VOLUME 7, ISSUE 4 - FALL EDITION 2000

TDA Trust Funds Impact MDB Procurements

It is well known that TDA promotes exports by providing grants for feasibility studies, conferences, orientation visits, technical assistance, and training. However, another way TDA promotes exports is through its work in conjunction with multilateral development banks (MDBs) such as the World Bank, the International Finance Corporation, the InterAmerican Development Bank, the InterAmerican Investment Corporation, and the European Bank for Reconstruction and Development. TDA works closely with these MDBs in order to increase the amount of procurement under bank investments that go to U.S. companies.

TDA has established trust fund accounts at these MDBs for use by the banks to support U.S. individual consultants or U.S. firms to conduct full-scale feasibility studies for upcoming bank projects. The purpose of the funds is to position U.S. firms in infrastructure projects in middle income and developing countries that have potential for U.S. exports. It is TDA's intention that by providing these funds, U.S. individuals and firms will be involved in the early stages of project development, thereby increasing the likelihood of significant U.S. procurement of goods and services in the project.

The trust funds are referred to as "Evergreen Funds" because any amount authorized by TDA to be used on bank projects is automatically replenished in the same amount from TDA's budget. The result is that there are always funds in place to seize time-sensitive opportunities for U.S. firms at the banks. Coupled with our small size, having trust fund accounts at the MDBs affords TDA the ability to quickly respond to requests from either the MDBs or U.S. consultants within a few weeks.

Any U.S. firm that is involved in an MDB project or is marketing its services to one of these MDBs, should discuss with the MDB the possibility of using TDA Evergreen Funds to finance the consultancy. Typically, proposals come from the MDBs and TDA evaluates the project in the same manner as any other project. TDA considers criteria such as whether the project presents significant export potential of U.S. goods or services; is the project in a country or sector in which the U.S. is competitive; is the project consistent with ongoing TDA activities in the host country; and will the consultancy help TDA become knowledgeable about the project and alert U.S. firms to procurement opportunities available under International Competitive Bidding. Also, when suggesting a prospective project for TDA funding, it is important to keep in mind that the definition of "significant" depends on the region because some regions will consider projects with lower export potential.

The process to access the Evergreen Funds is initiated when an MDB task manager contacts TDA program staff and expresses interest in TDA funding for a portion of the project development. The bank follows up by submitting to TDA a description of the project, the terms of reference for the work to be done, and a detailed budget. TDA staff considers the proposal according to criteria such as those outlined above and determines whether or not to provide assistance to the project. If assistance is authorized, the bank chooses the U.S. firm according to its own procedures. U.S. firms interested in TDA funding must first approach the MDBs with respect to a particular project and a particular project activity. If you have general questions concerning the Evergreen Funds, please contact Caryn Hines in TDA's Office of the General Counsel, at (703) 875-4357.