MEMORANDUM OF UNDERSTANDING WITH THE FEDERAL DEMOCRATIC REPUBLIC OF
ETHIOPIA
FOR
NON BUDGET SUPPORT FINANCIAL AID
Between
The Government of the United Kingdom of Great Britain and Northern Ireland acting through the
Department for International Development (“DFID”)
and
The Federal Democratic Republic of Ethiopia acting through the Ministry of Finance and Economic
Development (MoFED)
together called “the Participants”
United Kingdom /Ethiopia for Climate Resilient Green Economy Facility (202597) Grant 2013
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1
Following the recent discussions between the Participants, DFID, will make available:
1.1
A sum not exceeding £15 million in Non Budget Support Financial Aid to support the Federal
Democratic Republic of Ethiopia. The amount will be paid in the following tranches:
1.2
November 2013
up to £2 million
February 2014
up to £2 million
May 2014
up to £2 million
August 2014
up to £2 million
November 2014
up to £2 million
February 2015
up to £2 million
May 2015
up to £2 million
August 2015
up to £1 million
The first tranche will be disbursed on agreement of the first Climate Resilient Green
Economy Operational Manual (hereinafter referred to as "the Operational Manual”) and when initial
staffing is in place in the CRGE Facility to ensure compliance with financial and other safeguards.
1.3
Subsequent tranches will be released on receipt of quarterly financial and progress reporting
for the previous quarter and on evidence of need. The above schedule can be amended at any time,
on agreement between the Participants.
1.4
The Ministry of Finance and Economic Development will submit financial and progress
reports as per the Operational Manual, when requesting each subsequent tranche. Disbursement of
the tranches will be subject to satisfactory performance of the previous tranche, as evaluated by
DFID in full consultation with the Ministry of Finance and Economic Development, against
deliverables in the Climate Resilient Green Economy (CRGE) Facility Workplan, timely disbursement
of finance, and taking into account any concerns from DFID or other partners regarding quality of
delivery or maintenance of appropriate standards and safeguards,
1.5
As per the Operational Manual, the Ministry of Finance and Economic Development shall
prepare and provide to DFID the following statements and reports:





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Quarterly financial reports
Quarterly narrative progress reports
Annual audited financial statements and reports
Annual narrative progress reports including environmental and social safeguards policies
and procedures implementation and monitoring
Final narrative reports, after the completion of the activities in each approved investment plan
(or project/initiative under the Responsive Window)
When requesting payment the Ministry of Finance and Economic Development should
complete Annex 3.
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3
Please confirm below Federal Government of Ethiopia bank account details.
Bank Name:
Bank Postal Address:
Name of Account:
Bank Account Number:
Sort Code:
Currency of Bank
Account:
IBAN number:
[required for bank accounts within
Europe]
SWIFT number:
ABA or BIC Number:
[BIC required for bank accounts
within Europe]
Intermediary bank
details:
E-Mail Business
Address
4.
The Grant will start on 08 November 2013 and will end on 31 December 2015.
5.
The arrangements and the purpose for which the Grant will be used are set out in this MOU,
the attached Climate-High Level Investment Programme Business Case, the Climate Resilient
Green Economy (CRGE) Facility Operational Manual, and DFID’s Conditionality How to Note, as
summarised in Annex 1, collectively referred to in this MOU as “this Arrangement”. The details may
be varied within the total grant by mutual arrangement between our two Governments.
6.1
The Grant will be paid in accordance with the attached Procedures and Practices For United
Kingdom Budget Support and Non Budget Support Financial Aid (hereinafter referred to as "the
Procedures"), attached at Annex 2.
6.2
The Procedures sets out requirements for procurement, accounts and audit. For the
purposes of this MOU, under Annex 2, section 9.2.1.(i), DFID grants prior approval for all
procurement activities in line with procurement process set out in the Operational Manual. DFID
reserves the right to assess the procurement capacity and capability of the relevant government
institutions at any time. In the event of concerns regarding procurement capacity arising from
MOFED or DFID, both Participants reserve the right to request review and the introduction of
additional procurement safeguards.
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7.
The Grant will not be used to meet the cost of any import or customs duties imposed by the
Federal Democratic Republic of Ethiopia. The Grant will not (unless DFID decides otherwise) be
used to meet the cost of any other duties or taxes, fees or similar charges imposed directly or
indirectly by the Federal Democratic Republic of Ethiopia or by any local public authority in Ethiopia
on the goods and/or services provided.
8.
The Ministry of Finance and Economic Development will within 9 months of the end of each
financial year provide DFID with Annual Audited Statements from its Accountant General (or
equivalent) confirming that DFID’s Grant has been used for the intended purposes.
9.
Unless otherwise accepted by the Participants, the Ministry of Finance and Economic
Development will ensure that all goods and services financed from the Grant will continue to be used for
the original purpose, as long as this remains feasible. In the event of such goods or services being used
for other purposes, the Ministry of Finance and Economic Development must notify DFID in writing and
DFID may seek to recover from the Ministry of Finance and Economic Development the value of the
goods and services concerned.
10.
Whenever required and practicable, the Ministry of Finance and Economic Development will
permit DFID authorised personnel to visit any Project in respect of this Grant and/or examine documents
and records relating to the Grant. The Ministry of Finance and Economic Development should also
provide any information that may be necessary to help DFID’s consideration of the documents, the
Grant, its progress and financing.
11.
Reviews will be conducted as appropriate, to assess progress. The timing of reviews will where
possible be aligned with existing national processes and in a coordinated manner.
12.
Except in extreme circumstances, if DFID is concerned that the provisions of this MOU, or
partnership commitments made under this Arrangement may not have been fulfilled by the Federal
Democratic Republic of Ethiopia or if any changes are made without mutual consent and in
contradiction of this MOU or the Operational Manual, and which could impair significantly the
development value of the project /programme, DFID will discuss with the Ministry of Finance and
Economic Development and where appropriate undertake assessment.
13.1. If DFID or MoFED considers that
a) there has been a failure to fulfil the commitments of this MOU
OR
b) there has been a failure to fulfil the commitments made under this Arrangement by the Federal
Democratic Republic of Ethiopia
OR
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c) If any changes are made regarding the CRGE Facility or the implementation of CRGE programmes
that are supported by DFID, without mutual consent and in contradiction of this MOU or the Operational
Manual, and which could in the opinion of DFID or MOFED impair significantly the development value of
the project/programme, then Participants will communicate concerns to each other for immediate
discussion. DFID may then take any of the following actions, always ensuring transparent
communication and, as far as possible, discussion in advance of action:

