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REPORT OF THE TWENTY-FIFTH MEETING OF THE COMMITTEE OF EXPERTS
OF THE PEREZ-GUERRERO TRUST FUND FOR ECDC/TCDC
New York, 20 to 23 July 2010
OFFICE OF THE CHAIRMAN OF THE GROUP OF 77
NEW YORK
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TABLE OF CONTENTS
Paragraphs Pages
I. INTRODUCTION. ………………………………….…………………... 1-6 4
II. REVIEW OF THE OPERATIONS OF THE PGTF ….…………….... 7-58 4-14
Highlights of twenty-three years of operations of PGTF (1986-2009)….... 8-14 5-6
Yield of PGTF resources…………………………………………….…..... 15-25 6-8
Sustainability of PGTF activities………………………………………… 26-30 8-9
Expansion of PGTF resources………………………………….…………. 31-51 9-14
Operating arrangements…………………………………………………. 52-57 14
Survey of the impact of PGTF…………………………….…….…...….. 58 14
III. CONSIDERATION OF NEW PROJECT PROPOSALS………….… 59-167 15-32
(1) Establishing alternative sustainable livelihoods in agriculture through
the development of a vibrant fine flavor Caribbean cocoa industry…........ 62-65 16
(2) Education Wastage and Economics of Education……………………….. 66-70 16-17
(3) Joint Development of Education Systems with China and Other
Developing Countries for the Rural Areas……………………………………. 71-75 17
(4) Acceleration of Small Hydro Power (SHP) Development and Carbon
Financing in African and Asian Countries……………………………………. 76-80 18
(5) Cooperation, integration and convergence in the area of health in
Latin America and the Caribbean……………………………………………… 81-84 18-19
(6) Production and Application of Bio-products in Cultures of Economic
Importance………………………………………………………………………… 85-89 19-20
(7) Survey Study for the Identification of Salt Products and Their
Potential Applications…………………………………………………………… 90-95 20-21
(8) Empowerment of women and young mothers in difficult situation by
intensive and diversified agricultural production……………………………. 96-98 21
(9) Capacity Building on Utilization of Geo-informatics for Early
Warning Systems on Climate Change and Food Security…………………... 99-103 21-22
(10) Sixth Forum for Businesswomen in Islamic Countries………………… 104-108 22-23
(11) A policy-oriented assessment after 20 years of Mercosur…………….. 109-113 23-24
(12) 2011 SIM Training and Development on Electrical Metrology……… 114-119 24-25
(13) Use of Distilled Slops for Biodiesel Production by Oil-Bearing Yeats
(Yeasts Biodiesel)………………………………………………………………… 120-123 25-26
(14) Management Information System for Hospital and Health
Management, “A Comparative Study of Selected Health Care Centers in
Jordan, Yemen and Sudan”……… …………………………………………….. 124-128 26
(15) A Proposal to Enhance the Capacity Building/Development on the
Effect of Climate Change on Animal Health Issue with Special Reference
to Bluetongue Disease in Egypt, Algeria, Palestinian Authority and
Jordan ……………………………………………………………………………... 129-132 26-27
(16) Re-use and Recycling of Polyethylene (Black Mulches)……….……… 133-137 27-28
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Paragraphs Pages
(17) Conducting Sectoral Studies to increase Origin Accumulation and
Local Value Added to Benefit from Great Arab Free Trade (GAFTA),
with emphasis on Syrian Market……………………………………………... 138-142 28
(18) Policy for Energy Saving and Using Alternative Energy Resources.. 143-147 28-29
(19) The Middle Eastern Agricultural Applied Research Center ……….. 148-153 29
(20) Assessment of Available Uranium Ores in the Southern part of
Jordan……………………………………………………………………………. 154-158 30
Project INT/00/K08 – “Support to the Committee of Experts– Phase III” 159-162 30-31
Summary of project proposals recommended for adoption………….…… 163-167 31-32
IV. ASSESSMENT OF THE IMPLEMENTATION OF APPROVED
PROJECTS………………………………………………………………. 168-343 32-58
Projects under implementation……………………………………………. 174-300 33-51
Projects under preparation still to be implemented……………………….. 301-339 51-58
Projects under query………………………………………………………. 340-343 58
V. OTHER MATTERS……………………………………………...……… 344-345 58
Annex I: List of participants…………………………………………….. 60
Annex II: Inactive projects………………………………………………. 61-101
- projects completed…………………………………………... 61-96
- projects cancelled and allocated resources reverted
to PGTF…………………………………………………….... 96-101
Annex III: Survey of the impact of PGTF ………………………………. 102-119
