Development Today | Sida kicks 15 NGOs out of race for funding

Norwegian aid minister challenges Angolan President’s daughter

Norwegian Development Minister Heikki Holmås has challenged the wealthy daughter of Angola’s President José Eduardo dos Santos to open her accounting books and prove that “political power has not been misused”. The American magazine Forbes announced this week that Isabel dos Santos is Africa’s first female billionaire.

At an appeals court in Oslo a prosecutor has called for Norconsult, which faces corruption charges related to a World Bank project in Tanzania, to pay a fine of NOK 4 million. The defense called for acquittal of the firm.

The World Bank has accused the Finnish company Pöyry Management Consulting Oy of “submitting false invoices and providing improper benefits” to Bank staff.

Ministry to close SADEV by year end

The Swedish Foreign Ministry proposes to close down the aid evaluation agency SADEV by the end of the year, following the publication of two critical reviews that point to serious weaknesses in the agency’s work. Staff at SADEV are “shocked and frustrated” by the sudden announcement, and the ministry’s failure to acknowledge what they see as the agency’s main problem, its management, a union leader said.

Norway’s innovative and ambitious forest climate agreement with Brazil is caught in a time lag, with political events overtaking the terms of the deal. As Norway announces another NOK 1 billion in aid for past reductions in deforestation, the Brazilian Senate passes a law that opens for massive clearing of the Amazon.

Former International Director of DanChurchAid, MP for the Social Liberal Party Christian Friis-Bach has been named Development Minister in the newly-formed Social Democrat-led Danish government.

For the first time, Norway has become the largest Nordic donor, due to billions of crowns slated for climate aid, mainly in Brazil. Norway is also the world’s top aid performer, measured as a share of the economy, OECD figures released Wednesday show. Sweden is Nr 3 on the list, followed by Denmark.

The alleged payment of kickbacks by the Swedish truck maker Scania to the Saddam Hussein regime in Iraq took place too long ago for the case to be investigated in the United States, DT has learned. However, the Swedish police probe into Scania and Volvo continues.

Sida: ‘No’ to SEKAB biofuel in Tanzania

Sida will not provide a credit guarantee to the Swedish biofuel company SEKAB for its sugarcane-ethanol project in Tanzania, Development Today has learned.

The OECD hails the Swedish government’s aid policy reforms and its leading role in the donor community in a peer review published a week after Sweden assumed the EU Presidency.

The Swedish Auditor General calls for a review of the engagement of the aid agency Sida and Swedfund in risk capital funds that are located in tax havens.

The Swedish biofuel company SEKAB wants a Sida loan guarantee for its operations in Tanzania. An initial figure of USD 20-25 million (about SEK 200 million) is indicated. SEKAB also wants aid-financed investment funds to provide almost half the equity for its investments over the next 20 years.

Iceland cuts aid by one-third

Iceland will reduce its official development assistance by ISK 1.7 billion, equivalent to one-third of the planned budget for 2009.

The Foreign Ministry is considering closing down the Norwegian untied mixed credit scheme, an idea originally proposed in a report by the consultant Econ Pöyry. Stakeholders strongly object. GIEK says the consultant does not provide a sufficient basis for making changes in the private sector schemes.

An evaluation of Norwegian aid to the hydropower sector over a quarter-century concludes that Norway has been a consistent, predictable donor. Tied aid has until recently laid the groundwork for the long-term involvement of Norwegian private and state actors. But environmental concerns have taken a back seat. According to the report, Norwegian environmental guidelines are outdated and implementation of existing rules has been weak.

Norway is ready to provide budget support unilaterally to the new Palestinian government formed by Fatah and Hamas without any new conditions, Norwegian Foreign Minister Jonas Gahr Støre announced Thursday.

OECD: Sweden No. 1, Norway’s aid drops

Global aid is falling and support for Africa is basically flat, despite donors’ promises to double aid to Africa by 2010. Sweden is now the world's top donor, while Norwegian aid dropped to 0.89 per cent of GNI, according to figures released by the OECD.

