work program and budget framework (2017–2019) · for adb leading up to 2030 through a fully...
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____________________________________________________________________ November 2016
Work Program and Budget Framework, 2017–2019
This document is being disclosed to the public in accordance with ADB’s Public Communications Policy 2011.
ABBREVIATIONS
ADB – Asian Development Bank
ADF – Asian Development Fund
BPMSD – Budget, Personnel and Management Systems Department
COL – concessional ordinary capital resources lending
DMC – developing member country
DRR – disaster risk reduction
FCAS – fragile and conflict-affected situations
IT – information technology
NSO – nonsovereign operation
OCR
– ordinary capital resources PPP – public–private partnership
PSOD – Private Sector Operations Department
RBL – results-based lending
SDG – Sustainable Development Goal
TA – technical assistance
TAS – transaction advisory services
TFP – Trade Finance Program
TMS – time management system
WPBF – work program and budget framework
NOTE
In this report, “$” refers to US dollars.
Directors General I. Bhushan, Strategy and Policy Department (SPD) T. Oya, Budget, Personnel and Management Systems Department (BPMSD)
Directors
S. Jarvenpaa, Operations Planning and Coordination Division, SPD V. Tan, Budget and Management Services Division, BPMSD
Team Leaders A. Hussain, Lead Operations Planning and Coordination Specialist, SPD
H. Hong, Principal Budget and Management Services Specialist, BPMSD Team Members M. de Asis, Portfolio Management Analyst, OSFMD
C. de Guzman, Strategy and Policy Assistant, SPD I. de Guzman, Strategy and Policy Officer, SPD V. Dimaano, Senior Strategy and Policy Officer, SPD M. E. Khan, Advisor, BPMSD and Head, Unit for Institutional Coordination G. Ong, Senior Strategy and Policy Officer, SPD M. S. Regalado, Strategy and Policy Officer, SPD G. A. Sevilla, Associate Strategy and Policy Officer, SPD K. C. Vila, Strategy and Policy Assistant, SPD K. Wangdi, Principal Budget and Management Services Specialist, BPMSD
In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
CONTENTS
Page
EXECUTIVE SUMMARY i
I. INTRODUCTION 1
II. OPERATIONAL TRAJECTORY, 2017–2019: SUPPORTING AMBITIOUS DEVELOPMENT GOALS IN THE REGION 1
III. STRATEGIC PRIORITIES, 2017–2019 5
A. Operational Highlights 5
B. Inclusive Economic Growth 6
C. Environmentally Sustainable Growth and Climate Change 9
D. Regional Cooperation and Integration 13
E. Private Sector Development and Operations 13
F. High-Level Technologies 16
G. Knowledge Management 17
H. External Relations and Communication 18
IV. DELIVERING A STRONGER, BETTER, AND FASTER ADB 18
A. Implementation of Midterm Review Action Plan 18
B. Portfolio Management 18
C. Strengthening Information Technology 20
D. Planned Human Resources Reforms 21
E. Organization Resilience 23
V. HUMAN RESOURCES AND BUDGET REQUIREMENT 23
A. Cost Drivers 24
B. Opportunities for Savings and Efficiency 24
C. Workforce Analysis 25
D. Staffing Requirements for 2017‒2019 26
E. Budget Framework: Indicative Budget Growth for 2017 and Medium-Term Outlook for 2018–2019 28
APPENDIXES
1. Indicative Sovereign Operations Pipeline by Sector, Strategic Agenda, and Drivers of Change 29
2. Indicative Resources Available for Approval 37
3. Strengthening Cofinancing Framework 44
4. Status of Midterm Review of Strategy 2020 Action Plan 46
5. Portfolio Actions Proposed by ADB’s Regional Departments, 2016 49
6. Update on Midterm Review Procurement Actions (10-Point Action Plan) Implementation and Procurement Reforms 51
7. Workforce Analysis 53
8. Opportunities for Savings and Efficiency 60
9. Indicative Work Program: Summary of Selected Deliverables 63
EXECUTIVE SUMMARY
During the Work Program and Budget Framework (WPBF), 2017–2019, the Asian Development Bank (ADB) plans to scale up its assistance to its developing member countries (DMCs) to $58.6 billion from $47.5 billion during 2014–2016, an increase of 23%. This responds to strong demand from DMCs to finance development commitments for the Sustainable Development Goals and climate actions. The scale-up is also consistent with the emphasis of the international community to increase infrastructure investment to support global growth.
The increased resources for approval are supported by ADB’s strong financial capacity
due to the combination of the Asian Development Fund (ADF) lending operations with the ordinary capital resources (OCR) balance sheet, and the 11th ADF replenishment (ADF 12).
For sovereign operations, ADF grants are projected to increase by 67%, concessional
lending by 33%, and regular OCR by 17%. Nonsovereign operations (NSO) will increase by 34%. In scaling up, ADB has prioritized assistance for Group A and Group B countries. Resources available for approval for Group A countries are projected to increase by 50%. For countries in fragile and conflict affected situations, the increase is 87%. The increases for Group B and Group C countries are projected to be 24% and 14%, respectively.
The proposed scale-up is backed by a concrete pipeline of operations agreed with
DMCs. Against the resources available for approval of $58.6 billion, the pipeline of sovereign projects stands at $60.2 billion, which includes about 20% overprogramming.
Infrastructure financing will remain the major area of operations, comprising about 70%
of the operations pipeline during 2017–2019. Of this, slightly more than a third, by value, will support infrastructure development in lagging areas. ADB will promote and progressively increase the use of high-level technologies in project designs, especially for transport, power, water, urban development, and other sectors. This work will be expanded to other sectors during the WPBF period.
The work program for 2017–2019 strongly supports inclusive growth. About 55% of the
operational pipeline, by value, focuses on increasing access to economic opportunities and social services including through assistance to health and education. At the same time, about 43% of the operations pipeline, by value, will support expansion of economic growth largely through infrastructure projects. About 8% supports social protection. ADB will continue to achieve the target for gender equity and mainstreaming at 45%, by number of operations, during the WPBF period.
During the WPBF period, ADB is projected to achieve $6.5 billion in climate financing for
mitigation and adaptation by 2019, exceeding the target of $6.0 billion by 2020. ADB will also exceed the annual targets of $2.0 billion each for food security and clean energy. ADB will seek to identify opportunities for strengthening the pipelines for assistance in health, railways and urban transport sectors.
NSO will be expanded, both by number and volume. NSO will meet their target of 40%
of operations (by number) in Group A and Group B countries (excluding India) during the WPBF period. In delivering NSO, ADB will make greater use of instruments such as equity investments, guarantees, and risk transfers. In addition to infrastructure financing, opportunities for NSO will be explored in agribusiness, education and health. ADB will expand its support for public–private partnerships.
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ADB will strengthen its credentials as a knowledge institution. DMCs expect ADB to more effectively combine advanced knowledge and ideas with finance. ADB’s knowledge will be shared with DMCs through projects and programs as well as knowledge products and services. It is critical that sector and thematic groups under the leadership of their technical advisors promote sharing of knowledge, provide knowledge and expertise to operations departments, and strengthen partnerships with knowledge centers of excellence around the world.
During the WPBF period, ADB will continue to provide important knowledge products
and services such as technical assistance, publications, policy briefs, op-eds, forums and workshops. ADB will encourage its research and knowledge departments to produce a high quality knowledge products and services that stimulate new ideas, encourage discussions on policies and provide insight from regional perspective. ADB will deliver knowledge products and services that are operationally relevant, help build more robust project pipelines, and support designing and implementing innovative projects. ADB will also put an importance on knowledge products and services provided by nonoperations departments such as the Office of Anticorruption and Integrity, Office of the General Counsel, Office of Risk Management, Operations Services and Financial Management Department, and Treasury Department.
ADB will continue to improve disbursement performance and enhance development effectiveness. This will be done by increasing project readiness, improving project management, undertaking further procurement reforms, and deploying more staff and delegating greater authority to field offices.
ADB has started the process to modernize and transform its existing information
technology (IT) systems in order to have integrated operations, financial and knowledge platforms, supported by cloud-based services. This will result in better reporting capability, faster analytics, and enhanced mobility support.
ADB is also embarking on the organizational resilience program. This will enhance
ADB’s shift to a resilient organization by strengthening our emergency and crisis response, enhancing the agility of the organization, and increasing the mobility of our staff.
For the budget framework 2017–2019, ADB projects indicative nominal increases of 3.8% in 2017, 4.4% in 2018, and 4.5% in 2019 including an indicative average 2.2% price increase. The volume increases are estimated from (i) scaling up of operations and staff increase to support this volume growth net of staff optimization measures, (ii) continuation of the midterm review actions of Strategy 2020, (iii) IT reforms, and (iv) organizational resilience.
ADB estimates that IT reforms will require budget increases until around 2020, after
which IT expenses are expected to decline as depreciation from capital expenditures decreases. Resource savings are expected in future years from productivity gains and cost avoidance. Regarding expenses for organizational resilience, after an initial increase in 2017, they are projected to decline in the following years.
ADB estimates a net staff increase of 200 during the WPBF period, more modest than
the 218 positions envisaged for 2017–2018, the remaining 2 years in the previous WPBF, 2016–2018. This net increase would also include provisions for new requirements from the second generation of procurement reforms and the scale-up of transaction advisory services.
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Good progress from the ongoing staff optimization measures and further envisaged measures in 2018–2019 has enabled and is expected to sustain the more modest projected staff growth. Specifically, ADB will expedite human resources reforms and staff optimization measures through more strategic staffing, increased mobility in staff assignments across the organization, flexible position management, and mainstreaming workforce analysis on an annual basis.
ADB will continue to promote efficiency and prioritize resource allocations to meet the
needs of evolving priority areas of operations. For more efficient resource management, ADB introduced the enhanced budget management flexibility measures in 2016 for a faster and effective redeployment of budgetary resources and will continue to improve its resource management during the WPBF period.
I. INTRODUCTION
1. Given the large financing needs for achieving the Sustainable Development Goals (SDGs), the Asian Development Bank (ADB) has committed to scale up its operations by at least 50% by 2020. ADB seeks to use its resources more effectively to support poverty reduction and climate change efforts by improving project designs, enhancing project readiness and implementation, accelerating disbursements, and increasing responsiveness. While continuing to support high-priority infrastructure development, ADB will pay more attention to maintenance cost and sustainability, as well as the effective integration of cleaner and more advanced technologies. ADB also aims to strengthen its credentials as a knowledge institution, and deepen its private sector work, including public–private partnerships (PPPs).1 2. ADB will enhance its capacity, efficiency, and effectiveness by (i) upgrading human resource management, particularly to foster an innovative culture and “one ADB” approach; (ii) further enhancing ADB’s efficiency through measures such as streamlined procedures, greater use of country systems, and establishment of future corporate targets based on commitments rather than approvals for both sovereign and nonsovereign operations; (iii) making better use of information technology (IT) systems; and (iv) developing a new long-term strategy for ADB leading up to 2030 through a fully consultative process. 3. The Work Program and Budget Framework (WPBF), 2017–2019 outlines the plan to achieve this vision. This paper describes the (i) operational trajectory for 2017–2019; (ii) operations priorities over this period; (iii) steps for delivering a stronger, better, and faster ADB; and (iv) cost drivers for the administrative budget during this period. It also analyzes and presents the operational resource requirements for implementing the WPBF.
II. OPERATIONAL TRAJECTORY, 2017–2019: SUPPORTING AMBITIOUS DEVELOPMENT GOALS IN THE REGION
4. Strong demand for development financing and scaling up operations. The combination of the Asian Development Fund (ADF) lending operations with the ordinary capital resources (OCR) balance sheet, coupled with the 11th ADF replenishment (ADF 12), presents an opportunity for ADB to respond positively to the strong demand from its developing member countries (DMCs) to support the SDGs and climate change efforts. ADF 12 comes with some innovative features, including a doubling of the minimum allocation for small countries, stronger support for disaster risk management, and greater assistance for regional health security (Box 1). This enhances ADB’s capacity to address vital development challenges in the region, especially in the poorest countries. 5. In response to robust country demand, ADB scaled up operations in 2015: loan and grant approvals reached a record $16.3 billion, an increase of 21% over 2014 levels. The operational pipelines for 2017–2019 demonstrate continued strong demand for ADB support, reflecting the projections under the stronger pipelines scenario of the WPBF, 2016–2018.2 While earlier scenario planning was based on limited information on country demand and ADB’s financial capacity, the current projections are backed by firm project pipelines and ADF 12 replenishment outcomes.
1 Closing address by ADB President Takehiko Nakao at the 49th Annual Meeting of the Board of Governors,
Frankfurt, Germany, May 2016. 2 ADB. 2015. Work Program and Budget Framework, 2016–2018. Manila.
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6. Operational program. For operational planning purposes, the scenario shown in Figure 1—with a cumulative value of $58.6 billion—is projected for the WPBF, 2017–2019. The corresponding value of the 2017–2019 operational pipeline is $69.8 billion, including overprogramming of about 20%. Table 1 shows the cumulative value of the indicative operational resources available for approval during the WPBF period. For sovereign operations, ADF grants are projected to increase by 67%, concessional OCR lending (COL) by 33%, and regular OCR lending by 17%. Nonsovereign operations (NSO) will increase by 34% (Table 2). Appendix 1 presents information on the WPBF, 2017–2019 sovereign operational pipeline by sector, strategic agenda, and drivers of change. Appendix 2 shows resources available for approval by region and country during the WPBF period.
Figure 1: Indicative Resources Available for Approval, 2017–2019 ($ million)
WPBF = work program and budget framework. Note: Resources available for approval in 2017–2019 are based on firm operations pipelines. Source: Asian Development Bank estimates.
13,628
16,288
17,680
18,715 19,715
20,214
16,061 16,345
18,688
20,049
14,809 14,738
16,351 16,841
10,000
12,000
14,000
16,000
18,000
20,000
22,000
2012–2014 Average
2015 2016 2017 2018 2019
Actual WPBF 2017–2019 Stronger Pipeline Scenario Base Case
WPBF, 2017–2019
Stronger Pipeline [WPBF, 2016–2018]
Base Case [WPBF, 2016–2018]
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Table 1: Indicative Operational Resources Available for Approval, 2017–2019 ($ million)
Operations2012–2014(Average) 2015
Estimate
2016 2017 2018 2019 Total
A. Sovereign 11,840 13,662 15,080 15,815 16,515 16,714 49,044
ADF Grant 647 358 383 659 659 601 1,920
ADF Loan/COL 2,669 2,514 2,531 3,401 3,401 3,460 10,262
Regular OCR 8,525 10,790 12,166 11,754 12,454 12,654 36,862
B. Nonsovereign 1,787 2,626 2,600 2,900 3,200 3,500 9,600
Regular OCR 1,787 2,626 2,600 2,900 3,200 3,500 9,600 as % of Total OCR 17% 20% 18% 20% 20% 22% 21%
C. Total ADB Resources 13,628 16,288 17,680 18,715 19,715 20,214 58,644
(C = A+B)ADF Grant 647 358 383 659 659 601 1,920 ADF Loan/COL 2,669 2,514 2,531 3,401 3,401 3,460 10,262 Regular OCR 10,312 13,416 14,766 14,654 15,654 16,154 46,462
D. Project Cofinancing 7,857 10,610 12,300 14,300 16,600 18,500 49,400
Official 3,290 6,046 7,100 8,500 10,200 11,500 30,200 Commercial 4,568 4,564 5,200 5,800 6,400 7,000 19,200
E. Technical Assistance 345 267 375 420 435 438 1,293
F. Total IRAA (F = C+D+E) 21,830 27,164 30,355 33,435 36,750 39,152 109,337
Indicative ResourcesActual Approvals
ADF = Asian Development Fund, COL = concessional OCR lending, OCR = ordinary capital resources. Note: Numbers may not sum precisely because of rounding. Source: Asian Development Bank estimates.
