ADB’s traditional role in the Pacific has been that of a project bank, providing lending and grant support to the 14 Pacific developing member countries for key projects in transport, power, water and sewerage, education, health, and public administration. In its newer and growing role in the region, ADB has supported capacity building, public policy analysis and reform, and improved development processes.
For ADB in the Pacific, 2007 proved to be the strongest year yet in terms of the value of lending, grants, and cofinancing received. Loans totaling $126.6 million and grants of $46.5 million were approved (Tables 22, 23, and 25). Cumulative lending for the region amounted to $1.8 billion (Table 26). ADB loans, grants, and technical assistance to the Pacific drew $82.5 million in cofinancing, up $40.4 million over 2006, continuing the trend of increasing levels of cofinancing.
New and innovative modes of assistance have allowed ADB to respond more quickly and flexibly to identified country needs and in partnership with other development partners. ADB stepped up its support to the Papua New Guinea transport sector: in its largest combined loan to the country so far, it approved $100.0 million in loans with grant financing of $2.3 million from the Japan Fund for Poverty Reduction and the HIV/AIDS fund for the Lae Port Development Project. ADB also pioneered a new instrument of engagement in a loan buy-down mechanism in Samoa. The mechanism was combined with approval of an Asian Development Fund (ADF) loan of $26.6 million and an ADF grant of $15.4 million for the Samoa Power Sector Expansion Project, which is cofinanced by the Japan Bank of International Cooperation (with a $38.0 million loan) and the Government of Australia (with an $8.0 million grant) (Tables 23 and 25). ADB continued its strong emphasis on facilitating private sector development in the Pacific. The $8.7 million private sector development initiative, cofinanced by Australia, was launched in early 2007 and has already provided focused and practical support in the core areas of state-owned enterprise reform and public-private partnerships; financial sector reform; and reform of the institutional, legal, and regulatory business environments.
ADB’s contribution to the understanding of Pacific issues has been strengthened through increased atten-tion to economic and social analyses. An in-depth assessment of capacity development experiences in the Pacific has created an important guide for future assistance. Oceanic Voyages: Aviation and Shipping in the Pacific Region, published in 2007, is expected to contribute to the reform of public sector operations and policies in the transport sector, and to greater private sector participation in the provision of transport service. ADB also continued its regular series of Pacific Islands Economic Reports, publishing a report on Tuvalu and presenting draft reports to partner governments in the Cook Islands, Nauru, Palau, Papua New Guinea, Samoa, and Tonga. Private sector assessments for Papua New Guinea, Samoa, and Tonga helped elevate policy dialogue on private sector development issues and solutions, and led to agreements on the implementation of specific reform activities. ADB is supporting an analysis of household income and expenditure surveys and poverty throughout the region. Regional technical assistance is being provided to support demographic and health survey work in the Marshall Islands, Nauru, Solomon Islands, and Tuvalu.
PORTFOLIO MANAGEMENT
Actual performance against targets was more than 98% for disbursements ($50.3 million) and 111% for contract awards ($50.9 million) (Table 24). Papua New Guinea contributed 76% of contract awards and 55% of disbursements, and the Fiji Islands 11% and 25%. The number of active technical assistance (TA) projects has averaged 88 over the past 3 years. TA sav-ings amounted to $1.3 million in 2007. A cumulative total of 16 loan and grant projects and 42 TA activities have been delegated to the resident missions. This contributes to effective monitoring and strengthened partnerships with developing member countries and development partners. It also facilitates greater ADB engagement in policy dialogue at the national and regional levels.
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HIGHLIGHTS |
- Emphasized new modes of assistance (community-based modes of procurement, a performance-based loan buy-down scheme, and grants)
- Deepened donor coordination of strategies, programs, and projects, which catalyzed a large increase in cofinancing and promoted harmonization and alignment
- Strengthened the Pacific program after the midterm review of the Pacific strategy (2005–2009) and the development of the first Pacific country partnership strategy (Tonga [2008–2012])
- Focused on capacity development through an in-depth assessment of the region’s experience, which guided the redesign of internal processes and the development of new technical assistance approaches
- Supported regional cooperation through a regional operations business plan to strengthen national ownership of regional approaches, facilitate regional provision of services, and improve the environment for private sector development
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ADB stepped up work on contract awards and disbursements and kept a watchful eye on projects at risk
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