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p. -1 of 18 BACK | NEXT Executive Summary I. Introduction II. Long-Term Vision and Strategy for ADF III. Operational Priorites IV. Use of ADF VII Resources to Date V. Financial Management VI. Conclusions

Asian Development Fund VII: Progress Report (1999)

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IV. USE OF ADF VII RESOURCES TO DATE

31. In the first half of the ADF VII period, 1997-1998, $2.6 billion of new ADF loans were approved. The largest borrowers were Viet Nam and Bangladesh, each accounting for more than $600 million; together, they used close to 50 percent of the total ADF lending. Sri Lanka, Pakistan, Kyrgyz Republic, Nepal, and Lao People’s Democratic Republic (PDR) were next (Table 1). Based on the current classification of DMCs under the graduation policy approved in December 1998 (para. 9), Group A countries, as a whole, accounted for $618 million or about 24 percent of the total; Group B1 countries accounted for $1,873 million or 72 percent of the total. Group B2 countries (i.e., Indonesia) received only $30 million or 1 percent of the total; and Group C countries received $79 million or 3 percent, in their final access to ADF before effectivity of the graduation policy.¹³

32. A total of 68 projects and programs were assisted through the ADF in 1997-1998 (Appendix 1). For these projects, the $2.6 billion of ADF lending, accompanied in part by $0.6 billion of OCR blend lending and equity investment, leveraged the mobilization of another $0.9 billion in cofinancing and $1.3 billion in government and beneficiary counterpart financing, for a total of $5.4 billion of project financing. In other words, for every $1.00 of ADF financing, $1.07 of non-ADF resources was mobilized for the projects approved in 1997-1998.

33. All Bank assistance is intended to contribute to poverty reduction, either directly or indirectly. In terms of the Bank’s strategic development objectives, around $1.1 billion or 44 percent of the total went toward more traditional growth-oriented projects in which the poverty reduction objectives are implicit, while $1.5 billion, or 56 percent, funded projects with explicit environmental and social objectives, including specific poverty reduction objectives. Of the latter grouping, $790 million (30 percent) funded projects primarily aimed at the social concerns of women in development, human resource development, and access for the poor to income/employment opportunities and human development services; and $214 million (8 percent) was for projects directly aimed at protection of the environment. Another $450 million (17 percent) financed growth-oriented projects that incorporated explicit social or environmental targets as secondary objectives. This 1997-1998 project profile continues the trend since earlier in the decade toward an increasing number of Bank projects with explicit social and environmental objectives set at the project design stage.

^a  Projects whose primary objective is to promote economic growth through investments that increase economic production capacity and/or enhance economic efficiency.

^b  Projects whose primary and direct objective is to reduce poverty, to support human development (including population planning), or to improve the status of women.

^c  Projects whose primary aim is to promote sound management of natural resources and the environment.

^d  Economic growth projects designed to also target, as a secondary objective, poverty reduction, human development, improvement in the status of women, or protection of the environment.

There are many good examples from among the ADF projects approved in 1997-1998 that were driven by the operational priorities discussed in the last section and that demonstrate the effective use of ADF resources during the first half of ADF VII. The Bank's significant partnership with its Pacific DMCs (PDMCs) to support wide-ranging reforms provides other good examples of effective use of ADF. Five projects were selected to indicate the wide breadth of development issues in which ADF is playing a long-term role:

• biodiversity conservation in Bangladesh;
• financial sector intermediation in Bhutan;
• rural microfinance in Nepal, targeted particularly at households headed by women;
• basic education in Lao PDR; and
• flood emergency rehabilitation in Kyrgyz Republic.

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