Public Works and Employment Project (LoRa), launched in 1996, was one of the first projects in Bosnia and Herzegovina (BiH), financed by the World Bank (WB). The aim of this Project was to provide temporary employment for those who were left unemployed due to the war hostilities, by creating jobs on the reconstruction of the war-damaged infrastructure. The World Bank is of the opinion that these were impressive accomplishments in the time of emergency. Reconstruction of destroyed infrastructure and the beginning of process of creating basic, minimum conditions for refugees and displaced persons to return to their homes had been successful beyond expectations. In many ways, Project was based on a Social Fund model. In the four years of implementation, LoRa implemented, in partner relationship with municipalities, 450 public works projects in the Federation of BiH.
Community Development Project (CDP) is a continuation of that Project and as such, is based on the implementation capacities of LoRa. Focusing on communities in undeveloped municipalities, CDP will complement Local Development Project (LDP), the aim of which is the strengthening of institutional and financial capabilities of more developed municipalities and utility companies and which has a credit line as a source for long-term financing of infrastructure investments in creditworthy municipalities.

1. Project Objectives

The main Project Objectives are:

1. improvement of living conditions in undeveloped municipalities and their poor communities, by improving physical and social infrastructure and services aimed at social and economic development.

2. training municipalities for providing quality service to communities, through better planning, management and by developing technical skills.

3. enabling equal access to infrastructure and services on the entire BiH territory.

4. reduction of migration from rural to urban areas by improving local conditions.
Through investments in non-profit, socially oriented projects and projects for undeveloped municipalities, assistance in management improvement and assistance in training of local/municipal departments for providing services through improved partnership between poor communities and municipalities, this Project will strengthen the capability of municipalities to lead the communities’ development process and strengthen the role of communities in making investment decisions.
With its focus on infrastructure and services in low income areas and on transparent institutional processes, the Community Development Project (CDP) follows the overall aim of establishing sustainable development and opening possibilities for this development for all BiH citizens, including those who are most in need.

2. Project Description

Component 1: Grants for Project Implementation

Grants are earmarked for low income municipalities and their poor communities for aimed investments, which are non-profitable, focusing on the improvement of the provision of services, reimbursement of expenses, training of local governments in financial management, public accountability and communities’ participation.
Grants will be mobilized on request by undeveloped municipalities and their poor communities. These grants will also be an auxiliary mechanism for harmonization of regional differences at public expenditure levels, by directing central government funds towards the low income areas.
Municipalities or even associations and citizens’ groups at the neighborhood, community or a village level, can initiate the applications for such non-profitable investments. Investments should have high social benefits, and can also include repair or building of infrastructure, such as : water supply, village roads, bridges, schools, health clinics, market-places, etc. Services will include maintenance services, waste disposal, recreation in the community, parks, lighting, etc. Selection of investment in sub-projects for infrastructure or services will be based on proposals with well-defined plan, including works and maintenance.

Component 2: Institutional Training

Based on the successful experience of LoRa, municipalities will be a key partner in the implementation of the Project. Municipalities’ capability to contact poor clients will be improved through better partner relations with communities in the area of identification, implementation, maintenance of investments that do not generate revenue. Activities related to the training of agencies in the areas of social analysis, project identification, monitoring and evaluation of projects will be financed within this component. Depending on needs, appropriate technical assistance and training will be provided in the area of procedures for identification, evaluation, implementation, financing, monitoring and assessment of projects. Training for development planning, financial management, environmental education will also be supported within this component.

Component 3: Project Implementation

Foundation for Sustainable Development (FSD), CDP Department, will implement the Project in partnership with municipalities, communities, citizens’ associations and NGOs.

3. Users and Target Population

On the basis of jointly submitted proposals, poor municipalities and poor communities within these municipalities will be eligible for the realization of projects based on grants. Primary benefit of the project would be the support and maintaining of social trust through contracts and agreements between municipal governments and communities/citizens and the creation of social environment, favourable for the acceleration of displaced persons’ return.

The Project will focus on:
• Undeveloped, poor and with low quality services municipalities and communities;
• Municipalities with a high degree of damage and displacement, but where people have begun to return;
• Minority, poor communities within a municipality ;
• Municipalities willing to participate in the Project.

4. Criteria for Projects’ Selection

Projects, eligible for financing, will be:
- Non-profit, social services and infrastructure.
- Value of the project will not exceed KM 100.000 (KM 50.000 for the first grant).
- Joint project proposal, submitted by a municipality and citizens’ group (community), based on social and environmental evaluation.
- Clearly presented Work Plan and Maintenance Plans.
- Project is not an investment for which the funds have been earmarked in advance and in full, as a transfer from a cantonal level or any other source.
- Project does not overlap with the existing or planned activities of other donors.
- Project does not encourage disintegration (such as, for instance, the new road that would bypass the use of an existing road in the area of the other ethnic group or school, when the other road exists just around the corner).
- Project has great social and environmental use.

Construction works and services will be financed through grants. Costs of land expropriation, taxes and working capital will not be financed through grants. Government (Municipal, Cantonal or Federal) should finance (in the form of cash or contributions in kind, such as land, construction materials, works or services donations), at least 10% of the project price and all taxes.
Project users (communities) should also participate in financing of the project, with at least 15%.