VZCZCXRO9050
PP RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHRO #0302/01 0721632
ZNR UUUUU ZZH
P 131632Z MAR 09
FM AMEMBASSY ROME
TO RUEHC/SECSTATE WASHDC PRIORITY 1764
INFO RUCNRAQ/IRAQ COLLECTIVE PRIORITY
RUEHGB/AMEMBASSY BAGHDAD PRIORITY 0375
RUEHNP/AMCONSUL NAPLES PRIORITY 3693
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 ROME 000302 
 
SIPDIS 
 
PLEASE PASS TO USAID 
 
E.O. 12958: N/A 
TAGS: EAID ECON IT IZ DA PGOV PREL
SUBJECT: ENDING IRFFI: REPORT ON THE 8TH IRFFI DONORS 
COMMITTEE MEETING, FEBRUARY 18, NAPLES 
 
REF: A. STATE 13703 
     ¶B. 08 BAGHDAD 2162 
 
ROME 00000302  001.2 OF 002 
 
 
¶1.  (U) Summary: The International Reconstruction Fund 
Facility for Iraq (IRFFI) Donors Committee discussed the 
closure of the donor facility and procedures for wrapping-up 
its project planning and commitment processes by the end of 
2010 at its Eighth Donors Committee (DC) meeting that was 
held in Naples, February 18.  The donors voted to extend the 
project completion and funds disbursement date that will 
terminate funding for IRFFI projects no later than December 
31, 2013.  An independent report of IRFFI's performance from 
2004 to 2007 was delivered that outlined IRFFI's successes 
and failures during the time covered.  This SCANTEAM report 
is an excellent lessons-learned resource for future 
multi-donor trust funds in post-conflict environments. 
Danish Ambassador to Baghdad Mikael Winther was elected the 
new IRFFI chair.  End summary. 
 
¶2.    (U) The IRFFI is comprised of two Iraq Trust Funds 
(ITFs), which are managed respectively by the United Nations 
Development Group (UNDG) and the World Bank (WB).  The UNDG 
ITF has received a total of USD 1.33 billion from donors and 
has accrued roughly USD 50 million in interest earnings.  It 
has approved a total of 158 joint projects valued at USD 1.22 
billion, leaving a total of about USD 160 million to be 
committed to new projects.  The WB ITF has received a total 
of USD 494 million in deposits and USD 74 million in 
investment income for a total of about USD 569 million.  The 
WB ITF has obligated a total of USD 481 million and is in 
discussions with Iraqi ministries to commit all but USD 18 
million of what is currently uncommitted.  The WB ITF is 
planning on using its accrued investment income to support 
successful projects that require additional funds and to 
potentially undertake small, technical assistance projects. 
 
¶3.    (U) Donor Committee members voted to change the 
termination date of the IRFFI.  The cut-off dates for new 
donor contributions for the WB and UNDG respectively are 
December 31, 2008 and June 30, 2009.  The ITFs will not 
approve any new projects more than 6 months after those 
dates.  No new project commitments will be made after 
December 31, 2010.  Any remaining funds will be set aside to 
pay for final close-out costs and possible small advisory 
contracts, administration fees, and small-scale support to 
projects that performed well.  The WB will terminate its ITF 
on December 31, 2013 and return any remaining funds on a 
pro-rata basis to donors.  Speaking on behalf of the WB, Jane 
Sansbury said that projects for banking reform, public 
financial management, and education sector reform, if 
approved in April, would require 4-4.5 years for full 
disbursement, necessitating an end date not earlier than 
December of 2013.  Any remaining UN funds will be deposited 
in the UN's general Multilateral Donor Trust Fund and the 
United Nations Development Fund will become the administering 
agent for those funds.  The utilization of remaining UN 
funds, if any, will be decided in consultation with Iraq and 
the other major donors and will support activities now 
overseen by the United Nations Assistance Mission to Iraq 
(UNAMI). 
 
¶4.    (U) The Donors Committee received a comprehensive 
report on the conduct of the IRFFI from 2004 to 2007, written 
by SCANTEAM, a Norwegian consulting firm that specializes in 
evaluating the performance of multi-donor trust funds.  This 
independent assessment gave generally favorable ratings for 
the appropriateness, efficiency and effectiveness of the 
IRFFI, finding that the IRFFI projects contributed tangibly 
to improving the lives of the people of Iraq.  Based on a 
representative sampling of projects SCANTEAM found no 
evidence of systematic corruption, but did cite "uneven" 
results on UN and WB projects.  The report also outlined 
shortfalls and provides an excellent "lessons-learned" on 
administering multi-donor trust fund in post-conflict 
environments. 
 
¶5.    (U) The DC received a report prepared by the Executive 
Director of Iraq's Strategic Review Board (ISRB) which 
provided insights into the challenges of improving 
institutional capacity development and enhancing the role of 
the private sector.  The DC did not address an agenda item 
about the International Compact with Iraq, prompting the 
Japanese representative, supported by others, to pointedly 
ask for a meeting of the ICI International Consultative Group 
to be held, as called for in prior ICI and IRFFI meetings. 
 
¶6.    (U) At the meeting's conclusion Denmark (Ambassador 
 
ROME 00000302  002.2 OF 002 
 
 
Mikael Winther) was elected to replace Italy (Ambassador 
Gianludovico De Martino) as Chairman of the IRFFI Donors 
Committee.  In a formal statement, Iraqi delegation Head 
Deputy Minister of Planning and Development Cooperation Dr. 
Mehdi Ismail Dr. Ismail advised that he would duly notify his 
government of this outcome.  Minister of Planning and 
Development Cooperation Dr. Ali Baban cancelled his trip to 
Naples the morning before the Conference. 
 
¶7.    (U) The U.S. delegation was led by Ambassador Marc 
Wall, Coordinator for Economic Transition in Iraq, Embassy 
Baghdad.  Embassy Baghdad has cleared on this message. 
DIBBLE