Box 1: Asian Development Fund 12 Replenishment
In May 2016, donors agreed to a $3.3 billion replenishment of the Asian Development Fund (ADF) grant window. When combined with planned concessional assistance lending during 2017–2020 of $13.2 billion, the concessional resources of the Asian Development Bank (ADB) have increased more than 40% compared with the previous 4 years. During the replenishment period, ADB’s grant support to the poorest countries will increase by 70%. Small island economies are the main beneficiaries as grant allocations will increase more than 100%. In addition, about $52.5 million was contributed to the ADF facility for regional health security and $0.5 billion to replenish the Technical Assistance Special Fund. Donors endorsed revisions to the performance-based allocation mechanism to enhance ADB’s effectiveness in addressing the challenges faced by concessional assistance countries. The following are key features of ADF 12:
(i) Increasing minimum allocations. A base allocation of $6 million per year to all concessional assistance countries will help to ensure small countries will have sufficient resources to implement meaningful programs.
(ii) Disaster risk reduction. Contributing to the effort to increase climate finance in the poorest countries, additional allocations of concessional resources will be provided to all concessional assistance-only countries to support disaster risk reduction (DRR) operations. The DRR financing mechanism established in ADF 12 will allocate up to $200 million in ADF grants, subject to the actual donor contributions, and about an equal amount of concessional ordinary capital resources lending, over 4 years. The Disaster Response Facility will be regularized for concessional assistance-only countries, and allocations to finance DRR in those countries will be integrated into the performance-based allocation process. Donors agreed for make DRR grant financing available to all concessional assistance-only countries.
(iii) Regional health security. Donors also agreed to extend the eligibility for grants to all concessional assistance countries in order to strengthen support for regional health security on a pilot basis with an allocation of $52.5 million. These grants will be used to help countries meet international standards for health security, secure broader regional cooperation, strengthen health systems for better preparedness for pandemics (including by strengthening rapid alert systems and communication on public health threats), and respond to outbreaks with the assistance of an emergency facility.
Source: ADB. 2016. Asian Development Fund 12 Donors’ Report: Scaling Up for Inclusive and Sustainable Development in Asia and the Pacific. Manila.
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7. Greater resources for fragile and conflict-affected situations and low-income countries. During the WPBF period, Group A and Group B countries3 (combined) will account for 43% of the sovereign resource allocation, while Group C will account for 40% (Table 2). Resources for DMCs classified as fragile and conflict-affected situations (FCAS) will increase by 87%, while resources for Group A countries will rise by 50%, for Group B countries by 24%, and for Group C countries by 14%. Allocations for emergencies will be considered on a case-by-case basis.
Table 2: Indicative Operational Resources Available for Approval by Country Group, 2017–2019
($ million) 2014–2016
Item ADF COL OCR Total % of Total Amount %
A. Sovereign Operations 40,352 1,920 10,262 36,862 49,044 84 8,691 22
Group A 3,856 1,920 3,857 5,776 10 1,921 50
Group Ba 15,781 6,406 13,168 19,574 33 3,793 24
Subtotal A and B 19,637 1,920 10,262 13,168 25,350 43 5,713 29
Group Cb 20,716 23,694 23,694 40 2,978 14
B. Nonsovereign 7,144 9,600 9,600 16 2,456 34
Total (A+B) 47,496 1,920 10,262 46,462 58,644 100 11,147 23
Memorandum Item
FCASc 1,619 777 1,229 1,028 3,034 5 1,415 87
ADF grant 1,146 1,920 1,920 3 773 67
Concessional OCR 7,731 10,262 10,262 17 2,531 33
Regular OCRd 31,476 36,862 36,862 63 5,386 17
2017–2019 Increase
Total
ADF = Asian Development Fund, COL = concessional OCR lending, FCAS = fragile and conflict-affected situations, OCR = ordinary capital resources. Note: Numbers may not sum precisely because of rounding. a Excluding India, which does not have access to concessional resources.
b Including India.
c FCAS countries are Afghanistan, Kiribati, Marshall Islands, Federated States of Micronesia, Myanmar, Nauru,
Papua New Guinea, Solomon Islands, and Tuvalu. d Refers to sovereign operations only.
Source: Asian Development Bank estimates.
8. Financing modalities. Under the WPBF, 2017–2019, more than three-quarters (77%) of the sovereign pipeline (by value) will use the project modality. The multitranche financing facility modality will be used for 98 periodic financing requests under 42 new facility operations. Policy-based lending is projected at 17% (by value) and results-based lending (RBL) is estimated at 6%.4 Policy-based loans will be closely monitored and managed given their fast-disbursing nature and the associated implications for the sustainable level of lending.5 Based on
3 Group A countries are defined as countries having access to concessional assistance only, while Group B counties
have access to both concessional and regular OCR assistance. Group C countries have access to regular OCR only.
4 ADB adopted the RBL modality in 2013 on a pilot basis covering 2013–2019. ADB limits the resources for RBL for
programs to 5% of the OCR and ADF resource allocation for the first 3 years of the 6-year pilot period. ADB is reviewing the modality’s first 3 years of implementation and, based on findings, appropriate changes may be considered.
5 The sustainable level of lending is updated annually based on factors such as actual and planned levels of lending,
disbursements, repayments, operating income, income transfers, and exchange rates (ADB. 2016. Treasury Report: Second Quarter 2016. Manila).
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country demand and the macroeconomic situation in the region, ADB will remain responsive in the use of its lending modality. 9. Greater cofinancing. By 2019, cofinancing is projected to be 92% of ADB’s resources (Table 1). To meet the cofinancing target of 100% by 2020, ADB will need to improve upstream donor coordination and better synchronize its processes with those of its cofinancing partners. ADB will deepen relationships with existing partners by, for example, renewing cofinancing arrangements for a longer term and larger cofinancing portfolio. ADB will also explore cofinancing opportunities with new multilateral institutions such as the Asian Infrastructure Investment Bank and the New Development Bank. In addition, collaboration will be sought with national development funds, philanthropic entities, and corporate social responsibility arms of private entities. Measures to strengthen cofinancing framework are listed at Appendix 3. 10. Technical assistance. During the WPBF period, technical assistance (TA) resources of $1.3 billion are planned—an annual average of $431 million. This is a 29% increase from the $1.0 billion in TA approvals during 2013–2015. About half of the 2017 TA resource envelope is earmarked for transaction support (51%) and half for knowledge and support (49%).6
11. To increase the effectiveness and quality of TA operations, ADB is implementing TA reforms with an objective to improve the quality and alignment of TA with ADB’s investment operations and streamline TA business processes to make a more effective and efficient use of the TA resources. In terms of resource allocation, the TA reform links TA resources with the future lending and grant operations and with performance, at which TA resources are used. 12. Scaling up of operations call for greater TA resources to provide direct transaction support for the preparation and implementation of investment operations as well as for focused knowledge and support services, aimed at advancing ADB as a knowledge institution and provision of broader capacity building. In view of this, ADB will replace the current four TA types with two new TA types of transaction TA, and knowledge and support TA. Given the expanded delegation of approval authority from the Board to the President, the TA reforms will strengthen the TA quality control process based on a risk and complexity associated with the TA.7 Finally, the TA reform will enhance the capture of knowledge generated under TA in a more efficient and user-friendly manner through an application of enhanced IT solution. The impact of the reforms will be assessed in 2020.
III. STRATEGIC PRIORITIES, 2017–2019
A. Operational Highlights
13. During the WPBF, 2017–2019, ADB will support its strategic agendas of inclusive economic growth, environmentally sustainable growth, and regional integration. The highlights of the sovereign operations pipelines8 for 2017–2019 (Figure 2) and other analyses follow:
6 Transaction TA is directly related to ADB’s loan, guarantee, equity investment, or transactional advisory service
operations. It is used to (i) prepare a project that ADB intends to finance under its sovereign and nonsovereign operations, (ii) deliver outputs or mitigate the risks that are both identified in the design monitoring framework of a an ongoing ADB-financed or ADB-administered project, or (iii) develop PPPs under transaction advisory services (TAS). Knowledge and support TA indirectly support ADB-financed operations.
7 ADB. 2015. Enhancing Operational Efficiency of the Asian Development Bank. Manila
8 With a cutoff date of 30 June 2016.
6
Figure 2: Highlights of Operations Pipeline, 2017–2019
(% of Sovereign Operations)
Inclusive Economic Growth Environmentally Sustainable Growth Creating opportunities $25.6 billion (43%) Environmentally sustainable 266 projects (61%) Increasing access to opportunities $33.3 billion (55%) growth Social protection $4.7 billion (8%) Disaster risk management $9.2 billion (15%) Total infrastructure $42.2 billion (70%) Climate financing
a $17.7 billion (25%)
in lagging areas $15.9 billion (38%) – Adaptation $4.3 billion (6%) – Mitigation $13.4 billion (19%) Transport $17.3 billion (29%) Clean energy
b $11.2 billion (19%)
Energy $13.3 billion (22%) Water and Other Urban $8.3 billion (14%) Sustainable transport
Infrastructure and Servicesc – Railways $2.6 billion (15%)
Education $3.7 billion (6%) – Urban transport $3.3 billion (19%) Health $1.2 billion (2%) Agriculture $7.0 billion (12%) Regional Integration
– Irrigation $2.6 billion (4%) Support to RCI 126 projects (29%)
Food security $8.5 billion (14%)
Gender mainstreaming 195 projects (45%) Governance and capacity
development 349 projects (80%)
Support to FCAS $3.6 billion (6%)
Nonsovereign Operations NSO (% of OCR) $9.6 billion (21%) Private sector development and
operations $30.4 billion (43%)
FCAS = fragile and conflict-affected situations, NSO = nonsovereign operations, OCR = ordinary capital resources, RCI = regional cooperation and integration. a Includes sovereign and nonsovereign pipeline.
b Clean energy includes renewable energy and energy efficiency.
c Water excludes rural water policy, institutional and capacity development; rural water supply services; rural
sanitation; and rural solid waste management, which are included here under Agriculture.
Source: Asian Development Bank estimates.
B. Inclusive Economic Growth
14. During the WPBF, 2017–2019, 55% of the operations pipeline, by value, will support increasing access to economic opportunities and social services. This will include support for infrastructure development in lagging areas,9 education, and health. About 43% of the operations pipeline, by value, will support expansion of economic growth through interventions in energy, transport, and urban services. Meanwhile, 8% of the operations pipeline, by value, will support social protection. ADB is refining its inclusive economic growth framework, and the outcome will be reflected in its new corporate strategy.
9 A lagging area is defined as an area that is behind other areas when comparing socioeconomic characteristics.
Specification of a lagging area requires a comparison within a DMC to determine which areas are behind others.
Central and
West Asia 23%
East Asia 10%
Pacific 3%
South Asia 25%
South-east Asia 25%
NSO 14%
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Infrastructure in Other Areas
26,299 (62%)
Rural 9,690 (23%)
Non-rural 6,216 (15%)
Infrastructure in Lagging
Areas 15,906 (38%)
Figure 3: Infrastructure in Lagging Areas, 2017–2019 ($ million)
Total infrastructure: $42,205 million. Source: Asian Development Bank estimates.
15. Infrastructure. ADB’s infrastructure operations during the WPBF period will account for 70% of sovereign operations, comprising transport (29%), energy (22%), water and other urban infrastructure and services (14%), irrigation (4%), and information and communication technology and other infrastructure (1%). Of these sovereign infrastructure operations, 38% by value ($15.9 billion)10 are projected to be in lagging areas (Figure 3). Climate risk assessments will be an integral part of project designs (paras. 28–34), and programmatic approaches will be considered in designing infrastructure projects, where feasible. ADB will ensure the operational sustainability of infrastructure projects by incorporating cost recovery mechanisms in project designs; other measures such as build-own-operate, build-own-transfer, and performance-based maintenance contracts will also be explored. 16. Education. During the WPBF period, ADB will further expand education operations, as envisaged by the Midterm Review of Strategy 2020.11 Education is projected to account for 6% of the operations pipeline, by value. ADB’s assistance will focus on quality education, technical and vocational education and training, and secondary-to-higher education. ADB assistance will help beneficiaries acquire the technical skills that markets require, thus increasing access to jobs. ADB will explore the establishment of an education partnership facility as an effective and flexible funding window to support early conceptualization and scaling up of innovative education projects. 17. Health. Health is projected to account for 2% of the sovereign operations pipeline, mainly supporting health system development, health sector development and reform, and health care finance. During the WPBF period, the annual country programming missions will intensify dialogue with national authorities to further develop the health sector pipelines in order to reach the midterm review target of 3%–5% of the approval volume by 2020. As ADB’s NSO explore health sector financing opportunities, the overall assistance level may exceed the projected value. Recognizing regional health security as a vital regional public good, ADB will make grants available under ADF 12 to all concessional assistance countries on a pilot basis to make improvements in this area. 18. Low-income countries and fragile and conflict-affected situations. Support to FCAS countries during the WPBF period will total $3.6 billion, an 87% increase over 2014–2016. Infrastructure development will account for 82% of the FCAS pipeline,12 followed by public sector management (11%), and education (3%). ADB plans to expand its NSO in low-income and FCAS countries, including Pacific DMCs (Box 2). In 2017, $21 million in TA is projected for
10
Compared with $12.5 billion in WPBF, 2016–2018. 11
ADB. 2014. Midterm Review of Strategy 2020: Meeting the Challenges of a Transforming Asia and Pacific. Manila. 12
Includes 49% for transport, 16% for energy, and 8% for irrigation.
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FCAS countries. During the WPBF, 2017–2019, ADB will apply an “FCAS-sensitive” approach in all FCAS operations to better understand the local context and thereby mitigate possible operational risks. Fragility assessments will be incorporated at the project concept stage and used continuously during project implementation. Gender mainstreaming and institutional capacity development will remain a priority in FCAS operations.
Box 2: ADB’s Engagement with Pacific Developing Member Countries
Many Pacific developing member countries (DMCs) are small, remote, and fragile. These characteristics make achieving sustainable and inclusive growth challenging. Their small size and isolation increase the costs of providing services and doing business. Their high exposure to climate change and disasters caused by natural hazards, as well as their size and narrow economic base, make them extremely vulnerable to shocks. High costs and risks further constrain these countries from realizing their limited but unique potential for growth. Seven of the Pacific DMCs are classified as fragile, and all countries in the region exhibit multiple vulnerabilities.
The Pacific Approach, 2016–2020 outlines a three-pronged strategy to guide the Asian Development Bank’s (ADB) assistance to the region, focusing on reducing costs, managing risks, and enabling value creation.
a
ADB will continue to support investments and provide technical assistance for (i) transport infrastructure to improve air, maritime, and land connectivity and facilitate seamless trade and logistics; (ii) renewable energy to improve access and affordability, especially in poorer underserved areas; (iii) information and communication technology connectivity; (iv) basic urban services and job creation to support livable cities and more inclusive growth; and (v) high-level policy advice for investment planning, capacity development, and institutional strengthening.
