Established in 1995, the Icelandic International Development Agency (ICEIDA) administers the bilateral development assistance provided by the Government of Iceland. It is autonomous from the Ministry of Foreign Affairs (MFA), but ultimately responsible to it. It is also a consulting body to the Icelandic Government in general and to the Minister of Foreign Affairs in relation to cooperation with the developing countries.

ICEIDA focuses its efforts on areas where Iceland operates a comparative advantage, especially in projects related to training and capacity building in fisheries, fisheries research and institutional development in the fisheries sector. All ICEIDA's major projects are related to training and capacity building in fisheries, health, energy and adult education sectors. In general, Iceland’s development cooperation policy revolves around the objective to combat poverty but is divided into four “pillars”:

• Human and Economic Development, and Equality
• Democracy, Human Rights and Good Governance
• Peace, Security and Development
• Sustainable Development

As is the case with most donor countries in the past decade, Iceland has shifted much of its development assistance towards instruments such as sector-wide approaches (SWAps) and direct budget support, instead of traditional project funding. Iceland currently follows a development policy strategy covering the years 2005-2009. In October 2009, a new law was adopted that reflected the intention to create a new strategy document from 2010 onwards. This has however been delayed, and as of 2010 Iceland continues to operate under the previous strategy.

The Financial Crisis has significantly affected Iceland’s development commitments and obligations since 2007, which have at times even affected their ability to transfer funds to ICEIDA offices world-wide. As a result of this, ICEIDA has been forced to cut its number of partner countries in half from six to three; specifically, Iceland’s development cooperation with Nicaragua, Sri Lanka, and Namibia will cease between 2009 and 2010, and all plans to extend that cooperation have been abandoned. Iceland’s remaining partner countries from 2010 onwards will be Malawi, Mozambique and Uganda.

Iceland had planned to increase its support towards the health sector under the 2005-2009 strategy documents, and propel health to one of the key sectors of ICEIDA’s involvement. Bilaterally, Icelandic support towards health has been exclusively in Mozambique, Malawi and Nicaragua. This has included projects to facilitate access to health services, to develop community-based health activities and, specifically in Nicaragua, to support the construction of a new hospital wing for maternal health. Besides this bilateral support, Iceland also contributes towards multilateral organisations, notably the GFATM.

While ICEIDA recognises the importance and utility of working with NGOs, its cooperation is primarily geared towards Icelandic organisations. This work forms an important part of the Agency’s domestic public dissemination and promotion efforts of Iceland’s international development work. In the past, ICEIDA has cooperated with organisations such as the Icelandic Red Cross Society, Icelandic Church Aid, the Icelandic Federation of Labour and ABC Children’s Aid. Historically, Iceland’s contributions towards NGOs have formed about 1% of Iceland’s total development cooperation budget.

In the ‘Medium-term Strategy’ 2005-2009, Iceland intended to formulate a policy and develop comprehensive rules governing cooperation with NGOs, although as of 2010 this has not yet been defined.  ICEIDA does place a preference for contract-based and clearly defined projects which are carefully prepared and regularly reviewed.
 

Iceland Ministry of Foreign Affairs

Iceland Ministry of Foreign Affairs: New Policy and Plan of Operations.

Iceland Ministry of Foreign Affairs: Iceland’s Policy on Development Cooperation 2005-2009.