional Development Component of IPA.

The Regional Development Component of IPA (IPA III) provides support to candidate countries for the policy development as well as for the preparation to the implementation of the Community's Cohesion policy, in particular in their preparation for the European Regional Development Fund and the Cohesion Fund. They require the relevant management structures to be in place in the Beneficiaries, and the IPA Funds will thus be managed directly by the Beneficiaries under decentralised management which entail, inter alia, specific project selection and approval procedures, similar to those applied for EU Cohesion Policy funds. Potential candidates can benefit from similar measures implemented through component I. Support concentrates on transport and environmental infrastructure investment as well as measures to enhance competitiveness.

6   When calculating the eligible costs of a project that may benefit from grant financing or co-financing, the rules and procedures of the Commission, the partner IFIs and the EWBJF will apply. According to the IPA Regulation the following expenditures are not eligible: a) taxes, including value added taxes (in principle); b) customs and import duties, or any other charges; c) purchase, rent or leasing of land and existing buildings; d) fines, financial penalties and expenses of litigation; e) operating costs (can be allowed on a case-by-case basis); f) second hand equipment; g) bank charges, cost of guarantees and similar charges; h) conversion costs, charges and exchange losses associated with any of the component specific euro accounts, as well as purely financial expenses; and i) contributions in kind. In addition, any leasing costs or depreciation costs are not eligible. In the case of revenue-generating projects, meaning a project involving an investment in infrastructure, which is subject to charges borne directly by users, the eligible cost is calculated according to a funding gap method deducting the value of the net revenue over a specific time from the value of the investment cost.

3.3. Eligible beneficiary entities

Investment projects may benefit public or private entities or entities with mixed public-private capital responsible for the provision, management, construction and negotiation of public utilities and services.
3.4. Eligible Costs

All elements of the eligible cost of the investment projects are in principle eligible for grant financing subject to approval of the Steering Committee.

3.5. Type of Grant operations

The grant financing to a specific investment project (“Grant operation”) may take the form of:

1)	Technical assistance: financing technical assistance including preparatory work for eligible investment projects such as impact assessments, feasibility studies, detailed design, project supervision and targeted capacity building and implementation support.
2)	Investment grants: direct grants for specific project components, as well as incentive schemes based on performance of implementing institutions.
3)	Incentive payments to financial intermediaries.
4)	Interest rates subsidies: provision of a lump-sum amount to ensure that the loan finance needed for the investment project can be made available at reduced interest rates.
5)	Insurance premia: funding of insurance premia necessary to implement the investment projects.

3.6. Beneficiary Ownership

3.6.1. Project proposals could be identified by different stakeholders, including national and local authorities of the Beneficiaries, the partner IFIs, other Multilateral and Bilateral financing institutions, regional and local institutions and bodies. They will be considered eligible only if submitted to the JGF by the Beneficiaries, either via the NIPACs or via the partner IFIs.

NIPAC = National IPA Coordinator. The NIPAC is responsible for coordination of programming and monitoring the implementation of IPA in the Beneficiaries of the Western Balkans and Turkey. As IPA represent the biggest source of external aid and is linked to the progress and development needed in the EU accession process, and in line with the local ownership over donor funds and donor coordination as foreseen in the Paris declaration, the involvement of the NIPAC is of utmost importance for the effectiveness of the JGF and the WBIF.

3.6.2. The projects for which the grant is requested should be consistent with the EU Pre-Accession Strategy and relevant sector policies and national investment plans, when these are available and/or up-to-date and, at regional level, support investments with high regional impact and/or a strong social and environmental dimension. The priority given to support these projects should also be consistent with the list of projects identified and prioritised in the context of regional networks (SEETO, REC, PEIP, ECS etc.). Ideally, proposed projects should also be part of relevant national sector strategies with clear resources allocated from national budgets.

SEETO = South Eastern Europe Transport Observatory; REC = Regional Environment Centre; PEIP = Priority Environmental Investment Projects, ECS = Energy Community Secretariat.

