Poverty Reduction Cooperation Fund

Background

Learning for Better Poverty Reduction

In November 1999, ADB approved its Poverty Reduction Strategy . In January 2002, ADB underwent a major reorganization to strengthen knowledge management, mainstream cross-cutting dimensions such as poverty and governance, and enhance country focus.

To support ADB's move to make poverty reduction its overarching goal and to be more relevant for the poor in Asia and the Pacific, donors set up poverty reduction grant facilities, totaling $387.5 million. The Poverty Reduction Cooperation Fund (PRF) is one grant fund modality to help ADB making this difference.

Rationale for the PRF

To better implement its Poverty Reduction Strategy in Asia and the Pacific, ADB faces some major challenges, including how to:

• augment declining resources for technical assistance grants to support capacity building and advisory inputs for poverty reduction
• strengthen the role of resident missions and cooperation with other funding agencies
• pilot new approaches for poverty reduction
• promote cross-border activities to cope with regional volatility, which affects the poor adversely
• enhance ADB's capacity to incorporate cross-cutting and multidisciplinary dimensions for poverty reduction, such as governance, social development, gender, and environment
• strengthen ADB's function as a knowledge management and learning institution
• enhance multidisciplinary collaboration

United Kingdom's Support

The Government of the United Kingdom of Great Britain and Northern Ireland, through its Department for International Development (DFID), strongly supports ADB's Poverty Reduction Strategy, and recognizes ADB's efforts to help achieve the Millennium Development Goals. ADB's and DFID's policies are closely aligned for poverty reduction.

Common priorities are reflected in the DFID's White Paper on International Development and its Institutional Strategy Paper for ADB. which commits ADB to develop, in partnership with bilateral and other sources, mechanisms such as trust funds to target poverty interventions better.

Coordination with Development Partners

The PRF complements the three other poverty reduction grant facilities. This list of grant funds in ADB is not exhaustive:

• The Cooperation Fund in Support of the Formulation and Implementation of National Poverty Reduction Strategies (NPRS) is a $6 million trust fund from the Government of the Netherlands. It was established in November 2001 to support technical assistance for systemic poverty reduction



• The Japan Fund for Poverty Reduction (JFPR) amounts to $295 million so far from the Government of Japan. It was established in May 2000 to pilot innovative poverty reduction investments which can be upscaled under ADB loans
  
  
• The Technical Assistance Cooperation Fund for India (TACF-IND) has a total funding of £20 million (approximately $28.5 million) from the Government of the United Kingdom and Northern Ireland. It was established in June 2001 to promote poverty analysis in India

To enhance the pilot character of those funds and their strategic value for ADB's leaning towards poverty reduction, JFPR, NPRS and PRF are coordinated by the Poverty Reduction and Social Development Division (RSPR) of the Regional Sustainable Development Department (RSDD) of ADB. The NPRS and PRF are treated similarly.

PRF is not intended to be regarded within ADB as a DFID fund. DFID hopes other donors would make contributions to the PRF. DFID is also happy to consider proposals that might otherwise be eligible for funding by the NPRS, after the NPRS is exhausted.