Regional initiatives include support for climate change responses, disaster risk management, education, energy, urban development, gender, and institutional capacity building. The Framework for Pacific Regionalism, endorsed by the Pacific Islands Forum leaders in 2014, provides an opportunity for ADB to expand its assistance for regional cooperation and integration, and more fully integrate the region’s priorities into its work.
b
ADB will leverage the work of the Pacific Private Sector Development Initiative to expand private sector operations, and promote public–private partnerships, particularly for capital-intensive projects in information and communication technology, ports, and energy. a
ADB. 2016. Pacific Approach 2016–2020. Manila. b Pacific Islands Forum Secretariat. 2014. The Framework for Pacific Regionalism.
http://www.forumsec.org/resources/uploads/embeds/file/framework%20for%20pacific%20regionalism_booklet.pdf Source: Asian Development Bank.
19. Food security. During the WPBF period, sovereign operations supporting food security are estimated at $8.5 billion—or an annual average of $2.8 billion, exceeding the target of $2.0 billion. Figure 4 shows major areas of support, while para. 32 describes assistance for agriculture and natural resources.
Other Sovereign
Operations, $51,710 (86%)
Agriculture, $5,426 (64%)
Transport, $1,572 (18%) Energy,
$698 (8%) Water,
$552 (6%)
Others, $280 (4%)
Food Security, $8,528 (14%)
Figure 4: Sovereign Pipeline Supporting Food Security, by Sector 2017–2019
($ million)
Note: Water refers to water and other urban infrastructure and services. Source: Asian Development Bank estimates.
9
20. Gender equity and mainstreaming. ADB will continue to promote gender equity, both upstream in country partnership strategies and downstream in the design and implementation of programs and projects. Persisting country gender disparities and gaps will inform ADB’s approach, along with the commitments set out in the gender-related SDGs. ADB will continue to rigorously monitor project implementation to ensure adequate gender equality outcomes at the project and sector levels, and will document gender equality results. ADB will disaggregate project performance indicators by gender, as feasible, to assess progress made and benefits accrued from a gender perspective. 21. During the WPBF period, 45% of the projects, by number, are projected to support gender mainstreaming, meeting the corporate results framework target.13 ADB will seek to narrow gender gaps in secondary and tertiary education completion; vocational and technical skills training; and access to health and social protection services, financial services, and credit. In addition, gender mainstreaming will be pursued in (i) agriculture and natural resource management projects; (ii) micro, small, and medium-sized enterprise development; (iii) access to finance; and (iv) urban development projects. Rural and urban electrification, renewable energy solutions, and time-saving technologies will help to reduce women’s drudgery and time-poverty, and enhance energy-based livelihoods. Assistance for strengthening national gender policies and institutions is envisaged in many countries. 22. Governance and capacity development. Operations supporting governance and capacity development during the WPBF period are expected to reach 76% of the total by volume and 80% by number—exceeding the target of 57%, by number, in the ADB corporate results framework (footnote 13). Focus areas include national and state public financial management, procurement, and corruption. About 81% of sovereign TA operations, by volume, are expected to support governance and capacity development. ADB will continue to undertake governance risk assessments for all projects to identify such risks and incorporate mitigating measures in project designs. An annual high-level forum on governance and institutions will be launched in November 2016 in collaboration with the ADB Institute to identify opportunities for scaling up investments in governance and public sector management. ADB will also forge new knowledge partnerships with premier institutions in the region to support knowledge products and services in governance and capacity building, as well as in public sector management. C. Environmentally Sustainable Growth and Climate Change
23. During the WPBF period, ADB’s support for environmentally sustainable growth is estimated at $35.3 billion, or 58% of sovereign operations. New TA operations promoting environmentally sustainable growth are expected to reach 46% by volume and 40% by number in 2017. Of the proposed WPBF operations, 15% by value and 17% by number will have integrated disaster risk management components. 24. ADB has committed to double its annual climate financing to $6.0 billion by 2020: $4.0 billion for mitigation and $2.0 billion for adaptation. By 2019, the last year of this WPBF period, ADB’s climate finance is estimated to reach $6.5 billion, thus exceeding the overall target. As Figure 5 shows, this amount comprises $4.8 billion for mitigation (119% of the mitigation target) and $1.7 billion for adaptation (86% of the adaptation target). As climate adaptation is context-specific, more reliable estimates will be available at the project concept development stage. As such, estimates may change as detailed project information becomes available.
13
ADB. 2014. ADB’s Results Framework: Interim Update to Align with the Midterm Review of Strategy 2020. Manila.
10
25. Building on the commitments made at the 2015 Conference of the Parties on Climate Change, ADB completed a working paper on the intended nationally determined contributions of its DMCs. The paper focuses on three elements: (i) contributions to greenhouse gas emission reduction; (ii) sectoral climate actions and priorities; and (iii) support requirements, including financing. ADB will develop a long-term climate change strategic framework and directions by 2017 that will feed into ADB’s Strategy 2030, aiming to build resilience and strengthen climate actions across the region.14 26. Disaster risk management. Under the ADF 12 framework, a financing mechanism for disaster risk reduction (DRR) has been established that will provide assistance to concessional assistance countries. Grant-eligible countries will receive this funding in the form of grants, while other concessional assistance countries will receive additional COL.15 In addition, ADB intends to develop a disaster risk financing approach paper to guide its work in strengthening the fiscal management of disaster risk, including through the identification of new instruments to finance early recovery and reconstruction. In 2017, ADB will update its Disaster and Emergency Assistance Policy16 to include stronger integration of disaster risk management and climate adaptation. 27. Leveraging climate financing. To leverage climate financing from other sources, ADB will facilitate and support climate change-related funds such as the Clean Energy Financing Partnership Facility and Urban Financing Partnership Facility. Further, ADB will facilitate DMC access to climate finance by supporting (i) the identification of projects and preparation of 14
A formal guidance note for climate finance tracking, anchored on the joint multilateral development banks’ methodology, is being developed to provide staff guidance on the subject. This will be accompanied by detailed guidance notes for key sectors, including energy, transport, urban and water, and agriculture.
15 For ADF 12, $200 million in grant financing for DRR is allocated across all concessional assistance-only countries in accordance with their pro-rata shares in the performance-based allocation for concessional assistance-only countries (including base allocations), subject to a 50% portion of their pro-rata share in the performance-based allocation for countries at low risk of debt distress and a cap of $20 million per country. The balance in grant resources is redistributed to grant-eligible countries. Additional COL is made available to COL-eligible countries solely for DRR. Countries at medium risk of debt distress would receive matching amounts in grant and COL resources, while countries at low risk of debt distress would receive twice as much in COL allocations as they receive in grant allocations.
16 ADB. 2004. Disaster and Emergency Assistance Policy. Manila
4,420 4,247 4,769
4,000
1,150 1,426
1,713 2,000
Total: 5,570 Total: 5,673 Total: 6,482 Target: 6,000 by 2020
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2017 2018 2019 2020
Figure 5: ADB's Climate Financing, 2017–2020 ($ million)
Mitigation (M) Adaptation (A)
Note: Numbers may not sum precisely because of rounding Source: Asian Development Bank staff estimates.
A M
11
funding requests for financing from the Green Climate Fund, Climate Investment Funds, and Global Environment Facility; (ii) the use of new carbon market mechanisms; (iii) the leveraging of external finance from public and private sources, including blending of concessional resources with private sector operations; and (iii) the enhancement of support for innovative instruments such as green bonds. In 2017, ADB will launch the Asia Climate Finance Facility with the Government of Germany. The facility will leverage public and private investment in climate change mitigation and adaptation in support of the Paris Agreement outcomes. 28. Mitigation and adaptation. During the WPBF, 2017–2019, climate financing is estimated at $17.7 billion, a 127% increase over 2013–2015. ADB’s climate change strategic priorities include (i) increasing the use of clean energy; (ii) expanding sustainable transport and urban development; (iii) managing land use and forests; (iv) integrating climate change and disaster risk considerations; and (v) strengthening policies, governance, and capacities. 29. Clean energy. During the WPBF period, clean energy investments in sovereign operations are projected to reach $11.2 billion—or annual approvals of about $3.7 billion,17 exceeding the midterm review target of $2.0 billion (Figure 6). ADB will continue to finance renewable energy (solar, hydro, wind, and biomass) and energy efficiency projects. In addition, power distribution enhancement programs are envisioned to increase energy access. Planned power transmission and distribution sector projects will also support climate change mitigation through the reduction of technical losses. The existing metering system will be replaced with a smart metering system that will encourage energy efficiency and conservation.
17
Clean energy includes renewable energy and energy efficiency.
1,111
743
1,132 1,185 1,280
1,532 1,397
1,686
2,664 3,083
3,638
4,443
-
1,000
2,000
3,000
4,000
5,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Figure 6: Clean Energy Investments in Sovereign Operations by Volume, 2008–2019
($ million)
Note: Clean energy investment is the portion of Asian Development Bank (ADB) assistance used to fund projects or project components involving renewable energy, energy efficiency, and/or fuel switching. The common denominator of all clean energy projects is that they reduce greenhouse gas emissions. ADB's clean energy investment may be calculated as: Clean Energy Investment = β x ADB assistance, where β is the percentage of the total project cost that may be attributed to funding the clean energy component. Source: Asian Development Bank estimates.
12
30. Sustainable transport. ADB financing of transport investments is estimated at $17.3 billion during the WPBF period. About 19% will be for urban transport, while 15% will be for railways (non-urban)—compared with the midterm review targets of 30% for urban transport and 25% for railways by 2020. Financing of road projects (non-urban) is estimated at 57% of total transport financing, down from 90% in 2010 at the start of the Sustainable Transport Initiative Operational Plan, 2010–2020.18 Under a new partnership with the Japan International Cooperation Agency, ADB will seek to identify additional opportunities for supporting urban transport (metro and bus rapid transit systems) and railways in order to meet the 2020 targets. All transport investments will incorporate climate risk screening to promote climate proofing of infrastructure. In addition, about $53 million (13%) of TA operations during 2017 are expected to support transport. 31. Urban development. In addition to the $3.3 billion that will be invested in urban transport during the WPBF period, ADB will invest about $8.3 billion in urban flood protection, water supply, sanitation, sewerage, solid and hazardous waste management, housing and slum development, and other services. Most urban sector projects will contribute directly to urban environmental improvement. Smart city, city cluster, and water supply management projects will integrate elements of disaster risk management and contribute to natural resource conservation and eco-efficiency. Regional economic centers will integrate urban roads, wastewater treatment, sanitation, drainage, and solid waste management as part of a holistic approach. This will help cities become more resilient to climate change impacts. About $48 million (11%) of TA operations during 2017 will support water and other urban infrastructure and services. 32. Agriculture and natural resources management. The operations pipeline supporting agriculture is projected to be $7.0 billion during the WPBF period.19 Of this amount, 29% will support land-based and water-based natural resource management programs. Investments in the agriculture, natural resources, and rural development sector will improve water use efficiency and food security, while also facilitating community participation. ADB will promote river basin planning and development of large irrigation schemes to ensure integrated water resources management and increased agricultural productivity. For areas that are flood prone and vulnerable to climate change, ADB will continue to focus on flood control, erosion management, and coastal protection, while integrating disaster risk management components into projects. About $48 million (11%) of TA operations during 2017 are expected to support agriculture and natural resources. 33. Integrating climate change and disaster risk consideration. ADB will continue to use its Climate Risk Management Framework to (i) screen all relevant projects for climate risks, starting from the project concept development stage; and (ii) identify viable adaptation options that can be incorporated into project designs.20 ADB also plans to conduct learning and capacity building events to strengthen the capacity of DMCs to address climate change and increase disaster resilience. 34. Environmental governance. ADB will promote the use of market-based and other voluntary approaches to environmental management that promote technology development and adaption, and are cost effective. The development of green businesses that mobilize private financing for environmental management will be supported. ADB will help DMCs integrate the new environment-related SDGs into national strategies, policies, and programs. ADB will also
18
ADB. 2010. Sustainable Transport Initiative Operational Plan. Manila. 19
Including irrigation projects amounting to $2.6 billion, and rural water supply, sanitation, waste management, and market infrastructure totaling $3.2 billion.
20 ADB. 2014. Climate Risk Management in ADB Projects. Manila
13
continue to strengthen country safeguard systems in DMCs, and will use country safeguard systems on selected sectors or agencies where equivalence and acceptability are mostly achieved and remaining minor gaps can be easily filled through action plans. D. Regional Cooperation and Integration
35. During the WPBF period, operations supporting regional cooperation and integration are projected to reach $16.1 billion for 126 projects, or 29% of the total by number, compared with the midterm review target of 30%. New TA operations supporting regional integration are expected to reach 24% by value and 21% by number in 2017. ADB will continue to lead in the promotion of regional cooperation through three priority interventions.21 36. Transport connectivity. Multimodal transport corridor networks are envisaged through investments in new roads, inland waterways, logistic hubs, and railway networks, as well as upgrading of existing networks and developing links to gateway ports. Assistance for economic corridors will include urban areas and growth centers to better integrate national and regional value chains, promote employment, and improve competitiveness and efficiencies throughout the value chain. 37. Energy connectivity. ADB’s assistance will improve cross-border electricity and gas transmission, boost power and natural gas trades, and facilitate energy efficiency and clean power, such as cross-border natural gas transmission and trade in liquefied natural gas. This will facilitate the use of cleaner fuel in power generation and transport. 38. Trade facilitation. Assistance is likely to alleviate constraints to trade among ADB DMCs by addressing high tariffs and inefficiencies in customs, border procedures, port operations, and logistics performance. Systematically addressing these issues will result in higher trade volumes and improved competitiveness. Planned investments will help DMCs improve border crossing services through customs modernization and integrated border management. 39. ADB will remain the secretariat for three regional cooperation groups: Greater Mekong Subregion, Central Asia Regional Economic Cooperation, and South Asia Subregional Economic Cooperation. ADB will also continue as an observer to the Pacific Islands Forum and maintain its partnerships with the Association of Southeast Nations (ASEAN); Indonesia–Malaysia–Thailand Growth Triangle; and Brunei Darussalam, Indonesia, Malaysia, the Philippines–East ASEAN Growth Area. In addition to providing capacity development support to these groups, ADB will continue to provide assistance for policy development in priority areas. During the WPBF period, concessional and nonconcessional set-aside resources for regional projects will continue. E. Private Sector Development and Operations
Private Sector Development 1.
40. During the WPBF period, projects supporting private sector development and operations are projected to be 43% by value and 47% by number,22 compared with the midterm review
21
ADB will also provide assistance for regional public goods in terms of regional health operations and disaster risk finance.
22 This comprises about 145 sovereign operations totaling $20.8 billion and 111 nonsovereign operations totaling $9.6 billion.
14
target of 50% by number by 2020. About 30% of TA by value is expected to support private sector development in 2017. ADB will continue to support policy, regulatory, and governance reforms to strengthen public management systems and promote the role of the private sector, particularly in infrastructure development. This will include support for PPPs. Further, support for cross-border regional cooperation projects will be considered, including possible support for the ASEAN Secretariat’s interest in regional harmonization of common PPP regulatory frameworks. During the WPBF period, about 61% of planned sovereign operations for the finance sector, by value, will support projects for inclusive finance, insurance and contractual savings, small and medium enterprises, and capital market development. A review of the Financial Sector Operational Plan has been undertaken in 2016 with three broad areas of focus, namely, finance sector development, inclusive finance, and infrastructure finance. It is expected to be finalized by year-end.
