Project Cycle Management Manual

Contents

English summary (Summary)

Sammendrag (Sammenfattende artikel)

List of Abbreviations and Key Concepts

Background

1. Introduction
1.1 Objective of the Manual
1.2 DANCEE Programme - Strategy, Priorities and Criteria for Support
1.3 Organisation of the Manual

2. Project Preparation
2.1 Two Types of Projects
2.2 Project Identification
2.3 Project Preparation for Tendered Projects
2.4 Project Preparation for Application Projects
2.4.1 Submission of Ideas
2.4.2 The Formal Application
2.4.3 Approval of Application

3. Award of Projects
3.1 Differences Between the two Models for Awarding Projects
3.2 Award of Projects by Application
3.3 Award of Projects by Tender
3.3.1 Rules and Procedures for Award of Contracts
3.3.2 Standard Contract Forms
3.3.3 Eligibility
3.3.4 DEPA's Manual for Tendering and Contracting

4. Project Implementation
4.1 Key Stakeholders in Project Implementation
4.1.1 The Project Holder
4.1.2 The Beneficiary
4.1.3 The Ministry of Environment
4.1.4 DANCEE
4.2 Management Forums
4.2.1 Project Management Group
4.2.2 Steering Committee
4.2.3 Advisory Committee
4.3 Project Monitoring and Reporting
4.3.1 Project Monitoring Systems
4.3.2 Reporting
4.3.3 Baseline Descriptions
4.3.4 Approval of Reports
4.3.5 Inception Report
4.3.6 Procedures Manual
4.3.7 Progress Reports
4.3.8 Technical Reports
4.3.9 Completion Report
4.4 Financial Management
4.4.1 Financial Management
4.4.2 Payment Schemes
4.4.3 Terms of Payment
4.4.4 Financial reporting

5. Evaluation
5.1 Framework for Evaluation
5.2 Evaluations Carried Out by External Consultants
5.2.1 Terms of Reference
5.2.2 Contracting
5.2.3 Implementing the Evaluation
5.2.4 The Evaluation Report
5.3 Lessons Learned
5.4 Inspection and Examination of Projects

Annex
Enclosure A - Project Idea Format
Enclosure B - Project Document Format
Enclosure C - Terms of Reference Format
Enclosure D - Appraisal Report Format
Enclosure E - Guidelines for Steering Committee Meetings
Enclosure F - Covering Letter to Progress Report
Enclosure G - Letter of Confirmation
Enclosure H - List of DANCEE Indicators
Enclosure I - References

List of Abbreviations and Key Concepts

AC Advisory Committee
BAT Best Available Technology
CEEC Central and Eastern European Countries
DANCEA Danish Cooperation for Environment in the Arctic (DEPA division)
DANCEE Danish Cooperation for Environment in Eastern Europe (DEPA division)
DANCED Danish Cooperation for Environment and Development (DEPA division)
DANIDA Danish International Development Assistance (Ministry of Foreign Affairs)
DEPA Danish Environmental Protection Agency
DESF Danish Environmental Support Fund for Eastern Europe
DKK Danish Kroner (Danish currency)
EDRF Environment and Disaster Relief Facility
EKF Danish State Export Credit Agency
EU European Union
IPPC Integrated Pollution Prevention Conrol (EU Directive)
IØ Investment Fund for Central and Eastern Europe
LFA Logical Framework Approach
LPC Local Project Coordinator
M/M Man Month
MoE Ministry of Environment in the partner country
MoEE Danish Ministry of Environment and Energy
MKØ Environmental Soft Loan Programme for Eastern Europe (administered by EKF)
NEAP National Environmental Action Plan
NEHAP National Environmental Health Action Plan
NEFCO Nordic Environment Finance Corporation
NGO Non-Governmental Organisation
NIS Newly Independent States
NPAA National Programmes for the Adoption of the Acquis
PIP Project Implementation Plan
SC Steering Committee
ToR Terms of Reference
UN United Nations

Appraisal
Overall assessment of the relevance, feasibility and sustainability of a project prior to decision on funding.

Beneficiary
An organisation in a Partner Country which benefits from the project and which receives the result of the project after completion. The term "beneficiary" is broadly defined and may include public and private enterprises, government authorities, NGOs, etc.

Contact Person
A contact person in MoE who is responsible for coordinating the cooperation between DANCEE and MoE.

Country Coordinator
A DANCEE specialist employed by DEPA, responsible for cooperation with the partner country on DANCEE supported projects.

Effectiveness
A measure of the extent to which a project or programme achieves its objectives.

Efficiency
A measure of the "productivity" of the implementation process - how economically inputs are transformed into outputs.

Evaluation
An independent examination of a project or programme, partly to determine its results, efficiency, effectiveness, impact, relevance and sustainability, and partly to draw lessons that may be more widely applicable.

Letter of Grant (Tilsagnsskrivelse)
A document issued by DANCEE to an applicant granting a specific amount of money for implementation of a project according to the application (the project document). After acceptance by the applicant, the letter of grant, with its terms and conditions, constitutes an agreement regarding the implementation of a project.

Local Project Coordinator
A local specialist employed by DEPA to coordinate DANCEE activities in a partner country.

Local Project Director
A senior manager appointed by MoE to be responsible for the overall implementation of the project.

Local Project Manager
A person appointed by the beneficiary having day-to-day responsibility for project implementation.

Logical Framework Approach
An objective-oriented management tool used to plan, execute and evaluate programmes and projects.

MoEE Specialist
DANCEE may appoint a specialist from the Danish Ministry of Environment and Energy (MoEE), e.g. from one of DEPA's specialised divisions or from one of MoEE's Agencies to represent DANCEE in specific projects.

Monitoring
Continuous or periodic surveillance of the progress of a programme or project.

Partner Country
One of the countries selected to receive DANCEE assistance.

Project Document
The project document describes the objectives, outputs and activities of a project, relevant policies and external support. The project document also specifies the terms and conditions for the implementation of a project, and the responsibilities of the project holder and the beneficiary.

Project Holder
An organisation (private enterprise, parastatal, government or non- government institution), which has been awarded a contract after tender or a grant after application.

Project Management Group
The group responsible for day-to-day project management. Normally the group consists of the local project manager and the team leader.

Review
A comprehensive assessment of a programme or project during implementation.

Team Leader
A person appointed by the project holder and approved by DANCEE. The team leader has direct daily responsibility for the timely and correct implementation of the project according to the project document.

Background

In April 1991, the Act on Subsides for Environmental Activities in Eastern European Countries was adopted by the Danish Parliament. The Danish Environmental Support Fund for Eastern Europe (DESF) was subsequently established.

In 1993, the DESF was incorporated into the new Environment and Disaster Relief Facility (EDRF), a new Danish facility for the support of environment and disaster areas in Eastern Europe and developing countries. This initiative was based on the changes in Europe after the collapse of the Berlin Wall in 1989 and to follow-up the intentions from the UN Conference in Rio on Environment and Development in 1992. The intention is to annually increase funds to support environmental and disaster issues until the total Danish support constitutes 0,5 % of Gross National Income in year 2005. Funds are distributed fifty-fifty to environmental and disaster issues respectively.

In October 1993, the "Strategy for Environmental Activities in Eastern Europe" was drawn up and has been the basis for environmental assistance to Eastern Europe. The DESF was administered by the Danish Environmental Protection Agency (DEPA).

From 1999, the name of the EDRF was changed to the Environment, Peace and Stability Facility. The environmental part of the facility is supporting projects in Eastern Europe, specific developing countries and the arctic regions. At the same time the name DESF has been changed to Danish Cooperation for Environment in Eastern Europe (DANCEE), still administered by DEPA.

The funds for developing countries administered by DEPA is administered by the Danish Cooperation for Environment and Development (DANCED). Funds for the arctic region are administered by the Danish Cooperation for Environment in the Arctic (DANCEA), a DEPA division.

Denmark's environmental assistance under the Environment, Peace and Stability Facility comprises not only the DANCEE Programme but also - in 1994-96 - environment-related sectoral assistance and the Green Investment Facility under the Investment Fund for Central and Eastern Europe (the IØ Fund). From 1998, the environment-related sectoral assistance is designated sector-integrated environmental assistance and is an element of the Government's Baltic Sea Initiative in the environment sector. From 1998, the environmental assistance are supplemented with the Environmental Soft Loan Programme for Eastern Europe (MKØ), administered by the Danish State Export Credit Agency (EKF).

Denmark's assistance in the environment sector is co-ordinated by the Danish Environmental Protection Agency (DEPA), in that DEPA discusses the sectoral programmes with the ministries and agencies implementing them and guides the environmental approach. DEPA is also the consultation party on the environmental aspects of projects under the IØ Fund's Green Investment Facility. Lastly, DEPA has a seat on the board of Nordic Environment Finance Corporation (NEFCO). Many Danish players with different expertise thus work together and supplement each other's environmental activities.

Grants to environmental assistance in Eastern Europe from 1996 to 1999.

1. Introduction

This project cycle management manual replaces the publication "Projektforslag til miljøaktiviteter i Øst- og Centraleuropa. Orientering fra Miljøstyelsen, nr. 14, 1995".

1.1 Objective of the Manual

Project cycle management
Project cycle management is the process of developing and managing a project from the initial idea to the final evaluation of the project's results. A project is defined as a planned undertaking designed to achieve certain specific objectives within a given budget and within a specific period of time.

The purpose of the manual
The purpose of this Project Cycle Management Manual (the Manual) is to provide information on project cycle management procedures for projects supported by DANCEE.

The target group
The primary target group of the Manual is the Ministry of Environment (MoE) and environmental funds in the partner countries and potential project holders, e.g. consultants, institutions, Non-Governmental Organisations (NGOs), and enterprises, and their local partners and beneficiaries in the partner countries.

Donor organisations and international banks are the secondary target groups. The Manual should facilitate the co-financing of DANCEE support and support from other donors and international banks.

Two administrative models are applied in connection with environmental projects supported by DANCEE.

The application model
The application model is typically used by a Danish company or organisation in coorporation with a beneficiary in the partner country. This partnership identifies and describes a project according to DANCEE's guidelines for application - please refer to Section 2.4. Subsequently, the Danish organisation or company applies to DEPA for DANCEE support.

The tender model
In the tender model, DANCEE and MoE identify a project portfolio within the framework of the country programme - please refer to Section 2.3. The identified projects will subsequently be tendered according to DEPA's official tendering procedures.

The two models are designed to complement each other. The tender model allows DANCEE and MoE full control with the project portfolio, whereas the ideas for applications are initiated outside the formal ministerial collaboration.

Project holder
The term "project holder" is used in the Manual to describe an organisation (private, parastatal, government or non government institution), which has been awarded a contract after tender or a grant after application.

The aim of the Manual
The aim of the Manual is to facilitate the transparent and efficient development and management of DANCEE supported projects. The Manual will inform project holders about requirements for project preparation and implementation under DANCEE.

Furthermore, the Manual should assist project holders to undertake a more efficient preparation and implementation of projects. To achieve this aim, the Manual outlines a set of flexible but standardised guidelines for project preparation, award of projects, implementation and evaluation. Where necessary, projects may deviate from the guidelines, on DANCEE's initiative or based on a specific written agreement.

The project cycles for the two project models (application and tender model) differ to some extent. In particular, the responsibilities of DANCEE and the project holders differ in the project preparation process. However, DANCEE has harmonised the administrative procedures for the two models to the largest extent possible. The Manual will describe the procedures and guidelines in general. Differences between the two project models will be mentioned explicitly where appropriate and necessary.

