Bilateral cooperation

Approaches in bilateral cooperation between Germany and its partner countries

Direct development cooperation between Germany and its partner countries rests on two main instruments: Financial and Technical Cooperation.

Financial Cooperation

Financial Cooperation is an instrument involving state bodies only. It can be used, for instance, to finance investments, particularly in infrastructure and financial systems, to finance materials and equipment, or to establish effective structures. The volume of funds is agreed and laid out in a contract between Germany and the partner country. The funding usually takes the form of soft loans; the poorest developing countries (LDCs) are also granted funding in the form of a non-repayable grant. One special form of Financial Cooperation is called "programme-oriented joint financing". Here the funding is not made available for individual projects but is paid into the partner country's budget.

Technical Cooperation

Technical Cooperation is always non-repayable. It aims primarily to boost the performance capacities of individuals and organisations in partner countries, from small self-help organisations to government authorities, by providing advisory services and teaching know-how and skills.

To take the narrowest definition, Technical Cooperation embraces projects and programmes agreed on during negotiations between the German government and the government of the partner country. This Official Development Assistance (ODA) is implemented on behalf of the German government by a few specialised organisations.

Technical Cooperation in the broad sense also includes projects and programmes implemented by non-governmental organisations, such as political foundations and NGOs.

Other areas

As well as these two instruments of direct cooperation, there are other diverse fields of work, ranging from seconding and placing experts, to the Development Volunteers Service and university twinning, to the reintegration of experts returning home after a period in Germany.

See also:

BMZ glossary

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