Annex IV: Financial Statement of the PGTF……………………………. 120-122
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I. INTRODUCTION
1. Pursuant to the provisions of the High-level Meeting on ECDC held in Cairo in August 1986, the
rules of procedure adopted at its first meeting held in Caracas in August 1987, the provisions of the 12th
Annual Ministerial Meeting of the Group of 77 held in New York in 1988, the Seventh Meeting of the
Intergovernmental Follow-up and Coordination Committee on ECDC (IFCC-VII) held in Kuala Lumpur
in July-August 1989, the First Annual Meeting of the Group of 77, held in New York in September 1989,
the Eighth Meeting of the Intergovernmental Follow-up and Coordination Committee on ECDC (IFCC-
VIII), held in Panama City in August-September 1993, the 18th and 19th Annual Ministerial Meetings of
the Group of 77, held in New York respectively in 1994 and 1995, the Ninth Meeting of the
Intergovernmental Follow-up and Coordination Committee on ECDC (IFCC-IX), held in Manila on 9-12
February 1996, and the 20th to 33rd Annual Ministerial Meetings of the Group of 77 held in New York
respectively from 1996 to 2009, the Committee of Experts of the Perez-Guerrero Trust Fund (PGTF) for
ECDC/TCDC held its twenty-fifth meeting in New York from 20 to 23 July 2010.
2. The meeting was attended by five of the six members of the Committee, representing the three
regions of the Group of 77. Dr. Eduardo Praselj was elected chairman of the Committee for the
biennium 2010-2011. The list of participants appears in Annex I.
3. A representative of the Special Unit for South-South Cooperation of UNDP was invited to
provide information on matters related to PGTF. Two representatives of the Treasury Division of UNDP
were also invited by the Committee to provide information on matters related to the management of
PGTF resources, including yield and structure of PGTF portfolio, as well as financial markets
developments and investment strategy.
4. The Committee adopted the following substantive agenda:
1. Review of the operations of the PGTF;
2. Consideration of new project proposals;
3. Assessment of the implementation of approved projects;
4. Other matters.
5. The Committee had before it the following documents:
1. Twenty (20) project proposals;
2. Sixteen (16) progress, terminal and financial reports;
3. Note by UNDP on the composition and yield of the PGTF portfolio;
4. Note by UNDP on the financial status of PGTF and the status of implementation of
approved projects.
6. According to the information provided by UNDP, uncommitted resources available for 2010
allocations were US$274,067, including projected interest earnings until 31 December 2010. In line with
guideline A(p) for utilization of PGTF, the maximum support that could be given to any individual
project would be one seventh of this total, i.e. US$39,150.
II. REVIEW OF THE OPERATIONS OF PGTF
7. An executive summary of the main operational issues regarding the performance of PGTF,
including highlights of its operations, yield and expansion of its resources, associated costs and
operational arrangements, and survey on the impact of PGTF, is presented below.
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Highlights of twenty-three years of operation of PGTF (1986-2009)
8. In 1986, a High-level Meeting on ECDC held at Cairo defined the main features for launching
operations of PGTF, including definition of the objectives of the Fund and criteria for project eligibility,
as well as operational arrangements for the submission, appraisal and approval of project proposals.
9. The Trust Fund was established with a core capital of US$5 million, which was increased to US$
6 million in 2004 by a US$ 1 million contribution from a member country. According to guideline F(f)
for its utilization, only interest accruing on the Fund could be used for project support so as to preserve
intact the initial US$5 million. Same criteria have been applied with regard to additional core resources.
10. From 1986 to 2009, 668 project proposals were submitted to PGTF and, in accordance with the
guidelines for its utilization, the Fund has provided support to 206 projects with a total allocation of
US$10.9 million, i.e. respectively an annual average of 9 projects and US$473,000.