The Netherlands and Norway want to put development and security in Afghanistan high on the agenda when foreign ministers of the defence alliance NATO gather in Oslo this week.

A report commissioned by the Norwegian Ministry of Foreign Affairs calls for “a clear separation" between security and humanitarian mandates in Faryab province where Norwegian forces are located. It warns against the emergence of a “Norwegian province" in Afghanistan.

US financial muscle in the World Bank has shrunk and it is no longer the largest donor in the Bank’s most important tool for channelling money to poor countries, the soft loan arm, IDA. The United Kingdom has bypassed the United States as the top WB donor. Still, after Paul Wolfowitz's forced resignation last week, US President Bush clings to the outdated American prerogative to appoint an American as head of the bank.

Robert Zoellick, the US candidate to take over as World Bank President, currently in Oslo, has received Nordic blessing for the job. Support for his candidacy expressed by Denmark and Norway in late May effectively undermined the possibility of promoting alternative candidates.

Norway has transferred USD 10 million for salaries to Palestinian officials to a new bank account, which is not affected by current US bank restrictions on the Hamas-led government. Norway is the first Western donor to transfer money into the account. Sweden considers following suit.

OECD tells Denmark: untie mixed credits

The OECD peer review of the Danish aid programme combines praise with a strong message for Denmark to stop the practice of reserving mixed credits for its own companies.

Six governments in the Horn of Africa agreed last week on a road map for tackling the root causes of hunger in the drought-stricken region. Frustrated by past funding shortages, UN Special Humanitarian Envoy Kjell Magne Bondevik now challenges donors to put financial weight behind the new plan.

100 candidates compete for Sida top job

Three former ministers, two former state secretaries, two ambassadors and a dozen business leaders are among the 55 people who have applied for the job of Director General of Sida. DT has learned that a parallel non-open search conducted by a recruitment firm has produced another 50 names.

Norway is offering to finance a study on tax havens and capital flight. The Norwegian Development Minister Erik Solheim has in a letter to the new World Bank President Robert B. Zoellick asked the Bank to carry out such a study. An answer is expected next week.

The Swedish government this week launched the most significant change in aid policy in decades, dramatically reducing the number of recipient countries by half and potentially freeing resources of up to SEK 2.2 billion over the next few years. Minister Carlsson says reforms in Swedish aid were long overdue.

18 new NGOs eye coveted Sida funding

Eighteen new NGOs are competing for a share of Sida’s special SEK 1.3 billion budget for multi-year NGO grants - the so-called framework agreements. This budget is currently divided among 14 other Swedish NGOs.

Göran Hydén, the Swedish Africa scholar based at the University of Florida, calls Norway a “last outpost" where politicians continue to wield influence over the priorities of development researchers.

An investigation by the Swedish National Audit Office of aid channelled through non-governmental organisations finds irregularities in most of the projects reviewed. Sida is harshly criticised for having insufficient internal control systems that allow the misuse of aid funds to continue undetected.

When the Red-Green Norwegian government took office two years ago, it promised to increase funding to the UN at the expense of the World Bank. Now it is doing the opposite.

Anders Nordström to head Sida

The Swedish government has appointed the Swede Anders Nordström, currently Assistant Director General of the World Health Organisation in Geneva, to be the new Director General of Sida. The government points to Nordström’s experience in “change management" at the UN agency as an important qualification for his new job.

In the new Danish government programme presented last week, Prime Minister Anders Fogh Rasmussen indicates an increase in the aid budget over the coming years.

Nordics losing ground in World Bank

The Nordic donor block’s share of World Bank funding over the next three years will drop. But a sharp rise in Finnish funds will soften the fall, Development Today has learned ahead of the final negotiations for IDA 15 in Berlin, December 13-14.

The authority of the new World Bank President Robert B. Zoellick is at stake as donors meet in Berlin to finalise negotiations about the next three years of funding for the International Development Association (IDA).