Nonsovereign Operations 2.
a. Future Directions
41. During the WPBF period, ADB will expand the number and value of its NSO with the objective of reaching 25% of regular OCR approvals by value by 2020. To meet this objective, ADB will continue to make sufficient financial resources available to its Private Sector Operations Department (PSOD) based on the economic capital planning model, multiyear planning flexibility, and use of such instruments as risk transfers and reinsurance, which free up a portion of committed headroom. During the WPBF period, NSO are projected to grow from 19.8% of regular OCR approvals in 2017 to 22% by 2019. NSO funding can be increased, as necessary, to have a smoother trajectory to meet its 2020 target. 42. To deepen NSO, ADB is also committed to (i) increasing the number of transactions from 25 in 2015 to 40 or more by 2019; (ii) converting approvals to commitments;23 and (iii) reducing cancellations24 and droppages,25 which have been high over the past 6–7 years.26 While the absolute level of droppages and cancelations will vary year to year, ADB expects annual NSO droppages and cancellations of no more than 15% of approvals on average by the end of this WPBF period. 43. During the WPBF period, NSO will meet their annual targets of 40% of operations by number in Group A and Group B countries (excluding India) and 25% by number for renewable energy financing. Further, through the Trade Finance Program (TFP), ADB will continue to support regional cooperation by focusing its operations in lower-income countries and providing greater access by expanding the reach of TFP to Pacific DMCs. In undertaking NSO, ADB will continue to prioritize gender equity and gender mainstreaming, as well as climate resilience.
b. Operational Priorities
44. During the WPBF period, ADB will pursue the following operational priorities.
23
The 2017 Statement of ADB Operations and the Annual Report will use 2016 ADB approvals as well as commitments.
24 Refers to undisbursed, committed balance of an equity investment, loan, or guarantee cancelled by the mutual consent of ADB and an investee company.
25 Refers to projects approved by ADB’s Board of Directors but failed to become a signed agreement.
26 This has been caused by unforeseen events at the project level as well as aggressive review of the portfolio.
15
45. Infrastructure financing. ADB will continue to build on its successes in financing infrastructure and financial institution operations. During the WPBF period, power generation will remain at the core with clean and renewable energy and clean technologies as a pillar of ADB’s nonsovereign work.27 In addition, greater emphasis will be placed on funding other core infrastructure areas, including water, waste and sanitation, and transportation infrastructure, using PPPs and other financing modes. 46. Financial institutions. ADB’s focus on financial institutions will continue with a broad spectrum of interventions in banks and nonbanks, including supporting rural finance, microfinance, housing finance, small and medium-sized enterprise finance, climate finance, inclusive business, gender mainstreaming, and other core development mandates through the finance sector in a wide range of DMCs. The TFP will expand into new markets as it has just started to do in the Pacific. Further, the Microfinance Program will grow both geographically and in absolute terms. In both the infrastructure and financial institutions areas, ADB will seek more opportunities to finance state-owned enterprises and to work with other public nonsovereign borrowers. 47. Deeper engagement with the Asian Development Fund and middle-income economies. During the WPBF period, ADB will undertake more deals in frontier markets and in countries where it has yet to operate—maintaining the annual target of at least 40% of deal approvals in such markets. This will contribute to the increase in the number of NSO. ADB will consider establishing a fund to blend grant resources for NSO in FCAS countries. In addition, ADB plans to dedicate additional resources to sourcing and processing deals in its poorest DMCs, including Afghanistan, Myanmar, parts of Central Asia, and the Pacific. Concurrently, ADB will respond to the call by many middle-income countries and upper middle-income countries for greater private sector participation and a greater role for PSOD, particularly in supporting new technologies, new sectors, and new business models. 48. Agribusiness, education, and health. ADB will expand its operations beyond core infrastructure, financial institutions, and private equity funds to address private sector needs in its DMCs. This will include building up ADB’s nascent agribusiness focus across Asia, with a strong emphasis on underserved markets, food security, productivity upgrades, and farmer support. ADB also plans to increase financing for health and education projects. 49. Equity investments. During the WPBF period, ADB plans to substantially increase its direct equity investments to build up a solid book that can be profitably divested in the years ahead. The level of annual equity investment will depend on market opportunities, but the amount is expected to grow to about 10% of annual approvals or commitments by 2019. 50. Private equity funds. ADB will seek out proven managers with demonstrated track records in funds that have scale, reach, and strong commercial prospects, as well as good development alignment. A new strategy is being rolled out that will lead to an increase, by value, in overall private equity fund investments. 51. Credit enhancement instruments. During the WPBF period, ADB also plans to structure and deploy newer financing modalities. Building up an Asian project bond market is one such option. Following the success in credit enhancing project bonds in India and the Philippines over the past 12 months, ADB sees considerable scope for leading this new market
27
PSOD expects to be one of the largest contributors to ADB’s overall renewable energy commitments.
16
for Asia. Further, ADB plans to make greater use of guarantees and credit enhancement instruments, as well as risk-transfer arrangements, across its NSO. 52. Management of third-party funds. Another new area of business for ADB is the management of third-party funds for deployment on a concessional or commercial basis into qualifying infrastructure—largely along with its own financing. This started modestly but successfully with facilities related to climate change, but has grown significantly in 2016 with the addition of $1.5 billion from the Japan International Cooperation Agency’s Leading Asia’s Private Sector Infrastructure Fund.28 This fund will be deployed during 2016–2020. Negotiations are also being conducted with other third parties to manage funds on their behalf. This could be replicated with other pools of capital in the future, making the asset management model an increasingly important area for NSO during the WPBF period. 53. Other areas. During the WPBF period, ADB also plans to expand its sector coverage and explore possible interventions in manufacturing and tourism. Further, ADB will seek to increase gender mainstreaming and emphasize inclusive business.
Public–Private Partnerships 3.
54. During the WPBF period, ADB will continue to provide transaction advisory services (TAS) and project preparation support to clients. These services will complement ADB sovereign operations’ support for capacity development and improving the enabling environment for PPPs in DMCs. ADB’s Office of Public–Private Partnership will continue to provide TAS to assist DMC clients in structuring their projects and successfully attracting private sector participation and financing. During the WPBF period, ADB will broaden its provision of TAS to private sector sponsors, on a pilot basis, with the objective of increasing the number of PPP transactions in the region. Nine new TAS mandates are projected during the WPBF period. The Asia Pacific Project Preparation Facility will provide assistance to DMCs for the preparation and structuring of projects, capacity development and policy reform, and project monitoring and restructuring.29 F. High-Level Technologies
55. Adoption of high-level technologies. ADB will pursue the use of advanced technologies to promote efficiency and minimize environmental impacts. To improve sector policy and governance, policy and regulatory advice is envisaged, as well as promoting the role of the private sector. Where feasible, use of PPPs will be explored and encouraged. Through climate-resilient infrastructure interventions, ADB will seek to provide continued support to urban and rural communities, ensuring access to jobs, markets, and social services (Box 3).
Box 3: Mainstreaming the Use of High-Level Technology in ADB Operations Apart from scaling up its operations, the Asian Development Bank (ADB) plans to integrate high-level technology in its projects and programs to help its developing member countries (DMCs) achieve their Sustainable Development Goals and tackle climate change. Ongoing or recently approved projects using advanced technology include Sri Lanka’s Jaffna Kilinochchi Water Supply and Sanitation Project, which will install a desalination plant to treat seawater for a potable water supply using semipermeable membranes to separate salts from the water. The Green Energy
28
ADB. 2016. Establishment of the Leading Asia’s Private Sector Infrastructure Fund. Manila. 29
ADB. 2014. Establishment of the Asia Pacific Project Preparation Facility. Manila.
17
Corridor and Grid Strengthening Project in India will adopt high-voltage direct current transmission technology to improve efficiency and reduce transmission losses as well as carbon emissions. Metro projects in Hanoi and Ho Chi Minh City in Viet Nam will result in cleaner, more efficient, and integrated urban transport systems. Bus rapid transit projects in cities in the People's Republic of China, Lao People’s Democratic Republic, and Mongolia will deliver quality mass transit, while also introducing high-level technology elements of clean vehicles, automated fare systems, intelligent transportation systems, and energy-efficient street lighting. In the pipeline are projects such as the Solar Rooftop Investment Program (multitranche financing facility), which will establish a credit facility at a national bank in India to provide dedicated long-term financing at reasonable rates for solar rooftop systems. The Information Technology Parks for Employment and Innovation Project in Bangladesh will enhance knowledge in new technologies in infrastructure development by involving selected universities in research and development and business incubation, including information communication and technology, teaching curriculum, and course development. Building on this progress, ADB will further mainstream the use of advanced technology in its operations. Actions may include the following: (i) Strengthening project design. ADB’s early stage discussions with DMCs, including policy dialogue,
consultations on country partnership strategy, and sector-level policy dialogue, will cover opportunities for the use of high-level technology. Projects with advanced technology or green content will be prioritized for ADB financing. This will entail balancing cost, quality, and sustainability considerations over the life cycle of infrastructure assets.
(ii) Emphasizing quality in procurement. ADB will place greater emphasis on the quality of consultants
to ensure countries get access to the best expertise in the latest advanced technologies. Increased use of single contractor arrangements, such as turnkey contracts, will be encouraged to make it easier to maintain a consistent focus on quality during project implementation.
(iii) Mobilizing expert resources. ADB’s strengthened sector groups (e.g., energy, transport, water, and
urban) and thematic groups (e.g., climate change and public–private partnership) will provide leadership in knowledge work, advise countries, drive innovation in projects, and build partnerships with centers of excellence and other institutions. ADB has also started an experts pool system to recruit highly specialized talent in such areas as smart grids, railways, and water utility management.
Source: Asian Development Bank. G. Knowledge Management
56. ADB will strengthen its credentials as a knowledge institution. DMCs expect ADB to more effectively combine advanced knowledge and ideas with finance. ADB’s knowledge will be shared with DMCs through projects and programs as well as knowledge products and services. ADB’s knowledge is in two general forms. Tacit knowledge comprises ADB’s collective experience including knowledge developed through day-to-day interactions with its DMCs. It is critical that sector and thematic groups under the leadership of their technical advisors promote sharing of knowledge, provide knowledge and expertise to operations departments, and strengthen partnerships with knowledge centers of excellence around the world. 57. There is also explicit knowledge that ADB systematically transfers through its high quality knowledge products and services. During the WPBF period, ADB will continue to provide important knowledge products and services such as TAs, publications, policy briefs, op-eds, forums and workshops. ADB will encourage its research and knowledge departments to produce a high quality knowledge products and services that stimulate new ideas, encourage discussions on policies and provide insight from regional perspective. ADB will deliver
18
knowledge products and services that are operationally relevant, help build more robust project pipelines, and support designing and implementing innovative projects. ADB will also put an importance on knowledge products and services provided by its nonoperations departments such as the Office of Anticorruption and Integrity, Office of the General Counsel, Office of Risk Management, Operations Services and Financial Management Department, and Treasury Department.
58. ADB will continue to embed its knowledge products and services in country partnership strategies, operations business plans, and knowledge plans. Country directors will coordinate the design and implementation of country knowledge plans in their role as knowledge custodians. 59. ADB will revitalize the Knowledge Sharing and Services Center to improve knowledge management across ADB. As its Office of Information Systems and Technology implements the new IT platform, ADB will establish new robust knowledge governance standards to strengthen our knowledge flow. For the purpose of monitoring and managing ADB’s knowledge products and services, ADB introduced reporting guidelines for several specific types of knowledge products and services in April 2016. H. External Relations and Communication
60. As operational and knowledge outputs expand, ADB will increase external relations and communication activities to ensure shareholders and stakeholders are well informed of ADB priorities and results, and have easy access to ADB information, knowledge, and expertise. ADB will use new technologies and communication channels such as multimedia features, social media such as Facebook and Twitter, Flickr, op-eds, and blogs to increase the organization’s visibility and transparency. This will help expand awareness, understanding, and support for ADB's mission among a broad spectrum of stakeholders. ADB is reviewing the Public Communications Policy 2011 to assess how the overall policy objectives are being achieved and to identify lessons. The review is expected to be completed by March 2017.
IV. DELIVERING A STRONGER, BETTER, AND FASTER ADB
A. Implementation of Midterm Review Action Plan
61. The Midterm Review of Strategy 2020 Action Plan was approved in July 2014 to implement the outcomes of the midterm review through a set of well-defined, concrete, and time-bound actions.30 It sets out a detailed operational and organizational reform agenda to help make ADB stronger, better, and faster. The plan includes 192 actions, which collectively aim to (i) strengthen operational efficiency and effectiveness, (ii) improve internal capacity, (iii) respond to the challenging business environment, and (iv) sharpen ADB’s operational and strategic focus. Overall, the implementation of the action plan is progressing well, although some important actions are pending completion (Appendix 4). B. Portfolio Management
62. Portfolio status. As reported in the 2015 Annual Portfolio Performance Report, ADB’s project approvals increased considerably, but contract awards and disbursements declined.31 While the contract award ratio decreased by 1 percentage point to 22.9% in 2015 and the
30
ADB. 2014. Midterm Review of Strategy 2020 Action Plan. Manila. 31
ADB. 2015. 2015 Annual Portfolio Performance Report. Manila.
19
disbursement ratio dropped by 1 percentage point to 17.2%, the midterm review actions and the 10-point procurement reform action plan are beginning to have an impact. Despite rising new approvals, ADB has been narrowing the gap between approvals and disbursements. In 2015, the total approvals were $16.3 billion and disbursements were $12.3 billion compared with approvals of $14.2 billion and disbursements of $8.7 billion in 2013. The same trend has continued for first half of 2016 with total sovereign and nonsovereign disbursements increasing by 60% over the same period in 2015. In the first 6 months of 2016, project contract awards have increased by 8% and project disbursements by 18% over the same period in 2015. However, more work needs to be done to enhance project readiness. To improve project implementation and disbursement, ADB is rolling out all the midterm review reforms and formulating the second phase of procurement reforms to reduce procurement time, improve quality, and strengthen the delivery system by increasing executing agency capacity and decentralization.
63. Strengthening portfolio performance. To address shortcomings and effectively prepare for scaling up of operations during the WPBF period, ADB is undertaking major portfolio reforms, including formulating a new procurement policy, procedures, and guidelines. The reforms also include an action plan with concrete measures such as (i) reducing total procurement time, (ii) improving the quality of procurement transactions, (iii) strengthening delivery systems in DMCs as well as within ADB, and (iv) introducing measures such as life-cycle costing of benefits. Box 4 summarizes some of the major focus areas. Subject to the planned Board consideration of the new procurement policy, these measures may be rolled out starting in July 2017.