3.7. Complementarities with IPA National Programmes and other donors' initiatives

Grant requests shall explicitly mention any complementarities or coherence with projects supported or planned for support under the IPA National Programmes (for implementation by the EC Delegations or by the Beneficiaries authorities) and/or other donors activities, by providing at least a preliminary indication of the type and amount of donor support that the investment project may receive from sources other than the JGF.

3.8. Blending grants and loans

The JGF resources are intended to be used principally to support operations jointly financed by the institutions cooperating in the framework of the Joint Lending Facility. On an exceptional basis technical assistance may be proposed for standalone assignments not directly related to loans from the JLF.

3.9. Consistency with policies, rules and procedures of the Contributors

Each Grant operation funded by the JGF and its implementation shall be consistent with the policies, rules and procedures of each source of funds (Commission, EIB, EBRD, CEB and EWBJF).

4. Governance structure

4.1. The Steering Committee

4.1.1. Functions

The Steering Committee decides on the JGF grant allocations, takes all decisions related to the Joint Grant Facility and provides strategic orientation on the Western Balkans Investment Framework. The Steering Committee has the following strategic, operational and supervision tasks:

Strategic tasks – The Steering Committee provides strategic guidance and advice by consensus on the strategy and policies of the JGF and of the WBIF through:

a) Advice on long-term strategic objectives of the JGF in line with the EU Pre-Accession Strategy;
b) Revision of eligibility criteria, terms of reference and other policy issues of the JGF;
c) Advice and guidance on the achievement of the WBIF.

Operational tasks – the Steering Committee approves the requests for grant support from the different funding sources of the JGF, namely the IPA funds, the partner IFIs contributions and the Contributions to the EWBJF. The Steering Committee may decide to reject grant requests for financing under the JGF, or to refer them back to the Project Financiers’ Group for further screening and re-submission.

The approval of grant resources from the partner IFIs would require also the approval of the IFIs’ respective governing bodies, according to their respective rules and procedures.

Supervision tasks – The Steering Committee will supervise and review the operations of the JGF through the annual progress reports submitted by the Project Financiers’ Group. The Steering Committee may request the Project Financiers’ Group to provide clarification or additional information on specific projects.

4.1.2. Structure and composition

Members - The Steering Committee is composed of representatives of the Commission, the partner IFIs and the Contributors to the EWBJF. Each member institution or Contributor to the EWBJF appoints up to two representatives. Experts/advisers from the lead IFIs can attend, as appropriate, for the projects of their competence.

Chairmanship - The Steering Committee is co-chaired by the Commission (permanent) and one of the Contributors to the EWBJF (on rotating basis every 12 months) holding the Chair of the Assembly of Contributors to the EWBJF.

Observers - The Beneficiaries and Member States not contributing to the EWBJF as well as the Regional Cooperation Council will be invited to the Steering Committee meetings for discussions on strategy and policy orientations of the WBIF. Other donors actively engaged in the Western Balkans as well as other stakeholders in the region may be invited by the Chairs as observers to the discussions.

4.1.4. Methods of work

Meetings - The Steering Committee meets at least twice a year in the headquarters of the Commission in Brussels, or in the headquarters of a partner IFIs or in the country of the EWBJF Co-chair, upon its request. Meetings may also be organised in the Western Balkans. The Project Financiers’ Group proposes an agenda for these meetings which is approved by the Co-chairs and issued at least 3 weeks before the meeting. The agenda shall be structured into a strategic & policy section and an operational section focusing on the JGF so as to allow for orderly discussions.

Decision making system - The Steering Committee will seek decisions by consensus for the approval of grant requests to be supported by the JGF. Where this proves impossible, the final responsibility for deciding on the allocation of the funds follows the management responsibilities of each funding source (i.e. the Commission for EC funds, each of the partner IFIs for their contributions, and the EWBJF Contributors for the EWBJF in accordance with the voting rules of the Fund).

