Contribution to PEGASE 2019-2020

Contract partner: MoF / PNA - Ministry of Finance of the Palestinian National AuthorityCountry: Palästinensische Gebiete Funding amount: € 2.000.000,00Project start: 01.01.2019End: 31.12.2020

Short Description:

Overall goal

The overall objective of this temporary EU support is to maintain the viability of the two-state solution by avoiding the fiscal collapse of the Palestinian Authority (PA) and sustaining basic living conditions of the whole Palestinian population.

Expected results

The specific objective is to support the Palestinian national development agenda and in particular: (1) to deliver to the Palestinian Population essential basic services by maintaining the functioning of the administration; (2) to improve the economic opportunities of poor, vulnerable and isolated population; and (3) to support the Palestinian Authority in reducing its budget deficit and implementing its reform agenda while increasing its transparency and accountability.

Three categories of public expenditure are eligible for support under the PEGASE Direct Financial Support (DFS) mechanism: Component 1: Supporting Palestinian administration and services. Component 2: Supporting the Palestinian social protection system (Vulnerable Palestinian Families). Component 3: Support to East Jerusalem hospitals.

The Austrian transfer contributes to Component 2.

Target group / Beneficiaries

The target group comprises poor and vulnerable Palestinian families in the West Bank and the Gaza Strip. The Austrian contribution may benefit approx. 5,720 people.

Component 2 Beneficiaries in West Bank and Gaza are selected according to a proxy-means-test-formula determining levels of poverty and taking into account other vulnerability factors. According to the Ministry of Social Development, 66% of the beneficiary families live in Gaza Strip and 34% in the West Bank.


Together with the EU and several other EU member states + Switzerland, ADA/Austria will contribute to the quarterly payment of social allowances to poor and vulnerable Palestinian families through the Palestinian Authority's national cash transfer programme (CTP) that functions in the West Bank and the Gaza Strip. The objective of this activity is to ensure the continued assistance to Palestinian families living in extreme poverty, who are dependent on financial aid from the Palestinian Authority. This activity also reinforces the reform of the social protection system and the social cohesion among Palestinians.


The overarching objective of the EU's support to Palestine is to contribute to maintaining the viability of the two-state solution. The multi-annual programming document for 2017-2020 is currently being implemented. This serves the purpose of ensuring continuity of the PEGASE Direct Financial Support (DFS) to the Palestinian Authority, thereby sustaining the delivery of basic services to the entire Palestinian population. Through PEGASE DFS, the EU has contributed substantially to the recurrent expenditure of the national budget (over EUR 2.3 billion since 2008), with systematic, predictable and unconditional contributions to the payment of Palestinian Authority civil servants' salaries and pensions ("Civil Servants and Pensioners" programme), of social allowances to the poorest and most vulnerable Palestinian families ("Vulnerable Palestinian Families" programme), and, since 2013, of health referral bills through the "East Jerusalem hospitals" programme. PEGASE DFS has contributed substantially to state building, as well as to the social cohesion, economic and security stabilisation of the Palestinian territories.

project number2562-00/2019
source of fundingOEZA
sector Andere soziale Infrastruktur und Leistungen
modalityBasket funds/pooled funding
marker Gender: 1, Democracy: 2, Poverty: 2
  • Policy marker: are used to identify, assess and facilitate the monitoring of activities in support of policy objectives concerning gender equality, aid to environment, participatory development/good governance, trade development and reproductive, maternal, newborn and child health. Activities targeting the objectives of the Rio Conventions include the identification of biodiversity, climate change mitigation, climate change adaptation, and desertification.
    • 1= policy is a significant objective of the activity
    • 2= policy is the principal objective of the activity
  • Donor/ source of funding: The ADA is not only implementing projects and programmes of the Austrian Development Cooperation , but also projects funded from other sources and donors such as
    • AKF - Foreign Disaster Fund of the Austrian federal government
    • BMLFUW - Federal Ministry for Agriculture, Forestry, Environment and Water
    • EU - Funds of the European Commission
    • Others - various other donors are listed in ADA’s annual business report.
  • Type of Aid – Aid modalities: classifies transfers from the donor to the first recipient of funds such as budget support, core contributions and pooled programmes and funds to CSOs and multilateral organisations, project-type interventions, experts and other technical assistance, scholarships and student costs in donor countries, debt relief, administrative costs and other in-donor expenditures.
  • Purpose/ sector code: classifies the specific area of the recipient’s economic or social structure, funded by a bilateral contribution.
  • Tied/Untied: Untied aid is defined as loans and grants whose proceeds are fully and freely available to finance procurement from all OECD countries and substantially all developing countries. Transactions are considered tied unless the donor has, at the time of the aid offer, clearly specified a range of countries eligible for procurement which meets the tests for “untied” aid.