MEMORANDUM OF UNDERSTANDING BETWEEN THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES REPRESENTED BY THE NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY AND THE AGENCE FRANÇAISE DE …

The Government of the Republic of the Philippines (hereinafter referred to as the Philippines) and the Agence française de développement (hereinafter referred to as AFD), (hereinafter jointly referred to as the “Parties” and separately as a “Party”).

For coordination and implementation purposes of the present Memorandum of Understanding, the Government of the Philippines and the Agence française de développement will be respectively represented by the Deputy Director General of the National Economic and Development Authority (NEDA) and the Undersecretary for the International Finance Group of the Department of Finance and by the Director of AFD’s Asia Department.

CONSIDERING that AFD, France’s main operator of Official Development Assistance, has been authorized by the French Government to operate in the Philippines in June 2009 under a specific mandate of fostering “green and inclusive growth” with a specific focus on climate change;

RECALLING that France is a signatory of the Paris Declaration on Aid effectiveness and of the Accra Agenda for action;

NOTING that AFD subsequently opened a country office in Manila in May 2010 under the umbrella of the Embassy of France in the Philippines, and started since then its prospecting activities, in close cooperation with government agencies, development partners and civil society organisations;

RECOGNISING that the Philippines has recently adopted its Philippine Development Plan (PDP) 2011-2016 for inclusive growth, which reflects President Aquino’s Social Contract with the Filipino People, and recognises the challenges posed by climate change and environmental degradation;

SUPPORTING the Philippines’ priorities to achieve its planned targets, in particular in terms of investment and social inclusiveness;

WELCOMING the recent adoption of the Philippine National Climate Change Action Plan (NCCAP) promoting an integrated approach to addressing adaptation and mitigation challenges in the country;

DESIRING to co-operate in order to support the fight against climate change and the protection of the environment, and to further contribute to sustainable development programmes and projects in the Philippines, in line with the country’s development priorities;

HEREBY AGREE as follows:

ARTICLE 1
OBJECTIVE OF THE MEMORANDUM OF UNDERSTANDING

The objective of this Memorandum of Understanding (hereinafter referred to as “the MOU”) is to provide a framework for development cooperation between the Philippines and AFD from the date of signing hereof up to the same date next year.

ARTICLE 2
PRIORITY SECTORS

(1) The Parties will enter into development cooperation in the fields of climate change, green infrastructure, renewable energy, energy efficiency, sustainable urban development, clean transport, water and sanitation, waste management, agro-forestry and biodiversity protection. Eligible areas of support by AFD could be extended to other sectors within the framework of its mandate of supporting green and inclusive growth.

(2) The Parties recognise the challenges faced by local government units (LGUs) in fulfilling their environmental services mandate as well as in coping with the adverse effects of climate change, in particular given their constraints as regards access to finance. AFD is committed to supporting LGUs’ actions to promote sustainable development. The parties agree to facilitate LGU’s access to AFD funding within the existing legislative framework.

(3) The Parties recognise the role of Government Finance Institutions (GFIs) in channelling and leveraging ODA funding to support the Government’s priorities for inclusive growth.

(4) The Parties will particularly try to find synergies between AFD’s proposed means of assistance and the need for financing of Public-Private Partnership (PPP) programs, currently defined as a priority by the Philippines. The present situation of the project proposals that have been identified until now in the various sectors is explained in the annex.

ARTICLE 3
FORMS OF SUPPORT

(1) AFD is authorised to provide funding to the Philippines either in the form of long term sovereign loans or non-sovereign loans (with or without the State’s guarantee).

(2) The cooperation can be implemented in different ways:

2.1. Project aid;
2.2. Programme aid;
2.3. Budget support;
2.4. Technical assistance during project implementation, when piggybacked to one of the above mentioned forms of support, and subject to yearly budgetary allocations.

(3) AFD’s financing conditions are untied and compliant with Official Development Assistance (OECD-DAC) criteria and the applicable laws, regulations and government policies of the Republic of the Philippines.

(4) The precise terms and the conditions for each project will be laid down in specific Agreements, to be negotiated and signed by the Department of Finance, representing the Government of the Philippines, for national government agencies and AFD subject to existing laws, rules, and regulations after the completion of the necessary preparatory work.

(5) AFD’s activities will also aim at promoting French-Filipino partnerships in areas related to its mandate.

ARTICLE 4
FORMS OF BIDDING PROCEDURES

(1) Under AFD Financing, bidding procedures are under the sole responsibility of the beneficiary and must be compliant with local legislation. This entails that that there is no legal relationship between suppliers and AFD. In general, AFD recommends to use procedures and standard documents similar to those of multilateral donors.

(2) For stand alone and parallel cofinancing operations, AFD gives its non objection at every key step of the tender process (publication, tender documents, evaluation of proposals, contract) in order to verify compliance with best international practice for open competition and with anti-money laundering/fight against terrorism policies.

(3) For joint cofinancing operations with multilateral donors, the cofinancier’s (i.e. the Asian Development Bank’s and the World Bank’s) rules shall apply in coordination with AFD. The above-mentioned bidding procedures modalities were presented during the 24 November 2011 1^st GPH-AFD Bilateral Consultations.

The forms of bidding procedures will be negotiated and agreed between the Department of Finance, representing the Government of the Philippines, in coordination with national government agencies, and AFD.

ARTICLE 5
GUIDELINES ON A MEDIUM-TERM FINANCING PROGRAM

(1) AFD will welcome proposals from government agencies and development partners to finance or co-finance activities which fit within its mandate. The Parties agree to regularly discuss potential opportunities for AFD financing.

(2) During its prospecting, appraisal and implementation activities, AFD is committed to seek alignment with the PDP and the NCCAP priorities, as well as regularly consult the National Economic and Development Authority, the Department of Finance and relevant line agencies. The Parties agree to regularly meet in order to review the progress of AFD’s project pipeline and to adapt it, if needed, to the evolutions of priorities within the PDP.

(3) AFD is determined to pursue close coordination and harmonisation with other development partners, in particular through its active participation in donor forums such as the Philippine Development Forum.

(4) In consultations with the relevant agencies of the Government of the Philippines, AFD will prepare a country strategy for the next two years.

(5) AFD confirms its availability to annual long term financing commitments in the Philippines of up to 150 to 200 million euros.

ARTICLE 6
SYNERGIES BETWEEN FRENCH ODA INSTRUMENTS

The Parties agree to investigate into potential synergies between untied and tied instruments provided by the French government for financing green investments.

ARTICLE 7
OFFICIAL ESTABLISHMENT

The Parties agree to pursue close dialogue with regard to the official establishment of AFD in the Philippines and related fiscal issues in an effort to resolve that matter in a timely manner.

ARTICLE 8
FREQUENCY OF BILATERAL CONSULTATIONS

The Department of Finance and the National Economic and Development Authority, in coordination with other agencies of the Government of the Philippines, shall meet annually with AFD senior management to review the ongoing strategy and projects.

Signed in Manila, Philippines, on ___________ 2012

Entry into Force: May 23, 2013