Results-Based Lending (RBL) for Programs
In the Spotlight
Results-based lending (RBL) is a performance-based form of financing, where disbursements are linked to the achievement of results rather than to upfront expenditures, as is the case with traditional investment lending.
Objectives of RBL
- Increase the government’s accountability and incentives to deliver and sustain results
- Improve the effectiveness and efficiency of government-owned sector programs
- Promote institutional development
- Support country ownership
- Reduce transaction costs
- Support development coordination and harmonization when more than one development agency is involved in a program
ADB's Work in RBL
RBL was approved in March 2013 as a new ADB financing modality on a pilot basis for an initial six years. RBL has quickly became a popular financing modality in ADB.
Under RBL, ADB supports developing member countries (DMCs) in designing and implementing government-owned sector programs. Disbursement is linked directly with the achievement of program results. Program implementation uses the DMCs’ own program systems. The DMC program systems are assessed, used, and improved as necessary based on commonly accepted good practice principles. The centerpiece of RBL is results achievement and institutional development.
RBL entails a significant paradigm shift which moves the operational focus from
- financing expenditures and controlling transactions to directly supporting results,
- a rules-based approach to a principle-based approach, and
- ring-fencing ADB financing to positively influence the entire government-owned RBL program and its systems.