Year in Review

Over the last two decades, results-based financing, or RBF, has played an increasingly important role in international development, as the World Bank Group, development partners, and governments around the world have sought more effective ways of delivering services to poor populations. While traditional aid disburses money against expenditures or contracts, RBF makes disbursements against demonstrated and independently verified results, increasing accountability and helping to measure performance. Output-based aid (OBA) is a form of RBF that provides results-based subsidies for the delivery of basic services to the world’s poorest and most marginalized citizens.

The Global Partnership on Output-Based Aid was established in 2003 to test OBA approaches. Through the generous support of its donors, GPOBA has built up a diverse portfolio of OBA subsidy projects which have now delivered basic services to over eight million direct beneficiaries. This is a significant milestone for GPOBA, and represents a 14 percent increase from FY14. GPOBA’s portfolio consists of 44 grant agreements in seven sectors, totaling $228 million, and 177 OBA/RBF technical assistance and knowledge-related projects totaling $28 million.

GPOBA has two integrated and complementary objectives. It designs and implements OBA projects for basic service delivery in sectors such as energy, water, and health. Over the past year, GPOBA has balanced its exploration of the applicability of OBA in new sectors, including education and climate-related solutions, and in challenging environments, such as those affected by conflict or natural disaster, with a continued focus on deepening the impact of OBA through mainstreaming and scaling up of successful pilot projects. This year alone, GPOBA worked with governments in Kenya, Bangladesh, and Uganda to scale up OBA pilots in three sectors. Work is ongoing with governments in Nepal and the Philippines on potential OBA facilities in energy and water.

GPOBA’s second, and equally important, objective is to become a Center of Expertise on OBA/RBF, by building on the knowledge and experience acquired through OBA/RBF project design and implementation, a goal that aligns with the increased emphasis on knowledge taking place throughout the World Bank Group. GPOBA documents and shares knowledge from every phase of the project cycle with development partners, practitioners, and governments, to inform future investments and to increase the effectiveness of OBA/RBF.

FY15 marked a year of significant change for the World Bank Group, with a new structure comprised of 14 Global Practices (GPs) and five cross-cutting solutions areas (CCSAs). GPOBA is now housed within the Social, Urban, Rural and Resilience Global Practice (GPSURR) within the WBG. GPSURR, in collaboration with other GPs and CCSAs, aims to create more sustainable, inclusive, and resilient communities. The coming year also marksthe transition from the Millennium Development Goals to the Sustainable Development Goals (SDGs), which will frame development agendas for the coming years. GPOBA’s work aligns with the SDGs in key ways, particularly with those goals related to access to water, energy, and basic services in cities.

Looking ahead, GPOBA will continue its commitment to the two pillars of its mission – operations and knowledge – as it progresses towards becoming a CoE. It will also strengthen specific aspects of its work, such as its Monitoring and Evaluation capacities.

This report offers a more in-depth look at GPOBA’s activities throughout the fiscal year, as it works to deliver basic services to the world’s poorest people.