Box 4: Strengthening Procurement to Improve Contract Awards The Asian Development Bank (ADB) is undertaking procurement reforms to improve portfolio performance and contract awards. The following reforms aim to reduce the end-to-end procurement time, enhance the value ADB adds to procurement processes, provide timely expertise and capacity building to reduce governance risks, and reduce manual procurement transactions in ADB and expedite procurement processes both within ADB and among the executing agencies:
(i) adopting a more principles-based procurement approach; (ii) introducing a risk-based and trust-and-verify procurement oversight system, aimed at reducing
end-to-end procurement time; (iii) introducing an agency procurement accreditation processes; (iv) mainstreaming post-review sampling; (v) establishing a policy unit at headquarters and outposting of more international staff to resident
missions; (vi) rolling out the procurement review system to enable electronic submissions and online approvals
by ADB of executing agency submissions; and (vii) undertaking an internal business process reengineering review to streamline procurement
documentation.
Source: Asian Development Bank. 64. In implementing the portfolio reforms, ADB will adopt an improved model for supporting procurement transactions. It will provide (i) more upfront engagement on procurement in the project design, and greater support to regional departments in handling and resolving contract management issues—to identify appropriate procurement modalities; (ii) greater fiduciary oversight over procurement transactions and consultant recruitment—to mitigate governance risks in procurement; (iii) technical advice to user departments on procurement, contract management, consultant recruitment, and administration of consultant contracts—to ensure appropriate contracting mechanisms and facilitate timely engagement of consulting services;
20
(iv) technical support to user departments in using the consultant management system and procurement review system—to automate and expedite engagement and recording of consulting services; and (v) contract administration support for ADB-administered consultants—to enhance the quality of consultant’s services and outputs. In addition, ADB will step up procurement assessments, update project administration instructions, provide capacity development for executing agencies, and lead engagement with multilateral development banks in procurement. 65. Continually improving portfolio management. ADB is working to strengthen portfolio performance, particularly disbursements; improve project readiness at entry; and decentralize more to resident missions. During the WPBF period, the following actions will be undertaken to further improve portfolio performance of sovereign operations:
(i) provide appropriate resources, incentives, and staff skill mix for project design and implementation to regional and operations support departments;
(ii) apply procurement readiness and design readiness criteria strictly before approval to all projects, and encourage the use of the project design advance and provide more project preparatory TA resources to ensure higher project readiness;
(iii) resolve contracting and disbursement issues, provide capacity building support to executing agencies and implementing agencies, and strengthen contract management;
(iv) review projects older than 6 years and above to reduce implementation problems;
(v) limit the number of TA projects, close old TA projects, and limit extensions and supplementary approvals; and
(vi) reduce the procurement time for contracts exceeding $20 million. 66. Department-specific actions. Each regional department has also identified specific actions (Appendix 5). An update of the midterm review 10-point procurement reform action plan is in Appendix 6. C. Strengthening Information Technology
67. IT is central to ADB’s efforts to become stronger, better, and faster. ADB is planning to modernize and integrate its IT systems through a transformation program named Real-Time ADB. It will cover (i) integrated systems and databases, (ii) knowledge management, (iii) analytics and reporting, (iv) mobility, (v) cloud services, and (vi) IT services. An initial set of projects will start in the second half of 2016 with the following objectives:
(i) Portfolio management for private sector operations. By 2020, this will cover (a) credit origination and client relationship management, (b) NSO financial transaction processing, and (c) an integrated data repository and portfolio reporting.
(ii) Integrated application for operations. ADB will implement a new platform for
the future eOperations system, including an accounting and disbursement system for loans, grants, and TA projects integrated with eOperations. This will reduce the end-to-end process of projects.
(iii) Treasury operations improvement. This initiative will (a) simplify and automate
manual data acquisition and cash management, and (b) increase the visibility of
21
the cash position, resulting in cash managers efficiently allocating cash surplus and exploring more asset classes.
(iv) Institutional procurement. The focus will be on including procurement planning
and budgeting, sourcing, and contract management, procuring to pay and integrating services in headquarter and subsequently in resident missions.
(v) Knowledge management. This work will establish the foundation for all relevant
initiatives that will use collaboration, document and content management, workflows, and search capabilities. This cloud-based collaboration and productivity suite will also improve ADB’s operational resilience.
(vi) Mobility. This initiative will (a) improve user collaboration and mobility,
(b) promote knowledge sharing, (c) increase productivity, (d) enhance organizational resilience, and (e) promote paperless workspace for a greener ADB.
(vii) Establishment of the organizational resilience active data center. In January
2016, the President endorsed immediate actions to maintain the key financial processes of the Controller’s Department, Office of Risk Management, and Treasury Department in the event of a prolonged disruption.
(viii) Human resource systems. This will assist in (a) implementing a centralized facility for filing, tracking, managing, and reporting on requests for human resources services; (b) providing a robust human resources technology architecture, improving efficiency and operational responsiveness; (c) increasing the visibility of ADB’s internal talent and skills inventory; and (d) allowing better collaboration on human resources information and content.
(ix) Information technology security. The growing business demand for
automation and integration of processes increases the complexity of securing ADB information on various platforms and devices. As ADB’s information systems become more sophisticated, security threats and risks also become more complex. The IT security program identified three areas to manage security risks effectively: (a) adaptive security awareness, (b) simplifying access management and authentication, and (c) strengthening security systems and tools.
68. Future measures. The following measures are planned for 2018 and beyond: (i) donor fund management system, (ii) risk management operations systems improvement, (iii) analytics and reporting, and (iv) progressive migration and integration of IT systems to cloud services. D. Planned Human Resources Reforms
69. To support a stronger, better, and faster ADB, human resources reforms are planned (paras. 70–75). 70. More strategic staffing based on centralized decision making. To address new challenges of ADB and its clients, staffing decisions should be more strategic and centralized. ADB’s Budget, Personnel and Management Systems Department (BPMSD), in close
22
consultation with relevant departments, will identify, recruit, and assign talented staff fit for each position. To support and implement this reform, BPMSD will work on the following:
(i) New mobility framework. Staff will be assigned strategically and flexibly across departments, as well as between headquarters and resident missions. BPMSD will develop a new mobility framework, including a rotation policy.
(ii) Flexible position management. The current position management system based on a fixed headcount will be reviewed. A more flexible system that allows for the conversion of positions between categories, advance and batch recruitments (one job advertisement for multiple recruitments or positions), overlaps for outgoing and incoming staff, and more efficient utilization of budgetary allocations for staffing will be considered (Appendix 7).
(iii) Mainstreaming workforce analysis. The workforce analysis provides crucial inputs for the strategic staffing. It is now mainstreamed as an annual exercise to accompany and inform the WPBF process. ADB is rolling out 3-year strategic departmental workforce plans that will incorporate the analysis of a department’s major deliverables and findings of the workforce analysis.32 The workforce analysis will identify current and emerging staffing surpluses and gaps, measures for staff optimization, and room for staff mobility.
71. More efficient, transparent, and accountable recruitment and assignments. BPMSD will continue to improve the operational efficiency, transparency, and accountability of the recruitment and assignment process. For example, BPMSD will be more involved in the early stage of recruitments and assignments, guided by the 2016 internal audit recommendations on the staff recruitment process. BPMSD will also review and revise the relevant administrative orders. 72. New recruitment initiatives. New recruitment initiatives have been launched. These include (i) increasing outreach to institutions and graduate schools providing a good pool of young professionals, and (ii) expanding hiring for a pool of experts with cutting-edge knowledge and/or in specialized fields. Other initiatives to be pursued include bulk recruitment, where pools of specialists are sourced in advance; and proactive talent sourcing, using social media to support strategic staffing, diversity, and succession planning. 73. Career and talent management. During the WPBF period, the career management framework and talent management will continue to be the basis for facilitating strategic and more mobile staffing in line with business needs and better career development. The leadership development program and executive coaching initiatives will continue. 74. Diversity and inclusion. ADB will further promote an inclusive work environment that is respectful, flexible, and diverse with more emphasis on gender representation. The Respectful Workplace Unit is being established. 75. Reforms of the Staff Retirement and Group Medical Insurance Plans. Following the work of the two advisory task forces in 2015–2016, ADB will implement reforms to the Staff Retirement and the Group Medical Insurance Plans. These reforms will strengthen the financial
32
A 3-year strategic departmental workforce plans are currently being piloted with six departments (2 operations departments, 2 direct operations support departments and 2 indirect operations support department), and will be rolled out bank-wide in 2017.
23
sustainability of both plans while also ensuring they contribute to an overall remuneration package for staff which is competitive to attract and retain staff, consistent with ADB’s mission, and in line with international trends. E. Organization Resilience
76. To maintain continuity of operations and protect shareholder value in the event of a disaster, and to ensure long-term viability, Management approved the Organizational Resilience paper in July 2016.33 The framework, which outlines a set of actions from 2016 to 2021, is to be implemented in phases. The organizational resilience program will transform ADB into a more agile, sustainable organization with the ability to continue operations throughout any type of disruptive incident. Key changes will be implemented to establish an effective crisis management structure and ensure appropriate policies and guidelines are in place to support the safety and well-being of staff and dependents. ADB's data and business operations will be strengthened through improvements to ADB’s IT infrastructure, rationalizing and digitizing processes to facilitate remote access and leading a culture change within ADB to adopt efficient, resilient work modalities.
V. HUMAN RESOURCES AND BUDGET REQUIREMENT
77. Since 2013, ADB has maintained budget growth at a moderate level (Figure 7) despite a significant growth in operations, i.e., more approvals and administration of a larger portfolio coupled with a commensurate increase in the size, complexity, and resource requirements per operation. It is crucial to maintain the momentum for efficiency, while providing adequate resources to support scaled-up operations and cost drivers listed in para. 78.
Figure 7: ADB Budget Growth for 2010–2016 (%)
ADB = Asian Development Bank. Source: Asian Development Bank estimates.
33
ADB. 2016. Organizational Resilience. Manila
8.0 8.0
4.5
1.7 - 0.6 1.0
5.1 4.9
5.3
4.2
3.9 2.9 2.5
0
2
4
6
8
10
12
14
2010 2011 2012 2013 2014 2015 2016
Volume (%) Price (%)
24
A. Cost Drivers
78. Key cost drivers include:
(i) scaling up operations to meet the strategic priorities (Section III); (ii) expanding NSO and PPPs (Section III); (iii) improving project and portfolio quality, including procurement and client
orientation (Section IV); (iv) strengthening ADB’s IT systems (Section IV); (v) strengthening field office operations, including security (Section IV); and (vi) implementing the organizational resilience framework (Section IV).
79. ADB has been prudent in increasing staff and formulating budgets. During the WPBF period, ADB will provide greater focus on appropriately resourcing ADB’s operations to achieve operational targets with due attention to quality at the design and implementation phases. ADB’s IT reforms and organizational resilience are projected to constitute an increasing share of ADB’s internal administrative budget. ADB will continue its best efforts to ensure that budget supports the operations growth and improved portfolio quality. B. Opportunities for Savings and Efficiency
80. Track record of efficiency. During the WPBF, 2016–2018, ADB took an “optimize first” approach before seeking additional resources. In fact, ADB’s volume growth decreased by 0.2% before the early separation program in the approved 2016 budget.34 ADB has made good progress on the implementation of reform efforts through the staff optimization measures (Table 3 and Appendix 7) and the midterm review actions (Appendix 4). 81. Opportunities for efficiency gains. Opportunities for staff optimization are detailed in Appendix 7. The planned human resources reforms, in particular, flexible position management will help maximize the use of existing budgetary resources and moderate budget growth. The completion of the reviews of staff benefits (staff requirement and group medical insurance plans) would lead to permanent changes in ADB’s cost base over the medium term. 82. ADB recently adopted a number of key commitments to achieve institutional effectiveness and efficiency during the WPBF, 2017–2019. Additional efficiency and productivity gains are expected from the reforms in TA, procurement, business travel, and IT (Appendix 8). 83. IT reforms, in particular, represent both cost and efficiency drivers. The Real-Time ADB features a major shift towards new IT systems and facilities, systems improvements and cloud and subscription-based computing. It is projected to (i) drive greater agility and mobility, (ii) improve collaboration, (iii) elevate data quality and consistency, (iv) replace manual processes, (v) reduce heavy reliance on paperwork, and (vi) increase resiliency. Resources savings are expected in future years from productivity gains and cost avoidance although such IT reforms will entail budget increases in the WPBF, 2017–2019 period. For example, it is expected that upfront automation investments in 2017–2018 in new nonsovereign operations system will result in cost savings equivalent to 27 full time staff over the next 5 years. 84. ADB is fully committed to enhancing the flexible use of nonstaff resources by (i) identifying savings in a timely manner, and redeploying them promptly; and (ii) seeking new opportunities for efficiency. For more effective and decentralized management of budgetary 34
ADB. 2015. Budget of the Asian Development Bank for 2016. Manila
25
resources by departments and offices, ADB introduced enhanced budget management flexibility for discretionary expense items and improved budget management reporting systems in 2016. ADB will continue to mainstream efficiency measures such as (i) eliminating duplicated, redundant, low-value-added activities; (ii) ramping up energy- and resource-conservation endeavors; and (iii) choosing optimal alternatives for communications and logistics to maintain a high level of efficiency. C. Workforce Analysis
85. 2015 workforce analysis. The findings of the 2015 workforce analysis indicated that scaling up of operations would require additional staff resources (Appendix 7). The additional staff requirements for 2016–2018 were estimated at 290 for the base case scenario and 430 for the stronger pipeline scenario. The workforce analysis had noted that staff optimization measures could offset the need for as many as 160 new staff positions. Taking into account the staff optimization measures, net staffing requirements for 2016–2018 were identified at 130 for the base case and 270 for the stronger pipeline scenario (Appendix 7, Table A7). 86. Staff optimization. Implementation of the optimization measures started in 2015 and is being pursued vigorously. Progress against individual targets for 2016 is on track, with full-year achievements expected to meet or exceed the targets (Table 3). Together with larger operational pipelines, completed optimization measures have been able to substantially reduce the number of divisions and resident missions that were deemed to possess excess capacity (Appendix 7).
87. Augmented capacity in 2016. In 2016, 52 new staff positions were made available to different departments, including 18 international staff positions, 18 national staff positions, and 16 administrative staff positions. New positions together with the positions redeployed across the departments augmented the capacity of the departments and divisions by about 91 positions. An additional 20 staff positions were redeployed within the departments to augment the capacity of divisions and resident missions with capacity constraints.
88. 2016 workforce analysis. The exercise followed the methodology adopted for the 2015 analysis, where the staffing requirements for operations and direct operations support departments for delivering scaled-up 2017–2019 operational pipelines by multiplying the ideal staff coefficients35 for key operational outputs with the anticipated number of outputs planned for the individual years (Appendix 7, paras. 9–10). In addition, the analysis took into account needs of various important ongoing and planned initiatives that may not be directly linked with the scaling-up (para. 90). Key findings of the analysis include: (i) higher trajectory of scale-up in operations than that anticipated by 2016–2018 base case scenario, 17% higher for 2018–2019; (ii) heavy processing and implementation workload for majority of the sector divisions in 2017–2019, in the absence of an influx of additional staff resources; (iii) little scope for further redeployments across the departments. Appendix 7 provides further details on some of the key findings of the exercise (Appendix 7, paras. 11–16).
35
Staff coefficient is the number of weeks of staff time required to deliver any given output. Processing related staff coefficients for 2015 exercise were based on the ideal staff coefficients for processing, which covered the time that an experienced staff will require for the activity. Use of ideal staff coefficients was to encourage the departments to invest in their staff and encourage greater efficiencies. Implementation related staff coefficients, on the other hand, were based on the actual average of the staff time being devoted to these activities. 2016 exercise improves on the methodology by using ideal coefficients for implementation as well, with the aim of ensuring that additional resources are made available to the portfolio implementation.
