In August 2014, the Italian Parliament approved a new development cooperation law establishing a development agency and a separate development bank. The agency will come under the Ministry of Foreign Affairs and International Cooperation. A new Deputy Minister for Development Cooperation will lead the strategic and political dimensions of the agenda while all operational aspects will be managed by the new agency

The establishment of the Italian agency moves Italy from a model in which development cooperation is managed by a department within the Ministry of Foreign Affairs to one in which the ministry has overall responsibility for policy and a separate executing agency is responsible for implementation. This structure has some similarity to previous institutional models used to deliver the UK bilateral programme.

This note sets out key strategic and operational considerations for the establishment of Italy’s new aid agency. It draws on practical experience and lessons from the UK’s Department for International Development (DFID) to set out reflections on the challenges of setting up a development agency.