REPORT FROM THE COMMISSION TO THE PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE 2009 ANNUAL REPORT ON THE IMPLEMENTATION OF THE INSTRUMENT FOR PRE-ACCESSION ASSISTANCE (IPA)   SEC(2010) 1430
Date: 2010-11-25
Institutions: European Commission
Subjects: EU financing, accession to the European Union, cross-border cooperation, institutional reform, pre-accession strategy, regional development, report, rural development

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EUROPEAN COMMISSION  

Brussels, 25.11.2010 
COM(2010) 687 final 

REPORT FROM THE COMMISSION TO THE PARLIAMENT, THE COUNCIL 
AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE 

2009 ANNUAL REPORT ON THE IMPLEMENTATION OF THE INSTRUMENT 
FOR PRE-ACCESSION ASSISTANCE (IPA) 

SEC(2010) 1430

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Summary 

This  report  presents  the  activities  undertaken  for  the  implementation  of  the  Instrument  for 
Pre-accession  Assistance  (IPA)  during  the  year  2009  and  provides  a  general  overview  of 
developments, including some considerations on future perspectives. 

The report outlines that, in 2009, the Commission has made concrete steps towards improving 
the IPA instrument's effectiveness, impact and sustainability by paving the way for a sector-
based approach to strategic planning and programming, by enhancing donor coordination and 
by increasing beneficiaries’ ownership. Better policy design and implementation will improve 
policy dialogue and help achieve better results in the EU integration process of the Western 
Balkans, Turkey and Iceland. 

Details on programming and implementation activities for IPA beneficiary specific or multi-
beneficiary programmes during the reporting period are available in the background document 
to the present report1 (Sections I and II), followed by financial data (Section III). The general 
framework  of  the  IPA  financial  instrument  is  also  recalled  in  the  introduction  to  the 
background document. 

* 

* 

* 

1. 

THE YEAR IN REVIEW 

1.1.  Main evolutions of the enlargement process 

2009 was a year of stability and security in the Western Balkans and in Turkey, with positive 
evolutions  concerning  mobility  and  neighbourly  relations.  In  the  wake  of  the  world-wide 
financial  and  economic  crisis,  the  Commission  contributed  to  ensuring  macro-economic 
stability  in  the  region,  inter  alia  by  introducing  a  financial  crisis  package  for  the  region, 
including direct budgetary support for Serbia, funded by IPA. 

During the reporting period, new EU membership applications were submitted by Albania (in 
April),  Iceland  (in  July)2  and  Serbia  (in  December)  while  Croatia  made  more  progress 
towards  reaching  the  final  stages  of  accession  negotiations.  Montenegro,  Serbia,  and  the 
former  Yugoslav  Republic  of  Macedonia  achieved  visa-free  travel  to  the  Schengen  area, 
having fulfilled the conditions set in the visa liberalisation roadmaps. The Commission also 
continued  to  work  with  Albania  and  Bosnia  and  Herzegovina  to  achieve  the  lifting  of  their 
visa obligations. 

However, challenges remained. In 2009 the countries of the Western Balkans and Turkey had 
still,  to  varying  degrees,  substantial  work  ahead  in  meeting  the  established  criteria  and 

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2 

Staff Working Document -  Background document to the report from the Commission to the Council, 
the European Parliament and the European Economic and Social Committee - 2009 annual report on the 
implementation of the Instrument for Pre-accession Assistance (IPA) 
The  Commission  proposed  to  amend  the  IPA  Regulation  1085/2006  in  October  2009  with  a  view  to 
include  Iceland  as  an  IPA  beneficiary  (subsequently  approved  in  2010,  through  Regulation  (EU)  No 
540/2010 of 16 June 2010).  

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conditions for accession. The pace of reform was often slow and the international economic 
crisis added to the strains.  

The  Commission  assessment  on  candidate  countries’  and  potential  candidates’  progress 
towards meeting, respectively, the conditions for accession and the terms of the Stabilisation 
and Association Agreements was presented in the document “Enlargement Strategy and main 
challenges 2009-2010” and the accompanying progress reports3, published in October 2009. 
The  findings  and  recommendations  of  this  Commission  Communication  were  broadly 
endorsed by the Council in December 2009. 

1.2.  Main  strategic  developments  for  an  improved  delivery  of  IPA  assistance: 

learning the lessons of two years of implementation  

In  2009,  the  Commission  proceeded  with  its  reflection  on  the  effectiveness  in  planning  and 
programming IPA assistance, leading to new approaches.  

A  donor  coordination  conference  in  Tirana  on  2nd  April  took  stock  of  the  progress  made  in 
advancing  donor  coordination  on  the  ground.  The  conference  analysed  the  strengths  and 
weaknesses of existing coordination mechanisms at the national and regional levels and came 
up  with  concrete  recommendations  to  be  followed  in  achieving  better  coordination  and  aid 
effectiveness.  Also,  the  conference  discussed  the  possibilities  of  enhancing  strategic 
programming and aid harmonisation alongside the National Development and EU integration 
Plans adopted by IPA beneficiaries and in the MIPDs. 

A conference on Effective Support for Enlargement, organised jointly by the Commission and 
the Swedish Presidency of the EU in Brussels on 19th October, examined broader aspects of 
the aid effectiveness agenda and concluded that an approach in programming assistance based 
on the beneficiary's needs and strategies could contribute to the advancement of the efficiency 
of  pre-accession  aid.  It  concluded  that  such  an  approach  would  be  beneficial,  not  only  in 
addressing  the  pre-accession  priorities,  but  also  in  helping  to  overcome  the  impact  of  the 
financial crisis and, since some of the donors in the Western Balkans were better equipped to 
address  those  difficulties  rapidly,  close  donor  coordination  would  enable  IPA  to  target  its 
support in the most effective and complementary way.  

Evaluation reports on programming and implementation of both IPA and earlier pre-accession 
assistance  (cf.  section  3  below)  also  proved  to  be  a  valuable  source  of  reflection  on  better 
ways to ensure that overall assistance objectives will be met.  

Lessons  from  these  reports  informed  the  Commission‘s  efforts  to  move  pre-accession 
assistance  increasingly  from  a  predominantly  project-based  to  a  more  comprehensive, 
policy-based approach in order to increase its overall impact. In November the Commission 
took the decision to introduce progressively the sector-based approach in the planning of 
IPA.  These  efforts  were  developed  in  2010  to  feed  into  the  strategic  planning  and 
programming of assistance (cf. section 3 below for details), and will continue in 2011. 

In December 2009, the General Affairs Council gave a political backing to this new sector-
based  planning  of  IPA  by  endorsing  the  conclusions  of  the  abovementioned  conferences: 
« The  Council  …emphasises  the  essential  link  between  enlargement  policy  priorities  and 
financial assistance, in line with the results from the recent conferences designed to improve 

3 

See in http://ec.europa.eu/enlargement/press_corner/key-documents/reports_oct_2009_en.htm 

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aid  effectiveness,…,welcomes  the  efforts  by  the  Commission  to  closely  align  IPA  annual 
programmes with the priorities identified in the Progress Reports. » 

Also  in  light  of  conclusions  from  the  evaluation  reports,  IPA  programming  was  already 
streamlined  in  2009  with  fewer,  larger  projects  designed  to  make  implementation  easier  to 
manage  and  increase  its  effectiveness  and  visibility.  The  main  focus  continued  to  be  on 
Institution  Building,  in  particular  rule  of  law  related  areas,  in  line  with  the  Enlargement 
strategy.  Socio-economic  development  also  remained  an  important  priority,  in  particular  in 
light of the economic crisis. A crisis response package was adopted for the Western Balkans 
and Turkey, and budgetary support was provided to Serbia, linked to an IMF agreement.  

2. 

PROGRAMMING  AND 
OVERVIEW 

IMPLEMENTATION  OF 

IPA:  GENERAL 

2.1. 

Strategic Planning & Programming 

2.1.1.  Multi-annual Indicative Financial Framework (MIFF) 

The following table provides the 2009 IPA allocations in million EUR by beneficiary and by 
component,  as  well  as  for  the  multi-beneficiary  programme  as  updated  in  the  2011-2013 
MIFF4. The figures take into account transfers made between components I and II during the 
course of 2009. 

Table 1: 2009 allocations by beneficiary and by component (in current prices in million 
EUR) 

III 

IV 

V 

TOTAL 

IPA beneficiaries/ 
Components 
Albania 
Bosnia and Herzegovina 
Croatia 
former Yugoslav 
Republic of Macedonia 
Kosovo 
Montenegro 
Serbia 
Turkey 
Multi-beneficiary  
TOTAL 

I 

71.4
83.9
45.6

39.3

106.1
28.6
182.6
239.6
166.1
963.2

II 

9.8
5.2
15.9

4.4

4.7
12.2
3.0

49.7

20.8

14.2

7.1

25.8 

10.2 

182.7

55.6

85.5 

55.2

253.2

76.9

121.5 

81.2 
89.1 
151.2 

81.8 

106.1 
33.3 
194.8 
566.4 
166.1 
1 470.0 

Information concerning the basis for the allocations per beneficiary and per component can be 
found in the Commission Communication on the MIFF. 