The World Bank sanctioned just one firm, Lahmeyer International GmbH of Germany, last year compared with 133 blacklisted firms three years ago. The Bank’s anti-corruption body urges the leadership to put in place a new sanctions system to make it possible to proceed with cases in the pipeline for such action.

Tanzania may face cuts in international aid following an audit which concluded that the Bank of Tanzania had made irregular payments of USD 113 million to 22 companies.

Following a positive audit report, Sida has now decided to release funds to the Africa NGO Electoral Institute of Southern Africa (EISA), which was hit by a corruption scandal in its Angola office last year.

Norway should phase out in-kind donations through the export facility NOREPS over the next five years, according to a new evaluation. This would mean a further untying of Norwegian humanitarian aid, and could jeopardise the position of some Norwegian suppliers’ in the emergency relief market.

The Swedish National Anti-Corruption Unit is in the final phase of investigating the involvement of Swedish companies in bribery related to the UN-financed oil-for-food scheme in Iraq. Christer van der Kwast, Chief Public Prosecutor, tells Development Today that efforts are being focused on “some larger companies".

Sida’s practice of transferring billions of crowns in aid assignments to other Swedish state agencies violates both Swedish public procurement law and EU procurement directives, a report by AffärsConcept AB concludes. As a general rule, such assignments should be tendered competitively.

Norway and the World Bank have agreed to arrange a joint conference this fall on illegal capital flight from developing countries. The initiative comes after Norway gave up trying to convince the World Bank to do a study on the role of tax havens in illegal capital flight from developing countries.

Auditor General: biased audit from Sida

The Swedish Auditor General casts doubt on the independence and quality of a forensic investigation of NGO aid commissioned by Sida. Audit Director Gina Funnemark is concerned about the biased presentation of the report reflected in the Swedish media. Magnus Lindell at Sida rejects the criticism.

The deadlock between Denmark and Sudan took a new turn at the Sudan donor conference in Oslo this week, where Denmark refused to pledge future development assistance for the country. Sudan has urged for a global boycott of Danish goods and is not allowing Danes to enter the country, following a reprint of a cartoon of the Prophet Mohammad in Danish media earlier this year.

The Nobel Prize winner Médecins Sans Frontières says a USD 1.5 billion aid deal to develop new vaccines for poor countries is much too lucrative for the drug industry. MSF has estimated an earlier version of the scheme to be overpriced by USD 600 million, but has been denied basic facts about the latest proposal. DT has obtained a confidential document about the scheme sent to donors last month, which shows GlaxoSmithKline walking away with almost the whole prize. Donors are expected to settle the deal next week.

Sida is putting pressure on the National Land Survey (NLS) to apply competitive tendering when procuring consultancy services for Sida-financed projects.

Norway keeps core funding of UNDP at the same level as last year and refuses to pledge multi-year funding of the agency in an effort to push UNDP to give high priority to human rights and good governance in its new strategic plan.

After working on the Karuma power project in energy-hungry Uganda for more than a decade, the Norwegian developer Norpak folded its cards this month following a protracted conflict with the World Bank. The Ugandan government now takes over Karuma.

The Swedish Competition Authority has delivered an unambiguous ruling on the close cooperation between the mapping agency National Land Survey and the consulting firm Swedesurvey in carrying out Sida-financed projects.

The Swedish government has launched a new private sector scheme for untied soft loans and subsidised guarantees in its aid budget for 2009. It also proposes drastic changes in UN funding, where UN Development Program (UNDP) is the loser. Sweden continues to prioritise Africa in its bilateral aid.

The Norwegian government increases the aid budget to 1.0 per cent of GNI next year with the lion’s share of the record high growth in the budget to be spent in Norway and Brazil. Africa’s relative share of Norwegian aid is going down, in sharp contrast with the priorities of Swedish and Danish aid.

