Poverty Reduction Cooperation Fund

About PRF
Objectives and Scope

Established in July 2002, the Poverty Reduction Cooperation Fund (PRF) is a $75 million grant facility from the Department for International Development (DFID) of the Government of the United Kingdom of Great Britain and Northern Ireland. The PRF aims to help ADB reduce structural poverty in its developing member countries.

Purpose

PRF aims to assist ADB in reducing poverty in its developing member countries. The PRF thus augments ADB's efforts for poverty reduction. The rationale and logic for the PRF is summarized in the PRF Framework.

Objectives

The PRF

• assists in policy dialogue and strategy formulation on poverty reduction
• develops new programs and projects with increased focus on poverty reduction
• monitors and assesses poverty reduction impacts at the project-, meso-, and macro-levels
• pilots poverty reduction activities to influence future loan design
• involves broader stakeholder consultations at all stages of project design and implementation
• strengthens ADB's role as the regional development bank for Asia and the Pacific promoting poverty reduction
• performs other activities as mutually agreed upon between the DFID and ADB.

Activities and Scope

More specifically, the PRF supports

• technical assistance for capacity and institution building
• provision of advisory inputs
• thematic and sector work
• monitoring, evaluation, and impact assessment
• public conferences, workshops, and other events
• innovative activities such as micro and pilot projects, with clear demonstration effects
• national experts based in resident missions of ADB, working on poverty analysis, and poverty-related gender, stakeholder participation, and governance issues
• outreach and communication
• administrative costs of fund management

The PRF is not meant to be used for ADB’s permanent staffing costs (e.g. salaries and training). It is principally focused on country-based activities albeit cross-border activities can be supported as long as they will have a measurable impact on a country's poverty situation.

The PRF particularly supports innovative action research, and country – or theme – focused poverty analysis, stakeholder coordination, NGO involvement, pilot activities and poverty reduction monitoring.

PRF Component for the People's Republic of China (PRF-PRC)

The PRF-PRC supports activities that

• increase the benefits of loan projects accruing to poor communities, groups, and individuals (direct targeting of the poor)
• include participatory design, implementation, monitoring, and evaluation to increase the poverty impact of loan projects, and partnership building with civil society (capacity building)
• address key strategic policy, institutional, and governance constraints to sustainable and systemic poverty reduction (policy dialogue on poverty reduction).

The procedure for approving projects for PRF-PRC financing follows the same general approval procedure of the PRF. However, the PRF-PRC specifically supports ADB's Country Strategy and Program process in the PRC. In addition, the process of strategic identification and conceptualization of PRF-financed activities during the strategy meetings is more elaborated with strong government ownership. Of the total PRF, $16 million are originally allocated for the PRC.

Financing

The Government of the United Kingdom of Great Britain and Northern Ireland made an initial contribution of £39 million (about $70 million as of 31 December 2003), comprising £30 million (approximately $54 million) from its regional cooperation window, and £9 million (approximately $16 million) from its window for the PRC.

The PRC window component was reduced from £9 million to £6 million ($10 million), per the MOU amendment dated 20 April 2006.

At its discretion, the United Kingdom or any other ADB member country may provide additional resources to the PRF.

Projects supported by the PRF are generally in the range of $0.1 to $1.0 million.