2.1.2.  Multi-annual Indicative Planning Documents (MIPDs) 

The 2009-2011 MIPDs were submitted for opinion to the IPA Management Committee in the 
first  half  of  2009,  namely  in  March  (Albania,  Bosnia  and  Herzegovina,  Serbia,  the  former 
Yugoslav  Republic  of  Macedonia,  Montenegro  and  Kosovo  MIPDs)  and  April  (Croatia, 
Turkey  and  the  Multi-beneficiary  MIPDs).  With  one  exception  due  to  abstentions,  they 

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COM(2009)543 final of 14 October 2009 

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received  a  unanimous  positive  opinion  by  Member  States  and  were  all  adopted  by  the 
Commission between June and July. 

As  in  previous  years  and  in  line  with  Article  6.5  of  the  IPA  Regulation,  the  main  priorities 
under  each  component  as  foreseen  in  the  existing  2008-2010  MIPDs  were  reviewed. 
Continuity prevailed, given the lack of developments in the EU, the region or elsewhere that 
might have justified substantial revisions. National authorities and other relevant stakeholders 
(Member  States,  International  Financial  Institutions  (IFIs),  potential  beneficiaries,  civil 
society) were consulted during the review process. 

As far as the volume of assistance under component I was concerned, the ability to assume 
membership obligations/acquis implementation remained the priority for candidate countries, 
at  an  equal  level  with  the  political  criteria  as  far  as  the  former  Yugoslav  Republic  of 
Macedonia was concerned. Civil society dialogue came second for Turkey, as did the political 
criteria  for  Croatia.  Regarding  potential  candidates,  economic  criteria  prevailed  for  Serbia, 
Montenegro  and  Kosovo,  while  the  ability  to  assume  membership  obligations  did  so  for 
Albania  and  Bosnia  and  Herzegovina,  together  with  the  political  criteria  as  far  as  the  latter 
was  concerned.  The  political  criteria  came  next  for  Serbia,  Kosovo  and  Albania,  while 
Montenegro gave equal focus to that and to European standards.  

In  the  context  of  the  IPA  Management  Committee,  the  Commission  and  Member  States 
discussed ways to pay greater attention to the following aspects in programming documents:  

– 

– 

– 

– 

– 

– 

Apply  the  lessons  learned  from  accreditation  for  decentralised  implementation  in 
candidate countries to the accreditation process in other IPA beneficiaries. In general, 
align decentralised management more to beneficiary systems, in order to strengthen 
ownership  and  absorption  capacity.  Refrain  from  setting  a 
timeframe  for 
accreditation;  

Highlight  more  explicitly  results  expected  in  relation  to  strengthening  European 
integration  structures,  beyond  EU-accession  requirements.  Involve  European 
integration  structures  more  in  programming,  for  verification  against  national 
accession-related  priorities.  Align  IPA  assistance  more  closely  to  national  strategic 
planning or, where the latter is lacking, focus on strengthening further governments’ 
planning, budgeting and performance management systems;  

Pursue  efforts  undertaken  to  identify  a  reduced  number  of  priorities,  or  ‘top’ 
priorities  agreed  with  the  government.  Pay  more  attention  to  lessons  learned, 
elaborate further objectives, expected results and measurable indicators;  

Where  absorption  capacity  is  an  issue,  consider  revising  programming  accordingly 
taking  into  account  the  feasibility  of  the  expected  results  within  the  MIPD 
timeframe; strengthen further the capacities for regional development.  

Further efforts to increase the division of  labour and  donor partnership, with major 
bilateral  and  multilateral  assistance  in  key  areas.  Enhance  further  the  consultation 
process  with  the  beneficiaries  based  on  a  clear  timetable,  including  early 
stakeholders’ consultation prior to drafting the project fiches;  

Provide  clearer  guidelines  for  tackling  cross-cutting  issues,  including  sustainable 
development and specific objectives for gender issues and equality;  

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Secure further support for projects related to the political criteria, judicial reform and 
the  fight  against  corruption.  Dedicate  increased  attention  to  public-procurement 
issues;  

the 

local  administrative  capacity  and  structures 

Strengthen  further 
the 
environmental sector and advocate the goal of gender equality for new environment 
jobs  (Component  III).  Define  more  clearly  the  process  for,  and  stakeholders' 
influence  in,  the  analysis  of  social  inclusion  and  related  strategy  definition 
(Component  IV).  Prioritise  further  the  leaders'  approaches  and  define  more  clearly 
horizontal issues (Component V);  

in 

Reinforce  local  communication  on  the  relevance  of  multi-beneficiary  activities  for 
accession, also as a way to increase national ownership of regional initiatives. Insist 
on  securing  regional  ownership  and  involvement  of  regional  cooperation  structures 
in the programming process.  

In  line  with  these  discussions,  the  Commission  took  measures  to  increase  the  consultation 
mechanism,  reinforce  the  link  between  the  MIPDs  and  national  strategies  and  ensure 
beneficiaries’ ownership to a higher degree than before. The MIPD structure will be further 
reviewed,  in  order  to  align  it  with  progress  towards  a  more  sector-based  approach  to  IPA 
financial assistance and to provide for a more comprehensive programming framework.  

2.1.3.  Programming of assistance in 2009 

Programming activity in 2009 consisted mainly in the finalisation and adoption of IPA 2009 
national/annual  and  multi-beneficiary  programs  under  component  I  as  well  as  starting  the 
preparation  of  IPA  2010  programs.  With  regard  to  cross-border  cooperation  programmes, 
programming  activity  was  limited  to  adding  the  2009  financial  allocations  to  the  on-going 
multi-annual programmes adopted in 2007, while there were no revisions of substance to the 
programmes  themselves.  The  same  applies  to  the  programming  of  components  III  for  the 
former  Yugoslav  Republic  of  Macedonia  and  to  component  V,  while  there  was  no 
programming activity in 2009 neither under component III for Croatia and Turkey nor under 
component IV, as the existing multi-annual programmes were already covered for that year. 
Generally,  lessons  learned  from  past  experience  in  all  candidate  countries  and  potential 
candidates informed the programming exercise under component I (project identification and 
definition). Lessons identified for IPA beneficiaries included the need to pay greater attention 
to the following:  

– 

– 

– 

– 

project design and maturity (in terms of, inter alia, the availability of needs analyses, 
designs,  feasibility  and  market  studies;  underlining  risks  and  assumptions; 
beneficiaries being established; simple implementation arrangements); 

administrative  and  absorption  capacity  of  beneficiaries  (inter  alia  based  on  past 
performance and existing workload of ongoing CARDS and IPA projects); 

ownership,  to  be  increased  by  addressing  also  beneficiaries’  own  development 
strategies and action plans and through early beneficiaries’ involvement in planning 
and programming of assistance as well as in implementation;  

sustainability  of  results,  through  careful  planning,  prioritization  and  timely 
sequencing of operations and attention to conditionality; 

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coordination  at  different  levels,  i.e.  among  donors,  with  other  linked  activities, 
between central and local governmental bodies;  

the number of key priorities, to be limited and closely aligned with the beneficiaries’ 
European reform agenda;  

links to the budget and the medium term expenditure framework;  

increased  monitoring,  impact,  visibility,  involvement  of  civil  society  and  cross-
cutting issues.  

Project selection was based on various parameters reflecting the above lessons, including: i) 
consistency  with  strategic  priorities  and  existing  sector  strategies,  ii)  the  identification  of 
needs,  priorities  and  relevant  stakeholders  for  project  development  and  implementation,  iii) 
the  maturity  and  sustainability  of  projects,  iv)  beneficiary’s  implementation  capacity,  v) 
prioritization  and  careful  sequencing  in  line  with  political  and  strategic  priorities,  vi) 
relevance  and  impact,  vii)  continuity  and/or  complementarities  with  past  or  ongoing 
assistance/other  donors,  viii)  no  duplication,  and  ix)  new  possible  areas  of  assistance 
emerging from political and technical dialogue. 

Highlights of the programming exercise in 2009 under component I were as follows: 

– 

– 

– 

Twinning  was  the  preferred  implementation  instrument  for  legal  approximation-
related projects in Croatia and its use was set to increase;  

There  were  fewer  contracts  than  in  the  previous  year’s  programme  in  the  former 
Yugoslav  Republic  of  Macedonia,  although  still  in  high  number.  Programming 
quality improved;  

2009  programming  in  Turkey  was  based  on  a  detailed  definition  of  steps,  criteria 
and  deadlines  (programming  process  document).  The  Commission  called  for 
coherent  sector  strategies  to  guide  the  programming  process  and  stakeholders’ 
involvement in the programming cycle through sectoral working groups. Ownership 
improved and civil society dialogue was given special attention as a response to the 
economic  and  financial  crisis,  together  with  the  transfer  of  EUR  35  million  from 
component  I  to  the  Multi-beneficiary  Crisis  Response  Package  -  Energy  Efficiency 
Facility  and  an  exceptional  contribution  to  support  Turkey’s  participation  to  EU 
programmes. On the other hand, the beneficiary’s agreement - in principle - with an 
earlier  preparatory  phase  and  with  more  sectoral  working  groups,  as  well  as 
discussions on how to make programming more strategic and policy-linked, were not 
yet  followed  by  an  agreement  on  concrete  measures.  It  was  crucial  for  the 
beneficiary to maintain flexibility on an upcoming-needs basis concerning the sectors 
supported  using  the  programming  exercise  to  stimulate  reform  in  all  ministries. 
Initial project proposals were a third less than in 2008 (a trend confirmed in the 2010 
programming process) and support from the Commission was still necessary to bring 
them to sufficient maturity; 

