Countries and Regions

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p. 4 of 4 BACK | NEXT I. Current Development Trends and Issues II. Implementation of the Country Strategy and Program III. Portfolio Management Issues IV. Country Performance and Assistance Levels

Country Strategy and Program Update 2005-2006: Bhutan

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IV. Country Performance and Assistance Levels

A. Lending Level Proposed

27. Based on the performance-based allocation (PBA) exercise, indicative Asian Development Fund (ADF) lending of $13.4 million, or an average of $6.7 million per year, is programmed for 2005–2006. The allocation of ADF funds will depend upon the revised PBA policy, expected to be finalized later in 2004. For planning purposes, the two-year allocation/annual allocation has been set at $6.7 million, but this will be subject to change based on the revised PBA policy.

28. There are four loan projects including a standby project in the pipeline for 2005–2006 (Appendix 1, Table A1.10). All projects are classified as poverty intervention. Private sector development is also emphasized, this being the key thematic area for two of the projects.

B. Nonlending Program

29. The nonlending program comprising 8 projects including 2 standby projects (2 project preparatory and 6 institutional development) is planned for a total amount of $2.1 million, an annual average of $1.05 million in 2005–2006 (Appendix 1, Table A1.11). In addition, 4 economic, thematic and sector work are programmed for 2005-2006. As before, the proposed lending and nonlending program will be operationalized ensuring compliance with ADB's policies and guidelines approved and endorsed by its Board (for details: http://www.adb.org). For reference, the 2004 assistance program for lending products and nonlending products and services is provided in Table A4.1 and Table A4.2, respectively.

C. Summary of Changes to Lending and Nonlending Programs

30. Some of the loans in the previous CSPU 2004–2006 are deferred, taking into consideration Government priorities, preparation, and constrained ADF availability. Urban housing development listed in 2004 was deferred to 2006 and its inclusion in the program is contingent on successful policy dialogue. SME development in 2005 and the cluster TA for the financial sector and financial sector reform in 2006 were postponed to 2006 or later.

31. TA for capacity building to implement environmental guidelines as standby in 2004 and firm in 2005, and labor regulations as standby in 2005 and firm in 2006 were added to the program.

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