As part of the Urban Development and Local Governance Program, a new system for granting subsidies to municipalities has been introduced. This system determines the amount of the subsidy based on a transparent, objective, and fair formula, and is conditional on performance evaluation and compliance with minimum eligibility requirements.

To obtain the total subsidy, municipalities are evaluated using indicators based on a scoring system that covers three areas: improvement of provided services, participation and transparency, and enhancement of financial resources.

Municipalities must obtain at least 50 points out of 100 in the performance evaluation conducted by the General Inspection of Public Services in order to benefit from part or all of the performance-based assistance. They must also meet the five mandatory minimum conditions. Any municipality that does not meet these conditions cannot receive the annual grant.