Amongst many other funding channels of the ADB, the Asian Development Fund (ADF) deserves particular attention since it provides grants to ADB lower-income developing member countries. ADF resources are mainly from contributions of ADB member countries, which are mobilized under periodic replenishments and net-income transfers from ADB’s ordinary capital resources. So far, 34 members have contributed to the ADF. Initial contributions to the ADF were made in 1973, and the ADF started with concessional loans in 1974. Grants were introduced in 2005, and since 2017 only grants are provided by the ADF.

Eligibility to Receive Funding

By March 2018, the following 18 lower-income developing member countries of the ADB have been eligible for funding through the ADF: Afghanistan, Bhutan, Cambodia, Kiribati, Kyrgyz

Republic, Lao People’s Democratic Republic,

Maldives, Marshall Islands, Federated States of

Micronesia, Myanmar, Nauru, Nepal, Samoa, Solomon Islands, Tajikistan, Tonga, Tuvalu, and Vanuatu.

Regional Focus: See the list above

Sector Focus

Activities supported by the ADF promote poverty reduction and improvements in the quality of life in the poorer countries of the Asia-Pacific regions.

The priority sectors include:

• Infrastructure;
• Policy support and policy reform;
• Production capacity, human development, and environmentally sustainable investments;
• Good governance and capacity building for development management;
• Regional cooperation.

The list of projects includes, inter alia, solar parks, climate resilience building, climate disaster risk reduction, sustainable agriculture, water management and sustainable transportation projects.

Funding Conditions

The ADB’s concessional assistance policy^[1] guides the allocation of concessional resources including ADF grants. Thus, the ADF falls under the ADB’s performance-based allocation system in order to allocate concessional resources in a way that is fair, effective and needs-driven. This process includes a formula that ensures that the proportion of assistance provided as grant financing is contingent on the country’s risk of debt distress, which is determined by the result of a forwardlooking debt sustainability analysis. High-risk countries receive 100% of their allocation as grants, moderate-risk countries receive 50% of their allocation as grants, while low-risk countries will receive only loans. To avoid rewarding poor performance, a 20% volume discount is applied to the grant portion of a country’s performancebased allocation.

Application Procedure

There is no standard form of application for ADB assistance. Amongst other criteria, the ADB would require a project description, feasibility study, project ownership and project implementation arrangements, cost estimations and a risk analysis. NGOs cannot apply themselves, but can be involved in project implementation. The ADB has a pro-active approach towards NGOs, particularly regarding projects in vulnerable contexts.

Contact

Asian Development Bank

6  ADB Avenue

Mandaluyong City 1550, Metro Manila,

Philippines

Tel: +63 2 6324444

Website: https://www.adb.org/site/funds/adf