Administrative Support - The Commission provides the necessary administrative support for the organisation, running and follow-up of the meetings of the Steering Committee. The Cochair from the EWBJF or the partner IFIs will take care of the logistics support and administrative support needed at the meeting, in case it hosts the meetings. The Commission will draft conclusions of the meetings and seek adequate input from participants so that the Co-chairs can finalise them. The final conclusions will be issued at the latest 3 weeks after the meeting.

Costs - Members of the Steering Committee and any other participant shall not receive from the JGF any form of remuneration for their participation in the Steering Committee nor any other compensation associated to their status including any costs incurred by them in relation to travelling to and attending the Steering Committee meetings.

4.2. The Project Financiers’ Group

4.2.1. Objectives

The Project Financiers' Group provides a "single entry point" for requests for grant support from the JGF. The Group is responsible for screening and assessing requests for financial support from the JGF. The main objective of the screening and assessment is to establish a pipeline of priority projects eligible for JGF grant support, to be submitted for approval to the Steering Committee.

4.2.2. Functions

The Project Financiers' Group coordinates the identification, screening & assessment of investment projects. The Member institutions of the Project Financiers' Group shall make available technical expertise within their organisations to facilitate this task. It submits grants requests to the Steering Committee and coordinates the implementation of approved Grant operations. This process is structured in the phases described in Section 5 below.

4.2.3. Structure and composition

Members - The Project Financiers' Group is composed of representatives of the Commission, each of the partner IFIs and EU bilateral Financial Institutions or development agencies of EWBJF Contributors participating on equal conditions as the partner IFIs to the JGF, and abiding to the principles of the Joint Lending Facility. All donors to the JGF, EU Member States and the Beneficiaries will be kept regularly informed about the work of the Project Financiers' Group and all grant requests sent to the Group will be made available for information following their submission. Each member institution appoints up to two representatives as regular members of the Group. For the technical work of the Project Financiers' Group, each member institution will draw from technical/sector expertise available within its organisation.

Chairmanship - The Project Financiers' Group is co-chaired by the Commission (permanent) and the partner IFIs (on rotating basis every 6 months), each leading for the matters of its competence as described under Section 5 below.

Liaison with other actors - The Project Financiers' Group will ensure timely and effective liaison within its organisations (Commission with other Commission Directorates General and relevant Delegations of the Commission, IFIs with their local offices), with the Beneficiaries (NIPACs and other relevant Beneficiary institutions), the Regional Cooperation Council and other Regional bodies set up by the Beneficiaries, as well as with the contributors to the EWBJF and with other donors and IFIs (e.g. the World Bank) operating in the region.

4.2.4. Methods of work

Work Programme - The Project Financiers' Group adopts an annual calendar of meetings, which takes into account of the meetings of the JGF Steering Committee.

Reporting - The Project Financiers' Group submits annual reports to the Steering Committee on the status of implementation of the JGF, including global achievements on all aspects of the JGF, from the resources allocation, commitment and disbursement, the investment projects supported and the status of their implementation. Detailed project reporting is the responsibility of the lead institution for each specific project. The Project Financiers' Group will decide on the standard format and content of this reporting.

Technical expert inputs - The Project Financiers' Group will be assisted, when needed, by the technical expertise within the member organisations. To this aim and where appropriate, technical experts from each member institution can be invited to attend meetings of the Project Financiers' Group to provide an opinion on projects requiring their technical expertise.

Frequency of meetings - The Project Financiers' Group meets at least on a quarterly basis (four times per year) in accordance with the agreed annual calendar. In addition to these regular meetings, the Project Financiers' Group may decide to hold additional ad hoc meetings and/or video/teleconferences to discuss projects and issues that require immediate action. If appropriate and with the agreement of the Project Financiers' Group members, the regular, scheduled meetings can also take place through teleconference.

Location of meetings - The regular meetings of the Project Financiers' Group shall normally be held in the premises of the Commission in Brussels. Alternatively, the Project Financiers' Group can decide to hold meetings in the headquarters of the partner IFIs or in a different location, for instance in the Western Balkans.

Administrative Support - The co-chairs of the Project Financiers' Group will each ensure that adequate administrative support is provided in terms of administrative, logistical, organisation functions for the tasks directly under their responsibility. To this aim, a contact point for administrative support will be appointed in each of the member institutions of the Project
Financiers' Group referred to in Section 4.2.3. 