The Manual is based on the terminology and the processes of the Logical Framework Approach (LFA).

1.2 DANCEE Programme - Strategy, Priorities and Criteria for Support

Strategy
The Danish government's strategy for environmental efforts in CEEC focuses on the Baltic Sea Region, EU accession, implementing international conventions, strengthening environmental awareness in the countries and increasing efforts in the Newly Independent States (NIS-countries).

The strategy takes into account the international environmental strategies resulting from the Conferences of the European Ministers of Environment held in Gdansk in March 1993, in Lucerne in April 1993, in Sofia in October 1995 and in Århus in June 1998.

Overall objectives
The overall objectives of DANCEE support are:

Priority areas
DANCEE priority areas covers:

Investment and technical assistance projects
DANCEE support may take the form of investment projects or technical assistance projects or a combination of the two. DANCEE identifies the two types of projects as follows:

Technical assistance includes:

Investment projects include:

The Manual describes the standard procedures covering both investment and technical assistance projects.

Partner countries
DANCEE funds are available for projects in a number of CEECs, including: Estonia, Latvia, Lithuania, Poland, Russia, The Czech Republic, Slovakia, Ukraine, Romania, Bulgaria, and Belarus. A cooperation agreement and a country programme has been drawn up with the partner countries, and DANCEE support is provided within this framework. The country programmes are described in the publication "Danish Environmental Support Fund for Eastern Europe", DEPA 1998.

Environmental strategies of partner countries
Support is granted to projects which are consistent with the partner country's environmental strategy as described in e.g. the National Environmental Action Plan (NEAP), the National Environmental Health Action Plan (NEHAP), and National Programmes for Adoption of the Acquis (NPAA). NPAA is prepared by a country applying for membership of the European Union (EU) and is the national plan for transposition and implementation of EU legislation. Most applicant countries have also developed sector strategies for implementing EU environmental legislation.

Criteria for support
DEPA has developed a number of criteria to determine which environmental projects may receive DANCEE funding. The criteria are outlined below and in Enclosure B of the Manual.

Needs of beneficiaries
A crucial criterion for DANCEE support is that projects reflect the needs and wishes of the beneficiary. It is essential to the success of a project that it is understood from the beginning which services and products are of interest to the beneficiary. The term "beneficiary" is broadly defined and may include public and private enterprises, government authorities, NGOs, etc.

Comformity with national and EU legislation
It is a key criterion for DANCEE support that the support conforms to the requirements of the environmental legislation of the partner country. Furthermore, support to countries applying for EU membership must contribute to the preparation of these countries for EU accession. At a minimum these projects in the EU candidate countries must be in compliance with the EU environmental legislation and other relevant EU standards.

Pollution reduction and environmental protection
The anticipated pollution reduction of a project constitutes another important criterion. Pollution reduction is measured in terms of quantity and toxicity. Projects which imply a significant quantitative and/or qualitative improvement of the environment and health standards are given high priority. However, technical assistance projects may be given just as high priority as an investment project if the projects are essential to the solution of environmental problems. Furthermore, priority is given to projects in geographical areas with serious environmental or health problems and to areas of particular natural value.

Focus on the prevention of environmental problems
Environmental problems are closely associated with the volume and structure of production and consumption. Therefore, projects should seek to attain savings in the consumption of raw materials, energy and water. Focus should be on pollution prevention, conservation, cleaner technologies and recycling, rather than on the reduction of existing pollution.

Sustainable management of nature and forest resources
It is crucial that the transition period from planned economy to market economy does not lead to a general degradation of natural resources, as these form a prime basis for long term economic growth and development in the region. Therefore, DANCEE supports the sustainable management of nature and forest resources within four main categories:

Benefits to the environment and the economy
When considering pollution prevention, the interrelation between pollution and economic development is important. The Central and Eastern European Countries (CEEC) are in a difficult process of economic transition. Benefits to both the environment and the economy may be realised if environmental projects can be integrated into the on-going economic restructuring process. Priority will be given to projects which demonstrate financially and technologically appropriate solutions to environmental problems.

Danish know-how and technology
DANCEE support is primarily granted to projects which entail the transfer of Danish know-how and/or technology. As a general rule, only projects involving proven technologies will be approved. Projects involving the development of new technology may, however, be considered in exceptional cases.

Projects of general interest
Projects of general interest and utility, possessing the potential for being replicated, are given preference over projects of interest only to a limited number of potential project holders. All projects should include carefully designed activities contributing to the dissemination of project results, either in the form of workshops, articles in journals or similar activities. All projects must also provide a brief summary (ex-ante[1] and ex-post[2] ) of project implementation. These summaries are used in DANCEE annual reports and are posted on the DANCEE Internet homepage. Further, plant and major equipment supplied for projects should be clearly marked to acknowledge DANCEE financial support.

Project sustainability
The degree of sustainability of a project is bound up with a number of factors, such as:

A project's sustainability can be assessed in terms of the project's ability to continue operations and to sustain the environmental improvement even after the withdrawal of donor support. Priority is given to projects which are likely to have a high degree of sustainability.

Co-financing
DANCEE funding is perceived as a means of promoting self-support. As such, projects involving the beneficiary's own funds or in-kind contribution, whether the beneficiary is an enterprise or a governmental agency, will be given priority over projects which rely solely on DANCEE support. Projects whose subsequent phases are likely to be financed by other sources - the beneficiary's own funds or funding from other donors or international financing institutions - will also be given high priority.

Three typical funding models are applied:

1.3 Organisation of the Manual

The DANCEE project management cycle
DANCEE's project management cycle has four phases. These are illustrated in the diagram of the project cycle shown in Figure 1.1. Each phase of the project management system is described in a separate chapter of the Manual.

Figure 1.1: DANCEE Project Management Cycle

The present chapter has outlined the objectives of the Manual and has described the criteria used by DANCEE to determine which projects to support.

Chapter two
Chapter two deals with project preparation. The chapter describes the development of projects from the initial idea to the final project document. The preparation process of projects by application and of projects by tender is outlined in separate sub-sections.

Chapter three
Chapter three deals with award of projects which in principle is identical for application and tender projects. The chapter describes the procedures used for contracting by DEPA and the standard conditions and responsibilities of the project holder.

Chapter four
Chapter four deals with project implementation. The chapter outlines the suggested project management structure and contains guidelines and procedures for reporting and monitoring.

Chapter five
Chapter five deals with project evaluation. The chapter describes DANCEE procedures for evaluation and contains guidelines for reviews, end-of-project and ex-post evaluation.

2. Project Preparation

2.1 Two Types of Projects

Awarding projects
Projects within the DANCEE programme can be identified and awarded in two different ways:

In short, projects by application are identified by a Danish company or organisation in cooperation with a beneficiary. Projects are awarded to the project holder on the basis of an application from the project holder and in the form of a grant.

A project by tender is identified by DANCEE in cooperation with MoE, and awarded to the project holder in the form of a contract to a tenderer.

Below the project preparation cycles are described for tendered projects and for projects by application.

2.2 Project Identification

The project identification procedure is shown in Figure 2.1.

Country programme
Denmark co-operates a number of CEECs - please refer to Section 1.3. In each country, a cooperation agreement and a country programme have been drawn up by DEPA and MoE.

The country programme is an agreement between MoE and DEPA describing sector priority areas in the individual country (e.g. water pollution, hazardous waste, air pollution, EU approximation) and project proposal procedures. The country programme is the basis upon which both projects by tendering and projects by application are prepared.

The country programmes are presented in the publication "Danish Environmental Support Fund for Eastern Europe", DEPA 1998. This publication will be updated regularly. Lists of all on-going and completed projects for each partner country will be available on DEPA's homepage http://www.mst.dk

Figure 2.1: Project Identification Procedure



Project long-list
A project long-list is prepared by DANCEE and MoE for all partner countries and is continuously updated. The list contains project ideas and project documents formulated by DANCEE and MoE, as well as project ideas and project documents submitted by applicants. The project long-list is not prioritised.

The project long-list is gradually reduced to a prioritised project short-list when DANCEE and MoE assess project ideas and project documents.

The project long-list is jointly assessed by DANCEE and MoE at least twice annually. The assessment includes an analysis of how the projects comply with the current priorities of the partner country, DANCEE's criteria for support, and the sector priority areas agreed in the country programme.

Project short-list
Based on the assessment of project ideas and project documents from the project long-list, DANCEE and MoE agree on a project short-list. This list constitutes the prioritised project pipeline which DANCEE and MoE intend to initiate during the following year.

Both the project long and short-lists are internal working papers for DANCEE and MoE.

The process for the gradual reduction of the project long-list into the project short-list is shown in Figure 2.2.

Figure 2.2.: Preparing the Prioritised Project Pipeline

2.3 Project Preparation for Tendered Projects

DANCEE is responsible for turning the project idea into a project document for tendered projects.

Project preparation mission
DANCEE may contract external consultants to prepare project documents, but also to participate in project preparation missions and project identification missions. DANCEE may also use external consultants for preparing appraisals. Opportunities for consultants to provide assistance are published on DEPA's home page (http://www.mst.dk). Interested consultants may contact DANCEE for registration of their interest.

The project document will normally be designed by a team of national and international experts with relevant expertise. The team will work according to Terms of Reference (ToR) worked out by DANCEE. The country coordinator or a Danish Ministry of Environment and Energy (MoEE) specialist will meet the project identification team to discuss the ToR. An ToR outline of the different project preparation missions is attached as Enclosure C.

Project document
The experts will prepare the project document using the LFA and the result will be presented in the format shown in Table 2.1. The project document can also be prepared as part of the feasibility study. For further explanation of the LFA please refer to the publications "Logical Framework Approach - A Flexible Tool for Participatory Development", Danida 1995, and "The Logical Framework Approach", Norad 1996.

Stakeholder analysis
The project document must include a stakeholder analysis. The stakeholder analysis will list stakeholders and beneficiaries and will describe their main interests in the project. Special attention should be given to the identification of possible conflicting interests among different stakeholders. The project document will describe how the project strategy will address conflicting interests.

Feasibility study
In connection with large and comprehensive projects, DANCEE may require that a feasibility study is carried out. The scope and level of detail of a feasibility study will depend on the complexity and size of the project. The task of undertaking feasibility studies will normally be competitively tendered.

Appraisal
Before a project document is finally approved, it is appraised internally by DANCEE, a MoEE specialist or by independent external specialists. Depending on the size and complexity of the project, DANCEE will decide whether a desk or a field appraisal should be applied. Representatives from the partner country may participate in the appraisal. The outline for ToR in Enclosure C is also used for appraisal missions.

Table 2.1: Project Document Format (identical with Application Format)

For further information, please refer to Enclosure B

The appraisal will focus on the relevance, feasibility and sustainability of the project, on its concurrence with national, EU and Danish policies, and on its compliance with priority areas and programme criteria. A format for appraisal reports is included as Enclosure D.

Final approval
Before the final approval, DANCEE must obtain a letter of confirmation from the beneficiary - please refer to Enclosure G.

Assuming a positive appraisal, the project document will be approved by DANCEE and MoE. Procedures for tendering and contracting are dealt with in Section 3.

