ADB’s instrument for poor countries offers lessons in project design and supervision

Since 1973, the ADB has offered a special instrument of concessional financing for its poorest member countries through the Asian Development Fund (ADF). Now on its 11th cycle, the ADF continues to offer lessons in terms of project design and supervision.

ADB’s Independent Evaluation Department (IED) recently conducted an evaluation study on ADF’s performance for the 10th and 11th cycle (or ADF X and XI, respectively) and found relevant insights that would guide the operations of similar instruments.

The following were some of the ADF’s lessons in project design and supervision, which are taken from IED’s study entitled Asian Development Fund X and XI Operations: Opportunity Amid Growing Challenges:

  • Pay attention to key design-related factors. These factors include understanding of the underlying development problem, stakeholder consultation and support, project complexity, consideration of country conditions and capacities, and risk assessment and mitigation.
  • Anticipate and manage common implementation challenges. These challenges are in the areas of institutional capacity to achieve project outputs/outcomes, adequacy of ADB’s implementation support, continued political commitment, government coordination, and financial resources to maintain project outputs and outcomes.
  • Focus on project efficiency and sustainability. Among the four primary evaluation criteria (relevance, efficiency, effectiveness, and sustainability), efficiency and sustainability consistently rate weaker in both project and country level evaluations.
  • Effective project supervisors are important. While high economic growth and good national policy environments are positively correlated with project success, the track record of the project supervisor in delivering successful projects is even more strongly correlated with project success.

Currently, the ADF offers loans to 29 eligible countries at very low interest rates as well as grants to help them reduce poverty.

ADF operations have provided infrastructure and services to boost economic growth, assist countries with fragile and conflict-affected situations, and expand the access of the poor, women, and children to quality basic social services. ADF has also helped these countries improve their institutional capacities and implement needed reforms.

Read more of these lessons and other findings of IEC’s corporate evaluation study on ADF here.