Germany weighs changes to foreign aid contracting

Hans-Jürgen Beerfeltz, state secretary at the Federal Ministry for Economic Cooperation and Development. Photo by: B. Frommann / Deutsche Welle Unternehmen / CC BY-NC

The German government has begun consultations with industry partners that could change the way foreign aid contracts are awarded. The goal: to take into greater account social and environmental factors when deciding whether to fund a project.

Hans-Jürgen Beerfeltz, state secretary at the Federal Ministry for Economic Cooperation and Development, or BMZ, met on Thursday, Feb. 7, with the leaders of several German trade associations. Norbert Kloppen­burg, board member in charge of the KfW Ent­wick­lungs­bank, also attended.

The conversation focused on sustainability standards for the awarding of contracts in development cooperation, according to the ministry. The German government is eager to expand its criteria for awarding contracts beyond traditional cost-benefit calculations, and take into greater account the expected social impact, environmental sustainability and job creation of a project.

“Whoever just looks at cost pays extra at the end — though high operating expenses and maintenance costs or because a project isn’t as effective in the long run as desired,” Beerfeltz said after the meeting.

Thursday’s talks were the first in what is expected to be a series of consultations with trade associations representing a variety of sectors such as water, infrastructure, health and energy.

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