Year in Review

Imagine a development financing tool that carefully targets resources to reach the poor and marginalized. Imagine that this tool is flexible enough to work with a range of private entities and government agencies, so that each project is tailored to its specific context and creates financial incentives and new markets for the private sector, enabling poor consumers to access basic services. Imagine, finally, that this tool only disburses funds once services have been delivered and verified, thus ensuring that providers are held accountable and that money is spent where it’s needed on things that actually happen.

This is a description of output-based aid, or OBA, a form of results-based financing (RBF) that ties the disbursement of subsidies to the provision of basic services for poor populations. As development partners around the world strive to meet growing needs while improving accountability and spending efficiency, interest in results-based approaches is increasing, and OBA and RBF are integral parts of the development financing toolkit.

Established in 2003, the Global Partnership on Output-Based Aid (GPOBA) funds, designs, demonstrates, and documents OBA approaches. It is housed within the World Bank’s Social, Urban, Rural and Resilience Global Practice, which aims to create more sustainable, inclusive, and resilient communities. Through the generous support of its donors, and in collaboration with 18 governments and 34 implementing partners, GPOBA has built a diverse portfolio of 46 subsidy projects in seven sectors totaling $234 million; these projects have disbursed $132.9 million and enabled over nine million people in 28 countries to access basic services. In addition, GPOBA has a solid portfolio of technical assistance and knowledge activities totaling $32.6 million.

GPOBA serves as a Center of Expertise on OBA/RBF, designing and implementing OBA projects, building on the experience gained through project implementation and technical assistance activities, and sharing best practices and lessons learned with donors, governments, and other development partners. As a Center of Expertise, GPOBA acts as a convener, both virtually and face-to-face, and the online OBA/RBF Community of Practice supports and coordinates convening events such as webinars and panel discussions that facilitate peer learning, knowledge sharing, and cross-sectoral collaboration on OBA/RBF. All of GPOBA’s work relies heavily on partnerships, and GPOBA builds and maintains strategic relationships in order to inform and maximize the impact of its own future investments and to advance the global conversation on results-based approaches.

FY16 was a strong year for GPOBA, with a robust and active portfolio that continues to deliver results. GPOBA disbursed $16.7 million to its subsidy projects this fiscal year, the third highest level of disbursement in its history. Two new investments were signed for energy projects in Kenya and the Philippines, and work continued on a solid pipeline of projects under development. GPOBA completed two in-depth sector studies analyzing lessons from over ten years’ work in the energy and water sectors, while exploratory studies scoped the potential for OBA/RBF interventions in untested sectors, including urban transport and housing.

GPOBA continues to support and incentivize innovation, recognizing projects in energy, climate and social inclusion, governance, and solid waste management at its annual Inn-OBA-tions Awards. The Bangladesh OBA Mini-grid Project, which supports renewable energy, was one of six winners at the World Bank’s highly competitive Innovation Awards. GPOBA also strengthened its monitoring and evaluation capacity through the development of a results framework, and launched the OBA/RBF Academy and GPOBA University, pillars of its enhanced learning offerings.

GPOBA’s achievements this year demonstrate the strong ongoing coordination between the operations and knowledge aspects of its work, which together aim to ensure that poor populations are included in development gains. Going forward, GPOBA and its partners will continue to work with results based approaches that help to create resilient communities whose citizens have affordable access to the basic services that contribute to improved health, quality of life, and economic opportunity. This work is part of the global effort to meet the Sustainable Development Goals (SDGs), which can only be achieved by mobilizing resources from multiple modalities, sources, and instruments. By joining with governments and development partners to catalyze the much needed financing and expertise of the private sector to support marginalized populations, GPOBA continues to ensure that results-based approaches are part of development solutions. This report offers a more in-depth look at GPOBA’s activities throughout the fiscal year, as it works to increase access to basic services for poor and marginalized populations.