Environment and Development Minister Erik Solheim rejects the notion that there is a conflict between aid and efforts to reduce CO2 emissions.

Norfund has agreed with SN Power to commit USD 700 million (NOK 4.9b) in equity for a new hydropower investment company targeting Africa and Central America. The commitment is part of a deal where Norfund sells a 10 per cent stake in SN Power to Statkraft for NOK 1.1 billion.

Norwegian MPs criticise the government for counting almost NOK 1 billion in acquisitions made by the hydropower company SN Power as aid. They say that reporting these capital injections in the Philippines and Peru as aid to the OECD contributes to "bending" the rules.

Three and a half years ago, Denmark pulled out of the Nordic Development Fund, and the owners decided to close it down. Now, under pressure from Finland, a proposal is on the table to revive NDF as a grant-based fund focusing on climate projects. EUR 90 million is likely to be available and the pipeline is empty.

Swedish Development Minister Gunilla Carlsson has quickly established networks in the new US administration ahead of Sweden’s EU Presidency. She has co-chaired a task force on closer cooperation between the United States and Europe in the development field.

The cash-strapped Swedish biofuel company SEKAB AB has asked for Sida’s help to rescue its controversial biofuel project in Tanzania, Development Today has learned. A figure of SEK 100 million was mentioned by SEKAB.

A major new study funded by Sida and written by academics from three Tanzanian universities points to the far-reaching impacts of large-scale biofuel plantations in Tanzania. The report warns of land grabbing by foreign investors and water shortages, and calls for a moratorium on biofuel projects until a new legal and policy framework is in place.

The Norwegian aid-financed risk capital fund Norfund has requested an extraordinary NOK 1 billion injection of capital to invest in Sub-Saharan Africa to counter a downward trend in foreign investments in the region following the international finance crisis.

The Tanzanian government has suspended implementation of all biofuel projects that have yet to receive approval from vital institutions such as the National Environmental Management Council (NEMC) and the Tanzania Investment Center.

The Swedish biofuel company SEKAB has been unable to find a new investor for its planned biofuel plantation projects in Tanzania, and has turned to Sida for an aid-financed credit guarantee. Sida says issues like untied procurement and environmental impact need to be considered, and the final decision rests with the Foreign Ministry.

Norwegian UN Ambassador Mona Juul slams UN Secretary General Ban Ki-moon’s performance in a secret memo to the Norwegian Ministry of Foreign Affairs, the daily Aftenposten reveals. Ban is scheduled to visit Oslo later this month.

In 2010, Norway will become the largest Nordic donor, bypassing Sweden. But there is growing criticism of Minister Erik Solheim, who spends all fresh funds on refugee costs in Norway and efforts to reduce CO2 emissions. Aid to Africa is cut.

Three Nordic governments dominate the top spots in the Humanitarian Response Index for 2009, which measures the generosity, neutrality and timeliness of humanitarian aid funding.

The economic crime unit of the Norwegian police will take the consultancy company Norconsult to court after the firm refused to pay a NOK 4 million fine for its involvement in a corruption case in Tanzania. (Updated)

Sweden has decided to release SEK 40 million in health aid to Zambia, part of the funds that were frozen in May after revelation of extensive embezzlement in the sector.

Norway has committed USD 110 million in additional support to train Afghan security forces and the police, the Norwegian Prime Minister Jens Stoltenberg announced at a joint press conference with US President Barack Obama in Oslo Thursday. Norway and the United States will cooperate on deforestation and global health initiatives.

In his acceptance speech at the Nobel Prize ceremony in Oslo Thursday, US President Barack Obama called for an adherence to international standards, strong international institutions and he argued for the universality of human rights. Aid is not charity, he said, and he called for the world to fight climate change as a matter of common security.

In an unprecedented letter to Development Minister Gunilla Carlsson, five top-level Sida officials have launched a counter-attack on Carlsson’s heavy criticism of the Swedish aid administration.