The situation should improve following the adoption in July 2009 of a law defining 
the  organisation  and  duties  of  the  responsible  implementing  structure.  The  gradual 
introduction  of  sector  approaches  to  the  planning  and  programming  of  assistance 
should increase ownership and strengthen the links between financial assistance and 
political  priorities.  The  definition  of  more  relevant  and  measurable  indicators  and 

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– 

benchmarks will also be sought, together with an increased focus on the results and 
impact  of  projects.  The  capacity  of  structures  involved  with  IPA  programming, 
implementation  and  monitoring  shall  be  improved  and  the  working  of  sectoral 
monitoring sub-committees shall be reviewed, as well as the new MIPD; 

There  was  higher  beneficiary  involvement  in  programming  in  Albania,  leading  to 
improved  ownership.  The  quality  of  project  fiches  was  improved  and  there  was  a 
trend towards fewer but bigger (infrastructure) projects, in response to the financial 
crisis; 

Programming in Bosnia and Herzegovina focused on measures aimed at alleviating 
the  impact  of  the  financial  crisis.  There  was  an  increased  proportion  of  assistance 
going  into  joint  or  indirect  centralised  management  agreements  with  IFIs  and  with 
other  national  and  international  actors.  A  trend  towards  fewer,  bigger  projects  was 
apparent also in this case; 

In  Kosovo  there  was  an  increased  involvement  of  beneficiary  institutions  in 
programming, with a higher number of project proposals presented than in the past 
(however showing somehow lack of prioritisation and filtering). Close co-ordination 
with the EU’s Rule of Law Mission (EULEX) and the EU Special Representative / 
International Civilian Office (EUSR/ICO) ensured the complementarity of European 
Union action; 

Programming in Montenegro witnessed an improved quality of draft project fiches 
and  an  increased  attention  to  conditionality  (co-financing,  land  ownership  and 
acquisitions  for  infrastructures)  and  the  size  of  projects,  consistent  with  the  (small) 
size  of  the  administration  and  its  absorption  capacity.  Other  features  included 
enhanced  complementarity  and  collaboration  with  other  donors;  improved  civil 
society  consultation;  more  leadership  by  the  beneficiary  for  the  2010  programming 
(started in 2009) and the focus gradually shifting towards the economic criteria and 
the ability to assume membership obligations; 

In Serbia, the programming process was characterised by the close involvement of 
beneficiary institutions and good quality programming documents. Over 60% of the 
assistance under component I was provided in the form of budget support to protect 
structural  reforms;  general  conditionality  including  a  sustainable  macro-economic 
and  fiscal  framework,  supported  by  IFIs;  administrative  and  financial  circuits 
establishing a sound fiduciary environment; specific disbursement conditions related 
the 
to  sound  public 
administrative capacity of relevant EU-accession related institutions and bodies. By 
the  end  of  the  reporting  period,  a  new  budget  system  law  had  been  submitted  to 
Parliament by the Government and the latter had adopted the public internal financial 
control strategy. 

financial  management;  maintaining  and  developing 

Detailed information on the content of each IPA 2009 national/annual programme and of the 
IPA 2009 Multi-beneficiary programme can be found in the background document (Part I and 
Part II). The same can be referred to for multi-annual programmes under Components II to V. 

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2.2. 

Implementation 

2.2.1. 

Implementation Modalities and Structures 

Assistance under IPA is designed to prepare candidate countries and potential  candidates to 
assume  full  responsibility  for  the  management  of  EU  financial  assistance.  Therefore, 
decentralised  management  by  the  beneficiaries  is  the  ‘target’  management  mode,  to  be 
achieved as soon as their administrative capacities are considered sufficiently developed, and 
the  appropriate  management  and  control  systems  are  in  place  to  ensure  sound  financial 
management.  For  candidate  countries,  the  medium  term  objective  is  fully  decentralised 
management, i.e. with Commission ex post control only (whereas component V assistance is 
implemented  in  that  way  from  the  start).  Each  beneficiary  must  therefore  have  specific 
strategies, action plans and timetables in place for moving towards those objectives, while at 
the  same  time  preparing  national  authorities  to  have  adequate  capacity  for  assuming  the 
increased related responsibilities.  

In  2009,  progress  towards  conferral  of  management  powers  for  decentralised 
management  advanced  at  different  speed  in  potential  candidates.  By  the  end  of  the 
reporting period, Albania made solid progress on component I (setting up of key structures, 
making  key  nominations  and  having  staff  in  relevant  implementing  agencies  trained)  and 
promising progress on component V (preparing a draft roadmap to decentralised management 
without ex-ante controls), while still remaining at an early stage with regard to components II, 
III and IV. On the other hand there was little progress in Bosnia and Herzegovina, with only 
the  nomination  of  the  National  IPA  Coordinator  within  the  Ministry  of  Finance,  while  the 
Central  Finance  and  Contracting  Unit  (CFCU)  and  the  National  Fund  remained  not  fully 
staffed.  Kosovo  remained  at  a  very  early  stage  in  the  preparation  of  a  roadmap  for 
decentralised  management.  There  was  some  advancement  in  Montenegro  for  components  I 
and II, with the 'gap assessment’ mission, while for components III to V identification of the 
main implementing bodies was not yet followed up with other key steps, including roadmaps 
definition.  Having  last  updated  their  roadmap  to  decentralised  management  in  March  2009 
and appointed all key actors by the end of the reporting period, Serbia was still not meeting 
its  commitments  in  terms  of  number  of  staff  in  EU  integration  structures,  due  to  budget 
restrictions.  

With  regard  to  candidate  countries,  in  2009  Croatia  proceeded  to  strengthen  its  already 
accredited system for the decentralised management of IPA components I to IV, notably with 
regard to internal audit, the Audit Authority and control functions of the Operating Structures. 
Roadmaps for lifting ex-ante controls on components I, III and IV were prepared, the last one 
needing improvements. A new implementing structure was set up for component II, but the 
waiving  of  ex-ante  controls  was  not  yet  achieved  by  the  end  of  the  reporting  period.  With 
regard  to  component  V,  management  powers  were  conferred  in  2009  for  two  out  of  seven 
measures. Other measures are expected to be accredited in 2010.  

Plans for the conferral of management under component I in the former Yugoslav Republic 
of Macedonia in 2009 suffered a set back due to a number of high risks identified within the 
relevant  implementation  and  control  structures.  Accreditation  was  instead  conferred  for  the 
management of components III, IV and V and a roadmap towards decentralised management 
without  ex-ante  controls  for  component  III  was  submitted  to  the  Commission  for 
consideration (while for component IV this was expected in the first half of 2010). There was 
no request for conferral of management under component II in 2009, while one was expected 
for 2010.  

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In  2009,  management  powers  were  conferred  to  Turkey  for  operational  programmes  under 
components III and IV, followed by the signing of the related four financing agreements. The 
country  prepared  roadmaps  for  full  decentralisation,  took  legislative  measures  to  strengthen 
the  accredited  structures  under  component  I  and  prepared  plans  to  address  the  remaining 
weaknesses  in  the  management  and  control  systems,  although  by  the  end  of  the  reporting 
period  it  had  not  yet  put  them  into  operation.  In  the  meantime  the  implementing  agency  of 
component  I  saw  its  capacity  stretched  as  a  result  of  the  operating  structures  under 
components III and IV having delegated to it certain tendering and contracting functions up to 
2010. There were no positive developments in 2009 regarding accreditation under component 
V,  due  to  delays  in  the  timetable  for  national  accreditation  caused  by  factors,  such  as  the 
complex structure of the  IPA  rural development programme  in Turkey and the lack of high 
level political commitment for the process. A revised action plan prepared in the year under 
review  foresaw  a  national  accreditation  for  2010  that  would  allow  for  the  conferral  of 
management  in  2011.  Implementation  of  component  V  funds  for  2007  and  2008  may  be  at 
risk as a result. Progress under component II under shared management was also limited.  

Audit reports in candidate countries found that the progress made by the national systems was 
mixed. Systems audits conducted by the Commission in Turkey continued to show high-risk 
findings,  albeit  in  smaller  numbers  than  in  previous  years.  In  Croatia,  the  authorities  had 
noticeably  strengthened  the  management  and  control  systems  for  IPA  funds.  However, 
concerns remained about the feasibility of the roadmap proposed by the National Authorising 
Officer  for  the  waiver  of  the  Commission’s  ex  ante  controls,  leading  the  Commission  to 
consider the possibility for partial waivers of individual controls. 

