Asian Development Fund at 50 — 12 Critical Areas of ADF Support

The devastating impacts of global challenges like climate change disproportionally affect vulnerable communities. The ADF - ADB’s largest Special Fund and ADB’s main source of grants - is vital to building resilience and sustainability in ADB’s poorest and most vulnerable developing member countries (DMCs).

Over the past 50 years, the ADF has provided more than $85 billion in soft loans and grants to 36 developing members. Here are 12 critical areas that the ADF is supporting to meet the needs of the region.

  1. Climate Adaptation and Resilience

    ADF countries are severely affected by climate change, despite contributing the least to greenhouse gases. Adaptation costs are likely to increase over time with accelerating environmental degradation. The ADF supports key areas of climate adaptation, including building resilient infrastructure and protecting ecosystems. The Sustainable Coastal and Marine Fisheries Project in Cambodia boosts the climate resilience of coastal and marine fisheries, seeking to reverse the sharp decline in fisheries and promote sustainable mariculture.


    Photo: Asian Development Bank
    Fish traders at Kandal fishing port, Kampot province. Photo courtesy of ADB Consultant Peter Degen.
  2. Building Clean Energy

    ADF supports the scale-up of clean energy and expanded access to reliable, sustainable electricity while ensuring that vulnerable communities are included in the benefits of this transition. In Tonga, ADF is partnering with state-owned power utility Tonga Power Limited (TPL) towards an ambitious goal of 70% renewable energy generation by 2030.


  3. Disaster Recovery and Risk Reduction

    ADF countries are particularly affected by disasters, with hazards including extreme weather events increasing in frequency and severity. Vulnerable communities rely on fewer and more vulnerable assets, often located in hazard-prone areas. ADF works with countries to strengthen the long-term resilience of basic services and institutions. The Pacific Disaster Resilience Program fills a financing gap experienced by many Pacific recipient countries hit hard by disasters, providing a predictable and quick-disbursing source of financing for early response, recovery, and reconstruction activities.

  4. Gender Equality

    Despite notable improvements, there continues to be a persistent gender gap in labor markets, wages, and access to essential services. These inequalities are at risk of accelerating in ADF countries, as women increasingly bear the brunt of climate change impacts. The ADF supports transformative approaches that center women in decision making and targets entrenched gender discrimination. In rural Cambodia, a project on safer water supply and sanitation services benefiting 370,000 residents ensured that 43% of the total board members were women.


    Photo: Asian Development Bank
    Time added. The construction and rehabilitation of water supply sources enabled women to use time previously spent fetching water with their families or participating in village activities. Photo: ADB
  5. Strengthening Health Systems

    Asia and the Pacific is a hotspot for emerging infectious disease outbreaks. COVID-19 – and its impact beyond borders - highlighted how critical it is to adopt a regional approach in strengthening health security, improving the region’s abilities to detect and contain public health threats. In the Kyrgyz Republic, the Strengthening Regional Health Security Project will improve laboratory diagnostics capacity and enhance regional linkages between laboratories and hospitals in busy border zones beyond the Kyrgyz Republic.


    Photo: Asian Development Bank
    ADB’s Strengthening Regional Health Security Project will improve the country’s laboratory diagnostics capacity and enhance the regional linkages of laboratories and hospitals. Photo courtesy of Alisher Aliev.
  6. Strengthening Food Security (Agriculture)

    Food security was a key focus of support when the ADF was established in 1974, as the region was in the midst of a food crisis. Fifty years later, food and nutrition insecurity persist as ADF countries grapple with high food prices and eroded food production from climate change and biodiversity losses. In line with ADB’s prioritization of food security, the ADF is focused on building resilient food systems and enhancing market connectivity, value-chain development, and food safety advances, along with improving governance and capacity-building. In Tajikistan, an ADF-supported project is modernizing the irrigation and drainage system in the lower Vakhsh river basin to help boost agricultural productivity.


  7. Education

    Quality education is key for vulnerable communities to break from the cycle of poverty, but COVID-19 and climate change have accelerated gaps in access. ADF helps countries respond in areas including teacher training and curriculum improvement, as well as workforce development. Through the ADF-funded Skills for Inclusive Growth Sector Development Program in the Kyrgyz Republic, over 450 students with disabilities were able to find jobs upon graduating from customized vocational training.


