ADB offers its developing member countries different types of financing modalities to support governments in boosting economic growth and solving development challenges. Responding to the evolving needs of countries and the Asia and Pacific region as a whole, ADB's range of public sector loans and grants differ in purpose, focus, financing and disbursements, and implementation arrangements. This video presents three modalities for the public sector that help developing member countries better design and implement development projects.

Project readiness financing supports activities that are expected to generate at least one ADB-funded project. The small expenditure financing facility responds to small, low-risk financing needs linked to ADB-financed projects. Technical assistance helps countries improve their capacities and make better use of their development resources.

Transcript

When ADB finances projects, they should be set up for success. ADB offers three modalities to help developing member countries better design and implement development projects.

Project readiness financing—or PRF—a fast and flexible modality, supports activities that are expected to generate at least one ADB-funded project. It can pay for project preparation consulting services like detailed engineering design, capacity building, limited project startup support, and project design pilot-testing. Such work ensures high project readiness and minimizes startup delays during the initial phase of project implementation.

The small expenditure financing facility—or SEFF—is ADB’s quick and flexible response to small financing needs linked to ADB-financed projects. Once the facility has been set up, individual activity loans or grants up to $15 million each can be processed whenever needed, up to the maximum approved facility amount. The SEFF typically supports low-risk activities across the project cycle covering preparation, implementation, pilot testing, and even post completion activities including operations and maintenance, rehabilitation, and post-disaster early recovery.

Lastly, ADB provides technical assistance—or TA—mostly as grants, to countries so they could improve their capacities and make better use of their development resources.

There are 2 types of TA. Transaction TA supports a specific ADB-funded project, either to prepare one that’s coming up, help an existing one meet its goals, or develop a public–private partnership project. Transaction TA can pay for feasibility studies, due diligence, preliminary engineering design, and preparation of cost estimates for proposed projects. During implementation, it can help develop capacity and provide policy advice. It also supports pilot testing of innovative project design.

Knowledge and support TA is not directly linked to an ADB-funded project. It focuses on knowledge sharing to build capacity, providing policy advice, and undertaking research and development. It can help develop a sector strategy, an investment master plan, a pipeline of future projects.

With its developing member countries rapidly progressing, ADB is committed to providing suitable products that respond to their changing needs.

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