2.2.2.  Overview of IPA implementation in 2009 

2.2.2.1.  Component I 

Table  2:  Global  Overview  of  IPA  2007-2009  Component  I  (annual  programmes) 
amounts  committed,  contracted  and  paid  as  at  31  December  2009  per  beneficiary,  in 
million EUR  

IPA beneficiaries 
Albania 
Bosnia and Herzegovina 
Croatia 
former Yugoslav Republic 
of Macedonia 
Kosovo 

Montenegro 

Serbia 

Turkey 

Multi-beneficiary 
programme 

Candidate countries 

Committed Contracted  %Contracted 
27.28%
29.74%
14.83%

183.17
196.99
131.38

49.97
58.59
19.48

109.12

348.30

79.10

504.03

716.88

597.88

21.98

149.95

32.74

242.80

247.80

421.50

Paid  %Paid 
14.67 
8.01%
12.91 
6.55%
13.48  10.26%
9.94%

10.85 

20.14%

43.05%

41.39%

59.02  16.95%
8.74  11.05%
83.50  16.57%
48.17%
34.57% 227.75  31.77%

70.50% 261.54  43.74%

In  Croatia,  the  contracting  of  IPA  in  2007  and  2008  under  component  I  reached  32%  and 
12% respectively by the end of the reporting period. There was no contracting activity under 
IPA  2009.  Implementing  IPA  2007  and  2008  programmes  during  2009  was  a  challenge  in 

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terms of administrative capacity for Croatia, although an increase in human resources in the 
implementing  agency  helped  speed  up  procurement  compared  to  the  situation  under  the 
previous  PHARE  instrument.  Acquis  implementation  (as  opposed  to  adoption)  and 
administrative strengthening in view of post-accession management of Structural Funds were 
the focus of activity, though results and impacts of assistance in these fields will be apparent 
only after accession.  

Implementation  activity  under  component  I  continued  in  2009  in  the  former  Yugoslav 
Republic of Macedonia, with IPA 2007 allocations under the first financing agreement fully 
contracted  by  the  deadline  of  30  October.  Contracting  proceeded  also  under  the  second 
financing  agreement.  By  the  year  end,  two-thirds  of  IPA  2007  allocations  were  contracted. 
With  regard  to  IPA  2008  and  IPA  2009  programmes,  there  was  virtually  no  contracting  in 
2009, while activity concentrated on project preparation, under decentralised management as 
far  as  IPA  2009  was  concerned.  Institution/capacity  building  activity  under  the  TAIEX 
instrument was intense, particularly in the fields of agriculture, internal market and justice and 
home affairs.  

Following the ratification of the IPA Framework Agreement in late 2008, the implementation 
of IPA could finally start in Turkey in 2009. Two financing agreements for implementation 
of  IPA  2008,  worth  256  million  EUR,  were  signed  in  March  and  April.  By  the  end  of  the 
reporting period, contracting of IPA 2007, 2008 and 2009 had reached, respectively, a third, a 
fourth and over two fifth of committed funds. Results on the ground are not yet available to 
report on, as the implementation of contracts started towards the end of the reporting period. 
Nevertheless, noteworthy under component I is a twinning project related to children’s rights 
that  started  towards  the  beginning  of  the  year  for  which  progress  was  visible  and  expected 
results  appeared  to  be  on  target.  Also  worth  mentioning,  for  its  positive  impact  on 
institution/capacity  building,  is  the  intense  activity  under  the  Technical  Assistance  and 
Information  Exchange  (TAIEX)  instrument  that  took  place  during  2009.  A  very  high 
participation  to  the  Lifelong  Learning  and  Youth  in  Action  programmes  is  also  to  be 
mentioned  for  its  contribution  towards  enhancing  mutual  EU-Turkey  knowledge  and 
understanding.  

Potential candidates 

By the end of the reporting period 52% and 43% of – respectively - IPA 2007 and IPA 2008 
allocations were contracted in Albania. Although there were no projects reaching completion 
and  therefore  no  related  results  to  report  on,  the  implementation  of  some  relevant  capacity 
building projects started in the second half of the year, supporting the Albanian authorities in 
(re)designing and/or implementing the whole spectrum of the Albanian Police’s activities, the 
decentralised  management  roadmap,  the  Cross  Cutting  Strategy  against  Corruption,  SMEs 
policy and support measures. More capacity building activities started also in relation to the 
Rural Development strategy and measures against animal diseases. A work contract related to 
rural  roads  infrastructure  was  signed  at  the  end  of  the  year.  Various  calls  for  proposals  for 
twinning projects were launched in 2009, mainly covering the finance sector, while none was 
signed yet by the year's end. TAIEX and SIGMA activities also took place. 

As  already  reported  in  2008,  implementation  under  IPA  2007  in  Bosnia  and  Herzegovina 
could not start until 2009, due to delays in adopting tax-exempting legislation for IPA-funded 
contracts. Additional delays accumulated in 2009 with relation to the signature of financing 
agreements, bringing about limited progress in implementation both with regards to IPA 2007 
and IPA 2008. There was improvement in contracting with 45 contracts signed under IPA in 

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2009 as against 6 in 2008. By the end of the reporting period, the contracting of IPA 2007, 
IPA 2008 and IPA 2009 had reached – respectively - 70%, 13% and 14% of available funds. 
Four  twinning  projects  were  launched  in  different  sectors,  but  none  were  implemented  yet. 
SIGMA also provided institution building support. Because of the above delays, there are no 
concrete results to report on under Component I during the reporting period yet.  

There was good progress in IPA implementation in Kosovo in 2009, with contracting by the 
ECLO hitting target at 90% and almost 40% of IPA 2007 and IPA 2008 funds, respectively. 
Positive  results  were  already  visible  under  ongoing  projects  (including  completion  and 
handing over of reconstructed or new houses for minority returnee families in one of the four 
municipalities  concerned;  44  students  granted  scholarships  to  be  trained  at  EU  universities; 
sports  and  playground  facilities  opened  in  four  municipalities)  while  other  projects  (e.g.  on 
sustainable resettlement and reintegration of Roma, Ashkali and Egyptian communities) were 
launched by the end of the reporting period.  

75% of IPA 2007 and 45% of IPA 2008 were contracted by the year end in Montenegro (47 
contracts  were  concluded)  and  tenders  for  the  remaining  funds  were  ongoing.  There  were 
various relevant projects under implementation in 2009 under IPA 2007, in fields such as anti-
corruption/organised  crime  and  justice  reform  (twinning),  policy  and  institutional  reform  in 
education  and  training  (an  institution  building  project),  the  transport  sector  (works  and 
technical assistance and detailed design). Other relevant IPA 2007 funded actions for which 
implementation  started  in  2009  related  to  acquis  approximation  in  various  fields.  A  call  for 
proposals under a large civil society project (IPA 2007) was launched in March 2009, leading 
to  8  projects  starting  activities  (on  Roma  issues;  social  care  for  the  elderly;  social  policy  at 
national  and  local  level;  tourism  development;  traditional  architecture).  More  projects  were 
implementated under IPA 2008, on durable solutions for refugees and displaced persons and 
support  to  the  transformation  of  radio  television  into  a  public  service  broadcaster.  TAIEX 
activity was also strong in Montenegro in 2009, as well as SIGMA activities and twinning (6 
of them were under implementation in 2009).  

In Serbia, activity under component I was intense, with 190 contracts signed under IPA 2007, 
2008  and  2009  Part  I  and  tenders  prepared  under  IPA  2008  and  2009,  while  there  was  no 
contracting under Part II of IPA 2009 national programme, as the related financing agreement 
was not signed. By the year end, 63% of IPA 2007, 24% of IPA 2008 and 57% of IPA 2009 
were  contracted,  the  last  figure  due  to  budget  support.  Activities  in  various  sectors  (health, 
municipal  support,  statistics)  started  or  continued  and  in  some  cases  started  to  deliver  their 
expected outputs/outcomes (e.g. equipments and training delivered, laws and by-laws drafted 
or  amended,  awareness  raised  through  conferences  and  workshops,  courses  developed). 
Activities  in  other  areas  (energy,  regional  socio-economic  development,  refugees  and 
internally  displaced  persons,  education)  were  at  inception  and  results  were  not  yet  visible. 
Operating  grants  were  awarded  to  regional  development  agencies  as  well  as  to  agencies 
supporting  integration  of  refugees  and  internally  displaced  persons.  Implementation  of 
environment-related  projects  progressed,  with  various  contracts  signed  during  the  year, 
including  twinning  and  design,  master  plan,  strategy  and  information  technology-system 
development  services.  Various  calls  for  proposals  for  twinning  projects  were  launched  in 
sectors  such  as  environment,  agriculture  and  rural  development,  justice  and  home  affairs, 
public finance and transport, and three were approved. It remains to be seen if the improved 
absorption  capacity  of  the  Serbian  government  will  be  sufficient  to  handle  all  ongoing 
activities,  but  positive  developments  were  visible  in  terms  of  twinning  coordination.  2009 
witnessed  also  a  substantial  increase  in  requests  for  TAIEX  activities  and  an  increased 
participation to the events organised.  

