APD | ADB approves Results-based lending as new financing option

By APD writer Melo M. Acuña

Ｍalila, Sept.19 (APD)- After a successful six-year pilot period, the Asian Development Bank (ADB) today approved the use of results-based lending (RBL) as a regular financing modality for its operations. This will allow ADB and its developing member countries (DMCs) to have more financing options to improve development outcomes in Asia and the Pacific.

In a statement released today, the Manila-based ADB said RBL is a results-based form of financing in which fund disbursements are linked to the achievement of agreed program results instead of expenditures, as in the case with project lending. The modality incentivizes borrowing governments and ADB to focus on results during the design and implementation of government programs, while promoting institutional development, enhancing development effectiveness, and supporting better coordination.

“ADB introduced results-based lending on a pilot basis in 20113 to strengthen both incentives and accountability for delivering and sustaining results, while improving the efficiency and effectiveness of government-owned programs,” said ADB’s Director General for Strategy, Policy and Partnerships Department Tomoyuki Kimujra. He added RBL has effectively helped development member countries enhance development effectiveness and strengthen their institutions by linking financing directly to the achievement of pre-determined outputs and outcomes targets.

The findings from the pilot phase showed that RBP helped strengthen country ownership and accountability by placing the responsibility for achieving results on government institutions instead of program-specific management units. It also manifested good potential for promoting effective development partnerships.

Nineteen RBLs have been approved by ADB in 11 developing member countries with a total commitment of US$4.8 billion. The projects involve education, energy, health, agriculture, finance and urban development. It was learned education is the predominant sector in terms of the number of programs with 10 RBLs with a value of commitment at US$1.8 billion.

(ASIA PACIFIC DAILY)