Costs - The member representatives of the Project Financiers' Group as well as experts attending the meetings shall not receive from the JGF any form of remuneration for their participation in the Project Financiers' Group nor any other compensation associated to their status including any costs incurred by them in relation to the travelling to and attending the Project Financiers' Group meetings.

5. Processing of projects requests and implementation of grant operations

The process for approving and implementing grant operations of the JGF is coordinated by the Project Financiers’ Group and it is structured along the following key phases:

Phase I: Upstream work and Project identification in close cooperation with Beneficiary NIPACs, Donor Coordination Offices and other relevant local stakeholders.

The NIPAC is not always the same as the Donor Coordination Office in the Beneficiary. However, as IPA Funds represents the largest source of Donor support in the Western Balkans, the NIPAC remains the key interlocutor of the Beneficiary for planning and prioritisation of Donor support. In particular since the main part of the IPA support will be implemented locally, and not be channelled via the JGF, it is crucial that support requested via the JGF is done by or with the involvement of the NIPAC. When a different body is appointed as Donor Coordinator it is important also to involve it.

Phase II: Submission of grant requests to the Project Financiers’ Group by the Beneficiaries via NIPACs or by the partner IFIs in coordination with the NIPACs and Donor Coordination Offices.

Phase III: Screening of submitted grant requests to verify eligibility and consistency of proposed projects with the EU Pre-Accession policies.

Phase IV: Assessment of eligible project requests to verify their long-term sustainability, technical and financial quality.

Phase V: Submission of grant requests by the Project Financiers’ Group to the Steering Committee for its approval.

Phase VI: Implementation of approved projects under the coordination of the Project Financiers’ Group.

5.1. Phase I - Upstream work and Project identification

In this phase projects are identified and discussed jointly by the Beneficiaries and potential donors and IFIs in order to be presented to the JGF. This process will include the following elements that can be run in part or total in parallel depending on the degree of maturity of the examined projects:

•	Upstream discussions on potential investment projects are initiated by NIPACs in liaison with National Donor Coordinator Offices (if different) and in coordination with EC Delegations, IFIs and (concerned) donor representatives on the ground. Potential implementing institutions/investors in the Beneficiaries should also be involved in these discussions. This coordination work aims at ensuring that requests for support from the JGF are consistent with relevant National (Sector) Strategies, investment plans, with national budgets and IPA programmes under decentralised management. In this context, they also identify together with other concerned stakeholders the questions that need to be addressed by the Project Financiers' Group during the screening and assessment of proposed projects.

•	Joint missions – the Commission and IFIs may organise joint missions to facilitate these discussions between the Beneficiaries and partner IFIs and to support the Beneficiaries to make the best possible use of the joint grants and loans resources from the EC (IPA funds allocated via the JGF and IPA funds implemented by the EC Delegations or implemented by decentralised management by the Beneficiary), the partner IFIs and from other donors operating in the region.

In the external actions field (i.e. EU activities involving non-Member States), budget appropriations may be managed (art. 163 Financial Regulation) on a decentralised basis by the beneficiary third country or countries. The implementation of actions by beneficiary third countries or international organisations is subject to scrutiny by the Commission (article 165 of the Financial Regulation). For Candidate Countries, the objective is that all IPA support shall be implemented under decentralised management and for component III of IPA, this is always the case. For the potential candidates for accession, implementation is done in close cooperation with the Beneficiary authorities by the Commission Delegations in the concerned Beneficiary allowing for appropriate preparation for decentralisation.

5.2. Phase II - Submission to of grant requests to the JGF

As a result of phase I, the requests for grant support shall be submitted to the Project Financiers' Group by the Beneficiaries, either by the NIPACs or by the partner IFIs. If a grant request is submitted without the Beneficiary's endorsement as to the priority for them of the proposed investment, the Project Financiers' Group will need to consult with the NIPAC and Donor Coordinators Office in the relevant Beneficiary following the submission. Grant requests shall be submitted according to the deadlines for submission indicated in the Annual Work Programme (see Section 4.2.4 below) of the Project Financiers' Group. The following functional mail box also included in the WBIF website shall be used for formal submission: ELARG-Joint-Grant-Facility@ec.europa.eu. 

