The Danish co‐financed Local Government Capacity Building Project (LGCBP) supports the on‐going efforts of the Palestinian Authority (PA) to reform the local government system in the WBG. With respect to implementation, the Government of Denmark and the World Bank have agreed that the support provided under this project will be channeled through the framework of MDLF.


The overall development objective of the project is to improve local governance and accountability thereby fosters an efficient and sustainable economy, and the social and physical development of the urban and rural areas in WBG.  The specific objectives of the project are to improve the accounting, financial management and budgetary control capabilities of MOLG Finance and Budget Department, and of the LGUs as well as the capacity of the MDLF.


The Agreement between the three parties involved (Denmark Government: the donor, the World Bank: administrator and Palestinian Authority: beneficiary) was signed on March, 2005.

The Project is composed of the following three components:

• Component 1: Financial Management and Accounting Systems Reform:
The main objective of the LGCBP first component is to improve the accounting, financial management and budgetary control capabilities of MOLG and LGUs through designing a unified financial and accounting system
for LGUs.

• Component 2: Physical Planning and Management Systems Reform:
The main objective of the second component is to strengthen the capacity of MOLG and the LGUs in WBG to effectively guide, manage and monitor the development of the urban areas and be responsive to the needs of citizens.

• Component 3: Institutional Development (MOLG/MDLF):
The main objective of the third component is to increase the capacity of MOLG/MDLF to manage a decentralized local government system. A World Bank consultant assessed the situation and provided the needed Terms of References (TOR) for different assignments.