INTRODUCTION FINAL BB6 Eng DNO 310115 2H30

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I. INTRODUCTION

Through the National Strategic Development Plan SDP, the Government has articulated clearly its vision for the social and economic development of the country, and has set about the pursuit of this vision. One of the central pillars of the SDP is the development of key and productive infrastructure. By Law No 12011 of 14 February 2011, approving the State Budget OGE the Government established the Infrastructure Fund IF which functions as a financial vehicle for the Government to target carefully investment in major public investment projects that are essential to boost development and create a well-functioning economy as outlined in the SDP 2011-2030. The subsidiary Decree-Law no 82011 of 16 March, 2011 sets out the primary objective of establishing the IF, which is to finance the implementation of sets of infrastructures that need major investment in multi-year and large projects above US1 million. This enables resources once programmed to be expended in a more efficient, transparent and accountable way. These projects require government to enter into multi-year legally binding contracts for which funding over more than one fiscal year has to be assured. The Fund is also able to retain unspent funds each year which are automatically carried forward to succeeding years. Investments in infrastructure not only reduces capacity constraints and assist in facilitating a more productive economy but also creates an enabling framework for development and growth through lowering transaction costs, job creation and income generation, which in turn stimulate domestic market integration and increased demand in rural areas. The process of developing the infrastructure program goes, generally, in two main stages, each with multiple sub-stages. The first stage ending with physical completion of the infrastructures encompasses selection of the type and location of projects, planning, design, preliminary evaluationstudiesfeasibilityimpact studies and the actual construction. Stage two refers to the infrastructure services that includes not only the stream of benefits derived from physical infrastructures over time, but also the management and oversight thereof, including operation and maintenance. This IF Budget Book proceeds as follows. Section II will briefly introduce the management of the Infrastructure Fund. Section III presents the annual budget allocations and disbursements over the years of 2011, 2012, 2013 and 2014. Section IV summarises 2015 IF budget by program. The book ends with Annexes detailing 2015 budget by programs and projects.

II. MANAGEMENT OF THE INFRASTRUCTURE FUND