Both for projects requesting investment grants and preparatory grants (TA grants) and in order to be able to screen projects requests effectively, applicants are requested to submit a summary for the investment using the "JGF Project Application Form" (established and updated as needed by the Project Financiers' Group).

5.3. Phase III: Project Screening

In this phase requests for investment support presented by the Beneficiaries to the JGF are analysed under the lead of the Commission in its role as co-chair of the Project Financiers' Group. The screening work is based on a sound identification of the projects along with the questions to be addressed. The screening work aims at drawing a list of eligible projects ready for the assessment phase. It focuses on the following activities, in particular checking the eligibility of grant requests and related investment projects as defined under Section 3 above:

Activity 1:  Ensuring beneficiary ownership and capacity building by collaboration with the NIPAC office and other Beneficiary and regional bodies. 
Activity 2: Assessing project consistency with national (sector) strategies, national and regional investment plans and with the IPA priorities and the project potential for IPA support (not allocated via the JGF) or other donor funding.
Activity 3: Assessing project consistency with EU policies (pre-accession agenda, sector priorities, competition rules etc.) drawing from and involving the EC Delegations, line DGs and ELARG geographical teams. 
Activity 4:  Assessing eligibility of projects for support from the JGF and the appropriate mix of funding sources.

5.4. Phase IV - Project Assessment

Project requests considered eligible under the JGF are also assessed, under the lead of the partner IFIs according to the rotating co-chair assignment, to verify the technical quality, compliance with environmental and social standards including the promotion of gender equality, procurement requirements, financial and economic profitability, credit risks and legal aspects. In this phase, a “lead IFI” will be identified among the partner IFIs that also cofinance with loans the project, to coordinate the lending process among co-financiers and to implement the JGF grant support, subject to approval of IFI loan (for investment grants). The assessment phase can be run in parallel with the screening phase depending on the nature and quality of the request, and needs to duly take into account of the due diligence process of the participating partner IFIs. Key activities for this assessment phase are:
Activity1:	Technical aspects, environmental and social standards, procurement, financial  and economic profitability, credit risk, legal aspects.
Activity 2:		Consistency with IFIs’ policies and procedures.
Activity 3:		Analysis and estimation of TA/grants needs.
Activity 4:	Financial structuring/identification of lending under the Joint Lending Facility (only IFIs).
Activity 5:      Identification of lead IFI and possible mutual reliance.
Activity 6:      Link with project borrowers and promoters on technical and financial aspects.
Activity 7:      Exchange of information among Finance Institutions (e.g. pricing, conditionality).

The following criteria (not in order of priority) will be used to assess and prioritise the eligible projects:

• Rationale for use of grant funds: Based on the justification for the use of grant funds provided in the grants application, the Project Financiers' Group will further analyse the economic justification for the request for and the use of grants for the project. The Project Financiers' Group will examine the leverage of the grant and the loan; the value-added to final beneficiaries in terms of social impact, acceleration, targeting or quality enhancement of project preparation, delivery and operation; and the financial, social and environmental sustainability of the project to which the grant contributes.

• The Financing Perspective: Proposals should be accompanied by a clear perspective of financing from the JLF and an indication of possible additional grant funding from IPA National Programmes and/or other donors and from the Beneficiary's own (national) budget. In particular for investments where the affordability necessitates substantial donor grant support in addition to loans, it should be verified whether the project has received earlier support from an EC Programme or if there is planned or potential further support from IPA outside the JGF (National Programmes implemented locally), and/or from other donors, for the implementation of the project.

This does not preclude approval of projects that require upstream work, e.g. feasibility studies and thus need not necessarily already have a financing perspective at that time. At the same time an indication of the maturity and readiness for implementation of the project should be provided. If a project is not ready for a quick start for any reason, the Project Financiers' Group will include it in the reserve list of grants requests ready to be presented again when the conditions are favourable

• The Regional / Cross Border Impact: Project with a strong regional and/or cross border impact will have a higher priority than those restricted to local impacts.