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Multi-beneficiary 

IPA implementation advanced rapidly in 2009 under the IPA Multi-Beneficiary programmes, 
with contracting rates standing at 79% of IPA 2007 allocations, 85% of IPA 2008 allocations 
and 53% of IPA 2009  allocations by the year  end.  Implementation  of  2008  and  2009  funds 
related to the Crisis Response Package and Municipal Investments was fast-tracked in order to 
help  IPA  beneficiaries  mitigate  the  impact  of  the  economic  crisis.  Highlights  of  Multi-
Beneficiary initiatives in 2009 include the following:  

– 

– 

– 

– 

– 

The  Regional  Cooperation  Council  (RCC),  which  became  fully  operational  and  is 
working towards fulfilling its strategic role to promote regional co-operation on the 
basis  of  a  strategic  programme  for  2011-2013  prepared  in  2009  with  Commission 
support.  The  RCC  was  also  involved  in  programming  of  Multi-beneficiary 
assistance,  to  ensure  that  regional  priorities  and  needs  were  addressed.  Financial 
support of its activities in the future was under discussion in 2009; 

The  Regional  School  for  Public  Administration  (ReSPA),  established  in  May  2009 
and  aimed  at  boosting  regional  cooperation  in  Public  Administration  reform, 
strengthen administrative capacity and develop human resources. By the end of 2009, 
four out of seven founding members had ratified the international agreement for its 
establishment  in  Montenegro  (it  shall  enter  into  force  upon  a  fifth  ratification). 
ReSPA  has  worked  as  a  virtual  school  so  far  (via  the  OECD  first  and  then  via  the 
European institute of Public Administration) and by the end of the reporting period it 
had  reached  cruise  speed,  providing  2500  participant  days  of  training  on  an  annual 
basis. As a spill-over effect, this initiative directly leveraged local development in the 
town where ReSPA is located (Danilovgrad); 

Fight  against  organized  crime:  two  projects  are  worth  highlighting,  on  1)  judicial 
cooperation (support to the prosecutor’s network), with an upgraded memorandum of 
understanding broadening the scope of cooperation by including also other forms of 
serious crime and 2) on police cooperation in the fight against illicit drug trafficking 
and  prevention  of  terrorism  (a  grant  contract  was  signed  for  fostering  police 
cooperation  in  the  region  and  strengthen  established  law  enforcement  coordination 
units, also assessing the requirements for setting up coordination units in Kosovo and 
Turkey); 

The  Civil  Society  Facility  (CSF):  a  single  facility  for  the  benefit  of  all  IPA 
beneficiaries,  to  strengthen  civil  society  organisations  (CSOs)  and  their  role  in  the 
local  capacity  for  civic  mobilisation,  encourage 
political  process,  enhance 
networking  and  promoting  cooperation  and  transfer  of  know-how.  A  technical 
assistance  office  (TASCO)  was  established  in  mid  2009  for  training  and  advice  to 
local  organisations,  needs  assessments,  analysis  of  local  legal  and  financial 
environment,  as  well  as  support  to  identification  and  selection  of  projects  at  local 
level. Local advisory groups were established to discuss needs and strategic issues. 
The CSF supported also people-to-people events, with high participation from CSO 
representatives  and  very  positive  feed-back  on  the  usefulness  of  such  events  for 
understanding EU policies and programmes as well as for networking; 

The  Western  Balkans  Investment  Framework  (WBIF):  officially  launched  in 
December  2009,  ensures  a  coordinated  cooperation  among  IFIs  (EIB,  EBRD,  CEB 
and others) against a background of high investment needs in the region and scarce 

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resources  available.  The  WBIF  provides  a  single  entry  point  for  the  region  for 
funding  requests  in  support  of  infrastructure  investments,  where  IPA  funds  are 
pooled  with  other  IFI  funds.  Benefits  include  increased  ownership  by  beneficiaries 
and  better  alignment  with  national/regional  priorities,  donor  coordination  and 
leveraging of grants with IFI loans.  

In addition, in 2009 there was general progress under other regional and horizontal activities 
addressing the political, economic and European standards axes of IPA component I, namely 
in the fields of refugee  return,  social inclusion, social security  coordination, participation in 
the  Union  for  the  Mediterranean,  public  administration,  justice,  freedom  and  security,  civil 
society  development  and  dialogue,  IFI  cooperation  and  competitiveness  in  support  of 
infrastructure  investments,  energy  efficiency  and  private  investments,  competitiveness  and 
trade, education, youth, quality infrastructure, industrial and intellectual property rights, food 
safety,  veterinary  and  phyto-sanitary  policy,  energy,  customs  and  taxation,  statistics,  the 
environment (including climate change) and nuclear safety and radiation protection.  

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2.2.2.2.  Component II 

Table  3:  Global  Overview  of  IPA  2007-2009  Component  II  amounts  committed, 
contracted and paid as at 31 December 2009 per beneficiary, in million EUR  

IPA beneficiaries 
Albania 
Bosnia and Herzegovina 
Croatia 
former Yugoslav Republic 
of Macedonia 
Kosovo 

Montenegro 

Serbia 

Turkey 

Candidate countries 

Committed Contracted  %Contracted 
2.71%
2.76%
1.09%

25.09
14.12
40.32

0.68
0.39
0.44

12.61

-

13.07

31.91

8.02

0.13

-

0.58

1.84

0.06

1.03%

-

4.44%

5.77%

0.69%

Paid  %Paid 
2.47%
2.20%
0.45%
0.00%

0.62 
0.31 
0.18 

0.00 

- 

0.25 

0.88 

0.04 

-

1.91%

2.76%

0.55%

Contracting  activity  in  Croatia  in  2009  was  also  limited  under  component  II  of  IPA  2007 
(5%).  Grant  award  procedures  started  for  all  programmes,  but  for  most  of  them  contracting 
did not take place by the end of the reporting period.  

Implementation activity under this component also started in 2009 in the former  Yugoslav 
Republic of Macedonia, with the first call launched in August for the CBC programme with 
Albania.  The  financing  agreements  for  the  2008  CBC  programmes  with  Albania  and  with 
Greece were signed in December 2009, opening the way for launching calls combining 2007 
and 2008 funds in 2010. No contracts were signed yet though under those two programmes. 
Only two contracts were signed under the CBC programme for South-East Europe. By the end 
of  the  reporting  period,  30%  of  the  European  Regional  Development  Fund  (ERDF) 
Programme allocations under IPA 2007 were contracted.  

In  Turkey  2009  saw  the  start  of  grant  award  procedures  under  this  component  (European 
Neighbourhood  Policy  Instrument  (ENPI) Black-sea Basin programme  and Bulgaria-Turkey 
cross-border cooperation programme), although somehow delayed by lengthy administrative 
procedures  on  the  Turkish  side  of  the  Bulgaria-Turkey  CBC.  The  situation  is  however 
expected to improve following changes at the level of the responsible management structures.  

Potential Candidates  

Under  component  II,  implementation  of  cross-border  activities  started  also  in  Albania  in 
2009, with the first calls for proposals under the intra-Western Balkans programmes (Albania-
Montenegro  and  Albania-the  former  Yugoslav  Republic  of  Macedonia)  published  in  the 
summer  (over  a  year  after  the  first  financing  agreements  had  been  signed)  and  closed  in 
September/October. Selection is to be completed in 2010, when it is expected to contract the 
whole 2010 allocation. In 2009 there was preparatory work also for a call for proposals for the 
Programme with Greece, to be launched in 2010. Three contracts with Albanian beneficiaries 
were signed under the ERDF South-East Europe transnational programme. 26% of IPA 2007 
component II allocations were contracted by the year end. 

Implementation  under  this  component  continued  in  2009  in  Bosnia  and  Herzegovina,  with 
the  first  calls  under  IPA  2007  and  IPA  2008  intra-Western  Balkans  programmes  being 

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launched  in  the  summer,  after  the  management  structures  were  set  up,  about  one  year  after 
signature  of  the  first  financing  agreements.  Project  selection  should  be  concluded  in  the 
course of 2010, when the entire 2007 and 2008 appropriations should be contracted. Calls for 
proposals  were  launched  also  under  programmes  at  borders  with  Member  States,  also  to  be 
concluded in 2010. Contracts were signed under the ERDF transnational programme ‘South-
East Europe’, absorbing all IPA 2007 funds, and calls were launched under the Mediterranean 
programme. 

As in previous years, in Kosovo, there was no cross-border-projects related activity in 2009, 
due to the necessary conditions not being in place yet.  

In Montenegro, four calls for proposals were launched in 2009 under this component, three 
of which covering 2007 and 2008 IPA funds, to be completed in 2010.  

In Serbia, the first calls for proposals were launched in 2009 covering 2007, 2008 and 2009 
allocations for all cross border programmes with neighbours. Contracting is to take place in 
2010,  except  for  the  ERDF  South-East  Europe  Programme,  under  which  17  contracts  were 
signed in the last quarter of 2009 and a second call for proposal was launched in November. 

Generally, there was higher participation than expected to the calls in both candidate countries 
and  potential  candidates,  particularly  under  the  intra-Western  Balkans  programmes, 
witnessing  how  cross-border  programmes  are  seen  as  offering  an  opportunity  for 
reconciliation and good neighbourly relations, as well as for local capacity-building.  

2.2.2.3.  Component III 

Table  4:  Global  Overview  of  IPA  2007-2009  Component  III  amounts  committed, 
contracted and paid as at 31 December 2009 per beneficiary, in million EUR  

IPA beneficiaries 
Croatia 
former Yugoslav Republic of Macedonia 

Turkey 

Committed 
142.35
40.50

524.00

Paid 

%Paid 

42.80 
12.15 

157.20 

30.07%
30.00%

30.00%

Implementation  activity  in  Croatia  also  started  in  2009  under  Component  III,  mainly 
concentrated on the appraisal and approval of projects and starting of tendering activity, while 
contracting  remained  low,  due  to  lengthy  and  complex  tender  procedures  for  infrastructure 
programmes. About 30% of the allocations under this component were paid out by the end of 
the reporting period.  

