The World Bank Group today approved a total US$160 million IDA grant financing for three projects in DR Congo (DRC) that are designed to support the implementation of “Governance Compact” adopted by the Government and help laying the foundation for sustained growth and progress towards the MDGs.

The three operations: (i) Additional Financing to the Emergency Demobilization and Reintegration Project (EDRP) (US$50 million), (ii) Additional Financing to the Private Sector Development and Competitiveness Project (US$60 million), and (iii) Governance Capacity Enhancement Project (US$50 million) are in line with the Bank Country Assistance Strategy for DRC and cover the main priorities of the “Governance Compact”: four transversal priority themes (Decentralization, Public Finance Management, Public Service Reform, and Transparency) and two priority sectoral themes (State-owned Enterprises Reform, Security Sector Reform).

The Additional Financing to the Emergency Demobilization and Reintegration Project, with a parallel financing of US$22 million from the African Development Bank, a US$6 million multi-donor trust fund, and US$2.2 million in counterpart funding from the government will help implement the Goma Peace Agreement, a key step for achieving peace in DRC eastern region.

Complementary to other donors’ interventions in the Security Sector Reform, this additional financing will help complete the demobilization and reintegration of ex-combatants that started under the original project in 2004. To date, morethan 102,000 ex-combatants have been demobilized (of which 69,000 have been reintegrated), and 30,000 children have been released from armed groups. Another 23,000 ex-combatants is expected to be demobilized, 9,000 additional children released from armed groups, and over 60,000 ex-combatants reintegrated, including disabled ex-combatants.

The original operation was subject to an investigation by the Bank’s Department of Institutional Integrity (INT); this additional financing was designed to reflect lessons learned from the INT investigation and builds on the elements of the action plan that will be implemented by the Government in close collaboration with the Bank to minimize risks related to misuse of public funds.

The Additional Financing to the Private Sector Development and Competitiveness Project will help scale up results from the ongoing operation, focusing on improving the investment climate and access to financial services as well as accelerating the parastatal reform. A poor investment climate (DR Congo ranked last in the 2008 Doing Business Report), low access to financial services (less than 100,000 bank accounts for 60 million inhabitants) and non performing public enterprises remain key constraints to private sector-led growth.

The Governance Capacity Enhancement Project will help establish sound public financial management practices that are required to re-establish the credibility of the state in the DRC basic service delivery in a post-conflict context.

It will lay the framework for addressing the four transversal themes mentioned above, including the wage system reform, fiscal decentralization and the reform of revenue and expenditure management systems.

Implementation of this framework will be primarily pursued under sector operations, such as the two sector operations presented today, as well as the ongoing health and education sector projects and the planned projects on agriculture, forestry and mining.

It has been designed in close cooperation with other donors, in particular UNDP, the EU and the Belgian Cooperation. While the project focuses on three provinces (Bandundu, Katanga and Sud-Kivu), it is developed within a comprehensive program, under the leadership of the Ministry of Interior whose target is to cover the entire country.