26
Table 3: Progress on Staff Optimization Measures (no. of staff)
Optimization Measures
WPBF, 2016–2018 Targets for end
2016a
Achievements, as of end August
2016 IS and NS AS IS and NS AS
Redeployment to the operations and priority direct operations support departments
14–18 18 21
Redeployment of positions across the divisions but within the original operations departments
5–10 16 4
Delegation of projects and programs to large and medium-sized resident missions (30 projects and programs)
10 13b
Operations efficiency improvements 10–20 10–20c
Increased ratio of IS and NS to administrative assistants 15 17 Deployment of positions freed up through early
separationsd,e
12–15 10 In Progress
Overall 51–73 25 57–67 42 AS = administrative staff, IS = international staff, no. = number, NS = national staff. a Includes the achievements made on redeployment of positions starting in the third quarter of 2015.
b Estimates based on the actual new delegation of 38 projects or programs by the end of August 2016.
c Anticipated savings based on the measures approved through the Enhancing Operational Efficiency of the Asian Development Bank approved in 2015. Data validation will take place in 2017.
d Estimates include incumbents occupying positions identified for redeployment or conversion within or across the
departments. e While the early staff separation program will be completed within 2016, redeployment of all the vacated positions
may only be possible in the first half of 2017. Source: Asian Development Bank estimates.
D. Staffing Requirements for 2017‒2019
89. Gross staff requirements. A review of the demand-driven WPBF operational pipelines and the scale-up trajectory (Figure 1), together with increased focus on project, program, and TA implementation, will raise the additional staffing requirements from those envisaged to implement the base case scenario. Staffing requirements of new initiatives such as the second generation of procurement reforms and further scale-up of PPP operations (particularly the transactional advisory services) are in addition to the needs that were considered during the preparation of the WPBF, 2016–2018. Additional needs have also been identified for strengthening tax integrity and anti-money laundering due diligence, and for implementing the organizational resilience plan. Capacities in BPMSD will also need strengthening to support the human resources reforms (covering recruitment and assignments, staff retirement plan and group medical insurance plan), the surge in recruitment for new positions, and strengthening support for workforce analysis. 90. Other priority staffing needs identified in the WPBF, 2016–2018 include (i) strengthening the resident missions (including small sized resident missions) and resourcing the extended missions; (ii) fully staffing the Myanmar Resident Mission as per the approved board paper;36 (iii) delivering on the climate change commitments; (iv) strengthening disaster and risk management capacities; (v) strengthening support to FCAS countries; (vi) scaling up the experts pool; (vii) fully resourcing the TFP; and (viii) strengthening the Treasury Department’s systems and operations, including its local currency operations. Taking into account these and priority needs outlined in para. 89, gross additional staffing requirements for 2017–2019 have been estimated at 360.
36
ADB. 2013. Establishment of a Resident Mission in Myanmar. Manila
27
91. Staff optimization. Part of the requirements for additional staffing could be met through staff optimization measures or offset by the operational efficiency measures. Implementation of optimization measures, such as redeployments, conversion of administrative assistant positions to analyst positions, and operations efficiency measures, will continue. Completion of the ongoing early separation program and deployment of freed up positions in 2016 and 2017 will also reduce the need for new positions. Moreover, planned and ongoing initiatives of various departments are expected to generate further staff savings when completed. Table 4 outlines the anticipated scope of optimization for 2017–2019. 92. To support the workforce analysis process, ADB intends to elevate enhancements to the time management system (TMS), thereby aligning with the workforce analysis activity categories to replace periodic staff time surveys and enable real-time monitoring and tracking of actual staff time spent by major activity. While presently in pilot use, ADB will simplify TMS input requirements with a view to roll out TMS ADB-wide in 2017.
Table 4: Indicative Scope for Further Optimization (no. of staff)
Optimization Measures 2017
a 2018–2019
IS and NS AS IS and NS AS Operations efficiency improvements 20 20 10 10 Efficiencies through flexibilities in position management 10 15 Increased ratio of IS and NS to administrative assistants 10 Deployment of positions freed up through early separations
b,c 22–25 25
Various automation and outsourcing initiativesc 15
Overall 42–45 55 20 40 AS = administrative staff, IS = international staff, no. = number, NS = national staff. a Includes the achievements made on redeployment of positions made in 2015.
b Includes positions vacated through implementation of early separation program and deployed in Q4 2016.
c Breakdown between IS, NS and AS is based on budget assumptions and may differ during actual implementation.
d Some of the targeted savings are additional requirements that would be avoided due to automation.
Source: Asian Development Bank estimates.
93. Net staffing requirements. Taking into account the scope for optimizing the use of existing resources, net new staffing requirements for 2017–2019 are estimated at 200 (Table 5). This includes 100 international staff, 75 national staff, and 25 administrative staff positions. Together with the 52 new positions made available in 2016, updated net new positions requirements for 2016–2019 total 252, compared with the net requirement of 270 new positions for 2016–2018 under the stronger pipeline scenario. Although the current estimates also provide for a number of new needs identified, the requirements are more modest than those envisaged for the WPBF, 2016–2018 stronger pipeline scenario (para. 89). In addition, the requirements are phased over a 3-year period (2017–2019) as opposed to a 2-year period (2017–2018) as originally envisaged, which will help smoothen the budgetary implications.
Table 5: Indicative Staffing Requirements for 2017–2019 (no. of staff)
Staffing Requirements
2017 2018 and 2019 2017–2019 IS and
NS ASa Total
IS and NS AS
a Total
IS and NS AS
a Total
Gross Requirements 115 65 180 125 55 180 240 120 360 Offset through
Optimization 45 55 100 20 40 60 65 95 160
Net Requirements 70 10 80 105 15 120 175 25 200 AS = administrative staff, IS = international staff, no. = number, NS = national staff. a Refers to analyst or analyst-type position.
Source: Asian Development Bank estimates.
28
E. Budget Framework: Indicative Budget Growth for 2017 and Medium-Term Outlook for 2018–2019
94. The budget framework is aligned with the WPBF, 2017–2019. The indicative budget is projected to be about $660 million, an indicative increase of $24 million (3.8%) over the 2016 budget (Table 6). This comprises a volume increase of 1.6% and a price increase of 2.2%.
Table 6: Summary of 2017 Indicative Budget by Expense Category
($ million)
Internal Administrative Expense Category 2015
Actual 2016
Budget 2017
Preview
Change over 2016 Budget
a
(%)
Board of Governors 2.1 2.2 2.2 1.0 Board of Directors 29.1 32.8 33.7 2.7 Operational Expenses 410.9 471.8 490.9 4.0 Administrative Expenses 105.1 123.6 135.2 9.4 Total before Contingency 547.2 630.4 662.0 5.0 General Contingency 6.3 6.6 Gross IAE 547.2 636.8 668.6 5.0
Fee Reimbursementsb (8.2) (8.4) (8.9)
Early Separation Program 7.3 NET IAE 539.0 635.6 659.7 3.8 ( ) = negative, IAE = internal administrative expenses. Note: Numbers may not sum precisely because of rounding. a Percentage change is based on absolute number.
b Estimated service charge for administering external grants excluding Japan trust funds.
Source: Asian Development Bank estimates.
95. The projected budget growth for 2017─2019 is shown in Table 7.
Table 7: Indicative Budget Growth, 2017─2019 (%)
Item 2017 2018 2019 Price 2.2 2.2 2.2 Volume 1.6 2.2 2.3 Budget Growth 3.8 4.4 4.5
Note: Numbers may not sum precisely because of rounding. Source: Asian Development Bank estimates.
96. Preparation of 2017 budget. ADB will firm up the internal administrative expenses resource envelope and budget allocation to support the implementation of the 2017 work program during the preparation of the budget for 2017.37 The 2017 budget will represent net additional resource requirements after incorporating estimated efficiency savings.
97. Board guidance will be sought through the iterative planning process. ADB plans to hold discussions on the 2017 draft budget proposal with the Budget Review Committee in early November 2016.
37
Key deliverables during the WPBF period are in Appendix 9.
Appendix 1 29
INDICATIVE SOVEREIGN OPERATIONS PIPELINE BY SECTOR, STRATEGIC AGENDA, AND DRIVERS OF CHANGE
Table A1.1: Sovereign Pipeline by Sector, 2013–2019
2013–2015 (Total)
a
2016 (Estimate)
2017–2019 (Estimated Total)
b
Sector No. % $ million % No. % $ million % No. % $ million % Agriculture, Natural Resources, and Rural Development 36 10 2,153 6 17 11 1,753 11 70 14 7,046 12
Education 29 8 2,048 5 12 8 878 5 33 7 3,710 6 Energy 60 16 9,299 25 20 13 3,030 18 75 16 13,347 22 Finance 30 8 3,193 8 13 8 2,123 13 24 5 4,493 7 Health 8 2 427 1 5 3 404 2 12 2 1,210 2 Industry and Trade 11 3 519 1 9 6 864 5 6 1 245 0.4
ICT 2 1 44 0.1 1 1 10 0.1 4 1 46 0.1 PSM 29 8 4,845 13 18 11 1,498 9 46 10 4,556 8 Transport 102 27 10,738 28 41 26 4,316 26 127 26 17,326 29 Water and Other Urban Infrastructure and Services 65 17 4,618 12 23 14 1,799 11 86 18 8,260 14
Total 372 100 37,883 100 159 100 16,675 100 483 100 60,238 100
Memorandum Item Infrastructure 284 67 25,705 68 99 58 10,077 60 335 65 42,205 70 – Energy 60 14 9,299 25 20 12 3,030 18 75 15 13,347 22 – Transport 102 24 10,738 28 41 24 4,316 26 127 25 17,326 29 – Water and
Other Urban Infrastructure and Services 65 15 4,618 12 23 14 1,799 11 86 17 8,260 14
– ICT 2 0.5 44 0.1 1 1 10 0.1 4 1 46 0.1 – Irrigation 17 4 904 2 9 5 802 5 22 4 2,564 4 – Other
Infrastructurec 38 9 102 0.3 5 3 120 1 21 4 663 1
ICT = information and communication technology, No. = number of operations, PSM = public sector management. Notes: The number of operations refers to sector components within projects and does not represent number of projects. Numbers may not sum precisely because of rounding. a Adjusted based on the project classification system introduced in 2014.
b Estimates based on the pipelines of country operations business plans jointly developed by developing member
countries and the Asian Development Bank. These pipelines are inclusive of about 20% overprogramming.
c Includes rural market infrastructure; rural water policy, institutional and capacity development; rural water supply
services; rural sanitation; and rural solid waste management. Source: Asian Development Bank estimates.
30 Appendix 1
Table A1.2: Regular Ordinary Capital Resources Pipeline by Sector, 2013–2019
2013–2015 (Total)
a
2016 (Estimate)
2017–2019 (Estimated Total)
b
Sector No. % $ million % No. % $ million % No. % $ million %
Agriculture, Natural Resources, and Rural Development 20 10 1,208 4 12 12 1,573 11 38 12 5,196 11
Education 12 6 1,084 4 2 2 325 2 16 5 2,050 4 Energy 35 17 6,952 25 16 16 2,687 20 55 17 11,669 24 Finance 17 8 2,675 10 11 11 1,895 14 19 6 3,453 7 Health 3 1 301 1 2 2 265 2 6 2 795 2 Industry and Trade 2 1 381 1 5 5 826 6 2 1 180 0.4
ICT 1 0.5 16 0.1 1 1 10 0.1 PSM 14 7 3,559 13 9 9 1,280 9 22 7 3,746 8 Transport 64 31 8,760 31 23 23 3,482 25 101 32 14,710 30 Water and Other Urban Infrastructure and Services 39 19 3,135 11 17 17 1,357 10 58 18 6,605 14
Total 207 100 28,070 100 98 100 13,701 100 317 100 48,405 100
Memorandum Item Infrastructure 167 72 19,234 69 66 62 8,330 61 235 71 35,112 73 – Energy 35 15 6,952 25 16 15 2,687 20 55 17 11,669 24 – Transport 64 27 8,760 31 23 22 3,482 25 101 30 14,710 30 – Water and
Other Urban Infrastructure and Services 39 17 3,135 11 17 16 1,357 10 58 17 6,605 14
– ICT 1 0.4 16 0.1 1 1 10 0.1 – Irrigation 6 3 295 1 6 6 726 5 10 3 1,616 3 – Other
Infrastructurec 22 9 76 0.3 3 3 68 0.5 11 3 512 1
ICT = information and communication technology, No. = number of operations, PSM = public sector management. Notes: The number of operations refers to sector components within projects and does not represent number of projects. Numbers may not sum precisely because of rounding. a Adjusted based on the project classification system introduced in 2014.
b Estimates based on the pipelines of country operations business plans jointly developed by developing member
countries and the Asian Development Bank. These pipelines are inclusive of about 20% overprogramming.
c Includes rural market infrastructure; rural water policy, institutional and capacity development; rural water supply
services; rural sanitation; and rural solid waste management. Source: Asian Development Bank estimates.
Appendix 1 31
Table A1.3: Asian Development Fund/Concessional Ordinary Capital Resources Lending Pipeline by Sector, 2013–2019
2013–2015 (Total)
a
2016 (Estimate)
2017–2019 (Estimated Total)
b
Sector No. % $ million % No. % $ million % No. % $ million % Agriculture, Natural Resources, and Rural Development 18 11 808 10 4 6 147 6 32 18 1,465 14
Education 15 9 901 11 12 18 504 19 18 10 1,613 16 Energy 22 13 1,648 20 7 10 204 8 21 12 1,383 13 Finance 13 8 468 6 5 7 222 9 7 4 1,040 10 Health 5 3 120 1 6 9 131 5 6 3 365 4 Industry and Trade 7 4 78 1 3 4 30 1 4 2 59 1
ICT 1 1 9 0.1 2 1 18 0.2 PSM 11 7 1,219 15 10 15 205 8 18 10 691 7 Transport 43 26 1,482 18 15 22 709 27 39 22 2,244 22 Water and Other Urban Infrastructure and Services 30 18 1,475 18 5 7 439 17 31 17 1,522 15
Total 165 100 8,207 100 67 100 2,590 100 178 100 10,399 100
Memorandum Item Infrastructure 128 66 5,125 62 31 45 1,451 56 113 59 5,956 57 – Energy 22 11 1,648 20 7 10 204 8 21 11 1,383 13 – Transport 43 22 1,482 18 15 22 709 27 39 21 2,244 22 – Water and
Other Urban Infrastructure and Services 30 15 1,475 18 5 7 439 17 31 16 1,522 15
– ICT 1 1 9 0.1 2 1 18 0.2 – Irrigation 13 7 485 6 2 3 47 2 11 6 652 6 – Other
Infrastructurec 19 10 26 0.3 2 3 52 2 9 5 137 1
ICT = information and communication technology, No. = number of operations, PSM = public sector management. Notes: The number of operations refers to sector components within projects and does not represent number of projects. Numbers may not sum precisely because of rounding. a Adjusted based on the project classification system introduced in 2014.
b Estimates based on the pipelines of country operations business plans jointly developed by developing member
countries and the Asian Development Bank. These pipelines are inclusive of about 20% overprogramming.
c Includes rural market infrastructure; rural water policy, institutional and capacity development; rural water supply
services; rural sanitation; and rural solid waste management. Source: Asian Development Bank estimates.
