Additional funding pledged for the Asian Development Fund
Press release 144/2008
5 May, 2008
The 30 donor countries of the Asian Development Fund (ASDF), a part of the Asian Development Bank Group, agreed in Madrid on Friday, 2 May on replenishment of the ASDF. Finland is among these 30 donor countries. The funding pledged for the period 2009–2012 totals 7.7 billion euros. Compared against the previous replenishment, this represents growth of over 50 per cent. Finland’s share is 21 million euros, which is about 0.7 per cent of the donors’ share.
The Asian Development Fund finances the economic and social development of the poorest countries of the Asian and Pacific region by providing concessional loans and grants. More than 400 million people living in this region must survive on less than 2 dollars a day. The increasing resources for the coming financial period will focus on projects where the the ASDF’s activities have been effective. The donors agreed on three main goals, which are: ecologically and economically sustainable development and participatory economic growth; regional cooperation and integration; and good governance and development of competence, support for fragile countries and partnership activities. Equality, the environment and private sector development are cross-cutting themes. Owing to the rising cost of foods, the Asian Development Bank Group shall take part in the measures agreed with other development financiers, from the departure point of its own mandate. In the longer term, there is reason to increase support for developing rural infrastructure and financing.
The share of projects for infrastructure, including energy and road projects, will remain high and development of rural areas will also continue, for instance, by means of road construction, electrification, and water and irrigation projects. Social development is supported in the health and education sector especially by means of infrastructure projects. The future programme will pay special attention to climate change. Projects will aim to prevent climate change, for example, by improving energy efficiency and increasing use of renewable energy. The projects will be adapted to occurring and anticipated changes. In addition, the ASDF will strive to help the governments of countries in the region to take climate change considerations into account in national development planning and development programmes.
Support for regional cooperation will double, as 10 per cent of the additional funding will be used to support regional integration. The Fund has supported, in particular, development of cooperation among the Southeast Asian Mekong River countries; activities will now be intensified in other regions. During the negotiations it was also agreed to allocate a 4.5 per cent special grant for the poorest Pacific states and 380 million euros in reconstruction aid to Afghanistan.
The replenishment of the Asian Development Fund pledged in Madrid is a show of confidence in the Asian Development Bank Group’s new strategy and the constant increase in efficiency. Effectiveness is measured by means of both country-specific indicators and indicators following the activities of the development fund. Targeting of country-specific funding is based on an allocation system that evaluates, among others, good governance and effective use of funding.
By supporting the goals of the Asian Development Fund and its replenishment, Finland implements the principles of economically, socially and ecologically sustainable development in order to reduce poverty, as set out in the Development Policy Programme. Finland has a bilateral fund for technical aid, for the support of environment and energy projects of the Asian Development Bank Group. In addition, Finland takes part in regional projects, such as the jointly funded projects in the Mekong region. Finland is also a member of the Asia-Pacific Coal Fund.
The Asian Development Bank Group has its headquarters in Manila. The Asian Development Fund was established in 1973. The largest borrowers from the Fund at present are Pakistan, Bangladesh, Vietnam, Afghanistan and Sri Lanka.
Additional information: Pekka Hukka, Head of the Unit for Development Financing Institutions, tel. +358 9 1605 6323, and Counsellor Ingmar Ström, tel. +358 9 1605 5669, www.adb.org(Link to another website.) (Opens New Window)