• Conformity with socio-environmental standards: The proposed investment project should meet EC and IFI policies and standards on social issues, on the environment, and threats against all categories of human rights and against ensuring equal opportunities.

• Economic and Financial soundness: It is recognized that proper assessment can only be done after the availability of a Feasibility Study/Report. The assessment of economic and financial soundness will be done by the lead IFI, in coordination with the co-financing IFIs, using their normal internal processes with respect to JLF financing for the project. Proposals to the JGF should only be made if the underlying JLF investments have a perspective of economic viability.

• Capacity of Beneficiary institution: The Beneficiary institutions must have a reasonable capacity to define their investment plans, to procure and implement the project, possibly supported with some specific technical assistance. 

• Balanced use of resources: The Project Financiers' Group will endeavour to present projects across a balance of sectors and Beneficiaries, paying due regard to the guidance of the Steering Committee. 

Following the screening and assessment phases, the Project Financiers' Group will establish and update the JGF project pipeline with priority and reserve lists of projects which are eligible under the JGF.

5.5. Phase V - Approval

The members of the Project Financiers' Group will endeavour to agree by consensus on the grant requests for submission to the Steering Committee, and issue them at least 3 weeks before the Steering Committee meetings.

5.6. Phase VI – Implementation

Implementation of support from the JGF will follow rules and modalities of the relevant funding source. The following general principles will apply:
(1)	For support originating from IPA under the IPF Technical   Assistance, the Commission implements the TA contract(s) under direct centralised management.

As defined by the EC Financial Regulation art. 53b, and the Implementing Regulation art. 35a, 42 and 42a, and specified in the Guidance for joint co-financing with Member States and other bilateral donors.

(2)	For support originating from the IPA/IPF Municipal Window, the “lead IFI” implements the projects under Joint Management mode.

As defined by the EC Financial Regulation art. 53d and the implementing rules of the Financial Regulation art. 35 and 43.

(3)	For support provided from the EWBJF or the partner IFIs’ grant resources, the “lead IFI” implements the project.
(4)	Once projects are approved and ready for implementation, for each project, relevant contacts will be identified from the lead IFI and other co-financing IFIs, the EC Delegation and the Beneficiary institution, with the purpose to follow-up in a coordinated manner on the project implementation progress and project completion. The “lead IFI” will inform the Project Financiers' Group.

6. Reporting, monitoring and review

On an annual basis the Project Financiers’ Group reports to the Steering Committee on the progress achieved in implementing the JGF. The report will cover all aspects of the JGF, from the resources allocation, commitment and disbursement, the investment projects supported and the status of their implementation. 
The JGF mechanism (e.g. grant needs vs. actual grant resources pooled, governance, single fund) and the EWBJF (e.g. fees, level of contributions, decision-making) will be reviewed by the participating Institutions (EC and partner IFIs) and contributors following one year of activities from the first Steering Committee meeting and prior to 31 December 2010, based on the annual reports submitted by the Project Financiers' Group and considering issues raised by the Steering Committee members and other stakeholders participating to the Steering Committee meetings.

7. Amendments and withdrawal

These ToRs may be modified at the request of any member of the Steering Committee. Such request, including rationale and justifications, shall be submitted to the Steering Committee, via the Commission, for approval by consensus. If consensus cannot be reached, the proposed amendments will be referred to the Governance Bodies of the Contributors to the JGF; i.e. the Commission, the partner IFIs and the EWBJF, who will agree or take a position on the proposed amendments in accordance with their respective procedures and/or voting rules, and then refer it back to the Steering Committee for approval. Changes to the practical methods of managing the grant requests as set out under Section 5 above can be made by the Project Financiers' Group, informing the Steering Group.

Any participating institution or donor may withdraw from the Joint Grant Facility as described in these terms of reference upon prior 6 months’ notice to the other participants.

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