32 Appendix 1
Table A1.4: Asian Development Fund Grant Pipeline by Sector, 2013–2019
2013–2015 (Total)
a
2016 (Estimate)
2017–2019 (Estimated Total)
b
Sector No. % $ million % No. % $ million % No. % $ million %
Agriculture, Natural Resources, and Rural Development 4 6 137 9 1 4 32 8 11 15 385 27
Education 7 10 64 4 2 8 49 13 3 4 47 3 Energy 18 27 700 44 4 17 140 36 12 16 294 20 Finance 7 10 50 3 1 4 6 2 Health 1 1 7 0.4 1 4 8 2 2 3 50 3 Industry and Trade 4 6 60 4 1 4 8 2 1 1 6 0.4
ICT 1 1 19 1 3 4 29 2 PSM 10 15 67 4 3 13 13 3 15 20 119 8 Transport 13 19 496 31 9 38 125 33 14 19 372 26 Water and Other Urban Infrastructure and Services 2 3 8 0.5 2 8 3 1 14 19 132 9
Total 67 100 1,606 100 24 100 383 100 75 100 1,434 100
Memorandum Item Infrastructure 36 53 1,346 84 17 65 297 77 52 63 1,137 79 – Energy 18 26 700 44 4 15 140 36 12 15 294 20 – Transport 13 19 496 31 9 35 125 33 14 17 372 26 – Water and
Other Urban Infrastructure and Services 2 3 8 0.5 2 8 3 1 14 17 132 9
– ICT 1 1 19 1 3 4 29 2 – Irrigation 2 3 125 8 2 8 29 8 5 6 297 21 – Other
Infrastructurec 4 5 13 1
ICT = information and communication technology, No. = number of operations, PSM = public sector management. Notes: The number of operations refers to sector components within projects and does not represent number of projects. Numbers may not sum precisely because of rounding. a Adjusted based on the project classification system introduced in 2014.
b Estimates based on the pipelines of country operations business plans jointly developed by developing member
countries and the Asian Development Bank. These pipelines are inclusive of about 20% overprogramming.
c Includes rural market infrastructure; rural water policy, institutional and capacity development; rural water supply
services; rural sanitation; and rural solid waste management. Source: Asian Development Bank estimates.
Appendix 1 33
Table A1.5: Sovereign Pipeline by Strategic Agenda, 2013–2019
Strategic 2013–2015
(Total) 2016
(Estimate) 2017–2019
(Estimated Total) Agenda No. % $ million % No. % $ million % No. % $ million %
Inclusive Economic Growth
Pillar 1 101 34 17,233 45 48 38 7,005 42 161 37 25,605 43 Pillar 2 195 65 20,050 53 74 58 8,845 53 263 60 33,289 55 Pillar 3 22 7 2,090 6 10 8 1,449 9 35 8 4,740 8
Environmentally
Sustainable Growth
173 58 18,467 49 59 46 8,173 49 266 61 36,346 60
Regional
Integration 74 25 8,826 23 34 27 4,457 27 126 29 16,054 27
No. = number of projects; Pillar 1 = economic opportunities, including jobs, created and expanded; Pillar 2 = access to economic opportunities, including jobs, made more inclusive; Pillar 3 = extreme deprivation prevented and effects of shocks reduced (social protection). Notes: 1. A project may contribute to any or all of the strategic agendas. Thus, the sum of the percentages may add up to more
than 100%. 2. Data for 2016–2019 are projections based on the pipelines of country operations business plans jointly developed by
developing member countries and the Asian Development Bank. Source: Asian Development Bank estimates.
Table A1.6: Regular Ordinary Capital Resources Pipeline
by Strategic Agenda, 2013–2019
Strategic 2013–2015
(Total) 2016
(Estimate) 2017–2019
(Estimated Total) Agenda No. % $ million % No. % $ million % No. % $ million %
Inclusive Economic Growth
6
Pillar 1 60 35 13,603 48 29 37 5,924 43 112 40 21,617 45 Pillar 2 109 64 14,317 51 45 58 7,152 52 163 58 26,551 55 Pillar 3 11 6 1,110 4 6 8 1,025 7 19 7 2,747 6
Environmentally
Sustainable Growth
104 61 14,214 51 40 51 6,901 50 179 64 29,885 62
Regional
Integration 35 21 5,978 21 17 22 3,331 24 76 27 13,122 27
No. = number of projects; Pillar 1 = economic opportunities, including jobs, created and expanded; Pillar 2 = access to economic opportunities, including jobs, made more inclusive; Pillar 3 = extreme deprivation prevented and effects of shocks reduced (social protection). Notes: 1. A project may contribute to any or all of the strategic agendas. Thus, the sum of the percentages may add up to more
than 100%. 2. Data for 2016–2019 are projections based on the pipelines of country operations business plans jointly developed by
developing member countries and the Asian Development Bank. Source: Asian Development Bank estimates.
34 Appendix 1
Table A1.7: Asian Development Fund/Concessional Ordinary Capital Resources Lending Pipeline by Strategic Agenda, 2013–2019
Strategic 2013–2015
(Total) 2016
(Estimate) 2017–2019
(Estimated Total) Agenda No. % $ million % No. % $ million % No. % $ million %
Inclusive Economic Growth
Pillar 1 42 30 2,818 34 19 33 831 32 50 29 3,392 33 Pillar 2 96 69 4,939 60 35 61 1,560 60 112 65 5,947 57 Pillar 3 14 10 940 11 6 11 398 15 19 11 1,915 18
Environmentally
Sustainable Growth
81 58 3,925 48 18 32 1,078 42 98 57 5,513 53
Regional
Integration 36 26 1,691 21 18 32 839 32 58 34 2,217 21
No. = number of projects; Pillar 1 = economic opportunities, including jobs, created and expanded; Pillar 2 = access to economic opportunities, including jobs, made more inclusive; Pillar 3 = extreme deprivation prevented and effects of shocks reduced (social protection). Notes: 1. A project may contribute to any or all of the strategic agendas. Thus, the sum of the percentages may add up to more
than 100%. 2. Data for 2016–2019 are projections based on the pipelines of country operations business plans jointly developed by
developing member countries and the Asian Development Bank. Source: Asian Development Bank estimates.
Table A1.8: Asian Development Fund Grant Pipeline
by Strategic Agenda, 2013–2019
Strategic 2013–2015
(Total) 2016
(Estimate) 2017–2019
(Estimated Total) Agenda No. % $ million % No. % $ million % No. % $ million %
Inclusive Economic Growth
Pillar 1 25 49 812 51 13 57 250 65 22 31 596 42 Pillar 2 26 51 794 49 10 43 134 35 46 65 790 55 Pillar 3 3 6 40 2 1 4 25 7 5 7 78 5
Environmentally
Sustainable Growth
24 47 328 20 11 48 195 51 44 62 948 66
Regional
Integration 20 39 1,157 72 12 52 287 75 22 31 714 50
No. = number of projects; Pillar 1 = economic opportunities, including jobs, created and expanded; Pillar 2 = access to economic opportunities, including jobs, made more inclusive; Pillar 3 = extreme deprivation prevented and effects of shocks reduced (social protection). Notes: 1. A project may contribute to any or all of the strategic agendas. Thus, the sum of the percentages may add up to more
than 100%. 2. Data for 2016–2019 are projections based on the pipelines of country operations business plans jointly developed by
developing member countries and the Asian Development Bank. Source: Asian Development Bank estimates.
Appendix 1 35
Table A1.9: Sovereign Pipeline by Drivers of Change, 2013–2019
Drivers of Change
2013–2015 (Total)
2016 (Estimate)
2017–2019 (Estimated Total)
No. % $ million % No. % $ million % No. % $ million %
Private Sector Development
122 41 16,328 43 51 40 8,440 51 145 33 20,780 34
Governance and Capacity Development
228 76 27,917 74 96 76 12,294 74 349 80 45,967 76
Gender Equity and Mainstreaming
160 54 16,332 43 49 39 6,448 39 195 45 23,381 39
Knowledge Solutions
a
… … … … 46 36 5,644 34 189 43 26,489 44
Partnershipsa … … … … 61 48 8,761 53 215 49 26,219 44
… = data not available, No. = number of projects. Notes: 1. A project may contribute to any or all of the drivers of change. Thus, the sum of the percentages may add up to
more than 100%. 2. Data for 2016–2019 are projections based on the pipelines of country operations business plans jointly developed
by developing member countries and the Asian Development Bank (ADB). a ADB began monitoring knowledge solutions and partnerships in 2014.
Source: Asian Development Bank estimates.
Table A1.10: Regular Ordinary Capital Resources Pipeline
by Drivers of Change, 2013–2019
Drivers of Change
2013–2015 (Total)
2016 (Estimate)
2017–2019 (Estimated Total)
No. % $ million % No. % $ million % No. % $ million % Private Sector
Development 68 40 12,626 45 35 45 7,115 52 91 33 17,056 35
Governance and Capacity Development
128 75 19,600 70 56 72 9,957 73 220 79 37,064 77
Gender Equity and Mainstreaming
84 49 10,814 39 29 37 5,151 38 111 40 16,908 35
Knowledge Solutions
a
… … … … 26 33 4,205 31 130 47 20,646 43
Partnershipsa … … … … 35 45 6,867 50 136 49 20,807 43
… = data not available, No. = number of projects. Notes: 1. A project may contribute to any or all of the drivers of change. Thus, the sum of the percentages may add up to
more than 100%. 2. Data for 2016–2019 are projections based on the pipelines of country operations business plans jointly developed
by developing member countries and the Asian Development Bank (ADB). a ADB began monitoring knowledge solutions and partnerships in 2014.
Source: Asian Development Bank estimates.
36 Appendix 1
Table A1.11: Asian Development Fund/Concessional Ordinary Capital Resources Lending Pipeline by Drivers of Change, 2013–2019
Drivers of Change
2013–2015 (Total)
2016 (Estimate)
2017–2019 (Estimated Total)
No. % $ million % No. % $ million % No. % $ million % Private Sector
Development 59 42 3,377 41 17 30 1,162 45 63 37 3,229 31
Governance and Capacity Development
120 86 7,467 91 46 81 2,125 82 139 81 8,260 79
Gender Equity and Mainstreaming
87 62 4,883 59 30 53 1,220 47 98 57 6,058 58
Knowledge Solutions
a
… … … … 23 40 1,252 48 78 45 5,545 53
Partnershipsa … … … … 29 51 1,589 61 81 47 4,448 43
… = data not available, No. = number of projects. Notes: 1. A project may contribute to any or all of the drivers of change. Thus, the sum of the percentages may add up to
more than 100%. 2. Data for 2016–2019 are projections based on the pipelines of country operations business plans jointly developed
by developing member countries and the Asian Development Bank (ADB). a ADB began monitoring knowledge solutions and partnerships in 2014.
Source: Asian Development Bank estimates.
Table A1.12: Asian Development Fund Grant Pipeline
by Drivers of Change, 2013–2019
Drivers of Change
2013–2015 (Total)
2016 (Estimate)
2017–2019 (Estimated Total)
No. % $ million % No. % $ million % No. % $ million % Private Sector
Development 22 43 324 20 10 43 163 42 24 34 495 35
Governance and Capacity Development
30 59 850 53 17 74 212 55 54 76 644 45
Gender Equity and Mainstreaming
20 39 635 40 6 26 77 20 36 51 414 29
Knowledge Solutions
a
… … … … 11 48 188 49 21 30 299 21
Partnershipsa … … … … 14 61 305 80 49 69 964 67
… = data not available, No. = number of projects. Notes: 1. A project may contribute to any or all of the drivers of change. Thus, the sum of the percentages may add up to
more than 100%. 2. Data for 2016–2019 are projections based on the pipelines of country operations business plans jointly developed
by developing member countries and the Asian Development Bank (ADB). a ADB began monitoring knowledge solutions and partnerships in 2014.
Source: Asian Development Bank estimates.
Appendix 2 37
INDICATIVE RESOURCES AVAILABLE FOR APPROVAL
Table A2.1: Indicative Ordinary Capital Resources and Asian Development Fund Resources by Region and Country, 2017–2019
($ million)
Average Indicative Resources
Region/Country Approvals 2013–2015
Estimate 2016 2017a 2018a 2019a
Total 2017–2019
A. Sovereign Operations 12,627.68 15,080.08 15,814.74 16,514.74 16,714.33 49,043.82
Operations Group 1 7,160.42 8,184.23 7,967.57 8,432.57 8,489.33 24,889.48 Central and West Asia 3,358.00 4,244.17 3,536.10 3,791.10 3,819.04 11,146.23 Afghanistan 219.03 255.18 219.76 219.76 219.76 659.27 Armenia 129.16 190.00 210.00 210.00 210.00 630.00 Azerbaijan 148.33 825.00 220.00 260.00 260.00 740.00 Georgia 174.67 199.97 200.00 200.00 200.00 600.00 Kazakhstan 459.33 550.00 350.00 335.00 365.00 1,050.00 Kyrgyz Republic 63.26 85.11 97.31 97.31 97.31 291.92 Pakistan 1,476.88 1,354.67 1,461.24 1,581.24 1,581.24 4,623.73 Tajikistan 96.67 70.10 107.00 107.00 104.94 318.94 Turkmenistan 200.00 40.00 50.00 50.00 140.00 Uzbekistan 590.67 514.13 630.79 730.79 730.79 2,092.38 South Asia 3,802.42 3,940.07 4,431.47 4,641.47 4,670.30 13,743.24 Bangladesh 935.67 679.97 1,088.40 1,158.40 1,178.40 3,425.19 Bhutan 80.35 17.87 52.90 52.90 57.67 163.47 India 2,034.07 2,500.00 2,400.00 2,480.00 2,480.00 7,360.00 Maldives 12.67 9.69 20.17 20.17 20.29 60.63 Nepal 307.00 226.82 298.17 298.17 292.12 888.46 Sri Lanka 432.67 505.72 571.83 631.83 641.83 1,845.49 Operations Group 2 5,151.46 6,034.86 6,903.61 7,088.61 7,231.43 21,223.66 East Asia 1,760.83 1,934.09 2,005.18 2,015.18 2,025.18 6,045.54 China, People's Republic of 1,586.33 1,700.00 1,750.00 1,750.00 1,750.00 5,250.00 Mongolia 174.50 234.09 255.18 265.18 275.18 795.54 Pacific 250.75 600.60 610.32 700.32 700.77 2,011.42 Cook Islands 3.73 6.00 9.00 9.00 24.00 Fiji 34.22 65.00 60.00 70.00 70.00 200.00 Kiribati 1.80 1.18 7.73 7.73 7.75 23.21 Marshall Islands 1.67 1.01 7.02 7.02 7.04 21.09 Micronesia, Federated States of 3.01 15.45 15.97 17.97 17.97 51.92 Nauru 1.67 1.67 6.02 6.02 6.04 18.09 Palau 13.43 22.05 27.05 27.05 76.15 Papua New Guinea 101.90 398.94 342.90 392.90 392.90 1,128.69 Samoa 17.07 0.67 18.13 18.13 18.24 54.50 Solomon Islands 10.07 32.33 19.43 19.43 19.54 58.40 Timor-Leste 46.00 68.18 73.22 93.22 93.22 259.67 Tonga 4.15 10.26 13.27 13.27 13.35 39.89 Tuvalu 1.33 5.91 6.16 6.16 6.18 18.50 Vanuatu 10.70 12.41 12.41 12.48 37.30
38 Appendix 2
Average Indicative Resources Total
2017–2019 Region/Country Approvals 2013–2015
Estimate 2016 2017a 2018a 2019a
Southeast Asia 3,139.87 3,500.17 4,288.11 4,373.11 4,505.48 13,166.70 Cambodia 133.00 183.95 217.86 217.86 213.53 649.25 Indonesia 882.81 1,500.00 1,800.00 1,900.00 2,000.00 5,700.00 Lao People’s Democratic Republic 70.46 95.92 99.36 99.36 109.28 308.00 Myanmar 296.83 177.49 352.66 352.66 349.44 1,054.76 Philippines 790.70 950.00 835.00 820.00 850.00 2,505.00 Viet Nam 966.07 592.81 983.23 983.23 983.23 2,949.69 OCR Regional Set-Aside 43.83 500.00 450.00 500.00 500.00 1,450.00 ADF Subregional Allocation 271.97 295.05 384.56 384.56 384.56 1,153.68 Disaster Response Facility 14.03 109.00 109.00 109.00 327.00 Hard-Term Facility 51.90 B. Nonsovereign Operations 2,048.77 2,600.00 2,900.00 3,200.00 3,500.00 9,600.00
C. Total (C = A + B) 14,676.45 17,680.08 18,714.74 19,714.74 20,214.33 58,643.82 Memorandum Items: Regular OCR 11,405.50 14,766.00 14,654.00 15,654.00 16,154.00 46,462.00 Sovereign 9,356.73 12,166.00 11,754.00 12,454.00 12,654.00 36,862.00 Nonsovereign 2,048.77 2,600.00 2,900.00 3,200.00 3,500.00 9,600.00 ADF/Concessional Assistance 3,270.95 2,914.08 4,060.74 4,060.74 4,060.33 12,181.82 ADF Grant 2,735.68 2,531.16 659.49 659.49 600.71 1,919.68 ADF Loan/Concessional OCR Loan 535.27 382.92 3,401.26 3,401.26 3,459.62 10,262.13 ADF = Asian Development Fund, OCR = ordinary capital resources. Note: Numbers may not sum precisely because of rounding. a
Includes disaster risk reduction allocations for concessional assistance-only countries (Table A2.6). Source: Asian Development Bank. 2016. Memo on Indicative Resources Available for Approval in 2017–2019. Manila.
