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A Graduation Policy for the Bank's DMCs

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ADB's Asian Development Fund (ADF) lends donated funds to its lowest-income developing member countries (DMCs) at concessional rates. This paper sets a new policy for reclassifying and even "graduating" DMCs from ADF-and ADB-assistance.

Country Classification Criteria

Graduation from one category to the next depends on improvements in

• gross national product
• debt repayment capacity

Eligibility System

• Group A: DMCs with very low per capita GNP and limited debt repayment capacity; eligible for ADF assistance only
• Group B1: lower middle income DMCs; eligible for ADF with limited amounts of OCR
• Group B2: lower middle income DMCs; eligible for OCR with limited amounts of ADF
• Group C: upper middle income and high income countries with relatively high debt repayment capacity; eligible for OCR only

In addition, ADB has nonborrowing DMCs and OECD member countries.

The country classification determines the access to ADB's concessional finance window and has implications for cost sharing in project and technical assistance financing.

Country Classification
As of January 2003

View the document [ PDF: 206kb | 61 pages ]. To read, you need Acrobat.

Contents

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Executive Summary

1. The Context

2. Present Bank Policies and Practices

   1. Policies
   2. Practices

3. Graduation Policies of Other Multilateral Development Banks

   1. World Bank Group
   2. Inter-American Development Bank
   3. African Development Bank
   4. European Bank for Reconstruction and Development

4. Rationalizing the Bank's Classification and Graduation System

   1. Graduation from ADF

   2. Graduation from Regular Bank Assistance

5. Other Operational Implications

   1. Cost-sharing Limits for Project Cost Financing and TA Financing
   2. Domestic Preference Scheme for Goods and Civil Works

6. Conclusions

7. Recommendation

Appendixes [ PDF: 58kb | 20 pages ]