2.4 Project Preparation for Application Projects

2.4.1 Submission of Ideas

Interested enterprises, consultants, organisations, NGOs and others are welcome to submit ideas for projects at any time. DANCEE recommends applicants to outline a project idea - using the format shown in Table 2.2. - to DANCEE in order to obtain DANCEE's comments. In this way, applicants can spare the cost of elaborating a full-blown application in form of a project document, if the project idea is not within DANCEE's scope or has already been carried out, etc.

The description of the project idea should as a minimum be one to two pages, including the underlined sections of Table 2.2 above. The idea must be formulated jointly with the project beneficiary.

DANCEE will give its initial assessment and comments on the project idea. The applicant can use the assessment and comments to decide whether or not the applicant wishes to elaborate on the idea and submit a formal application. The positive reception of a project idea at this stage by DANCEE does not imply that funding will eventually be made available.

Table 2.2: Project Idea Format

For further information, please refer to Enclosure A.

2.4.2 The Formal Application

Letter of confirmation
The application will be made by the applicant and the beneficiary in common. A Letter of Confirmation signed by the beneficiary must be enclosed with the application. DANCEE's format for a Letter of Confirmation must be used - please refer to Enclosure G. If possible, the idea should also have been discussed with the country coordinator and the local project coordinator (LPC).

The application must be prepared using LFA and the result must be presented in the format shown in Table 2.3 and further elaborated as shown in Enclosure B. The application format is identical with the project document format shown in Table 2.1. For further explanation on the LFA, please refer to the publications "Logical Framework Approach - A flexible Tool for Participatory Development", Danida 1995, and "The Logical Framework Approach", Norad 1996.

Following receipt of the application by DANCEE, the applicant will receive a letter giving DANCEE's reference number for the application and indicating the DANCEE person responsible for the assessment. DANCEE will normally decide on the merits of the application within four months of receipt. If this is not possible, the applicant will be informed in writing with a new date for the decision.

2.4.3 Approval of Application

Approval and rejection of applications
Applications are jointly assessed by the country coordinator or other DANCEE specialists, other MoEE specialists, the LPC and the contact person in MoE. The assessment is based on the project's compatibility with the country programme, the DANCEE criteria for support described in Section 1, and the partner country's current priorities.

When the assessment process has been completed, a document of recommendation will be drafted and submitted to DEPA's management for final approval and signature.

DANCEE will inform applicants by letter indicating approval or non-approval of the submission. In the case of successful applicants this will be a letter of grant.


Table 2.3: Application Format (identical with Project Document Format)

For further information, please refer to Enclosure B.

3. Award of Projects

3.1 Differences Between the two Models for

Awarding Projects
As mentioned in Chapter 2, projects by applications are initiated by the project holder, whereas projects by tender are initiated by DEPA.

Legal differences
From a legal point of view, the two methods differ in particular with respect to the responsibility for the project document.

Tendered projects
Since DEPA has prepared the project document in a project by tender, the responsibility for the project document rests with DEPA, and the project holder is responsible only for implementing the project in accordance with the duty of care.

Projects by application
In projects by application, the project holder is not only responsible for implementing the project, but he is also responsible for preparing the project document. This responsibility entails inter alia that the project document is founded on adequately detailed and thorough investigations and surveys of facts and circumstances surrounding the project and that the design of the project is feasible. DEPA requires the project document to be in accordance with the best professional practice. The fact that DEPA has assessed the application before a grant is awarded does not limit the responsibility of the project holder.

Advance payment
There is also a difference between the two project types with respect to advance payments made to the project holder.

In projects by application, advance payments are in general available only to NGOs, and advance payments are available to other project holders only in connection with the procurement of supplies or works.

In projects by tender, advance payments are available to all project holders.

3.2 Award of Projects by Application

As mentioned in Section 2.4, DANCEE and MoE assess the project application on the basis of the criteria for DANCEE support and the national programmes and priorities. After the assessment, DANCEE may approve the application and award the project to the project holder by way of a grant.

Letter of grant
The rules of procedure for the award of contracts do not apply to the award of projects by application. Instead of a contract, a letter of grant is issued, within which terms and conditions are specified.

Statistical summary and data sheet
A statistical summary (and instructions for filling in this summary) and a data sheet are attached to the letter of grant. The data sheet must be filled in and submitted to DANCEE within four weeks of the receipt of the letter of grant.

The statistical summary must be filled in at the end of the project and submitted to DANCEE - please refer to Section 4.3.8.

3.3 Award of Projects by Tender

A project by tender is initiated by DANCEE in cooperation with MoE, and DANCEE awards the project to a project holder in accordance with DEPA's rules of procedure for award of contracts.

Standard contract form
The project is awarded by way of a contract, and DANCEE uses DEPA standard contract forms.

Statistical summary and data sheet
A statistical summary (and instructions for filling in this summary) and a data sheet are attached to the contract. The data sheet must be filled in and submitted to DANCEE within four weeks of the receipt of the contract.

The statistical summary must be filled in at the end of the project and submitted to DANCEE - please refer to Section 4.3.8.

The purpose of this section is to provide an overview of DEPA's rules of procedure for the award of contracts and the standard contract forms used by DEPA. For a more comprehensive description of these tender and contract issues, see DEPA's separate Manual for Tendering and Contracting, also mentioned in Section 3.3.4.

3.3.1 Rules and Procedures for Award of Contracts

Governing rules and regulations
Normally, DEPA awards contracts under the DANCEE in pursuance of an international agreement between DEPA and a partner country which is not a member of the EU.

In such situations, the EU directives on public service contracts (92/50/EEC) and public supply contracts (93/36/EEC) do not apply to the award. Hence, DEPA's award of contracts under the DANCEE programme is normally governed only by national rules. In this manual, procedures for award of contracts and thresholds for award procedures are based on national rules.

Project holders
DEPA requires the project holders to follow these rules of procedure when undertaking procurement as part of the services paid for by DANCEE funds.

Procedures for Award of Contracts
DEPA uses the following procedures for the award of contracts (in short "the award procedures"):

Direct award
In a direct award, DEPA consults one company of DEPA's choice and negotiates the terms of the contract with the company. Before deciding upon a particular company, DEPA may invite expressions of interest from companies.

Negotiated procedure
In a negotiated procedure without publication of notice, DEPA selects a smaller number of companies and invites each of them to submit a tender. DEPA may, prior to invitation, call for expressions of interest from companies.

Open procedure
In an open procedure with publication of notice, DEPA advertises the contract by publication of notice in which DEPA invites all interested companies to submit tenders.

Restricted procedure
In a restricted procedure with publication of notice, DEPA advertises the contract by publication of a notice in which DEPA invites requests for participation in the tender pre-qualification. Based upon a set of selection criteria, DEPA then selects a few companies to submit tenders. Only the prequalified companies are invited to submit tenders.

In all award procedures involving more than one tender, the contract is awarded after an evaluation of the tenders on the basis of the award criteria that are included in the tender documents issued by DEPA to the tenders.

Award procedure
In every award, DEPA will follow the award procedure which, in consideration of the particular circumstances, ensures the most economic and efficient outcome. Publication of notice is always required, if the value of the contract is estimated to equal or exceed the thresholds specified below under Thresholds for Award Procedures.

When a contract is awarded by a procedure with publication of notice, DEPA will normally follow the restricted procedure. DEPA will only follow the open procedure in particular cases where DEPA expects to receive only a small number of tenders due to the nature of the services or the supply and/or where DEPA wishes to save the time required for a pre-qualification.

The most common award procedure (restricted procedure with publication of notice) involves the following steps:

Thresholds for Award Procedures
Thresholds for award procedures
Contracts with a value (net of VAT) estimated to be below the threshold may be awarded by a procedure without publication of notice, whereas contracts with a value (net of VAT) estimated to equal or exceed the threshold shall be awarded by a procedure with publication of notice.

The thresholds for the different types of contract are specified in Table 3.1.

Table 3.1:

1. The value of a service contract includes fees only and not reimbursable expenses or the value of supplies or works to be procured by a project holder as part of the services or which are arranged by other parties.
   
2. For purposes of the threshold, the term "supply contract" covers not only contracts for the delivery of goods but also contracts for the delivery and installation of goods. Particular requirements apply to the number of bids to be solicited before the award of a supply contract without publication of notice.
   
3. For purposes of the threshold, the term "mixed contract" means a contract with one company for a combination of services, supplies and /or works. The threshold for mixed contracts only applies if the values of the separate components of the contract do not exceed their individual thresholds. A contract providing for the procurement of supplies and/or works as part of the services is not a mixed contract as the project holder will not be the supplier or contractor.

No division of a contract
No contract shall be divided with the intent of reducing the value of the resulting contract(s) below these thresholds with the purpose of circumventing the rules.

Exemptions
DEPA may award a contract without publication of notice irrespective of the value of the contract by an exemption from the rules of procedure.

An exemption, however, shall be justified by particular circumstances, including reasons of extreme urgency or technical reasons for which the services or supplies may be provided or delivered only by a particular person or company. Further, an exemption requires the approval of DEPA's management.

3.3.2 Standard Contract Forms

In projects by tender DEPA will normally use standard contract forms.

The standard contract forms most frequently used by DEPA are the KR-contract form and the FIDIC contract forms.

KR-contract form
The KR-contract form is used for short term agreements on consultancy services. KR is an abbreviation of the Danish term "Korttidsrådgivning" which translates into "short term consultancy services".

The KR-contract is governed by rules and guidelines for short-term agreements on supply of consultancy services (the KR-rules).

The KR-rules is an agreed document on which the Danish Ministry of Foreign Affairs and DEPA for the one part and the Danish Association of Consulting Engineers ("F.R.I.") and other professional associations for the second part are in agreement.

The KR-rules only apply to service providers who are members of the associations which are party to the agreement on the KR-rules.

For practical reasons, DEPA may use the KR-contract form when contracting services from a service provider who is not a member of the above associations, but in that case DEPA reserves the right to deviate from the KR-rules.

Pursuant to the KR-rules, the KR-contract form can be used when

Normally, DEPA only uses the KR-contract form when the contract is awarded by a procedure without publication of notice (See Section 3.3.1).

FIDIC contract forms
"FIDIC" is the International Federation of Consulting Engineers.

FIDIC has published various contract forms[3] , and where applicable, DEPA normally uses the FIDIC contract forms.

DEPA will use the particular FIDIC contract form which is the most appropriate in consideration of the nature of the contract. However, the White FIDIC (see footnote) is only used when the KR-contract form cannot be used.

Other contract forms
For the procurement of supplies, DEPA may use various contract forms which include World Bank and EU tendering and contract forms.

3.3.3 Eligibility

General eligibility
In general, all persons and companies are eligible for the award of a contract by DEPA, and only a few restrictions apply.

The only general restriction on the eligibility is that DEPA will exclude from the award procedures any person or company who has unfulfilled obligations relating to the payment of taxes in excess of DKK 100,000. Reference is made to the Danish act on restrictions on debtors' eligibility to participate in public tender procedures (Act no. 1093 of 21 December 1984).

Particular eligibility
To be eligible for the award of a particular contract, a person or company must comply with the necessary legal, technical and financial requirements and must have the capability and adequacy of resources to provide the particular deliverables effectively. In a negotiated procedure without publication and a restricted procedure with publication of notice, only the tenders selected or prequalified by DEPA are eligible to submit tenders.

Rules of equality of treatment of the tenders in a tender procedure exclude from participation any person or company who has an unfair competitive advantage.