Implementation  under  this  component  -  mainly  projects  preparation  -  could  start  in  the 
former  Yugoslav  Republic  of  Macedonia  only  in  the  second  half  of  the  reporting  period, 
following conferral of management powers and signing of the financing agreement.  

Following  the  signature  of  financing  agreements  for  the  three  operational  programmes  in 
September  and  November  2009,  IPA  implementation  in  Turkey  could  start  also  under 
component  III,  with  a  call  for  applications  registering  a  much  wider  interest  than  expected 
(applications  under  the  regional  competitiveness  operational  programme  totalling  over  17 
times  the  available  funds).  Contracting  was  still  limited  by  the  end  of  the  reporting  period. 
Towards the end of 2009 the Commission approved two major infrastructure projects, under 
the transport and environment operational programmes, for which implementation just started 

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in one case only. Delays in preparation and publication of tender documents were a cause of 
concern.  

2.2.2.4.  Component IV 

Table  5:  Global  Overview  of  IPA  2007-2009  Component  IV  amounts  committed, 
contracted and paid as at 31 December 2009 per beneficiary, in million EUR  

IPA beneficiaries 
Croatia 
former Yugoslav Republic of Macedonia 

Turkey 

Committed 
38.28
16.30

158.70

Paid 

%Paid 

12.7 
4.89 

47.61 

33.18%
30.00%

30.00%

In 2009, IPA implementation started in Croatia under component IV with the launching of 8 
grant schemes, following the entering into force of the financing agreement in March. By the 
end of the year about 33% of commitments under this component had been paid.  

In  the  former  Yugoslav  Republic  of  Macedonia,  conferral  of  management  powers  under 
this  component  was  given  in  October  2009,  followed  by  the  signing  of  the  financing 
agreement  in  November  and  the  pre-financing  payment  in  December.  Implementation  was 
still moving very slowly, causing serious risks that funds might need to be de-committed in 
2011. Approval of the operating structures was an issue in 2009, a situation that improved in 
2010  but  with  approval  of  two  relevant  structures  (out  of  15)  still  remaining  pending  and 
raising concerns, given the absence of a clear perspective for them.  

Five calls for proposals were launched in 2009 in Turkey under the operational programme 
under  this  component,  in  relevant  human  resources  development  fields  such  as  girls 
education. Participation was altogether very successful, to the point of posing a challenge to 
the Turkish authorities for the smooth management of the evaluation process. There were no 
contracts signed by the end of 2009.  

2.2.2.5.  Component V 

Table  6:  Global  Overview  of  IPA  2007-2009  Component  V  amounts  committed, 
contracted and paid as at 31 December 2009 per beneficiary, in million EUR  

IPA beneficiaries 
Croatia 
former Yugoslav Republic of Macedonia 

Turkey 

Committed 
76.90
19.00

159.20

Paid 

%Paid 

0.00 
0.00 

0.00 

0.00%
0.00%

0.00%

There  was  no  implementation  activity  in  2009  in  Croatia  under  Component  V  for  the  two 
measures  that  have  been  accredited,  while  activity  centred  on  the  accreditation  of  the 
remaining  measures.  The  preparation  of  public  procurement  rules  registered  some  progress, 
but delays in implementation were still persisting by the end of the reporting period, putting at 
risk  2007  and  2008  funds.  Therefore  efforts  were  concentrated  on  conferral  of  management 
and calls for applications. There were no disbursements under this Component.  

Also in the former Yugoslav Republic of Macedonia, final preparations were made in 2009 
for  implementing  Component  V,  but  there  was  no  tendering  or  contracting  activity.  The 
management  and  control  system  for  this  component  was  finally  set  up  and  conferral  of 

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management powers was granted in December. Implementation started  for three  out of  four 
measures  under  the  programme.  The  multiannual  financing  agreement  was  finalised  and 
entered into force.  

There  was  no  implementation  under  this  component  in  Turkey  in  2009,  due  to  delays  in 
national accreditation of the necessary structures. The Commission continued to support the 
process by providing capacity building assistance.  

3. 

EVALUATION RESULTS 

The  main  objective  of  evaluation  is  to  support  decision-making  in  the  planning  and 
implementation  of  pre-accession  assistance  and  in the  formulation  of  policies  and  strategies 
by assessing  the performance of the financial support in achieving  pre-accession objectives. 
Evaluation  mainly  focuses  on  a  level  higher  than  projects  (sectors,  programmes,  strategic 
objectives,  etc).  Evaluation  also  provides  the  Commission  with  an  assessment  of  actions 
according  to  their  results,  impacts  and  the  needs  they  aim  to  satisfy,  and  provides 
accountability with respect to value for money and the use of pre-accession funds. In addition, 
support  is  given  to  the  development  of  local  evaluation  capacity  as  a  means  to  strengthen 
beneficiaries’ capacity to manage and control pre-accession aid. 

In  2009  sector,  thematic  and  ad-hoc  evaluations  were  completed  as  part  of  the  Interim 
Evaluation  (IE)  scheme  in  Turkey  and  Croatia.  These  evaluations  mainly  covered  the  pre-
accession financial instrument (Turkey) and PHARE and CARDS (Croatia). During 2009, the 
IE  was  replaced  by  a  new  interim  evaluation  tool  at  programme  level  (Country  Program 
Interim Evaluation - CPiE) covering both IPA and pre-IPA assistance in the three candidates 
countries.  The  CPiE  is  more  focussed  on  programme  level  approaches,  compared  to  the 
previous sector level approach, but it continues to serve as a management tool for programme 
managers namely by providing inputs for decision-making. The CPiE is also conceived as an 
instrument to provide relevant and timely capacity-building to IPA beneficiaries to help them 
meet  the  IPA  Implementing  Regulation  requirement  that  beneficiaries  should  take 
responsibility  of  interim  evaluations  under  IPA  Component  I  after  the  conferral  of 
management.  

For Croatia, the CPiE5 was already completed by the end of the reporting period. For Turkey6 
and the former Yugoslav Republic of Macedonia7, the CPiE will be completed during 2010. 
The  CPiE  Croatia  reviewed  a  series  of  horizontal  issues  concerning  the  programming, 
management, monitoring and evaluation of assistance and analyzed the relevance, efficiency, 
effectiveness, impact and sustainability of initiatives funded under the PHARE 2005 and 2006 
and IPA 2007 and 2008 programs. The main findings, clearly positive on a number of aspects 
while also pointing to room for improvement on others, were the following: 

– 

5 

6 

7 

Intervention logic: The assessment of the intervention logic showed good alignment 
between  national  programmes  and  the  MIPDs,  while  there  was  room  for 

2009  Country  Program  Interim  Evaluation  on  Pre-accession  Assistance  to  Croatia;  Contract  No 
IPA/2009/215-223 
2009 Country Programme Interim Evaluation of EU Pre-accession Assistance to Turkey; Contract No. 
IPA/2009/218-310 
2009 Country Programme Interim Evaluation of EU Pre-accession Assistance to the former Yugoslav 
Republic of Macedonia; Contract No. IPA/2009/224-311 

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– 

– 

– 

– 

improvement  at  the  project  level,  particularly  regarding  the  definition  of  objectives 
and indicators; 

Management  of  Assistance:  The  programming  mechanism  has  shown  signs  of 
improvement over time, but a more stringent screening of project proposals could be 
introduced, based on more substantive and less formal aspects. At the level of project 
implementation,  significant 
tendering  and 
contracting  process  and  the  ‘implementability’  of  projects  also  showed  signs  of 
improvement; 

improvements  were  made 

the 

in 

Monitoring: The monitoring system was functioning fairly smoothly, but the existing 
configuration  of  Sectoral  Monitoring  Sub-Committees  (SMSC)  (which  were 
originally  set  up  in  2006  to  ensure  the  monitoring  of  CARDS  and  PHARE 
decentralised  assistance)  needed  to  be  re-aligned  with  the  priorities  of  IPA 
assistance,  as  the  latter  was  structured  differently  from  PHARE  and  followed 
different  priorities.  This  resulted  in  an  unbalanced  distribution  of  workload  among 
the committees. Also, the low participation levels of high-ranking officials in SMSC 
meetings  limited  their  potential  as  a  tool  for  decision-making.  There  was  also 
significant  room  to  improve the  content  and  quality  of  monitoring  reports  prepared 
by the Croatian administration; 

Evaluation:  While  the  level  of  addressees'  endorsement  of  the  recommendations 
from European Commission evaluations has been quite satisfactory, the mechanism 
to follow up on their implementation needed to be improved.  

Performance  of  assistance:  The  vast  majority  of  projects  showed  a  high  degree  of 
relevance,  in  that  they  were  well-aligned  with  the  multiple  needs  of  accession. 
Effectiveness  and  prospects  for  impact  were  in  general  positive  in  areas  related  to 
specific  acquis  requirements  while  results  varied  in  areas  related  to  administrative 
capacity  and  public  administration.  Prospects  for  the  sustainability  of  results  were 
mixed.  The  main  issue  related  to  the  inadequate  staffing  of  beneficiary  institutions 
and  especially  to  the  difficulties  in  the  retention  of  personnel,  as  many  institutions 
experienced a constant outflow of qualified staff, often trained with EU assistance.  

