European Development Fund (EDF) Funding
The Overseas Countries and Territories (OCTs) benefit from the European Development Fund (EDF), which consists of several envelopes: a territorial envelope, a regional envelope and a thematic envelope dedicated to regional cooperation. Other envelopes are available for technical assistance for the OCTs, for the OCTA office and for emergency and performance aid.
The EDF Territorial Envelope
For the 10th EDF, New Caledonia received 19.81 million euros (2.3 billion CFP francs). This budget support, which was focused on vocational training, ended in 2014.
For the 11th EDF, New Caledonia will benefit from 29.8 million euros (3.6 billion francs) between 2017 and 2020. New Caledonia has chosen to dedicate the funds on the implementation of its sectoral strategy "employment and professional integration" 2016-2020.
The European Commission normally allocates its grants through the "budget support" process. This support consists of allocating funds directly to the country's budget, where they are then managed according to national and territorial systems. By contributing to the state/territory's budget, budget support contributes to the authorities' accountability and encourages the implementation of their growth strategies.
The European Commission implements budget support only in countries and territories that meet the following four eligibility conditions:
- have a well-defined national development policy or sectoral reform strategy; ;
- have a stability-oriented macroeconomic framework;
- have a relevant and credible program for improving public financial management ;
- have a transparent budget system.
Eligibility conditions are verified by the Commission as a part of PEFA (Public Expenditure and Financial Accountability) studies for public finance management and during the first phase of programming for sectoral policy and macroeconomic stability.
Implementation of Budget Support
In general, the Commission implements budget support through the disbursement of fixed tranches linked to eligibility criteria and variable tranches linked to the achievement of objectives in the sector (performance indicators with targets). These tranches (3 or 4) are generally disbursed each year and paid directly to the New Caledonian budget.
Thus, it is essential to have up-to-date and accurate statistics and indicators in the chosen sector (or to plan to put them in place thanks to the forthcoming reform). It is also essential to set the targets correctly. If the indicators are not met, the tranche will not be disbursed in full.
Disbursements are made on the basis of:
- an Annual Implementation Report (AIR) which presents the political, economic and social situation of the territory on the one hand and the performance of the sector on the other. ;
- a precise and detailed annual disbursement note that takes stock of the four eligibility criteria (implementation of sectoral policy, macroeconomic situation, implementation of public finance reform, and budgetary transparency) that allows the European Commission to verify that the territory continues to meet the conditions;
- providing the Commission with all available documents on the four eligibility criteria (sectoral report from the Institut d'émission d'outre-mer (IEOM) and the Institut de la statistique et des études économiques (ISEE), Amédée bulletins, budget reports, sectoral performance reports, etc.).
The European Commission is also conducting a mid-term and final evaluation of the budget support program, conducted by independent experts recruited by the Commission in Brussels.
- The preparation of the programming document is the responsibility of the OCTs: it is the OCTs that choose their sector of concentration.
- The "programming instructions" issued by the European Commission require that a wide range of stakeholders (including other local authorities and civil society) be consulted in the preparation of the programming document. The programming document must be the subject of an exchange of views with the French authorities and the Commission from the start of the programming period.
- The programming documents may take into account the territorial development plans that are concluded between the OCT and the Member State to which it is linked.
The Regional EDF Envelope
The regional EDF envelope covers the four Pacific OCTs: New Caledonia, French Polynesia, Wallis and Futuna and Pitcairn. The programming must be dedicated to a single area of concentration based on the analysis of common challenges at the regional level.
For the 10th regional EDF, the Pacific OCTs have benefited from 12 million euros (1.4 billion francs) which are implemented under the INTEGRE program on integrated environmental management.
For the 11th regional EDF, the Pacific OCTs will benefit from 36 million euros (4.2 billion francs). The programming of this envelope began in 2014 and should be completed in 2017 for operational implementation from 2018. Discussions on the sector of concentration of funds were carried out during the conference on the programming of the regional EDF in the Pacific (ACP and OCT) from November 23 to 25, 2014 in French Polynesia. The sustainable management of natural resources sector was chosen by the OCTs.
The Thematic EDF Envelope
The thematic EDF envelope concerns all OCTs.
- For the 10th EDF, this envelope financed the development, throughout 2015, of the Territorial Innovation Strategy of New Caledonia, which was adopted by government order on January 12, 2016. Also within the framework of the 10th EDF thematic component, the pilot project "Beneficial recipes: towards food self-sufficiency and sustainability in an island environment" received a grant of 160,000 euros in 2017.
- For the 11th EDF, the envelope is intended for the fight against climate change (including disaster risk reduction) and sustainable energy (which includes renewable energy and energy efficiency). The program, with a total budget of EUR 16-18 million, will include these two components, which should converge to promote the sustainable development of the OCTs. Discussions are underway between the OCTs. The programming is supported by technical assistance, and should be completed by early 2018.