How Results Based Lending Supports Agencies Working with ADB
Video | 12 January 2016
Results based lending or RBL, which is a new performance based form of financing, changes the way ADB works with external agencies who implement its projects.
Title: How Results Based Lending Supports Agencies Working with ADB
Description: Results based lending or RBL, which is a new performance based form of financing, changes the way ADB works with external agencies who implement its projects.
Director, Procurement Division 2
Asian Development Bank
Q: Results based lending or RBL is a new performance based form of financing, where disbursements are linked to results rather than expenditure. How does this impact the awarding of contracts to agencies working with ADB?
A: RBL operations are assessed using international best procurement practices.
- Open competition that’s the most important. Open competition is the default method for all RBL operations.
- Economy and efficiency. We want to ensure efficient outcome in terms of time and price of all our RBL operations.
- Fairness and transparency. We want to give all bidders who participate in RBL operations a fair and equal chance and treatment.
Q: How do RBL procurement guidelines differ from ADB’s traditional procurement methods?
A: First of all, I think it is important to know that ADB’s traditional procurement guidelines do not apply for RBL operations. This means when assessing RBL procurement operations it does require a different kind of mindset. And this is very important, it is important for ADB staff but it is also important for our clients to see that there is a different approach needed and a different skillset and mindset required when assessing operations for RBL. Basically, we’re looking at the procurement profile of a RBL as a whole then we look at the country level assessment. We look at rules, procedures that are applicable in a country then we go further down to the EA level assessment and see what kind of procedures, bidding documents a certain agency is using. We also look at the performance of an agency’s procurement systems.
Q: What is the role of capacity building in RBL operations?
A: It is important to know that your procurement systems are sometimes not perfect. It needs further improvement that’s where ADB comes in with capacity development assistance and this can take different forms. It can be part of the program, it can be a technical assistance project but it is very important and this is a main driver of RBL operations that we also want to improve procurement systems in our client countries.
Q: How does ADB’s anti-corruption stance impact RBL operations?
A: ADB has a zero tolerance policy for corruption in its RBL operations. ADB has RBL anti-corruption guidelines, which are discussed with the government to make sure the government fully understands ADB’s requirements. I would like to point out two specific issues. ADB has the right to investigate any allegations of corruption that is very important to protect the reputation of the client and ADB, and to ensure a fair and transparent procurement process. And ADB also makes sure that no debarred or suspended firms are awarded contracts under RBL operations.