11. With a view to increasing the multiplier effect of PGTF resources, guideline A(m) for utilization
of PGTF establishes that project sponsors should secure contributions from other sources of an amount at
least equal to the contribution requested from PGTF. Contributions from other sources for the 1986-2009
period amount to US$ 22.2 million, i.e. US$2.1 for each US$ of PGTF resources.
12. Food and agriculture, technical cooperation and trade are the priority areas that have received the
largest support from PGTF. A breakdown of resources allocated by priority area is provided below:
Number of Share of allocated
Area
projects resources (%)
Food and agriculture ……………..............…………... 55 28
Consulting services, training and other TCDC
activities………………………………………………. 70 27
Trade……………………………………….…………. 21 16
Technology………………………………………….... 17 8
Information exchange and dissemination……….……. 13 7
Industrialization………………………………………. 10 6
Energy………………………………………………… 10 4
Other (raw materials, health and finance)…..... 10 4
TOTAL 206 100
13. Approved projects have benefited a large number of developing countries as well as institutions
and peoples within these countries. So far, 119 developing countries have been direct participants in
and/or beneficiaries of PGTF-funded projects, while all member countries of the Group of 77 have been
collective beneficiaries of PGTF-funded projects carried out by a large number of regional or
interregional institutions and organizations of the South. Interregional and sub regional projects have
received the largest support from PGTF as indicated in the breakdown below:
Number of Share of allocated
Country coverage
projects resources (%)
Interregional projects…………….............……….…... 64 41
Sub regional projects………………………...……….. 100 40
Regional projects.………………………………...…... 40 18
Action Committees. .………………….…………….... 2 1
TOTAL 206 100
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14. Two-thirds of approved projects have been completed as of 20 July 2010. According to the status
of implementation of projects, PGTF support has been distributed as follows:
Number of Share of allocated
Status of implementation
projects resources (%)
Completed………….……………....................………. 136 73
Under implementation…..……………………………. 32 12
Under preparation, still to be implemented.......……… 17 5
Under query…………………………………………... 0 0
Not implemented, allocated funds reverted to PGTF… 21 10
TOTAL 206 100
Yield of PGTF resources
15. The Committee examined at its twenty-fifth meeting the status of the PGTF portfolio and yield of
PGTF resources, in line with the recommendations contained in paragraphs 20-23 of the report of the
Committee at its ninth meeting in 1994.
16. Total PGTF resources are constituted by the core capital (US$ 6 million) and unexpended
resources. Pursuant to guideline F(f) for utilization of PGTF, the core capital should be preserved intact
and only interest accrued and other earnings (i.e. additional contributions, reversion of allocated
resources) could be used for supporting new projects. Between 1987 and 2009, total resources have been
in the range of US$ 6.2 to 7.4 million.
17. PGTF resources are invested by the UNDP in accordance with its financial rules and regulations,
and the investment policy is discussed and agreed upon with the PGTF Committee of Experts.
Accordingly, the portfolio is fully invested with total holdings on a par value basis of US$7,029,782. It
consists of eleven bonds totaling US$7,011,000 (99.7 percent of total holdings), while a small portion of
the portfolio (US$18,782) is kept as liquidity in a money market fund (0.3 percent). Bonds maturities
have a ladder structure: nine bonds have maturities below five years and staggered from 2009 to 2014
(US$ 6,011,000 or 85.5 percent of total holdings) and two longer-term bonds mature in 2019 (US$
1,000,000 or 14.2 percent). The total marked to market value of the portfolio as of 20 July 2010 was
US$7,527,155.
18. Expected nominal yield of PGTF portfolio for 2010 is 4.06 percent per annum, but after adjusting
for the purchase price of the securities, the effective yield would be 3.04 percent. This figure is lower
than in the 2004-2009 periods, and reflects the decrease of interest rates that was partially offset by the
investment strategy adopted for PGTF resources.
Year 2004 2005 2006 2007 2008 2009 2010
Effective yield
3.30 3.62 4.20 4.69 4.09 3.42 3.04
(percentage)
From January to July 2010, total disbursements made by UNDP to beneficiaries of PGTF-funded projects
totaled US$ 109,783 compared to US$ 101,359 for the January-July 2009 period. This amount was paid
by PGTF as inter-fund settlement to UNDP.
