RISK MITIGATION: What are Updates & Proposals on Risk Mitigation Products?

Product Name Output-Based Aid
Link to Product Website
Provider Name GPOBA (Global Partnership for Output-Based Aid)
Product Definition The Global Partnership on Output-Based Aid (GPOBA) is a partnership of donors and international organizations working together to support output-based aid (OBA) approaches. It is a partnership established in 2003 by the UK (DFID) and the World Bank to support OBA approaches to improve service delivery for the poor. Its other donors are the IFC, the Netherlands (DGIS), Australia (AusAID), and Sweden (Sida). GPOBA provides technical assistance for OBA schemes, dissemination of experiences and best practices in OBA, and grants for OBA subsidy funding.

GPOBA's mandate is to fund, design, demonstrate, and document OBA approaches to improve delivery of basic infrastructure and social services to the poor in developing countries. The program's focus sectors are water and sanitation, energy, telecommunications, transport, health, and education. GPOBA is also developing pilots in other sectors, including irrigation. The goal is to mainstream OBA approaches with development partners, including developing country governments, international financial institutions, bilateral donors, and private foundations. Mainstreaming is defined as OBA being used on a regular basis in project design.

Output-based aid (OBA) is an innovative approach to increasing access to basic services – such as infrastructure, healthcare, and education – for the poor in developing countries. OBA is used in cases where poor people are being excluded from basic services because they cannot afford to pay the full cost of user fees such as connection fees. OBA is also known as “performance-based aid” or “results-based financing” (in the health sector). It is part of a broader donor effort to ensure that aid is well spent and that the benefits go to the poor.

The OBA Approach:

OBA links the payment of aid to the delivery of "outputs" like connection to electricity grids, water and sanitation systems, or healthcare services.

Service delivery is contracted out to a third party, which receives a subsidy to complement or replace the user fees.

Service providers pre-finance the project until outputs are delivered.

Explicit targeting by income or geography ensures that subsidy payments
help those who need it most, the poor.

Independent verification ensures that funds are paid only after the services or outputs have been delivered.

Product Type Output-Based Aid
Defined Risks Covered Commercial Risks: Demand
Eligible Form of Investments All
Eligible Currency of Underlying Investment Covered by this Product Both local and foreign currency
Eligible Countries & Regions All
Eligible Applicants PUBLIC: All
More on Eligible Applicants
Eligible Sector No Specific Sector
Maximum Tenor 0 to 5 years
Max. Absolute Amount (USD) 0 to 50 MM
Max. % of Project Costs Covered Max./under 25%
Max. % of Export Content Covered Max./under 50%
Fees Market-based

Other Conditions Sovereign Counterguarantee: No
Anti-Corruption and Governance Standards: Yes link
Environmental standards: Yes link
Social standards (incl. Human Rights Standards; Labor Rights Standards): Yes link
Source(s) n.a.
For more information, contact
GPOBA (Global Partnership on Output-Based Aid)
Email: gpoba@worldbank.org
Attachments n.a.
Additional Links www.gpoba.org/resources-practitioners
Deals Nepal Solid Waste Management (Nepal), Energy for Rural Transformation Project Phase II (Uganda), Philippines Public Health (Philippines), Kenya Electricity Expansion Project (Kenya), Sri Lanka Access to Sanitation Project (Sri Lanka)

Provider Name GPOBA (Global Partnership for Output-Based Aid)
Institution Type PUBLIC: Multi-donor Initiative
Ownership Owned by the five donors (AusAID, IFC, DGIS, Sida, and DFID) and administered by the World Bank.
Head Office n.a.
Provider Home Country United States
Rating N/A
Main Risk Mitigation Products n.a.
Attachments n.a.
Additional Links www.gpoba.org/publications
Entered On: 01/26/2009 at 12:23 PM
Updated On: 05/03/2013 at 08:07 AM