On a less positive note, an evaluation on Public Administration Reform (PAR) in ‘Croatia and 
beyond’8, delivered in 2009, found insufficient political commitment and ownership, together 
with  a  weak  strategic  approach,  to  have  undermined  a  wider  impact  and  sustainability  in 
Croatia.  Beyond  Croatia,  the  report  also  found  that  a  lack  of  explicit  strategy  and 
methodology for handling political criteria issues (including PAR) meant candidates were not 
clear on their obligations in this respect.  

A  further  evaluation  on  the  intervention  logic  for  programming  pre-accession  assistance  to 
Turkey  under  IPA  was  also  completed  in  20099.  The  evaluation  concluded  that  IPA 
programming  was  predominantly  focused  at  the  project  level.  While  most  projects  were 

8 

9 

“Supporting  Public  Administration  Reform  in  Croatia  and  beyond",  Thematic  Report  No.  R/ZZ/ 
PAR/0811 
“Ad  Hoc  Evaluation  of  the  European  Commission’s  Intervention  Logic  for  Financial  Assistance  in 
Candidate  Countries  and  Key  Lessons  for  MIPD  2010-2012  Revision  -  a  Case  Study  –  Turkey”. 
Thematic Report as part of Interim Evaluation of the EU pre-accession programmes in Croatia and in 
Turkey and Central Office Activities, Contract no. PHARE/2007/142-454 

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relevant  to  accession,  a  comprehensive  multi-annual  programming  was  not  in  place.  The 
three-year MIPD was a first step in the direction of establishing a more strategic programming 
framework – but it still did not provide a comprehensive framework for covering all accession 
needs in time for accession and to allow for efficient project selection and sequencing. 

Beneficiaries concerned addressed the findings and recommendations from the evaluations in 
2009  and  continued  to  do  so  in  2010.  For  its  part,  the  Commission  intensified  its  regular 
monitoring of progress in the actions undertaken by the beneficiaries to address the findings 
of  evaluations.  In  light  of  recommendations  of  the  2009  IPA  conference  and  the  December 
2009  Council  conclusions  on  IPA,  the  Commission  also  set  out  to  improve  further  the 
intervention logic of IPA assistance in a number of ways that are already under way in 2010, 
namely: 

- 

- 

- 

- 

- 

- 

- 

the structure and content of MIPDs are being reviewed, to provide a more strategic 
multiannual  programming  framework  linking  more  clearly  financial  assistance  to 
political priorities and to help further IPA beneficiaries meet the accession criteria, as 
well as allowing for more efficient project selection and sequencing; 

programming  is  being  complemented  with  a  more  sectoral  approach  where 
appropriate,  with  sector  strategies  aiming  at  improving  further  both  ownership  and 
impact;  

future  projects  will  have  clearer  objectives  and  indicators  that  will  result  in  an 
improved intervention; 

the use of clearly defined conditions will be strengthened when necessary to provide 
stronger assurance that beneficiaries implement commitments necessary for financial 
assistance to achieve results and impacts; 

monitoring  systems  will  be  further  improved  together  with  authorities  in  the 
beneficiaries,  to  increase  further  the  focus  on  results  and  impact  of  projects  under 
implementation; 

further  action  will  be  taken  to  address  outstanding  recommendations  to  strengthen 
the  management  and  control  systems  for  decentralised  implementation  that  will 
improve the supervision and control of funds; 

additional  specific  audits,  evaluations  and  close  monitoring  will  ensure  that 
improvements  are  effective  and  further  adjustments  to  the  system  are  made  if 
necessary. 

4. 

DONOR  COORDINATION  WITH  MEMBER  STATES  AND  BILATERAL 
DONORS 

As mentioned above, high-level conferences related to pre-accession assistance were held in 
Tirana  in  April  2009  and  in  Brussels  in  October  2009  on  the  subject  of  donor  coordination 
and  effective  support  for  enlargement.  At  these  conferences,  the  Commission  and  Member 
States, together with IFIs and non-EU donors, agreed to pursue enhanced donor coordination 
and  more  effective  management  of  funds  in  line  with  the  spirit  and  principles  of  the  Paris 
Declaration on aid effectiveness, the Accra Agenda for Action and the EU Code of Conduct 
on Division of Labor. Given that the major part of aid to the region comes from the European 

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Union  and  a  limited  number  of  bi-lateral  donors,  with  many  other  donors  providing  only  a 
very small amount of funding to a single beneficiary, it was agreed that complementarity and 
division of labor between donors should be substantially enhanced. 

The  conclusions  of  these  conferences  encouraged  the  EU  and  donors  inter  alia  to  fully 
support  beneficiary’s  ownership  of  donor  coordination  and  to  work  towards  a  sector-based 
approach, with the following aims: to help improve the effectiveness and impact of IPA and 
other donor funds; to organise joint training on aid effectiveness and methods of cooperation; 
to include aid effectiveness in their own management objectives and reporting systems; and to 
ensure  adaptability  and  predictability  of  aid.  Beneficiaries  were  encouraged  to  strengthen 
donor  coordination  structures,  ensure  coherent  use  of  external  assistance  and  internal 
budgetary  resources  and  make  further  progress  in  establishing  the  structures  and  the 
ownership necessary for ensuring effective decentralised management of IPA.  

In general, during 2009 consultation mechanisms for  discussion of  IPA strategic documents 
(such  as  the  MIPD)  and  programming  documents  (such  as  project  lists  and  national 
programmes) have been strengthened, to include Member States, other donors, local offices of 
IFIs  and  in  some  cases  civil  society  representatives.  Coordination,  coherence  and 
complementarity was ensured to a large extent by such meetings to exchange on the planning, 
programming  and  implementation  of  assistance.  In  many  cases,  there  was  increasing 
leadership by the beneficiary, for example in Albania where one Government Department was 
responsible for national, sectoral and crosscutting development strategy coordination as well 
as  for  donor  coordination.  However  there  is  still  work  to  do  on  supporting  beneficiaries  to 
take  a  stronger  lead  on  donor  coordination.  Equally  important  is  the  need  to  increase  the 
capacity of donor coordination to achieve more practical outcomes and improvements in aid 
effectiveness. Coordination meetings need to become more geared to agree on operational and 
practical steps in support of programming for results, on the implementation of decisions on 
division  of  labor  and  on  support  for  beneficiaries  to  develop  sector  strategies  and  have  in 
place the building blocks of a sector approach.    

In  Kosovo,  progress  was  made  on  developing  an  Aid  Management  Platform  to  ease  the 
sharing  of  information  on  ongoing  and  planned  projects  across  the  donor  community.  The 
Governments of the Former Yugoslav Republic of Macedonia and Serbia also collated data on 
donor-funded  projects.  Albania  and  Bosnia  Herzegovina  produced  donor-mapping  reports. 
Donor-mapping  reports  are  particularly  useful,  given  that  over  2009  the  donor  landscape 
began to show signs of change in the Western Balkans and Turkey. Due to pressures at home 
because of  the  financial crisis, there have  been shifts in  donor presence. Some  EU Member 
States announced plans to scale down bilateral programmes or to withdraw, particularly from 
candidate  countries.  While  information  sharing  on  donor  resources  and  medium  term  donor 
presence has occurred, more efforts are needed to assist beneficiaries with planning medium 
term expenditure frameworks and to assist donors in planing more coherent programmes. A 
clear  appreciation  of  the  medium-term  plans  of  all  donors  (including  China  and  Russia  in 
some cases) will be important for delivering on the EU Code of Conduct on Division of Labor 
and for supporting sector approaches. China and Russia initiated some significant investments 
and soft loans in the region in support, for example, of the energy and transport sectors. These 
investments will need to be taken into account alongside those of the IFIs, especially the EIB 
and the EBRD. 

There have been some notable advances made in the context of division of labor in Albania 
and  on  sector  or  programme  based  approaches  in  the  former  Yugoslav  Republic  of 
Macedonia. Both countries were selected for the implementation of Fast Track Initiative (FTI) 

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Division of Labor, which is designed to foster the implementation of the EU Code of Conduct 
on Complementarity and the Division of Labour in Development Policy. The EU Operational 
Framework  on  Aid  Effectiveness  (November  2009)  aimed  to  achieve  better  development 
results through more effective collaboration on the ground, less overlap and lower transaction 
costs. The Government of Albania's Department of Strategy and Donor coordination (DSDC) 
has  led  on  FTI  Division  of  Labor,  which  is  embedded  in  Albania's  National  Harmonisation 
Action  Plan  and  which  has  added  value  to  other  existing  coordination  mechanisms. 
Throughout 2009 a joint analysis was carried out so as to agree a common definition on roles 
and responsibilities of lead donors, and to begin the task of allocating donors lead in specific 
sectors.  

The  Former  Yugoslav  Republic  of  Macedonia  developed  plans  and  a  methodology  for  the 
programme  based  approach  with  strong  support  from  the  World  Bank  and  the  EU,  and 
fledgling  sector  working  groups  in  Serbia  have  also  begun  to  demonstrate  that  effective 
coordination can deliver results.  

However,  efficiency  and  effectiveness  gains  from  donor  coordination  structures  which  are 
capable  of  implementing  development  effectiveness  principles  should  be  better  tracked  by 
both the beneficiaries and donors.  FFuurrtthheerr  eeffffoorrttss  sshhoouulldd  ssttiillll  bbee  mmaaddee  bbyy  aallll  ddoonnoorrss  to reduce 
duplication  and  transaction  costs,  e.g.  through  joint  analytical  work;  improvement  in  and 
shared  use  of  beneficiary  monitoring  and  evaluation  mechanisms;  improved  beneficiary 
capacity to develop sector policy and to implement sector strategies.  