A small Danish NGO has been out-manoeuvred in the complex politics of selecting a standard model for shelters to be built for hundreds of thousands of people left homeless by the earthquake in Haiti.

As the UN High-Level Task Force on Climate Change Financing meets for the first time in London, hopes for achieving a common definition of “climate additionality” before 2012 are fading fast. Both the United States and the United Kingdom, which chairs the task force, oppose discussion in the OECD/DAC on common rules for measuring climate aid.

Nordic aid as a share of OECD development assistance is expanding. Sweden and Norway gave more aid in real terms last year than G8 countries like Canada and Italy. And Finland is moving up the ranking list of the world’s largest donors.

The Norwegian government has asked Parliament to commit NOK 1.5 billion over ten years to strengthen health systems in developing countries by supporting the second phase of IFFIm. The news was announced in connection with the revised fiscal budget for 2010.

Norwegian Prime Minister Jens Stoltenberg announced Wednesday that Norway will enter into an aid deal with Indonesia worth USD 1 billion aimed at combating deforestation.

The two remaining top officials in former Director General Anders Nordström’s management team at Sida are resigning from their positions, Development Today has learned.

The truck and bus producer Scania CV AB paid at least USD 5 million in kickbacks to the Saddam Husseinregime in connection with the UN Oil for Food Programme, the Swedish Prosecutor told US authorities Friday. The contracts amounted to USD 70 million and the vehicles were exported via Tunisian and Russian companies, according to an extended Swedish criminal investigation.

Swedish police say the truck producer Scania paid USD 5 million in kickbacks to the Saddam Hussein regime. The Swedish prosecutor wants US authorities to clarify whether they will launch their own investigation. In a parallel enquiry, Swedish police have targeted Volvo officials for similar offenses. The prosecutor says the officials failed to cooperate with the investigation and asks whether this violates Volvo’s deal with US authorities, whereby the company avoided a trial and promised full cooperation with the police.

The Swedish government is cancelling budget support to Zambia for 2010 and 2011 due to mounting concerns about corruption in the country. This decision implies a cut in Swedish aid to the Zambian government of more than SEK 300 million over two years.

Carlsson fires Sida chief

In a dramatic move, the Swedish government has sacked Anders Nordström, the Director General of its main aid agency, Sida. The government refers to the lack of financial control at the agency as the main reason for taking action, but the change in leadership follows a long-running power struggle between Development Minister Gunilla Carlsson and top management at Sida.

Four days after the Nobel Peace Prize was awarded in absentia to Chinese democracy activist Liu Xiaobo, Norway’s Development Minister Erik Solheim says that if the UN had a peace and development prize it should go to Deng Xiaoping.

The Norwegian hydropower investment company SN Power will likely give up its planned USD 600 million investment in the Trayenko dam project in Chile, following years of protests from Mapuche indigenous communities.

Denmark unfreezes road aid to Zambia

Denmark is ready to release aid to the Zambian roads sector frozen in 2009 due to suspicions of corruption. The Danes hope to spend the remaining DKK 270 million by 2013 when Zambia will be phased out as a recipient country.

The justification for the Amaila Falls hydropower dam that Guyana plans to build in the Amazon rainforest is unconvincing, says a water resources expert hired by the Inter-American Development Bank to assess the project. Guyana plans to spend most of the USD 60 million Norwegian climate aid funds for 2010-11 on the Amails Falls project.

Norwegian officials are racing against time to set new terms for Norway’s forest climate aid agreement with Guyana worth USD 30 million a year; the deadline is March 31 when Minister Erik Solheim arrives in Georgetown.

After five years of conflict with Mapuche indigenous people, the Norwegian hydropower investment company SN Power has decided to abandon the Trayenko project, a series of four dams to be built in Central Chile.

UN agencies operate increasingly as agents of a handful of donors, carrying out missions based on earmarking financing. Core funding for UN agencies is dropping sharply across the board making them less independent.