An unfair competitive advantage may be gained from participation in the project phases preceding the tender. However, only previous participation which DEPA considers to result in an unfair competitive advantage will cause exclusion from tendering. In these decisions, DEPA follows the guidelines on the principle of the equality of treatment issued by the Danish Competition Agency (KonkurrenceStyrelsen).

On request, DEPA may render an advance opinion on the particular eligibility of a person or company before a tender procedure. Although any exclusion will be based upon an individual and concrete decision, participation in the project phase immediately preceding the tender will normally result in exclusion. An appraisal prior to the tender will normally be regarded as sufficient to clear a person or company from exclusion on the grounds of an unfair competitive advantage.

In order to avoid any doubt about eligibility, DEPA may require a person or a company to agree to waive participation in a subsequent tender on the same project.

3.3.4 DEPA's Manual for Tendering and Contracting

DEPA contracting manual
DEPA has issued a separate manual for the tendering and contracting of projects; this manual also applies to projects funded under the DANCEE.

The separate manual provides a detailed description of DEPA's rules of procedure for award of contracts, standard contract forms and guidelines for various contract issues.

All detailed questions about tendering and contracting are referred to the separate manual.

4. Project Implementation

4.1 Key Stakeholders in Project Implementation

A number of stakeholders are involved in the implementation of projects. Key stakeholders responsible for project implementation are:

Key persons appointed by each key stakeholder are shown in Figure 4.1. Responsibilities and tasks of the key stakeholders and key persons are described in the following sections.

4.1.1 The Project Holder

Responsibility of the project holder
Projects funded under the DANCEE cover a wide range of services, supplies and works, and the particular tasks and responsibilities of project holders vary correspondingly.

At one extreme, the implementation may rely almost entirely on the project holder; at another extreme, the beneficiary or other stakeholders may implement major parts of a project.

As a general rule, DEPA will hold a project holder responsible for the achievement of the immediate objectives of the project, but the particular capacity or role of the project holder as specified in the project document may modify this responsibility.

DANCEE's prior or subsequent approval of proposals, initiatives and approaches does not limit the professional responsibility of the project holder in terms of the appropriateness or feasibility thereof, unless the project holder in advance explicitly has alerted DANCEE to particular risks associated therewith. This also applies to any information on the progress or quality of the implementation provided by the project holder to DANCEE in reports, etc.

Figure 4.1: Key Stakeholders

The project holder will assign a team of international and national experts to implement the project. The project holder will appoint a team leader and a project director. The project director will be responsible for quality assurance of the project implementation and project outputs. The team leader has the overall daily responsibility for the timely and correct implementation of the project. In most projects the project holder will also assign a local assistant team leader.

Team leader
DANCEE's acceptance of the team leader - and of expatriate personnel in general - is part of the contract procedure and procedure for approval of applications. Technical, professional and personal qualifications and past experience and references of expatriate personnel will be evaluated by DANCEE.

The team leader is expected to establish a smooth working relationship with the local project manager, local consultants and other stakeholders. Further, the team leader will draft the specific work plans for all experts involved in the project and supervise the work performed.

The team leader will be responsible for organising a steering committee (SC) and - if agreed - also a advisory committee - please refer to Sections 4.2.2 and 4.2.3. The team leader will act as secretary to the steering committee and the possible advisory committee.

In particular, the team leader will ensure:

4.1.2 The Beneficiary

Responsibility
The beneficiary is the organisation in the partner country which benefits from the project and which receives the results of the project after completion. The beneficiary will normally implement local project components.
The beneficiary will have the overall responsibility for implementation of local project components. The responsibilities of the beneficiary will be clearly defined in the project document.

The beneficiary provides any local services agreed in the project document, and is responsible for the correct and timely service of all those local sub-contractors and local stakeholders which do not form a part of the project holder's team.

A representative appointed by the beneficiary serves as deputy chairman of the steering committee and chairs all meetings of the advisory committee - please refer to Sections 4.2.2 and 4.2.3.

Local project manager
The beneficiary will nominate a local project manager who will have the day-to-day responsibility for the implementation of the local project component working in an informal project management group with the team leader.

4.1.3 The Ministry of Environment

Responsibility of MoE
MoE has the overall local responsibility for the implementation of the country programme. In this capacity, MoE also has overall responsibility for monitoring the progress of project implementation and the project's contribution to the overall country programme.

Local project director
MoE will appoint a local project director who will chair all steering committee meetings.

MoE has the right to demand a halt of a project if MoE deems that it is not progressing according to the project document or if external matters indicate a need for a reformulation of the project. However, such a request must be directed to DANCEE, as only DANCEE has the authority to demand that the project holder halts the implementation of the project according to the provisions in the contract or the letter of grant between DANCEE and the project holder. Likewise, if MoE requires changes in the project, the matter shall be discussed in the steering committee and any decision shall be agreed with DANCEE.

4.1.4 DANCEE

Responsibility of the country coordinator
DANCEE has overall supervision responsibility for the projects. One country coordinator has been appointed to handle all relations with one specific partner country. This implies at least two annual meetings to negotiate and prioritise the project long-list into the project short-list and to assess ongoing and finalised projects. The overall responsibility for all projects in one individual partner country is undertaken by the relevant country coordinator. However, other DEPA specialists or specialists from other agencies within MoEE may be appointed to be responsible for a specific project.
The country coordinator will follow the progress of project implementation through the assessment of reports, accounting statements, reports from the LPC and by making site visits.

Local project coordinator
The LPC is a local native-speaking specialist employed by DANCEE and based in the partner country - most often in MoE. The main task is to assist the country coordinator in coordinating DANCEE activities in the partner country.

The LPC will monitor project implementation by visiting the project implementation sites regularly. Inadequate performance in relation to the project document will be reported to DANCEE. The project holder will then be contacted by DANCEE in order to find possible solutions to the problems incurred. The local project coordinator does not, however, have the authority to demand changes in project implementation.

DANCEE can stop project implementation
If a project is not progressing according to plans in the project document, DANCEE reserves the right and authority to halt its implementation or terminate the project.

4.2 Management Forums

To ensure the efficient implementation of projects, each DANCEE project will establish a management structure for project implementation. The type of management structure established will depend on the particular tasks of the project. The management structure will be described in the project document and will be elaborated in the procedures manual - please refer to Section 4.3.5.

4.2.1 Project Management Group

Responsibilities
The team leader and the local project manager constitute the project management group. The project management group is responsible for the day-to-day implementation of the project.

The team leader is responsible on behalf of the project holder and the local project manager is responsible for inputs from the beneficiary.

The tasks and responsibilities of the team leader and the local project manager are described in the project document and shall be elaborated in the procedures manual.

4.2.2 Steering Committee

For most projects, DANCEE recommends a steering committee. Some projects, e.g. projects which basically consist of equipment deliveries may not require a steering committee.

Established by Project Holder
It is the responsibility of the project holder to establish a steering committee in close collaboration with MoE and the beneficiary. No later than six weeks after the start of the project, the team leader shall submit a proposal to DANCEE on the proposed composition of the steering committee. DANCEE will approve or amend the proposal for composition of the steering committee within 10 working days of receipt of the proposal.

Members
Members of the steering committee shall include as a minimum:

The steering committee may be expanded as appropriate to include:

Responsibility
The key responsibility of the steering committee is to monitor and supervise project implementation. This will be done by approving project reports, i.e. the inception report, the progress reports and the final report. This implies that the steering committee should have four yearly meetings as the progress reports are submitted quarterly by the project holder.

First steering committee meeting
The project holder will call the first meeting of the steering committee no later than three months after the start of the project. Generally, the first meeting of the steering committee shall be used for the formal introduction of project stakeholders. The team leader will present the first detailed plan for project implementation and introduce his team. At its first meeting the steering committee will approve or request revision of the inception report - please refer to Section 4.3.4. Recommended guidelines for steering committee meetings are shown in Enclosure E.

Final steering committee meeting
The focus of the final steering committee meeting will be an assessment of whether project objectives have been achieved. The committee will respond to a detailed reading of the completion report - please refer to Section 4.3.7. The conclusions of discussions will be summarised in the minutes of meetings. The minutes will be forwarded to DANCEE.

Project sustainability
Throughout the project period significant attention should be paid to the future. The team leader should monitor the end-of-project situation and the status of the sustainability of the project. This may also include a consideration of additional tasks deemed necessary to enhance the sustainability of the project's results which are beyond the scope of the project document. At the final steering committee meeting, the team leader should give a presentation on the end-of-project situation. Particular focus will be on the beneficiary's responsibility for developing the results achieved. Recommendations for locally initiated follow-up activities will be highlighted.

Costs of steering committee meetings
The project budget will have a provision to meet the costs of steering committee meetings.

4.2.3 Advisory Committee

The MoE and the beneficiary may decide to establish a project advisory committee to follow the development of the project implementation. Members of a project advisory committee will typically represent local and regional authorities, organisations, educational institutions, research institutes, NGOs, independent experts, citizen's groups and other stakeholders. A representative appointed by the beneficiary chairs all meetings of the advisory committee.

No formal responsibilities
This committee has no formal responsibility for project implementation. It decides its own order of business and frequency of meetings (twice a year may be regarded as a minimum). The committee can only give advice. This advice will be channelled to the steering committee by the chairman.

The project budget may have a small provision for to meet the costs of advisory meetings.

4.3 Project Monitoring and Reporting

4.3.1 Project Monitoring Systems

Monitoring system
Project monitoring systems are established to ensure that data are available for both the monitoring of the project implementation and the evaluation of the project's impact, sustainability and relevance.

Each DANCEE supported project is required to establish a monitoring system at the start of the project. The aims of the monitoring system are:

Issues to be monitored
In Table 4.1 below the issues to be monitored are listed in accordance with the project logic.

Table 4.1: Issues to be monitored

Progress monitoring
Monitoring is the continuous and periodic assessment of the physical implementation of a project. Monitoring is carried out by the project management group. Project monitoring shall assess if inputs have been delivered and activities carried out according to plans, and if the project has achieved its outputs. Monitoring also involves an assessment of the likelihood of achieving the project objectives. No projects can be implemented in isolation from the surrounding environment and, therefore, changes in the project's social and economic environment shall also be assessed. The efficiency shall be monitored by assessing the "productivity" of the implementation process - how economically inputs are transformed into outputs.

Evaluation
Part of the project evaluation will be the responsibility of the project holder and should be reported to DANCEE in the completion report and the statistical summary. Additionally, DANCEE may decide to carry out an independant evaluation - please refer to Section 5.

The effectiveness of the project is judged by an assessment of the extent to which the project has achieved its immediate objectives. The foreseen and unforeseen consequences of a project, to the beneficiary in particular, and to society in general, shall be assessed.

The project's effectiveness and impacts shall be assessed by the project holder as part of the completion report. In addition, DANCEE can decide that the project should undergo an external evaluation according to the guidelines in Section 5.

The monitoring system should normally ensure that baseline data are available against which to assess the environmental impact of a project.

Baseline measurements or estimates should be made both before and after project implementation in order to measure the environmental impacts of the project - please refer to Section 4.3.3.

Indicators
Monitoring will normally be based on indicators. Indicators are established as success criteria at the output and objective level. Indicators are used as an economic and efficient way of making a partial test, on the premise that if the test conditions have been fulfilled, then the project's outputs and objectives have also been fulfilled.

An indicator should be:

The list of indicators used by DANCEE as part of the statistical summary is provided in Enclosure H.

