ADB-Administered Cofinancing Channels for Predetermined Countries or Development Thrusts
A trust fund is a means of channeling cofinancing resources to finance various projects and activities that meet certain eligibility criteria. ADB administered 45 trust funds in 2020.
Trust funds may be financed by a single partner or supported by multiple partners or donors. They can either stand on their own or be a part of an umbrella facility, called Financing Partnership Facility (FPF), that supports specific ADB corporate initiatives, such as clean energy or increasing health impacts and health security across the region. The FPFs have one or more trust funds that finance projects and programs contributing toward the achievement of its targets and objectives. On the other hand, the stand-alone trust funds are single- or multi-partner channels of cofinancing resources that fund various projects, programs, technical assistance, and other activities.
New Trust Funds
January 2020 saw the establishment of a new financing facility, the ADB Ventures FPF. This is the sixth facility under ADB’s administration, the others being on clean energy, health, regional cooperation and integration, urban development, and water. ADB Ventures invests in early-stage technology companies that address urgent development challenges in emerging Asia.
The year also saw the creation of three new trust funds. Two were under the ADB Ventures—the ADB Ventures Investment Fund 1 (Fund 1) and the ADB Ventures Investment Fund 2 (Fund 2). Fund 1, already operational, makes equity investments in solutions that address climate change and gender inequality. Fund 2, not yet operational, will provide debt financing to early-stage technology companies. The third trust fund established in 2020 was the Australian Climate Finance Partnership, designed to catalyze financing for nonsovereign climate adaptation and mitigation projects in eligible countries in the Pacific and Southeast Asia.
ADB administered 45 trust funds in 2020, of which 15 trust funds are under the 6 FPFs.
Trust fund operations in 2020 covered 117* committed projects (grants and technical assistance) totaling $287.9 million.
By the trust fund operation and location, the 2020 projects supported are as follows:
The largest committed financing support was by the Afghanistan Infrastructure Trust Fund, a multi-donor trust fund with $119.6 million. The Japan Fund for Poverty Reduction contributed $71 million, the Republic of Korea e-Asia and Knowledge Partnership Fund contributed $15 million, and the High-Level Technology Fund with $14.3 million. Examples of the projects supported by the trust funds are (i) a technical assistance cluster that prepares energy system development scenarios and technology road maps and supports the scaling-up of innovative energy technologies in developing members; (ii) a technical assistance to increase capacities and investments for climate-friendly, safe, and sustainable agri-food value chains for Cambodia, the Lao People’s Democratic Republic, Myanmar, the People’s Republic of China, Thailand, and Viet Nam; (iii) and another that will generate policy-relevant knowledge supporting policies toward reforms in health and social security programs for the aging population, which will be implemented in Bangladesh, Indonesia, Malaysia, Sri Lanka, Thailand, and Viet Nam.
The following trust funds committed over $441.1 million either as replenishment or new contribution in 2020.
Trust funds supported some $18 million worth of COVID-19 response project commitments in 2020. One example is a technical assistance that integrates considerations and measures to address the risks posed by the pandemic and help developing members in post-pandemic recovery. Another is an initiative to help developing members respond to the ongoing COVID-19 outbreak to mitigate long-term damage to economies and adverse effects on population health. Still, another supports the implementation of measures to prepare for and respond to needs arising from the disease by civil society organizations, including community-based organizations and nongovernment organizations.