The EU combines different types of support to countries in need. It provides funding in the form of grants to support projects and organisations furthering its development objectives. It also offers public contracts and provides budget and sector support.
Grants and contracts
Grants are direct financial contributions provided to organisations, or to projects carried out by them. Most of the time, the Commission attributes them through calls for proposals.
Contracts are awarded through tendering procedures to purchase services, supplies or works.
Both contracts and grants are awarded for activities contributing to specific development goals.
Budget support is an important tool to finance partner countries’ development strategies. It consists of financial transfers to the national treasuries, and also involves policy dialogue and measures to assess the use made of these funds.
Budget support helps to deliver aid adapted to the needs identified by the countries themselves.
To benefit from budget support, a beneficiary country must demonstrate commitment to the fundamental values of human rights, democracy and the rule of law.
A large part of the development funding made available by the EU targets specific sectors in partner countries. This so called ‘sector approach’ increases the effectiveness of aid by supporting government-owned strategies.
Sector support gives a boost to sector programmes run by partner governments. The funding can take on the form of sector budget support, grant and contract funding, or ‘common basket funding’ pooling resources from different donors.