Assessment of the PEGASE Direct Financial Support to the Palestinian Authority ¿ Incentives Based Mechanism Contract related to: Assessment of the PEGASE Direct Financial Support to the Palestinian Authority ¿ Incentives Based Mechanism - The PEGASE programme aims at contributing to democratic governance, effective and accountable institutions as well as improved well-being of the Palestinian population. The specific objectives are: (1) improved access to social public services for all; (2) improved inclusiveness, effectiveness, efficiency and transparency in policy making and budgeting. The action's objectives and policy related outputs (indirect outputs) are underpinned by the following direct outputs: eased financing for social public services; enhanced administrative and technical capacity of the Palestinian Authority (PA) institutions; improved coordination with government, development partners and Civil Society Organisations (CSOs) for enhanced policy dialogue at global and sector level; public oversight towards reforms implementation. &nbsp;The overall contribution of the EU amounts to EUR 145.35 million. Key components of this Action are: a contribution to the payments of the salaries and pensions of civil servants (Civil Servants and Pensioners, CSP, EUR 55 million), part of which is conditioned upon the fulfilment of the defined targets related to the agreed reforms in the areas of Public Finance Management (PFM), governance incl. education, energy and water; a contribution to the social allowances to vulnerable families (cash transfers programme ¿ CTP, EUR 50 million); and a contribution to the payment for the referrals to the East Jerusalem Hospitals (EJH, EUR 13 million). In view of the needs arising from the COVID-19 pandemic the EU accords exceptionally an additional EUR 20 million to contribute to the purchase of European Medicines Agency (EMA) authorized COVID-19 vaccines. EUR 10 million from the Food and Resilience Facility will be added to the CTP (social protection for vulnerable families) component which will therefore amount to EUR 50 million in total. This additional support will aim to address the consequences of rising prices of food and commodities in Palestine, thus helping mitigate the impact of Russia¿s war against Ukraine. The present Action Document (AD) introduces some elements of innovation compared to past PEGASE programmes, such as a.) an increased and gradual weight of the incentive based component to stimulate reforms, b.) a more stringent governance system to enhance policy dialogue and monitoring of implementation through the setting up of a dedicated Steering Committee, c.) a more solid assessment of the reform process and its achievements through a system of external oversight, and d.) strengthening the synergies with complementary capacity development activities. Pegase¿s exceptionally strong safeguard system of controls will be maintained.&nbsp;