Some examples of typical indicators are:

Milestones
The implementation of activities is monitored by a comparison with milestones established in the project's work plan. A milestone indicates when a given set of activities is expected to have been performed.

Specifying indicators and milestones
Indicators and milestones are normally defined during the project's inception period, as the project document will often only describe indicators and milestones for project monitoring in general terms. Indicators and milestones should be established in collaboration with local partners and the beneficiary, to ensure that all parties to the project are committed to the achievement of the project's outputs and objectives from the beginning.

4.3.2 Reporting

During project implementation, the project holder is responsible for the production of the reports specified in the project document. Reports normally include monitoring reports, management reports and technical reports. The different reports to be presented by the project holder are outlined in Figure 4.2.

Figure 4.2: Reports produced during project implementation

The procedures manual
Management reports include:

Technical reports
Technical reports may include:

Reporting monitoring results
The outcomes of project monitoring are reported by the project management group to the steering committee and to DANCEE. The focus of project monitoring will initially be on the delivery of inputs and the implementation of activities, but as the project progresses, the monitoring emphasis will shift towards an assessment of achieved results.

The project reporting system is based on three types of monitoring reports:

1. an inception report describing how the project is to be implemented in relation to the project document,
2. progress reports which address project progress will normally be submitted quarterly. The progress reports should be brief, and focus on problems and deviations, not repeating issues previously reported. Approved progress reports are a precondition for the settlement of invoices,
3. a completion report summarising overall project achievements,
   

In addition to the above monitoring reports, a baseline study/description should be part of the project's monitoring and evaluation system.

Formats and requirements for the individual reports are outlined below.

4.3.3 Baseline Descriptions

A baseline description is established with the aim of describing the existing situation (the baseline) against which the impact of a project can be measured.

DANCEE requires baseline descriptions
All DANCEE supported projects shall establish baseline descriptions.
A baseline may refer to water quality parameters, biological diversity and species composition, the state of ecosystems, the physical background sustaining existing ecosystems or a specific species. Any impacts introduced as a change in the physical background shall be subsequently described and assessed in relation to a baseline description.
Two examples of baseline descriptions are given below.

Baseline for waste water treatment
For projects related to waste water treatment the baseline description will be used for the evaluation of the treatment facilities and the pollution of the receiving waters. The amount of waste water discharged will be assessed together with the content of the polluting substances (especially BOD, nitrogen, ammonia and phosphorous). If the catchment area includes large industries, the discharge of heavy metals, petro-chemical by-products etc. will be assessed.

Existing waste water treatment facilities will be evaluated and a baseline describing the present treatment facilities, their efficiency and the level of pollution from the discharge of waste water will be established.

Next, an assessment will be made of the improvements in the waste water treatment required to meet an outlet quality equal to e.g. EU standards and the expected consequent effect on the receiving waters.

In some projects, it is not possible to measure the direct impact of the project on the environment. In these situations, the baseline can be established by a comparison with the pre-existing processes. Two examples are given below of baseline studies for projects with no direct, measurable environmental impacts.

Baselines for legislative assistance
For assistance related to environmental legislation, baseline descriptions usually consist of a description of existing national legislation. In accession projects, legislative gap analysis is the usual methodology, i.e. a comparison of national legislation with the requirements found in EU Directives. The legislative baseline refers methodologically to provisions found in the national legislation. Required changes are defined by EU requirements.

Baselines for technical studies
For technical studies, baseline descriptions are used for an evaluation of the required enhancements in the technical production capabilities of enterprises, or of their capability to prevent pollution of the external environment.

An example of such evaluations is related to the Integrated Pollution Prevention Control (IPPC) Directive in European countries. From an evaluation of existing production facilities in industrial units, a baseline describing production facilities and levels of pollution control is established. Next, an assessment is made of modified production capability and pollution prevention measures based on the introduction of Best Available Technology (BAT), also in accordance with the IPPC Directive. All achievements are described in relation to the baseline situation.

4.3.4 Approval of Reports

Reports need to be approved first by the steering committee and subsequently by DANCEE. The general procedures for the approval of project reports are described below.

The steering committee
The steering committee may reject a report if it is of poor quality, i.e. if it does not comply with DANCEE's requirements or if it does not give a fair assessment of the project implementation. If a report indicates that project implementation is not meeting the expectations laid down in the project document and the proposed solutions seem inadequate, the report will normally be rejected.

Rejections of reports
If the steering committee rejects a report, the project holder will revise the report and re-submit it to the steering committee for their written approval. If members have not commented on the report within 10 working days, the report is deemed to be approved and can be forwarded to DANCEE by the team leader. If the steering committee again rejects the report, a further meeting will be called for approval of the report.

The project holder may request the chairman to ask the MoEE representative to participate in this further meeting, whether or not the MoEE representative took part in the meeting which rejected the original report. Once such a request has been submitted, the meeting cannot be held without the MoEE representative being present.

In those cases where the MoEE representative participates in the steering committee meetings, all reports are approved if the MoEE representative has no objections.

DANCEE's approval of reports
DANCEE will normally approve reports at the recommendation of the steering committee. However, DANCEE may reject reports approved by the steering committee. If this happens, a further steering committee meeting will be convened and the MoEE representative must participate and provide reasons for the rejection of the report.

DANCEE's approval of reports does not limit the professional responsibilities of the project holder - please refer to Section 4.1.1.

4.3.5 Inception Report

Typically all tendered projects have an inception phase and an inception report, whereas some projects by application, and most equipment supply projects do not have an inception phase. The project document will specify whether the project requires an inception phase. The usual length of the inception phase is three months.

Inception phase
The inception report will include:

The procedures manual and the baseline study will be attached to the inception report. The draft inception report shall normally be submitted to the steering committee and DANCEE at least one month before the first steering committee meeting.

Assessment of project document
During the inception phase, and at the team leader's initiative, the project management group will assess the project document, the budget and the plan of implementation. They will detail project activities and make required adjustments according to changes in the local environment. They will specify the project implementation plan. The project implementation plan will indicate when draft monitoring reports will be forwarded to the steering committee and to DANCEE. If any deficiencies or need for modifications are found, this must be clarified and agreed, and appropriate action taken.

The assessment of the project document is intended to verify that the description of the context, problems and assumptions for the project remain valid. In addition, the adequacy of inputs and support from the implementing organisation and other parties will be assessed, and clear roles and responsibilities will be defined. The assessment will also verify that the outputs can be produced with the planned activities and inputs specified in the project implementation plan. The indicators and means of verification will be detailed and refined, and the adequacy of baseline data will be checked.

Adjustments to project document
The results of this assessment will be documented in the inception report as shown in Table 4.2. If adjustments are required to the project document, the project holder must submit to DANCEE a revised project document or an addendum to the existing project document. DANCEE must approve the adjustments by co-signing with the project holder the revised project document or addendum to the existing project document.

Approval of inception report
Comments by the steering committee to the inception report shall be submitted to DANCEE by the project holder. DANCEE shall approve the report in writing within ten working days of receipt of the comments. If DANCEE cannot approve the report within ten working days of receipt of the comments from the steering committee, notice shall be given in writing to the project holder.

Table 4.2: Inception Report Format
Inception Report Format

4.3.6 Procedures Manual

The procedures manual serves as a guide for project staff, sub-consultants, steering committee members and other stakeholders. It contains information on project organisation and procedures and responsibilities for general management, financial management, project monitoring and reporting, and quality management.

Monitoring
The monitoring procedures shall clearly indicate:

Table 4.3: Procedures Manual Format (example)

Format of manual
Table 4.3 suggests contents and format for a procedures manual, but a manual will always be project-specific. Thus, it may contain additional information that project staff and steering committee may find appropriate. The physical format should be flexible (ring binder as well as electronic format) to allow continuous updating during the project's lifetime.

4.3.7 Progress Reports

Progress reports are prepared by the project management group at the initiative of the team leader. They are normally submitted to DANCEE and the steering committee every three months. The scheduling of progress reports is established in the inception report, and progress reports should to the extent possible correspond to the planned achievement of project outputs.

Means of communication
The progress reports (max. 10 pages plus annexes) are a means for the project management group to communicate information about the implementation of the project to the steering committee, MoE, DANCEE and other stakeholders.

Focus on problems
Progress reports should not repeat information contained in previously submitted reports. Their prime function is to point to unexpected problems which have occurred in the reporting period or which can be foreseen. Progress reports should propose solutions to identified problems for approval by the steering committee and DANCEE. These reports will also allow controlled adjustments, convey information to stakeholders, and serve as a project diary, showing agreed alterations to the project document.

DANCEE will primarily use the progress reports to monitor project implementation and will not normally initiate action unless specifically requested by the team leader or by MoE, or in cases where it is obvious that project implementation is not progressing satisfactory.

Approval of progress report
The draft progress report is normally submitted to the steering committee and DANCEE at least ten working days before the steering committee meeting. The steering committee comments on the draft progress report which is submitted to DANCEE after the meeting. DANCEE shall approve the report in writing within ten working days upon receipt of comments from the steering committee. If DANCEE cannot approve within ten working days, notice shall be given in writing to the project holder.

Approval of changes
If changes to the project outputs or objectives become necessary, these will be presented and documented in the progress reports. Proposed changes should be listed in the covering letter to the progress report for subsequent approval by DANCEE. Adjustments will be approved only when the covering letter is signed by DANCEE and the project holder - please refer to Enclosure F.

Adjustments of budget lines
Adjustments of budget lines are possible to a limited extent in tendered projects - please refer to Section 4.4. For projects by application, adjustment of budget lines is only possible to a limited extent and only after DANCEE's approval. Accounts for reimbursable expenses and accounts for fees should be submitted at the same time as progress reports. Payments cannot be made without approval of submitted progress reports.

A suggested format for progress reports is shown in Table 4.4. However, the reports may contain additional information found appropriate by the project management group.

Table 4.4: Progress Report Format

4.3.8 Technical Reports

Technical reports may include masterplans, feasibility studies, manuals, tender documents etc.

The technical reports can be used as milestones and it must be specified in the project document which technical reports are required.

The technical reports must be submitted to DANCEE in accordance with the time scedule in the project document. DANCEE shall approve the report within 20 working days upon reception. This approval must be in written form and addressed to the project holder.

4.3.9 Completion Report

At the initiative and responsibility of the team leader, the team leader and the local project manager will prepare a draft completion report prior to the end of the project. The primary purposes of the report are:

The team leader will submit the draft completion report to the steering committee. The steering committee will discuss the draft completion report. The draft completion report will be sent to DANCEE in two copies after approval by the steering committee.

Approval of completion report
The draft completion report is normally submitted to the steering committee and DANCEE at least one month before the steering committee meeting. After the steering committee, comments are submitted to DANCEE. DANCEE shall approve the report in writing within 20 working days upon receipt of the comments. If DANCEE cannot approve the report within 20 working days upon receipt of the comments from the SC, notice will be given in writing to the project holder.

Final completion report
If there is no request for changes, the draft completion report will become final by a replacement of the cover page. If the steering committee or DANCEE request changes, a revised draft completion report will be submitted by the team leader to the chairman of the steering committee and to DANCEE within 10 working days of receipt of the steering committee's or DANCEE's comments. If the project holder does not receive any comments from the steering committee or DANCEE within 20 working days, the revised draft completion report may be considered approved.

Statistical summary
DANCEE maintains a database of all projects carried out under the DANCEE programme. This database contains e.g. information on environmental impacts, ex-post summary, co-financing. All DANCEE projects must be included in this database. For this purpose, a statistical summary for each project must be filled in.

