“Tru as in ‘trusted’”
Up until now, donor-financed projects are generally not processed using recipient country procedures. Instead, they use cost-intensive, individually varying parallel structures defined by the respective donor institutions. This leads to a multitude of different procedures and requirements that further strain the already limited capacities of partner countries and are everything but efficient.
The main reason for adhering to these parallel structures is the high risk of possible misappropriation of donor funds. With TruBudget (“Trusted Budget Expenditure”), KfW has developed a digital platform based on blockchain technology that enables decision-making and work processes between business partners to be made transparent, tamper-proof and efficient. Partners can jointly carry out the processes relevant for project implementation (e.g. allocation of funds, tendering procedures and payment transactions) – the underlying blockchain technology makes them unalterable and transparently documented at all times for all participants.
Various countries have already set up and launched their own TruBudget platforms, including Brazil, Georgia, Ethiopia and Burkina Faso. Setup and use of TruBudget is in the pipeline with further partners.
TruBudget's potential is enormous. Other institutions’ and countries’ high level of interest in the open-source software is not the only indicator. TruBudget also makes a significant contribution in times of crisis like the current coronavirus pandemic as it facilitates fast and secure realisation of aid money in the affected countries.
Introducing TruBudget as the standard application for partner countries means that donors can directly inject their funds via partner countries’ budgets. This not only makes a substantial contribution to improving efficiency and sustainability of development cooperation, it also strengthens transparent and responsible governance.