Italian tied aid: some examples

According to the current 20 yers old legislation on Italian ODA, all concessional loans must be tied. Yet, following 2001 DAC recommendations on aid-untying in LDCs countries, the Law was informally modified by a decision from the Interministerial Committee on development and planning by accepting the DAC recommendations. The ODA law was not re-drafted and its tying provision is still partially responsible for the tying of Italian aid. The last official report on Italian development cooperation (2005 - 2006 report is to be made available early 2008) list some tied aid cases. In the Kwanza Sul province of Angola, the telecommunication network is being updated by the Alcatel Italy company thanks to a 18 million euro loans. In Vietnam, a 2.3 million a tied loan funds the building of the water system in the city of Quang Ngai and an Italian company is setting up the Vietnamese floods monitoring system – 2.5 million euro.