  8. Enhancing Debt Sustainability

    ADF grants play a critical role in enhancing debt sustainability for members, addressing challenges without risking the deterioration of debt situations. The ADF – which has recently revamped its policies to adjust to new regional contexts - works with ADF countries to strengthen policy actions and improve public financial management performance. The ADF-funded Domestic Resource Mobilization Project, cofinanced with the governments of New Zealand and Australia, will help Solomon Islands overhaul its tax system to expand and secure the country’s revenue base.


    Photo: Asian Development Bank
    Comprehensive tax reform is never easy, let alone in a small island developing state that is fragile and still trying to fight a global pandemic.
  9. Empowering Innovation

    ADF projects integrate advanced technologies and innovations that increase durability, improve the efficiency and quality of services, and minimize negative environmental and social impacts. An ADF-supported renewable energy development project in Maldives is installing merging technologies such as ocean-based floating solar panels, ocean energy devices, small wind turbines, and flow batteries, which have the potential for replication.


    Photo: Asian Development Bank
    ADB will support the installation of grid-scale energy storage, energy management systems, and distribution grid upgrades in 20 outer islands.
  10. Small Island Developing States

    SIDS are typically constrained by narrow economic bases, small domestic markets, limited exports, high cost of doing business, challenges in connectivity and markets, and high vulnerability to climate change and natural hazards. Investments in social and economic sectors and institutions can help reduce their vulnerability to shocks. The ADF helped fund the delivery of low-cost, high-quality internet service in Micronesia, in partnership with the World Bank, which will complement existing cable systems connecting the major islands in the North Pacific region.


    Photo: Asian Development Bank
    The project will help deliver low-cost, high quality internet service in the Federated States of Micronesia, Kiribati, and Nauru.
  11. Support for Countries in Crisis

    ADF supports countries affected by crisis, including political instability, weak governance, and limited institutional capacity. Recent examples include a grant to Bangladesh to address the displaced persons crisis in Cox’s Bazar, as well as support to the people of Afghanistan and Myanmar through the provision of essential services and livelihood developments. ADF crisis support is provided through various modalities, such as emergency assistance and countercyclical support facility. The Building Resilience with Active Countercyclical Expenditures (BRACE) Program is supporting the Tajikistan government's efforts to contain inflation and provide targeted social assistance to ensure that more than 500,000 poor and vulnerable households benefit.


  12. Private Sector Development

    Grants have a unique role to play in promoting private sector operations in the poorest and most vulnerable countries. Through blended finance interventions, grants can support private sector operations to de-risk investments, mobilize private finance and bring projects to markets that might not proceed without concessional financing. The ADF helped finance the first wind power project in Lao PDR, the largest in Southeast Asia, and the first cross-border in Asia. Cutting edge use of concessional blended finance was critical in overcoming the project’s bankability hurdles to crowd in commercial capital.


    Photo: Asian Development Bank
    Harnessing the Lao PDR's untapped wind resources can provide energy diversification as the seasonality of the wind resource is countercyclical to the rainy season, which supports the country’s hydropower generation.

ADF Members

Over the years donor contributions have been supplemented by other sources of financing. In total, ADF has provided more than $85 billion in concessional lending and grants to 36 developing member countries (DMCs). These are:

Afghanistan Georgia Nauru Sri Lanka
Armenia Indonesia Nepal Tajikistan
Azerbaijan Kazakhstan Pakistan Thailand
Bangladesh Kyrgyz Republic Palau Timor-Leste
Bhutan Kiribati Philippines Tonga
Cambodia Lao People’s Democratic Republic Papua New Guinea Tuvalu
Cook Islands Maldives Republic of the Marshall Islands Uzbekistan
Fiji Mongolia Samoa Vanuatu
Federated States of Micronesia Myanmar Solomon Islands Viet Nam

The fund has been replenished 12 times, with 36 donor partners contributing a total of $38 billion. These 36 donors are:

Australia France Korea, Republic of Singapore
Austria Germany Luxembourg Spain
Azerbaijan Hong Kong, China Malaysia Sweden
Belgium India Nauru Switzerland
Brunei Darussalam Indonesia The Netherlands Taipei,China
Canada Ireland New Zealand Thailand
China, People’s Republic of Italy Norway Türkiye
Denmark Japan Philippines United Kingdom
Finland Kazakhstan Portugal United States

 

 
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Source URL: https://www.adb.org/news/features/asian-development-fund-at-50-12-critical-areas-adf-support