The project holder is responsible for filling in the data necessary in the statistal summary at the end of the project. The project holder shall submit the statistical summary (in MS Word format) together with the completion report. The summary must be filled in in accordance to specific instructions and submitted to DANCEE on diskette.

With the approval of the completion report and the statistical summary, the project holder may submit his final accounts and invoice.

The project holder will have completed his services once the completion report, the statistical summary and the final accounts have been accepted by DANCEE.

A format for the completion report is shown in Table 4.5.

Table 4.5:Completion Report Format

4.4 Financial Management

The purpose of this Section is to provide an overview of DANCEE's terms of payment and requirements for financial reporting. It is for information only, has no legal status, and can be deviated from by the DANCEE. The legal and detailed terms and requirements for a specific project are specified in the contracts and the letter of grant.

4.4.1 Financial Management

Project holder's responsibility
The general responsibility for the financial management of funds provided by DANCEE to projects rests with the project holder.

Financial management responsibilities entail inter alia that all fees and reimbursable expenses invoiced to DANCEE are against specific provisions in the budget and are adequately supported by evidence that procurement is based upon fair and open bargaining or tendering and on competitive terms and conditions, and that the use of the funds is appropriately accounted for. In general, financial management must be in accordance with common professional principles of sound commercial practice.

DANCEE cannot accept that any offer, payment, consideration, or benefit of any kind, which constitutes an illegal or corrupt practice, shall be made or accepted, directly or indirectly, as an inducement or reward in relation to the tendering, award, execution or performance of a contract or a grant. Any such practice will be grounds for the immediate termination of a project. The project holder will be permanently disqualified from DANCEE funded projects and activities. DANCEE may also pursue further civil and criminal actions against the project holder.

4.4.2 Payment Schemes

DANCEE will pay the project holder for fees and reimbursable expenses which are specified in the budget and incurred in the implementation of the project within the budgeted amounts.

Payments will be made on the basis of invoices submitted to DANCEE by the project holder.

Projects by Tender
Advance payment
In projects by tender, DANCEE may make advance payments to the project holder upon signing of the contract in an amount corresponding to a maximum of 30 % of the total estimated fees and to a maximum of 40 % of the total estimated reimbursable expenses. An advance payment must be repaid by means of pro rata deductions from the subsequent progress payments to the project holder.

Project holders other than NGOs must provide a security (bank guarantee) for an advance payment. For advance payments of less than DKK 400,000, DANCEE may waive this requirement.

DEPA may conduct an assessment of the institutional and financial standing of a NGO for purposes of determining the size of the advance payments.

Progress payments
Progress payments are made quarterly. DANCEE's approval of the most recent progress report is a precondition for the progress payment.

Progress payments are made on the basis of invoices submitted to DANCEE by the project holder for the services rendered and for the reimbursable expenses actually incurred in the preceding quarter.

Final payment
In a KR-contract, the advance and progress payment can as a maximum amount to 75% of the total estimated fees and reimbursable expenses. A final payment is made after DANCEE's approval of the final accounts.

For the procurement of supplies and works, DANCEE and the project holder may agree that DANCEE pays directly to the supplier or contractor on the basis of invoices endorsed for payment by the project holder.

Projects by Application
In projects by application, DANCEE will disburse the grant in two instalments.

First instalment
The first instalment corresponding to 90% of the grant will be paid at the time of submission of the completion report. If DANCEE at this point of time should have any substantial objections to making the payment, DANCEE may postpone it until DANCEE has approved the completion report and the audited final statement of accounts.

Second instalment
The second instalment (10% of the grant) will be paid when DANCEE has approved the completion report and the audited final statement of accounts.

The project holder shall submit invoices for the payment of the instalments.

Quarterly payments in projects longer than 6 months
In projects with a duration of more than 6 months, DANCEE may agree to make payments on account at quarterly intervals in amounts which correspond to fees and reimbursable expenses accrued in the preceding quarter. These payments cannot in total exceed 90% of the grant. Payments on account will not be finalised until DANCEE has approved the completion report and the audited final statement of accounts.

Advance payments to NGOs
Advance payments to NGOs are made in amounts which are suited to the accrual of fees and reimbursable expenses. Normally, DANCEE makes quarterly or biannual advance payments in amounts which correspond to the budgeted fees and reimbursable expenses in the following period.

DEPA may conduct an assessment of the institutional and financial standing of a NGO for purposes of determining the size of the advance payments.

Advance payment for supplies and works
Advance payments in connection with the procurement of supplies or works may correspond to maximum 75% of the costs. Such advance payments are subject to separate agreement between DANCEE and the project holder.

Project holders other than NGOs must provide a security (bank guarantee) for an advance payment. For advance payments of less than DKK 400,000 DEPA may waive this requirement.

Direct payment to supplier or contractor
For the procurement of supplies and works, DANCEE and the project holder may agree that DANCEE pays directly to the supplier or contractor on the basis of invoices endorsed for payment by the project holder.

4.4.3 Terms of Payment

DANCEE will pay the invoices within a period of 30 days from receipt provided that the invoices are complete and not disputed and that the project holder has submitted requisite reports.

Payment of the invoice as of 31 December and the final invoice further require the submission of the annual or final statement of accounts.

VAT and Taxation
In a project by application, the grant is not subject to Danish VAT, but the grant is taxable income for the project holder.

Services, supplies and works under a contract with a Danish project holder or subcontractor are not subject to Danish VAT, if the deliverables exclusively are used outside the EU.

All funds from the DANCEE shall be exempted from VAT, duties and taxation in the partner country.

4.4.4 Financial reporting

Statements of account
DANCEE may require that the project holder submits audited annual and final statements of accounts to DANCEE within a period of three months after December 31 or after completion.

In projects by application, the requirement for annual statements of accounts only applies if DANCEE has agreed to make payments on account.

For longer projects, the first annual statement of accounts and the final statement of accounts may cover a period of up to 14 months, and the consultant needs not submit annual statements of accounts within that period. The consultant shall in advance notify DANCEE of the omission of an annual statement of accounts.

The annual statement of accounts shall include a budget for the remaining project period.

The statements of accounts shall be in accordance with the specifications issued and be in the form which DANCEE may require at any time. Please refer to Table 4.6.

Audits
The annual and final statements of accounts shall be audited, and the auditor shall render his opinion and sign the statements.

The auditor shall be a state authorised or registered accountant.

The audit shall be conducted in accordance with standard auditing practice and any particular instructions issued by DANCEE.

The costs of the audits may be included in the budget as a reimbursable expense and invoiced to DANCEE.

Other donors
In case of projects which have been co-financed by funds from DANCEE and funds from other donors or financial institutions, DANCEE shall receive a copy of the auditing report from the entire project.

Inspection
DANCEE and its representatives shall be entitled to inspect and otherwise examine the project, including (but not limited to) all and any accounts, receipts, vouchers, contracts, and make site inspections, during and after the project. The project holder and the beneficiary are required to grant access for such inspection and examination. This also applies to investigations conducted by the office of the Auditor General of Denmark.

Table 4.6: Annual State of Accounts Format

5. Evaluation

Evaluation
Evaluation is a systematic and objective assessment of the design, implementation and results of an on-going or completed project or programme. The aim of the evaluation is to determine the efficiency, effectiveness, impact, sustainability and relevance of the project. Evaluations are undertaken at the initiative of DANCEE.

The evaluations of DANCEE supported projects serve two purposes:

Reviews
Reviews are midway between monitoring and evaluation, as they involve a fresh look at the objectives, design and performance of a project. Compared to evaluations, reviews are more limited in scope, time and focus. Reviews are used to verify the relevance and efficiency of the project. The focus of the review is in particular on any needs for adjustments of the project. Reviews are also carried out at the initiative of DANCEE.

The term "evaluation" is used below, when speaking of reviews and evaluations.

5.1 Framework for Evaluation

Evaluation procedures
DANCEE applies the same evaluation procedures for tender and application projects. DANCEE operates with the three types of evaluations shown in Table 5.1 below.

Table 5.1: Structure for Project Evaluation

Mid-term reviews
Mid-term reviews are carried out on projects with a duration of more than three years, on complicated and complex projects and on projects where problems have been identified. Mid-term reviews are carried out by a team of external consultants appointed by DANCEE. The mid-term review will verify the relevance, sustainability and efficiency of the project and will recommend relevant adjustments.

End-of-project evaluations
End-of-project evaluations will as a minimum be carried out as a desk evaluation by the MoEE representative. End-of-project evaluations may also be carried out by a team of external consultants appointed by DANCEE. The aim of the end-of-project evaluation is to assess what lasting impact the project is likely to have. The focus of the end-of-project evaluation is on the effectiveness of the project and the impact of the project. Furthermore, the end-of-project evaluation will assess the sustainability of the project.

Ex-post evaluation
DANCEE will normally carry out ex-post evaluations of groups of projects. The ex-post evaluation will focus on the sustainability of the projects' impacts. Ex-post evaluations will be carried out by a team of external consultants appointed by DANCEE, 2-5 years after project completion.

Furthermore, DANCEE and its representatives are entitled to carry out inspections and examinations of projects, as described in Section 5.4.

5.2 Evaluations Carried Out by External Consultants

5.2.1 Terms of Reference

ToR
ToR for reviews and evaluations carried out by external consultants are developed by DANCEE. The ToR defines the objectives of the evaluation and indicates the issues which DANCEE finds of particular importance. In addition, information is provided on the background for the evaluation, the composition of the evaluation team and the timing of the evaluation. A standard outline of the DANCEE ToR is shown in Table 5.2.

5.2.2 Contracting

The evaluation team
An external review or evaluation team will consist of 1-4 persons. The team can include both international consultants and consultants from the partner country, all the members being selected for their technical expertise. The team will present their independent views on the project.

The beneficiary
A representative from the beneficiary will act as a resource person for the evaluation team and will ensure that lessons learned are discussed with the beneficiary.

The team leader
DANCEE will sign a contract with the evaluation team. The ToR forms part of the contract. The contract will specify the team leader of the evaluation. The team leader will be responsible for the implementation of the evaluation and for the final reporting.

DANCEE will hold a briefing meeting with the team. The purpose of the meeting is to ensure that the team has the broad understanding of the project to be evaluated, to identify needs for further documentation and to discuss the ToR.

5.2.3 Implementing the Evaluation

The evaluation team
The evaluation team is responsible for planning and undertaking the evaluation. The team leader will be responsible to DANCEE but will delegate assignments to the team members. The local project coordinator will upon request assist with the planning of a programme, visits and meetings for the evaluation team.

Local project coordinator
Upon arrival in the partner country the team will consult with the local project coordinator and will brief MoE on the programme for the evaluation.

Table 5.2: Standard Outline of DANCEE's ToR for evaluations

Debriefing note
Before departure from the partner country, the team will debrief MoE. The head of the evaluation team will present a debriefing note to MoE. This note will form the basis for a discussion with MoE, the beneficiary and other stakeholders about the results of the evaluation.

The debriefing note should not exceed ten pages and will specify the findings and recommendations of the evaluation team. An outline for a debriefing note is shown in Figure 5.1 below.

Figure 5.1: Outline of debriefing note

5.2.4 The Evaluation Report

The evaluation team will write its evaluation report based on the findings and recommendations outlined in the debriefing note. The team will prepare a draft final report, which will be scrutinised by DANCEE before the final report is produced. The final report should not exceed 50 pages.

