The replenishment amounting to a total of $3.8 billion will be financed from new donor contributions ($2.5 billion*), net income transfers from ADB's ordinary capital resources (OCR) ($1.0 billion), and income from ADF liquidity investments ($0.2 billion). This amount is expected to increase further over the next few months as more donors confirm their pledges.
One important feature of the ADF 12 replenishment is the greater role played by non-traditional donors. The share of donor contributions** from Asian emerging economies increased to 11.7% from 6.9% during the ADF 11 period (2013-2016).
ADB grant support of $3.3 billion to the poorest countries represents an increase of 70% as compared to the previous 4 years. ADF grants together with ADB's concessional loans will deliver more than $16 billion in assistance to poor countries during the same period, an increase of more than 40%. Assistance to small island countries will rise by over 150%.
In addition to the $3.3 billion in new resources for the core activities of the ADF, some donors will together contribute up to $150 million to an ADF facility for regional health security.
We highly appreciate our donors' support. It will allow us to boost our grant operations in the poorest countries, especially fragile and conflict-affected countries, said ADB President Takehiko Nakao. This will help the region achieve the new Sustainable Development Goals (SDGs) and the COP21 climate change commitments.
Other priority areas targeted in ADF 12 include gender equity, food security, private sector development, governance, preparedness and response to climate change and disasters, and regional public goods such as cross-border health issues.
The Asia and Pacific region has made large development strides in recent decades, but around 450 million people still live below the poverty line. The poorest and most debt-distressed countries in the region failed to achieve the 2015 international goals for reducing child and maternal mortality, improving sanitation, and strengthening gender equity, among others. Adding to these challenges is the ambitious new mandate of the SDGs.
This ADF 12 replenishment is the first after the announcement of the merger of the ADF loan operations with ADB's OCR balance sheet effective in 2017. After the merger, ADB's concessional lending will be provided from its OCR, instead of from the ADF. This merger will increase ADB's total financing, including market-based lending, concessional lending, and grants by over 50% by 2020. Financing for poorer countries, including market-based lending to blend countries***, will increase by 70%. At the same time, it will reduce donors' burden for the ADF 12 and future replenishments by about half.
* The amount includes intended contributions which will be finalized in coming months. Donor contributions including the financing gap are $3.1 billion.
** Contributions from Asian emerging economies to ADF 12 are from Brunei Darussalam; People's Republic of China; Hong Kong, China; India; Indonesia; Republic of Korea; Malaysia; Singapore; Taipei, China; and Thailand.
*** Blend countries are eligible to borrow concessional as well as market-based loans.
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