MENA Transition Fund Q&A

What is the MENA Transition Fund?

The Deauville Partnership with Arab Countries in Transition requested the World Bank to establish the MENA Transition Fund. This special fund was approved September 25, 2012, by The World Bank’s Board of Executive Directors. The objective of the fund is to support the transformation currently underway in several countries in the region by providing funds for technical cooperation to strengthen governance and public institutions, and foster sustainable and inclusive economic growth by advancing country-led reforms with the ultimate goal of improving the lives of citizens in transition countries.

Why is a new fund being created?

At its May 2011 summit, the G8 launched the Deauville Partnership with Arab Countries in Transition as a "long-term, global partnership to respond to the historic changes in some of the countries in the MENA region."
On April 20, 2012, Finance Ministers of the Deauville Partnership endorsed the creation of a new Transition Fund that would complement other multilateral and bilateral initiatives. The new fund would provide additional financing to help countries scale up transformational and cross-cutting proposals across a broad range of inter-related thematic areas, which are in full alignment with the pillars of the Bank’s MENA strategy and with the Deauville Partnership (finance, trade and governance).

Who is eligible to participate in the Transition Fund?

Countries eligible to receive financing would initially include Egypt, Jordan, Libya, Morocco and Tunisia; other countries in the region may be added later, as determined by the Deauville Partnership and approved by the fund Steering Committee.

International Financial Institutions (IFIs) eligible to become Implementation Support Agencies (ISAs) to provide implementation support to transition country proposals are: the African Development Bank, Arab Fund for Economic and Social Development, Arab Monetary Fund, European Bank for Reconstruction and Development, European Investment Bank, International Finance Corporation, International Monetary Fund, Islamic Development Bank, OPEC Fund for International Development, and The World Bank.

What is the Bank’s role in the fund? 

As a key development partner supporting the MENA transition countries, the Bank has been asked by its Deauville partners to support the Transition Fund in several capacities. During the initial phase, the Bank will contribute to the fund’s design and set-up. Once the fund is established, the roles envisaged for the Bank include serving as Trustee, setting up and managing the fund’s Coordination Unit, providing implementation support, and participating as an observer in the fund’s Steering Committee.

  • Trustee. The MENA Transition Fund will be established as a Financial Intermediary Fund (FIF). FIFs are multilateral financial mechanisms that support global development initiatives for which the World Bank acts as financial trustee and provides an agreed set of financial intermediary services, which include, but are not limited to, receiving, holding and transferring funds to Implementation Support Agencies. In its Trustee role, the Bank is not responsible for or accountable to donors or FIF governing bodies for the use of funds after transfer.
  • Coordination Unit. The Bank’s MENA region will manage the fund’s Coordination Unit, whose function is to facilitate the work of the Steering Committee by serving as a liaison between Steering Committee, the Trustee, the Roster of Experts, and the ISAs.
  • Implementation Support Agency. As an ISA along with other IFIs, the Bank would help prepare/appraise, monitor, and report on projects proposed by Transition Countries to be funded by grants from the Transition Fund, in accordance with its own policies and procedures, working with transition countries.
  • Observer to Steering Committee. A Steering Committee will be established to oversee the operations of the Transition Fund, as well as its funding decisions. The Bank will participate in the committee as an observer.

How will the World Bank’s performance on the fund be monitored?

To help with the continuous monitoring of the Bank’s a performance, a scorecard, with indicators relevant to each of the Bank’s roles, will be developed, in consultation with the Steering Committee. About three years after the establishment of the Transition Fund, the Bank will commission an assessment of its performance in each role, on the basis of these indicators.

September 25, 2012

Dale Lautenbach, dlautenbach@worldbank.org, 202.473.3405.
Angie Gentile, agentile@worldbank.org, 202.473.3509