$5 bn Asian Development Fund replenishment agreed to support most vulnerable in Asia and Pacific

KATHMANDU: In a significant commitment to addressing the pressing development challenges faced by the most vulnerable countries in Asia and the Pacific, donors and the Asian Development Bank (ADB) have agreed to replenish the Asian Development Fund (ADF) with $5 billion for ADF 14 and Technical Assistance Special Fund (TASF) 8. This decision was reached during ADB’s 57th Annual Meeting, underscoring the collective effort to support inclusive and sustainable development in the region.

The ADF serves as ADB’s primary source of grants for operations in its poorest and most vulnerable member countries and is replenished every four years. ADF 14, marking the 13th replenishment since the fund’s establishment, will extend support for grant operations during 2025–2028.

With a replenishment amount 22% higher than its predecessor, ADF 14 will provide eligible ADB members with the largest-ever volume of ADF grants. TASF 8, meanwhile, will facilitate grants aimed at preparing projects, building capacity, and providing technical or policy advice.

ADB President Masatsugu Asakawa emphasized the critical importance of grants in addressing the development challenges faced by the region’s poorest and most vulnerable communities, particularly in the context of reversing setbacks and combating the climate crisis. He expressed gratitude for the remarkable replenishment, which reflects donors’ continued partnership with ADB in addressing the urgent needs of those most in need.

ADF 14 will prioritize dedicated assistance to small island developing states and countries in fragile and conflict-affected situations, acknowledging their heightened vulnerability, especially to climate change.

Furthermore, it will continue to play a pivotal role in supporting climate change adaptation, disaster risk reduction, regional cooperation, regional public goods, transformative gender action, and agile assistance in emergency situations through its crisis response window.

Of the total replenishment amount, more than $2.5 billion, or 51%, will be funded by contributions from donors, including two new countries, Armenia and Georgia.

ADB will also significantly increase its net income transfers to ADF, reflecting a 35% increase compared to the previous replenishment cycle. The remaining funds will be sourced from transfers from earlier ADF cycles and income from liquidity investments.

In parallel to the ADF 14 replenishment, ADB aims to provide $16.7 billion in concessional loans with very low interest rates over long repayment periods. This substantial commitment underscores ADB’s capacity to leverage donor contributions, with over $8 in grants and concessional loans for every $1 in donor contributions.

Established in 1966 and owned by 68 members, including 49 from the region, ADB remains steadfast in its commitment to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while continuing efforts to eradicate extreme poverty. The replenishment of ADF and TASF stands as a testament to the collective resolve to leave no one behind in the pursuit of shared prosperity and well-being in the region.

Fiscal Nepal |
Friday May 3, 2024, 09:26:59 PM |

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