A Norwegian court has found three consultants who worked for Norway’s leading engineering firm Norconsult on a World Bank project in Tanzania guilty of corruption. They have been given suspended prison sentences of between two and six months. The company was also on trial, but was acquitted. The court’s ruling took into account the dramatic consequences a guilty conviction would have had for the firm – debarment from public procurement in Norway.

New rules for Sida NGO funding

The aid agency Sida invites Swedish organisations to apply for multi-year funding grants under the new criteria for framework agreements that have just been finalised. International organisations will for the first time be eligible to apply for multi-year agreements for humanitarian activities.

The Swedish government has announced a SEK 1.45 billion aid package for private sector development over the coming three years. The bulk will be channelled through the aid-financed investment fund, Swedfund, with the rest supporting innovative business initiatives.

Norway is in a delicate dispute with the Paris-based watchdog OECD about how to report its controversial rainforest aid to Brazil as Official Development Assistance (ODA). Norway may have over-reported assistance to its largest recipient Brazil by more than NOK 2 billion over the last two years and received too favorable a ranking in the overview of donor performance for 2011, published by the OECD. (Updated)

An appeal court has convicted the leading Norwegian engineering firm Norconsult of being complicit in bribing officials related to a World Bank-funded project in Tanzania. The firm must pay a fine of NOK 4 million.

The Finnish ministry of Labour and the Economy will investigate charges that a Pöyry company has violated the OECD guidelines on multinational companies on a contract in Laos.

Former Norwegian Environment and Development Minister Erik Solheim has been appointed Chair of the OECD’s Development Assistance Committee (DAC), according to a press release from the Norwegian Foreign Ministry. He takes over from the American Brian Atwood, who steps down at the end of the year.

The OECD peer review of Finnish development assistance commends Finland for its new focus on human rights and for continuity in its aid policy. However, specific targets and goals are not clearly enough defined.

A shortlist of four international candidates for the position of executive director of the Global Fund has been presented to the board. A final decision on the appointment is expected in mid-November.

A Swedish prosecutor is taking two employees of the Swedish truck producer Scania CV AB to court on charges of violating UN sanctions against the Saddam Hussein regime by paying kickbacks related to the UN Oil for Food Programme.

Mark Dybul, the American physician who helped create and lead former President George Bush’s giant AIDS initiative PEPFAR, has been named Executive Director of the Global Fund, the board announced Thursday.

Mark Dybul, the new head of the Global Fund, has one year to generate enthusiasm among donors befor the next replenishment in September 2013.

USD 8 million in bribes were allegedly paid to secure a Finnish company medical equipment contracts in Costa Rica a decade ago. The trial of three Finns starts in January.

Norway has over-reported its aid to the Paris-based aid watchdog OECD by billions of crowns since 2010, and must now reduce its aid level for the last three years. Brazil has been wrongly reported as being Norway’s top aid recipient for this period, and Norwegian aid statistics will have to be revised. (Updated)

The Norwegian Supreme Court has agreed to hear the corruption case against Norway’s leading engineering company Norconsult, Development Today has learned. If acquitted, Norconsult could avoid debarment from public procurement in Norway.

Assessments have been completed of 14 organisations competing for Sida multi-year frame grants - both NGOs that have received frame funds for years and “new” NGOs trying to get a foot in the door. Now it’s up to Sida to decide who’s in and who’s out. Read the conclusions of the consultants’ reports.

Sweden best-performing Nordic donor

Sweden was the best-performing Nordic donor last year, according to the OECD. Combined ODA provided by the Nordic countries amounted to USD 15 billion, second only to the United States.

The Foreign Ministry in Stockholm is breathing a sigh of relief as the four-party coalition government approved new country strategies for two key recipients, Tanzania and Zambia, on Thursday. The decision represents a breakthrough for Development Minister Gunilla Carlsson who has come under heavy criticism for severe delays in the process of revamping Swedish aid policy.

Sida kicks 15 NGOs out of race for funding

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