The European Commission and the results based financing (RBF)

Results-based financing (RBF) is one of several broad approaches to finance official development assistance that attempt to connect at least a portion of payment to the verified achievement of results.

The European Commission is one large and influential donor that has shown a long-standing interest in RBF approaches.

In this respect, the 2018 revision of the European Union Financial Regulation contains several provisions that explicitly encourage and permit deployment of RBF financing models. Specifically, the Regulation specifies the permissibility of “financing not linked to costs” but instead to “the achievement of results measured by reference to previously set milestones or through performance indicators.” In addition, the European Parliament has strongly supported and urged expansion of these measures, explicitly recognizing “the need to strengthen the focus of future spending on performance”.

Also the revised FAFA, in its preamble, states: “The shift to a results orientation should be accompanied by a corresponding shift away from the exclusive examination of inputs and activities: it should simplify the administration of, and information generated by, UN Actions.”

Finally, the PRAG, at article Art 14.3 of the General Conditions, refers to the “Performance-based financing” as a possibility.

Given the high interest of EU institutions in the adoption of this approach, in late 2019, the Center for Global Development (CGD) entered in a research partnership with DG INTPA to develop operational guidelines for the use of results-based financing and broadly communicate lessons learned from the process. The result is the policy paper “Translating Results-Based Financing from Theory to Operational Reality: Lessons from the Practical Application of RBF at the European Commission” that you can read at this link.

Considering the relevance of the topic for the next coming years, the PuntoSud Academy is glad to announce the launch of the course: “Result Based Management approach: driving and measuring change in developing contexts”. The course will be held in virtual classroom modality on 18-19-20 May 2022 by Andrea Stroppiana, subject matter expert with the support of PuntoSud Academy experts.

Click on this link to have an overview of the course, don’ t miss this opportunity!