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ADB Sharpens Program in Timor-Leste to be More Results Focused

MANILA, PHILIPPINES (7 October 2005) - Timor-Leste is now eligible to access grants from ADB's concessional Asian Development Fund (ADF), according to a Country Strategy and Program (CSP) update for 2006-2008 endorsed by ADB's Board of Directors.

Timor-Leste will be allocated about $7.6 million over the first two years of the ADF IX period of 2005-2008, amounting to 40% of the country's total ADF allocation, the update says. Its entitlement will be adjusted for the second two years according to a revised performance based allocation rating to be agreed this year.

The ADF allocation for Timor-Leste will be supported by technical assistance grants amounting to about $1 million per year over the three years of the updated CSP.

ADB's strategy and program in Timor-Leste now stresses main roads rehabilitation and improved water supply and sanitation in the capital, Dili. Reinforcing these targeted investments, ADB will strengthen the Government's roads and water supply agencies, and will help the Government coordinate all infrastructure sectors.

But the update brings three program refinements, making it more results-oriented; more aligned with ADB's Pacific Strategy; and leveraging ADB support through leadership, coordination, and resource mobilization in the infrastructure sector.

Poverty incidence in Timor-Leste is thought to have increased in recent years, while social indicators remain among the lowest in the region and social services delivery is improving only gradually.

As the country moves into the consolidation phase three years after the restoration of independence, the Government is keen for both external assistance and its own programs to deliver concrete benefits to ordinary people, particularly outside of the capital city.

"ADB's updated strategy in Timor-Leste identifies longer-term development results that ADB will help the Government achieve, as well as outcomes expected during its implementation," says Charles Andrews, ADB Resident Representative in Timor-Leste.

"A keen focus on main roads and on city water supplies and sanitation allows us to commit to results - for instance reducing vehicle operating costs and travel times by 15% during the Strategy period. Better road connectivity and reliable water supplies are essential to achieve the Government's economic growth and poverty reduction targets."

Besides undertaking $10 million in technical assistance projects, ADB has to date in Timor-Leste administered some six projects amounting to $52.8 million under the multidonor Trust Fund for East Timor. The Government has no borrowing program to finance its approved sector investment programs, but also does not have an explicit no borrowing policy.

CSPs define ADB's medium-term development strategy as agreed with the country. A CSP update is usually prepared every year taking into account the continued relevance of the CSP, its implementation, and ADB's operational program.

The Asian Development Bank is dedicated to reducing poverty in the Asia and Pacific region through pro-poor sustainable economic growth, social development, and good governance. Established in 1966, it is owned by 64 members, with 46 from the region. In 2004, it approved loans and technical assistance totaling $5.3 billion and $196.6 million, respectively.

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