19. On the basis of PGTF portfolio as of 15 July 2010, the projected interest earnings for 2010 are
US$ 213,551. The present structure of the portfolio is as follows:
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Effective
Buy price Coupon
Face value Coupon Effective 2008
Security Maturity date (% of face payment
(US$) rate (%) Rate (%) income
value) (US$)
(US$)
Bonds and deposits matured between 1 January and 15 July 2010
Bond 500,000 15-Jan-2010 4.200 99.814 817 4.238 824
Bonds and deposits in PGTF portfolio as of 15 July 2010
Bond 440,000 17-Sept-2010 4.375 100.802 4,010 0.526 482
Bond 873,000 21-Jan-2011 4.250 104.530 37,103 1.236 10,787
Bond 500,000 22-Feb-2011 6.000 108.780 30,000 4.449 22,245
Bond 950,000 14-Nov-2011 5.000 105.640 47,500 3.102 29,473
Bond 1,158,000 17-Jan-2012 2.250 99.937 26,055 2.271 26,300
Bond 800,000 6-Jun-2013 4.250 101.155 34,000 4.004 32,034
Bond 440,000 16-Sept-2013 4.500 99.263 19,800 4.574 20,125
Bond 500,000 27-May-2014 6.640 119.685 33,200 4.717 23,587
Bond 350,000 22-Sept-2014 2.875 100.995 10,063 2.674 9,360
Bond 500,000 17-Jun-2019 4.875 107.297 23,427 3.941 19,705
Bond 500,000 9-Sept-2019 3.875 101.485 19,375 3.726 18,629
Money market 18,782
Total 7,029,782 4.06 285,350 3.04 213,551
20. Two bonds matured in the second half of 2009 and the first half of 2010 and the proceeds were
reinvested in three bonds with maturities ranging from four to nine years.
21. Main recent developments in the financial markets include (a) United States Treasury yields
remain at historical lows; (b) European sovereign debt fears have largely subsided (but “contagion” risk
still remains); (c) market focus is on weak United States growth prospects, stalled recovery; (d) the
United States Federal Reserve is not expected to raise rates any time soon; and (e) most forecasts see next
interest rate increase only in 2012.
22. In light of the above, the investment strategy should continue to be extremely conservative with
regard to the credit risk profile.
23. Two (2) bonds in the amount of US$ 1,370,000 will mature between January and February 2011
and the investment strategy for the next 12 months would be as follows:
(a) to increase to 20 percent of the portfolio the share of securities with maturities exceeding five
years (maximum allowed to PGTF as per UNDP Investment Committee approval) by
reinvesting some US$ 400,000 of the maturing proceeds in bonds having the highest credit
quality with 7 to 10 years maturities, with a target interest rate of 3 percent;
(b) to reinvest the rest in bonds of the same characteristics with 4 to 5 years maturities, with a
target rate of 2 percent per annum;
(c) the standard practice is to invest only in securities with AAA credit ratings, but investment
opportunities in eligible institutions having AA credit ratings will also be explored with a
view to increasing income while maintaining a high credit quality;
(d) to consider selling part of the portfolio so as to maximize income to PGTF since the current
marked to market value of the portfolio is US$ 7,527,155 compared to a par value of US$
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7,029,782. The timing and attractiveness of this option would be monitored and discussed
with the Committee and any decision in this regard will have to be approved by the Chairman
of the Committee.
24. Performance of the PGTF portfolio is being measured on a quarterly basis against a benchmark
(i.e. the 5-year U.S. Treasury) since the beginning of 2007 and the PGTF portfolio has consistently
outperformed the benchmark, as shown in the table below:
Benchmark Benchmark
Year Quarter (5 year PGTF Year Quarter (5 year PGTF
Treasury) Treasury)
2007 1st 4.64% 4.61% 2009 1st 1.75% 3.65%
nd nd
2 4.76% 4.61% 2 2.23% 3.58%
rd rd
3 4.51% 4.79% 3 2.45% 3.31%
th th
4 3.79% 4.78% 4 2.29% 3.07%
2008 1st 2.75% 4.43% 2010 1st 2.41% 3.07%
nd &nb
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