5. 

CO-ORDINATION WITH IFIS  

The  Commission  is  committed  to  closer  coordination  with  European  and  International 
Financial Institutions (IFIs) supporting modernisation and socio-economic development in the 
Western Balkans. Closer coordination with IFIs is pursued at the policy/institutional level as 
well as at the level of financing. 

(IFIAG)  consists  of 
The  International  Financial  Institutions  Advisory  Group 
representatives  from  the  Commission,  the  World  Bank  Group  (IBRD/IFC),  the  European 
Bank  for  Reconstruction  and  Development  (EBRD),  the  European  Investment  Bank  (EIB), 
the Council of Europe Development Bank (CEB), the Regional Cooperation Council (RCC), 
the Nordic Investment Bank, the Nordic Environment Finance Corporation and the Black Sea 
Trade and Development Bank. The IFIAG held a plenary session in January 2009 to discuss 
remedial actions for the Western Balkans and Turkey in light of the financial and economic 
crisis. Participants agreed that the IFIAG should continue to closely cooperate in monitoring 
the  economic  and  financial  situation  in  the  region  and  coordinate  adequate  responses  to  the 
crisis.  

In 2009, the Commission worked closely with the European Central Bank and the IFIs to set 
up  a  Crisis  Response  Package  of  EUR  160  million  funded  under  IPA  2009.  EU  grants 
combined with IFI loans under the package to accelerate the implementation of highly needed 
municipal infrastructure investments and energy saving investments. 

The need to follow up at beneficiary and sector level was recognised. The Commission set up 
a  regional  project  in  joint  management  with  the  European  Central  Bank  as  part  of  a  larger 
package aimed as a response to the financial crisis. Support for the supervision of the regional 
banking  sector  (micro  and  macro-prudential)  was  set  up  to  strengthen  capacity  and 
cooperation  between  the  national  central  banks  of  the  Western  Balkans  and  Turkey  and  14 

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national  central  banks  of  the  Eurosystem.  This  project  will,  for  two  years,  coordinate  the 
contribution  of  the  major  international  financial  actors  such  as  the  Basel  Committee  of 
Banking  Supervisors,  the  Ljubljana  Centre  for  Excellence  in  Finance,  the  Joint  Vienna 
Institute, the International Monetary Fund and the World Bank. As of 2009, the secretariat of 
the IFIs Advisory Group was taken over by the Commission following the closure of the Joint 
European Commission -World Bank Office in Brussels. 

The  Commission  also  co-operated  with  the  OECD  Investment  Compact  for  South  East 
Europe  for  measures  to  increase  the  competitiveness  of  the  economies  in  the  context  of  the 
Crisis Response Package as from the autumn 2009. 

In  December  2009,  the  Commission,  the  EIB,  the  EBRD  and  the  CEB  established  the 
Western  Balkans  Investment  Framework  (WBIF)  to  further  enhance  harmonisation  and 
cooperation  in  financing  of  investments  for  socio-economic  development  in  the  region.  The 
WBIF  comprises  two  instruments:  a  Joint  Lending  Facility  (JLF)  and  a  Joint  Grant  Facility 
(JGF).  The  JLF  brings  together  in  a  common  pipeline  for  priority  investments  joint  lending 
from the EBRD and EIB (indicatively totalling 1 billion EUR) as well as from CEB and other 
bilateral financial institutions of Member States that are contributing to the European Western 
Balkans  Joint  Fund  (EWBJF).  The  JGF  pools  grant  funds  from  the  EU  (IPA  budget),  the 
participating  partner  IFIs  (CEB,  EIB,  EBRD)  and  the  EWBJF,  to  which  contributions  from 
Member States and other potential donors may be made.  

Examples  of  enhanced  cooperation  include:  the  improved  visibility  over  IFI's  project 
preparation  pipelines;  joint  efforts  to  harmonize  IFI  investment  priorities  with  the  EU 
accession priorities by sector; improved representation of the IPA beneficiaries in the project 
selection  process;  streamlining  of  preparation  and  implementation  concentrating  on  projects 
requiring IFI support, and participation of member states with bilateral grants. 

Significant  efforts  were  also  made  during  2009  to  continue  the  implementation  of  the  three 
strands of cooperation with IFIs: private sector  development  and micro, small and  medium-
sized enterprises (SMEs), energy efficiency and infrastructure.  

– 

Strand I - Private sector development: on the supply side, EU assistance to promote 
access to finance for micro and small-sized enterprises is mainly channelled through 
the European Fund for South East Europe (EFSE), which consolidated the previous 
micro-credit  schemes  throughout  the  region  into  one  single  instrument.  EFSE 
provides for long term sustainability and leveraging of funds by offering risk cover to 
attract  private  capital  to  invest  in  micro-lending.  EFSE  has  been  rolled  out 
successfully. By December 2009, the Commission subscription to EFSE, through the 
European Investment Fund (EIF), amounted to EUR 96.4 million and the total value 
of  the  portfolio  was  increased  to  EUR  579  million.  The  outstanding  sub-loan 
portfolio amounted to EUR 450 million spread across 115,600 sub-borrowers. Total 
disbursements since the EFSE's inception reached 216,000 loans amounting to EUR 
1.1 billion. 

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– 

Strand  II  –  Energy  efficiency:  this  strand  aims  at  promoting  investments  in  energy 
efficiency  and  renewable  energy  in  small and  medium  enterprises,  housing  and  the 
public  sector  by  capitalising  on  actions  supported  by  the  national  programmes, 
including increasing public awareness regarding energy efficiency and the potential 
for energy savings, implementing legislation with regards to the Directives on energy 
performance  of  buildings10  and  on  the  energy  end-use  efficiency  and  energy 
services11  (including  renewable  energy).  The  promotion  of  energy  efficiency 
investments meets the recommendation of the European Commission Green Paper on 
Energy  Efficiency12,  encouraging  IFIs  to  provide  long-term  funding  to  finance 
energy efficiency investments. In the building and industry sectors, further support to 
financial  intermediaries  and  end-borrowers  was  provided  under  the  Energy 
Efficiency Finance  Facility by  offering opportunities for higher  energy  savings and 
reduction  of  CO2  emissions.  In  addition,  as  part  of  the  2009  Crisis  Response 
Package,  the  European  Commission  undertook  its  participation  in  the  Southeast 
Europe Energy Efficiency Fund, a public-private partnership initiated by the EIB and 
Kreditanstalt  für  Wiederaufbau  (KfW)  and  involving  IFIs,  donors  and  private 
investors.  The  Fund  will  provide  investments  in  energy  efficiency  and  renewable 
energy  through  dedicated  financial  support  and  technical  assistance  to  businesses, 
energy services companies, households, municipalities and other public institutions. 
In 2009, the Facility has supported two local banks in Bosnia and Herzegovina and 
Serbia  with  the  development  of  their  investment  portfolio  in  the  field  of  energy 
efficiency  and  renewable  energies.  These  projects  were  extended  an  EBRD  total 
financing  of  EUR  20  million  combined  with  EUR  4.6  million  of  EU  grant  as 

10 
11 
12 

Directive 2002/91/EC of the European Parliament and of the Council of 16 December 2002 
Directive 2006/32/EC of the European Parliament and of the Council of 5 April 2006 
COM(2005) 265 final of 22 June 2005 

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– 

investment  incentives  to  end-borrowers  and  administration  fees  to  the  participating 
bank. 

Strand  III  –  Promotion  of  infrastructure  investments:  adequate  infrastructure 
networks  and  services  in  the  transport,  energy,  environment  and  social  sectors  are 
crucial in ensuring sustained socio-economic development and stability in the region. 
Among the key factors hindering improvements in infrastructure are: inefficient use 
of financial resources; lack of beneficiaries' experience in project preparation for IFIs 
and  other  donors'  funding;  or  funding  gaps  hampering  projects'  bankability.  This 
strand  included  the  setting  up  of  a  multi-sector,  multi-beneficiary  Infrastructure 
Projects  Facility  (IPF).  The  IPF  supports  institutions  at  the  national,  regional  and 
municipal  levels  to  prepare  and  implement  infrastructure  investment  projects 
financed by IFIs and/or other donors. The aim of the mechanism is to pool funds to 
enable  project  implementation.  The  IPF  is  providing  expert  technical  assistance 
services  for  the  execution  of  projects  such  as  pre-feasibility  studies,  feasibility 
studies,  preliminary  and  detailed  design,  support 
tendering  process, 
implementation  works,  etc.  The  IPF  is  also  co-financing  investments  in  municipal 
infrastructure  which  are  ready  for  implementation  by  the  IFIs.  The  IPF  was 
incorporated  in  the  Western  Balkan  Investment  Framework  in  December  2009.  By 
the  end  of  the  reporting  period  there  were  65  projects  supported  through  this 
mechanism  for  a  volume  of  grant  support  of  EUR  123  million  and  estimated  total 
investments of EUR 1 billion. For instance, in Albania, a EUR 4.7 million EU grant 
leveraged a EUR 12 million loan which, added to the national contribution and other 
grant  support  from  bilateral  sources,  enabled  a  water  supply  and  treatment 
investment of EUR 21.7 million.  

for 

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