The format of the evaluation report is outlined in Table 5.3. The importance accorded to each of the points should reflect the ToR. The report will focus on the achievements of the project.

The evaluation team will comment on positive and negative aspects of the project, conclusions being operational and action-oriented.

DANCEE shall approve the draft evaluation report in writing to the team leader within 20 working days after reciving the draft.

5.3 Lessons Learned

The application of the evaluation results
One of the main purposes of carrying out an evaluation is to applicate the evaluation results and lessons learned to new projects.

In the case of a mid-term review, the final evaluation report is given to the steering committee. The steering committee will review, approve or disapprove, and implement recommendations. DANCEE is responsible for submitting the final evaluation report to the project holder and the steering committee.

Final or ex-post evaluation
In an end-of-project or ex-post evaluation, the emphasis is on lessons learned for new projects and for future strategies. End-of-project evaluations will be discussed at the final steering committee meeting. The steering committee will discuss the lessons learned and will suggest adjustments to the beneficiary to ensure sustainability of project results. DANCEE and MoE will discuss the outcomes of ex-post evaluations with relevant stakeholders.

5.4 Inspection and Examination of Projects

DANCEE and its representatives shall be entitled to inspect and otherwise examine projects, including (but not limited to) all and any accounts, receipts, contracts, and to make on-site inspections, during and after completion of the project. The project holder and the beneficiary are required to grant access and render the assistance necessary for such inspection and examination.

These provisions also apply to investigations conducted by the Office of the Auditor General of Denmark.

Table 5.3: Evaluation Report Format[5]

Annex

Enclosure A
Project Idea Format

Project Idea Format

Project Idea Format

The project idea must be submitted in English and should not exceed 5 pages. The description of the project idea should as a minimum be 1-2 pages and should include the topics underlined in the Project Idea Format (refer to opposite page). The subjects to be described are in general the same as for the project document (Enclosure B). However, the intention of the project idea format is that the level of detail and the accuracy of the information are considerably less than those required for the project document.

Applicants are not required to formally submit a project idea, but applicants may do so if they find the procedure helpful. Approval of a project idea cannot be interpreted to mean that funding for the application project will eventually be provided.

For an explanation of the different topics please refer to Enclosure B.

Enclosure B
Project Document Format

Figure 1: Project Document Format

Project Document Format

The project document must be submitted in English and should not exceed 20 pages (excluding annexes). The project document should include the sections shown in Figure 1. Brief explanations are provided below:

Sentences written bold are fixed headings and sentences in italics are comments and explanations.

Executive Summary

A paragraph of 15 - 20 lines indicating why the project is important. The summary should state the project’s context, including the project’s relation to other projects, the project’s objective and main activitie, the budget (specifying the contribution by DEPA and by other parties), the duration, the expected environmental impact, potential for replication and sustainability. The executive summary is official ex-ante project summary and will be in Danish and English.

1. Context

This section outlines the project idea and the significance of the environmental problem(s) it intends to solve. The major characteristics of the setting in which the project will operate are also described. The scope of the section is relative to the size and complexity of the project. It should deal with the following issues:

1.1 Project Idea

A brief overall description of the project idea. In one or two paragraphs, describe the problem which the project is intended to solve and how the project will solve it.

1.2 Significance of the Environmental Problem

Describe and analyse the environmental problem(s) to be solved and its/their significance. Specify the level of natural reesources and health-related problems in the project area and the expected impacts of the project.

1.3 Legal Framework, EU Environmental Legislation and NPAA if Applicable

Describe the partner country’s environmental legislation and for countries which apply for EU-membership, their National Plan for Adaptation to EU environmental legislation (NPAA).

1.4 Institutional Set-up and Stakeholder Identification and Analysis

Describe the beneficiary and other major stakeholders.

1.5 Prior, On-going or Planned Assistance to the Sector

Describe the assistance to the sector financed by national and/or international means.

2. Definition of Project Interventions

The project is planned and described using the logical framework approach. From the project description it should logically follow that the specified inputs will enable the specified activities to be carried out and the outputs to be produced. Similarly, the completion of outputs will lead to the immediate objective and contribute to the achievement of the development objective. For all elements, a number of external assumptions must be fulfilled to assure the success of the project.

In addition to the text, a project planning matrix should be annexed to the project document. A recommended format is shown as Annex 8.

2.1 The Development Objective and Indicators

The development objective represents the overall objectives to which the project’s immediate objective is expected to contribute. The development objective is described as a desired future situation

Indicators should be stated in operational and measurable terms, i.e. quality, quantity, time and place. Also the means of verification explaining how the indicator will be checked in practice, should be described

Example

2.2 Immediate Objective and Indicators

Indicate the immediate objective, its indicator and means of verification. The immediate objective states the specific purpose of the project and should address the problems described in Section 1.2 above.

The immediate objective states a desired situation at the end of the project if it is implemented according to the plans, and if the external assumptions are fulfilled.

2.3 Outputs and Indicators

Describe the outputs produced directly by the project including indicators and means of verification. State only those outputs which are necessary and sufficient to achieve the immediate objective.

2.4 Main Activities

Describe the main activities which must be carried out in order to produce and sustain the specified outputs. The activities should also be reflected in the project implementation plan

2.5 Inputs

List all inputs which are to be provided by the beneficiaries, other donors or financing institutions and the applicant. Inputs are all the resources to be used by the project and may include funds, personnel, equipment, land and building, etc.

2.6 Assumptions, Risk and Preconditions

State the specific assumptions which are beyond the control of the project management, but necessary for achieving project outputs or objectives. In case these assumptions do not hold true, there can be major risks to the project, and they should be carefully monitored throughout the project.

3. Compatibility with DANCEE Policies and the Country Programme

All projects supported by DANCEE should coincide with the overall DANCEE policy and the environmental strategy of the partner country. This section should therefore clearly demonstrate how these conditions are fulfilled.

3.1 Programme Priority Areas Targeted by the Project

DANCEE general priority areas are:

Describe how the project fulfils DANCEE priority areas as spelled out in the specific country programme.(ref. Danish Environmental Support Fund for Eastern Europe, Co-operation Development 1991 - 96 and Priority Areas)

3.2 Programme Priority Criteria Targeted by the Project

Describe how the project relates to DANCEE’s criteria of priority as outlined in Section 1 and summarised below.

Needs and Wishes of Beneficiaries

A crucial criterion for DANCEE support is that projects should reflect the needs and wishes of the beneficiary institution. It is essential to the success of a project that it is understood from the beginning which services and products are of interest to the beneficiary. The term "beneficiary" is broadly defined and may include public and private enterprises, government authorities, NGOs etc.

It is a key criterion for DANCEE support that the support should be in agreement with national environmental legislation. Furthermore, support to countries applying for membership of the EU, must be consistent and in line with EU environmental legislation. Supplies and construction works should comply with EU environmental standards as well as with national standards.

It is a condition for DANCEE support that a project can be approved by the MoE. However, this approval will be obtained by DANCEE and not by the applicant.

Pollution Reduction, Nature Protection and other Environmental Benefits

The anticipated pollution reduction influences of a project constitute important criteria. Pollution reduction is measured in terms of quantity and toxicity. Projects which imply a significant quantitative and/or qualitative improvement of the environment, natural resources and public health, are given high priority. However, technical assistance may be given just as high priority as an investment project if the project under consideration is critical to the solution of environmental problems. Furthermore, priority is given to projects in geographical areas with serious environmental or health problems and to areas of significant natural value.

The environmental impact must be quantified to the degree possible. The impact will typically be measured in tons/year, m³/year, kg/ha, etc. The environmental impact must be the expected values for the project, i.e. how much the specific project will reduce detrimental environmental effects if it is implemented as planned. The resultant environmental effect, for instance caused by more effective cleaning, depositing of waste from filtering etc., must be indicated. All figures should be carefully explained by text. In projects where the environmental impact cannot be directly quantified, other indicators like number of course-months, size of natural areas etc. must be used. All indicators must be specific, measurable, timed and their accuracy stated.

All project documents should pay special attention to the expected positive environmental impacts, and to the pollution reduction effect of the project. The quantitative and qualitative pollution reduction and environmental impacts will be compared to the figures established during the baseline study

Transfer of Danish Know-how and Technology

DANCEE support is primarily granted to projects which entail the transfer of Danish know-how and/or technology. As a general rule, only projects involving proven technologies will be approved. Projects involving the development of new technology may, however, be considered in exceptional cases.

Pollution Prevention, Purification and Clean-up

Environmental problems are closely tied to the volume and structure of production and consumption. Therefore, projects should seek to attain savings in the consumption of raw materials, energy and water. The focus should be on pollution prevention, conservation, cleaner technologies and recycling rather than on the clean-up of pollution. However, funds may also be used for clean-ups if this is deemed necessary in order to prevent further damage to natural resources, health or the general environment.

When considering pollution prevention, the interrelation between pollution and economic development is important. The Central and Eastern European Countries are in a difficult process of economic transition. Benefits to both the environment and the economy can be attained to the extent that environmental protection and enhancement projects can be integrated into the economic restructuring process. Priority will be given to projects which demonstrate a financially and technologically appropriate solution to environmental problems.

Degree of Project Completion

DANCEE aims at supporting projects which in themselves result in final, applicable results. This types of projects have a higher priority than projects which will only achieve prefatory objectives. This also means that the completion of already initiated projects may be given priority over new initiatives.

Dissemination of Project Results

Projects of general interest and utility, possessing the potential for being replicated, will be given preference over projects of interests only to a limited number of potential project holders. All projects should include specially designed activities which can contribute to the dissemination of project results, e.g. workshops, articles in journals etc. All projects will also provide brief project summaries for publication by DANCEE. All plant and major equipment donated by DANCEE should be marked accordingly.

Coherent Technical and/ or Geographical Effort

Particular weight will be put on projects with a professionally coherent content which will contribute towards the general usability of the results. Linkages to existing DANCEE projects are therefore important for the prioritisation of new projects.

The emphasis will be on projects focused on geographically adjoining areas, with significant environmental problems, and areas of high natural value.

To assure a coherent technical and geographical effort, DANCEE will initiate projects both by tender and by application.

Project Sustainability

The sustainability of a project is bound up with a number of factors, such as:

A project’s sustainability can be assessed in terms of the project’s ability to continue operations and to sustain environmental improvement measures, even following a withdrawal of donor support. Priority will be given to projects which are likely to have a high degree of sustainability.

Degree of Co-financing

DANCEE funding is perceived as a means of promoting self-support. As such, projects involving the beneficiary’s own funds, no matter whether the beneficiary is an enterprise or a governmental agency, will be given priority compared to projects which rely solely on DANCEE support. Projects where subsequent phases are likely to be financed by other sources - the beneficiary’s own funds or funding from other donors or international financing institutions - will also be given high priority.

Three typical funding models are applied:

Degree of Investment and/or Technical Assistance Component

DANCEE support may take the form of investment projects, technical assistance projects or a combination of the two. DANCEE identifies technical assistance projects as:

Investment projects include:

4. Implementation

This chapter deals with the practical aspects of project implementation under the following headings:

4.1 Project Implementation Plan (PIP)

The PIP will provide an overview of the input (consultant’s and beneficiary’s staff) and the activities. For each activity, the PIP should indicate when and by whom it will be implemeneted. The PIP will also include deadlines for reports. The PIP should preferably be presented as a bar chart, with accompanying explanations.