signal a possible future response

change the way DFID delivers aid

delay all or part of a specific aid disbursement to the Partner Government

reduce, suspend or stop aid under this Arrangement or terminate this Arrangement under
paragraph 16 of this MOU.
13.2
Only in exceptional circumstances will DFID interrupt planned disbursements of aid within the
Federal Democratic Republic of Ethiopia’s financial year.
14.
DFID will not be responsible for the activities of any person or third party engaged by the
Federal Democratic Republic of Ethiopia as a result of this Memorandum, nor will DFID be responsible
for any costs incurred by Federal Democratic Republic of Ethiopia in terminating the engagement of
any such person.
15.
If at any stage the Federal Democratic Republic of Ethiopia should become aware of, or
suspect, any misappropriation or diversion of funds or possible fraud or corruption or failure to maintain
social or environmental safeguards relating to the project / programme activities funded by the DFID
grant, the Ministry of Finance and Economic Development must report the matter immediately to DFID.
16.
As per the Operational Manual, the Facility will adopt the World Bank Social and
Environmental Safeguards Policies and Procedures. These are adapted to the Ethiopian context; the
agreed adjustment is regarding indigenous peoples, as per the Operational Manual. No other
adjustments will be made without formal agreement with DFID.
17.
This Arrangement including this MOU can be terminated by three months’ written notice by
either Government. It is accepted nonetheless that any decision of either Government regarding
termination of this Arrangement will first be subject to discussion. Any other step under paragraph 13.1
of this MOU may be taken meantime by DFID; if so, it will be clearly communicated and wherever
possible discussed in advance in the spirit of partnership and communication.
18.
In line with DFID's Transparency commitments, the Federal Democratic Republic of Ethiopia
gives consent for this arrangement (and any subsequent amendments) to be published on DFID's
website.
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19.
Communications and Branding
19.1
The Federal Democratic Republic of Ethiopia commits to collaborate with DFID to build
support for development and raise awareness of the UK government's funding for development
activity. Both will proactively look for ways to raise awareness of UK government funding for
development. The Federal Democratic Republic of Ethiopia will explicitly acknowledge DFID's
support through use of DFID's UKaid logo in all communications with the public or third parties about
this project / programme, unless otherwise agreed in advance. The Federal Democratic Republic of
Ethiopia also commits to collaborate with DFID on other awareness raising activities where feasible
and appropriate, in the UK and overseas, to profile the partnership and the results it is delivering.
20.
If the arrangements set out in the MOU above, its Annex 1 “CONDITIONALITY”, and in the
attached Business Case and Operational Manual and Annexes 1 and 2 to the MoU are acceptable to
the Government of Ethiopia, this Arrangement and this MOU will place on record the understanding of
the Participants and will come into operation on the date of the Federal Democratic Republic of
Ethiopia’s signature below. The Federal Democratic Republic of Ethiopia should please sign both
copies of the original, retain one for its own records and return the other to DFID.
21.
In the event of translation the English text of this document will prevail.
Signed on behalf of DFID:
Name:
Position:
Address/Contact Details:
Date:
Signed on behalf of the Government of ETHIOPIA :
Name:
Position:
Address/Contact Details:
Date:
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