4.2 Organisation and Administration

Describe the organisational set-up for the project. Specify the role and responsibility of the different entities, e.g. project management, steering committee etc. Outline the main administrative procedures. (These will be further detailed in the Procedures Manual which will be drafted during the inception period). Include an organisation chart as an annex.

4.3 Reporting, Monitoring and Reviews

Describe the reporting system, indicating the frequency, minimum content, persons responsible, and distribution of reports. The reporting system will follow DANCEE’s requirements for reporting as described in Section 4.2.

The monitoring should be based on the indicators and means of verification described in the project document and refined during the baseline study.

4.4 Dissemination of Project Results

Describe how the project results can be made useful for external parties through conferences, articles, use of the internet etc.

4.5 Budget

The consultant responsible for preparing the project document must estimate a total budget broken down into as much detail as possible. The project document shall, however,also include the formats provided in Enclosure B2-B7. The purpose is to provide the winner of the tender with these formats to fill in during project implementation.The tenderer shall on a regular basis inform DANCEE on the financial status of the project by submitting these formats.

4.6 Accounting and Auditing

Describe the accounting and auditing procedures to be applied, including frequency of inspections, partners involved, responsibilities and feed-back mechanisms. The suggested procedures will be in accordance with DANCEE’s general guidelines for accounting, documentation and auditing.

For projects lasting more than one year, annual audited accounts will be submitted.

Reference is made to Section 4.3 where financial management procedures are detailed

The annual statement of accounts format as shown in Table 4.6. must be used by the project holder when reporting to DANCEE.

Enclosure B1

Danish Environmental Protection Agency

Danish Cooperation for Environment in Eastern Europe

(DANCEE)

Project Cover Sheet

NOTICE FOR HANDLING PROJECT DESCRIPTIONS: This is to be used only by DEPA and recipient country, Ministry of Environmental Protection, for evaluation purposes. If a contract is awarded on basis of this project description, the terms of the contract shall control disclosure and use.

Enclosure C
Terms of Reference Format

Terms of Reference Format

These terms of reference are shown for a mission, but may also be used for other purposes.

1. Preparing Terms of Reference (ToR)

In any development programme or project the Terms of Reference (ToR) specifies the objectives and final outputs of an assignment, and thereby also the success indicators for the assignment. ToR provides the basis for any contract with a consultant.

Below is an outline of a set of ToR with notes on the various sections, plus examples. Sentences written bold are fixed headings and sentences in italics are comments and explanations.

Terms of Reference

STATE TITLE OF MISSION

1.1 Background

Describe the project background in as much detail as necessary for the assignment. Bear in mind that mission team members may use the Terms of Reference as an introduction to various local organisations/partners/government officials. The level of background detail should therefore be sufficient for someone not directly involved in the project or programme to obtain an adequate idea of the setting for his/her particular assignment.

1.2 Objectives

The overall objective of the mission is:

Describe in words the overall purpose of the mission (in LFA terms). The objective is equivalent to the "Development Objective", i.e. the situation/condition that the assignment will contribute to bring about. The overall objective of the assignment should be stated in terms of quantity, time and location and should clarify to the consultant the overall justification for the assignment.

The specific objective of the mission is:

Describe in words the "immediate objective" of the mission, i.e. the situation/condition prevailing at the end of the assignment (or immediately thereafter) as a result of successful outputs (products) of the assignment. This could be a reviewed and assessed project, or a project identified.

1.3 Outputs

The outputs of the mission are:

a. State mission outputs ("products") as explicitly as possible. Several outputs are likely to be needed to reach the immediate objective of the mission.

b. An output could, for instance, be an appraisal report, , a project document etc. Each output must be specified in five dimensions: time; location; quality; quantity ; target group (i.e. when ? where ? of what quality ?, how much? and with/for whom ?.

c. An output may also be a set of Terms of Reference for a following assignment (mission, study) and/or recommendations as to the organisation and content of a particular project.

d. An output may be a report describing the process which has lead to other outputs.

1.4 Scope of Work (activities)

Scope of work is called "activities" in the LFA. Therefore, this section should in detail list the activities necessary to produce the outputs specified above. For each output there must be at least one activity.

The scope of work for the consultancy will include, but not necessarily be limited to the following tasks:

Re: Output a:

Re Output b:

1.5 Method of Work

In this section, overall guidance to the team on the working methodology is provided. For instance whether the mission is expected to take an expert role, a consultative role, a process-oriented role or a participatory role. This section is important as it may define the mission's boundaries of authority. Tthis section may also describe any reparatory work or local consultations needed.

1.6 Staffing

Include names and positions of all identified staff on the mission, both international and local. If the ToR forms part of a proposal, you should indicate the number of team members and the qualifications that you recommend.

1.7 Timing and Duration of the Assignment

Start with the total duration and timing (when and for how long should the assignment run ?). Then specify for the individual(s) assigned/proposed exactly how much time you foresee for the different phases of work (e.g. preparatory, field visit, report writing etc.).

1.8 Reporting

Include all reporting procedures here. This should include:

- Briefing at head office and country office.

- Debriefing note or summary of findings to be presented prior to departure from the country of assignment. Specify who is responsible for arranging the debriefing meeting and who should attend.

- Report(s) in specific formats (reference can be made to the Manual formats). Any special format requirements (e.g. special summary, special information required or specific wordprocessing programmes to be used) should be mentioned if they differ from the Manual formats.

- Exact timing of report(s) i.e. deadlines for various drafts (including deadlines for DANCEE comments on draft) and final report.

1.9 Inputs

This is the raw material necessary for the contracted party to deliver the activities and outputs. When stating input, monetary inputs are NOT included - they are regulated in the contract. But it includes all resources and support that DANCEE, local authorities/agencies/establishments or other simultaneous missions will be able to provide to the consultant.

Examples could be:

- DANCEE CC (name of person responsible) will arrange for xxx

- Local project coordinator (name of person responsible) will provide yyyy reports,

Stating and specifying the inputs lets the assigned consultant know exactly what support can be expected from DANCEE (and what not) and identifies the responsible contact person is.

1.10 Attachments

Include a list of attachments (e.g. LFA guide, policy guide, DANCEE Project Cycle Management Manual, project papers and reports for preparation etc).

Enclosure D
Appraisal Report Format

Appraisal Report Format

Appraisal reports will be submitted in English and should include the parts highlighted below. Sentences written in bold are fixed headings and sentences in italics are comments and explanations.

1. Introduction

A brief presentation of the project including project name, country, objectives, timing and size of budget.

Brief presentation of the appraisal team.

The events preceding the assignment of the appraisal team and the timing of the appraisal.

In connection with field appraisals only, the following two clauses should always be inserted in the introduction:

"The team would like to express its thanks to all officials and individuals met for their kind support and for the valuable information which the team received during its stay in (country), which facilitated the work of the team."

"This report contains the views of the team which do not necessarily correspond to the views of DANCEE or the government of (country). All proposals are subject to approval by the two governments."

2. External Relevance

Is the project in line with DANCEE priority areas?

Is the project in line with DANCEE priority criteria?

Is the project in line with the country programme?

Does the project conform with the institutional set-up and organisation in the partner country?

3. Internal Quality

Does the project document fulfil the formal requirements?

Is the problem analysis satisfactory?

Is the project strategy realistic, i.e. will the proposed inputs and activities lead to the expected outputs, and are the outputs of the project sufficient and relevant to the achievement of the projects objectives?

Are the assumptions realistic?

Have key potential risks been identified and assessed?

Is the budget realistic?

Is the time frame realistic?

Has an adequate monitoring system been proposed

Is it realistic that the proposed beneficiary and involvement of stakeholders will secure effective implementation of the project?

4. Presentation

Is the language correct, straightforward and easy to understand?

Is the information presented sufficient for a person without previous involvement in the pro-ject to understand and begin implementation it?

5. Decisions and Recommendations

Is the project suitable for DANCEE support?

Are any changes to the project document proposed?

Do any preconditions have to be fulfilled before DANCEE support can be granted?

6. Annexes to the Appraisal Report

ToR for the Appraisal Team

Enclosure E
Guidelines for Steering Committee Meetings

Guidelines for Steering Committee Meetings

1. Procedure

Meetings are held according to the regulations provided in the project document, usually quarterly.

The team leader is responsible for identifying candidates for the steering committee. This will be done in close co-operation with the local project director nominated by the MoE. It is likewise the responsibility of the team leader to secure DANCEE’s approval of the steering committee members no later than six weeks after the start of the project.

The team leader shall act as secretary to the steering committee.

2. Order of Business

DANCEE recommends that the following order of business be used at all steering committee meetings.

1. Introduction to the meeting and presentation of the participants.
2. Approval of the proposed order of agenda.
3. Approval of the minutes from the last meeting.
4. Verbal report from the team leader of project progress since the last meeting.

as a minimum this will always include:

5. Presentation of reports for approval by the steering committee.
1. Next meeting.
2. Any other business.

Enclosure F
Covering Letter to Progress Report

Covering Letter to Progress Report

Project Ref. No.                                                                       

Project Name:                                                                          

Reporting Period:                                                                      

Enclosure G
Letter of Confirmation

This Letter of Confirmation is issued by ___________ (Beneficiary) to the Danish Co-operation for Environment in Eastern Europe (DANCEE) for purposes of DANCEE’s considerations of making available a grant for a project with the title ___________(title) as described in the Project Document (Project) dated ____________ (date).

By this Letter of Confirmation, the Beneficiary confirms

that the Beneficiary wishes that the Project is implemented,

that the Beneficiary accepts the content of the Project Document,

that the Beneficiary appreciates the nature and scope of the inputs to the Project from the Beneficiary as specified in the Project Document (the "Input"),

that the Beneficiary will endeavour to (a) make the Input available to the Project, and (b) facilitate the implementation of the Project in ways as may be reasonably expected by DANCEE, and

that the Beneficiary will timely report to the Steering Committee or the Project Holder (if no Steering Committe is established) any foreseeable failure in terms of these endeavours along with proposals for the remedy of the failure.

By this Letter of Confirmation, the Beneficiary acknowledges

that the above confirmation will be part of the basis for DANCEE’s decision to make a grant available to the Project, and

that any failure by the Beneficiary to make the Input available timely and without hesitation may cause DANCEE to reduce or discontinue the Project.

This Letter of Confirmation shall be annexed to the Project Document.

                                                                                       
            Date                             Signature of Beneficiary

Enclosure H
List of DANCEE Indicators

The following indicators are used in the DANCEE statistical summary

Enclosure I
References

References

1. Danish Environmental Support Fund for Eastern Europe, 1998; Co-operation Development 1991 -1996 and Programme Priority Areas. DEPA.
2. Strategy for Danish Co-operation for Environment in Eastern Europe, 1999. DEPA.
3. Retningslinier for Revision. Finansministeriet 1999
4. Logical Framework Approach - A flexible Tool for Participatory Development, Danida 1995.
5. The Logical Framework Approach, Handbook for objectives-oriented planning. Norad 1996.

Notes:

1. Please refer to Executive Sumary in Enclosure B
   
2. Please refer to Statistical summary in Section 4.3.8
   
3. Fidic contract forms include:

4. Only for projects with a duration of more than three years or in the case of projects where problems have been identified.
   
5. The format is meant as a checklist. The evaluation team shall focus on issues of special importance to the project being evaluated.