Appendix 2 39
Table A2.2: Indicative Regular Ordinary Capital Resources Available for Approval by Region and Country, 2017–2019
($ million)
Average Indicative Resources
Region/Country Approvals 2013–2015
Estimate 2016 2017 2018 2019
Total 2017–2019
Sovereign Operations 9,356.73 12,166 11,754 12,454 12,654 36,862
Operations Group 1 5,117.95 6,665 5,770 6,235 6,295 18,300
Central and West Asia 2,266.21 3,275 2,420 2,675 2,705 7,800 Armenia 70.99 190 210 210 210 630 Azerbaijan 148.33 825 220 260 260 740 Georgia 94.00 150 200 200 200 600 Kazakhstan 459.33 550 350 335 365 1,050 Pakistan 995.89 1,120 1,000 1,120 1,120 3,240 Turkmenistan 200 40 50 50 140 Uzbekistan 497.67 240 400 500 500 1,400
South Asia 2,851.74 3,390 3,350 3,560 3,590 10,500 Bangladesh 500.00 500 560 630 650 1,840 Bhutan 23.33 India 2,034.07 2,500 2,400 2,480 2,480 7,360 Sri Lanka 294.33 390 390 450 460 1,300 Operations Group 2 4,194.95 5,001 5,534 5,719 5,859 17,112
East Asia 1,728.65 1,900 1,960 1,970 1,980 5,910 China, People's Republic of 1,586.33 1,700 1,750 1,750 1,750 5,250 Mongolia 142.32 200 210 220 230 660
Pacific 163.62 425 439 529 529 1,497 Cook Islands 3.73 6 9 9 24 Fiji 34.22 65 60 70 70 200 Micronesia, Federated States of 1.56 5 8 10 10 28 Palau 10.62 15 20 20 55 Papua New Guinea 78.57 320 300 350 350 1,000 Timor-Leste 34.93 35 50 70 70 190
Southeast Asia 2,302.68 2,676 3,135 3,220 3,350 9,705 Indonesia 882.81 1,500 1,800 1,900 2,000 5,700 Philippines 790.70 950 835 820 850 2,505 Viet Nam 629.17 226 500 500 500 1,500
Regional Set-Aside 43.83 500 450 500 500 1,450
Nonsovereign Operations 2,048.77 2,600 2,900 3,200 3,500 9,600
Total 11,405.50 14,766 14,654 15,654 16,154 46,462 Note: Numbers may not sum precisely because of rounding. Source: Asian Development Bank. 2016. Memo on Indicative Resources Available for Approval in 2017–2019. Manila.
40 Appendix 2
Table A2.3: Indicative Concessional Resources Available for Approval by Region and Country, 2017–2019
($ million)
Average Indicative Resources
Region/Country Approvals 2013–2015
Estimate 2016 2017a 2018a 2019a
Total 2017–2019
A. Operations Group 1 2,042.47 1,519.23 2,197.57 2,197.57 2,194.33 6,589.48 Central and West Asia 1,091.79 969.17 1,116.10 1,116.10 1,114.04 3,346.23
Afghanistan 219.03 255.18 219.76 219.76 219.76 659.27 Armenia 58.17 Georgia 80.67 49.97 Kyrgyz Republic 63.26 85.11 97.31 97.31 97.31 291.92 Pakistan 480.99 234.67 461.24 461.24 461.24 1,383.73 Tajikistan 96.67 70.10 107.00 107.00 104.94 318.94 Uzbekistan 93.00 274.13 230.79 230.79 230.79 692.38
South Asia 950.68 550.07 1,081.47 1,081.47 1,080.30 3,243.24 Bangladesh 435.67 179.97 528.40 528.40 528.40 1,585.19 Bhutan 57.02 17.87 52.90 52.90 57.67 163.47 Maldives 12.67 9.69 20.17 20.17 20.29 60.63 Nepal 307.00 226.82 298.17 298.17 292.12 888.46 Sri Lanka 138.33 115.72 181.83 181.83 181.83 545.49
B. Operations Group 2 956.51 1,033.86 1,369.61 1,369.61 1,372.43 4,111.66 East Asia 32.18 34.09 45.18 45.18 45.18 135.54
Mongolia 32.18 34.09 45.18 45.18 45.18 135.54
Pacific 87.13 175.60 171.32 171.32 171.77 514.42 Kiribati 1.80 1.18 7.73 7.73 7.75 23.21 Marshall Islands 1.67 1.01 7.02 7.02 7.04 21.09 Micronesia, Federated States of 1.45 10.45 7.97 7.97 7.97 23.92 Nauru 1.67 1.67 6.02 6.02 6.04 18.09 Palau 2.81 7.05 7.05 7.05 21.15 Papua New Guinea 23.33 78.94 42.90 42.90 42.90 128.69 Samoa 17.07 0.67 18.13 18.13 18.24 54.50 Solomon Islands 10.07 32.33 19.43 19.43 19.54 58.40 Timor-Leste 11.07 33.18 23.22 23.22 23.22 69.67 Tonga 4.15 10.26 13.27 13.27 13.35 39.89 Tuvalu 1.33 5.91 6.16 6.16 6.18 18.50 Vanuatu 10.70 12.41 12.41 12.48 37.30
Southeast Asia 837.20 824.17 1,153.11 1,153.11 1,155.48 3,461.70 Cambodia 133.00 183.95 217.86 217.86 213.53 649.25 Lao People’s Democratic Republic 70.46 95.92 99.36 99.36 109.28 308.00 Myanmar 296.83 177.49 352.66 352.66 349.44 1,054.76 Viet Nam 336.90 366.81 483.23 483.23 483.23 1,449.69
C. ADF Subregional Allocation 271.97 295.05 384.56 384.56 384.56 1,153.68
D. Disaster Response Facility 14.03 109.00 109.00 109.00 327.00
E. Hard-termb 51.90
Total (A + B + C + D + E) 3,270.95 2,914.08 4,060.74 4,060.74 4,060.33 12,181.62 ADF = Asian Development Fund. Note: Numbers may not sum precisely because of rounding. a Final allocations are subject to available ADF resources and concessional ordinary capital resources, and the outcome of
country performance assessments. Indicative resources for 2017–2019 include disaster risk reduction allocations (Table A2.6).
b For ADF 12, resources freed up from the 20% volume discount are redistributed to Group A DMCs with low risk of debt
distress. Source: Asian Development Bank. 2016. Memo on Indicative Resources Available for Approval in 2017–2019. Manila.
Appendix 2 41
Table A2.4: Indicative Asian Development Fund Loan/Concessional Ordinary Capital Resources Available for Approval by Region and Country, 2017–2019
($ million) Average Indicative Resources
Region/Country Approvals 2013–2015
Estimate 2016 2017a 2018a 2019a
Total 2017–2019
A. Operations Group 1 1,652.55 1,215.03 1,866.40 1,866.40 1,882.62 5,615.41 Central and West Asia 750.07 682.91 840.86 840.86 838.93 2,520.66
Armenia 58.17 Georgia 80.67 49.97 Kyrgyz Republic 30.05 59.89 48.50 48.50 48.50 145.51 Pakistan 480.99 234.67 461.24 461.24 461.24 1,383.73 Tajikistan 7.20 64.25 100.32 100.32 98.39 299.04 Uzbekistan 93.00 274.13 230.79 230.79 230.79 692.38
South Asia 902.48 532.11 1,025.53 1,025.53 1,043.69 3,094.75 Bangladesh 435.67 179.97 528.40 528.40 528.40 1,585.19 Bhutan 36.64 9.61 23.83 23.83 47.67 95.33 Maldives 8.30 8.30 8.30 24.89 Nepal 291.83 226.82 283.17 283.17 277.49 843.84 Sri Lanka 138.33 115.72 181.83 181.83 181.83 545.49
B. Operations Group 2 919.68 955.15 1,231.94 1,231.94 1,274.50 3,738.38 East Asia 32.18 34.09 45.18 45.18 45.18 135.54
Mongolia 32.18 34.09 45.18 45.18 45.18 135.54
Pacific 50.30 149.36 107.16 107.16 107.16 321.48 Micronesia, Federated States of 1.45 10.45 7.97 7.97 7.97 23.92 Palau 2.81 7.05 7.05 7.05 21.15 Papua New Guinea 23.33 78.94 42.90 42.90 42.90 128.69 Samoa 7.46 7.46 7.46 22.38 Solomon Islands 4.20 21.76 7.99 7.99 7.99 23.98 Timor-Leste 11.07 33.18 23.22 23.22 23.22 69.67 Tonga 5.02 5.46 5.46 5.46 16.38 Vanuatu 7.43 5.10 5.10 5.10 15.31
Southeast Asia 837.20 771.70 1,079.60 1,079.60 1,122.16 3,281.36 Cambodia 133.00 183.95 204.27 204.27 200.21 608.75 Lao People’s Democratic Republic 70.46 43.45 49.64 49.64 99.28 198.57 Myanmar 296.83 177.49 342.46 342.46 339.44 1,024.36 Viet Nam 336.90 366.81 483.23 483.23 483.23 1,449.69
C. ADF Subregional Allocationb 163.45 295.05 192.28 192.28 192.28 576.84 D. Disaster Response Facilityc 14.03 54.50 54.50 54.50 163.50 E. Disaster Risk Reductiond 56.14 56.14 55.72 168.00 F. Hard-Term Facilitye 51.90 Total (A + B + C + D +E + F) 2,735.68 2,531.16 3,401.26 3,401.26 3,459.62 10,262.13
ADF = Asian Development Fund. Note: Numbers may not sum precisely because of rounding. a Data reflect half of the projected resources available for approval (including exceptional support to Afghanistan and
Myanmar) in 2017–2018 and 2019–2020. Final allocations are subject to available ADF resources and concessional ordinary capital resources (OCR), and the outcome of country performance assessments. For ADF 12, Myanmar would continue to receive its performance-based allocation (PBA) plus a portion of the exceptional allocation, derived as [$524 million – half of PBA].
b For ADF 12, the resources available for subregional projects are estimated at $384.56 million annually, with 50% in
loans/concessional OCR lending. c Disaster Response Facility lending is assumed to be at the same level as that for grants.
d Disaster risk reduction allocations are presented in Table A2.6.
e For ADF 12, resources freed up from the 20% volume discount are redistributed to Group A DMCs with low risk of debt
distress. Source: Asian Development Bank. 2016. Memo on Indicative Resources Available for Approval in 2017–2019. Manila.
42 Appendix 2
Table A2.5: Indicative Asian Development Fund Grant Resources Available for Approval by Region and Country, 2017–2019
($ million)
Average Indicative Resources
Region/Country Approvals 2013–2015
Estimate 2016 2017a 2018a 2019a
Total 2017–2019
A. Operations Group 1 389.92 304.21 279.26 279.26 260.20 818.72
Central and West Asia 341.72 286.25 253.56 253.56 253.56 760.68 Afghanistan 219.03 255.18 214.76 214.76 214.76 644.27 Kyrgyz Republic 33.22 25.22 38.80 38.80 38.80 116.41 Tajikistan 89.47 5.85
South Asia 48.21 17.95 25.70 25.70 6.64 58.05 Bhutan 20.37 8.26 19.07 19.07 38.13 Maldives 12.67 9.69 6.64 6.64 6.64 19.91 Nepal 15.17
B. Operations Group 2 36.83 78.71 83.44 83.44 43.73 210.62
East Asia
Pacific 36.83 26.24 43.73 43.73 43.73 131.19 Kiribati 1.80 1.18 6.58 6.58 6.58 19.73 Marshall Islands 1.67 1.01 5.97 5.97 5.97 17.92 Nauru 1.67 1.67 5.12 5.12 5.12 15.37 Samoa 17.07 0.67 5.97 5.97 5.97 17.90 Solomon Islands 5.87 10.57 6.39 6.39 6.39 19.18 Tonga 4.15 5.24 4.37 4.37 4.37 13.10 Tuvalu 1.33 5.91 5.24 5.24 5.24 15.73 Vanuatu 3.27 4.08 4.08 4.08 12.25
Southeast Asia 52.47 39.71 39.71 79.43 Lao People’s Democratic Republic 52.47 39.71 39.71 79.43
C. ADF Subregional Allocationb 108.52 192.28 192.28 192.28 576.84
D. Disaster Response Facilityc 54.50 54.50 54.50 163.50
E. Disaster Risk Reductiond 50.00 50.00 50.00 150.00
Total (A + B + C + D + E) 535.27 382.92 659.49 659.49 600.71 1,919.68 ADF = Asian Development Fund. Note: Numbers may not sum precisely because of rounding. a Data reflect half of the projected resources available for approval (including exceptional support to Afghanistan) in
2017–2018 and 2019–2020. Final allocations are subject to available ADF resources and concessional ordinary capital resources (OCR), and the outcome of country performance assessments. For ADF 12 (2017–2020), Afghanistan would continue to receive its performance-based allocation (PBA) plus a portion of post-conflict premiums, derived as [7/18*($847 million – PBA)]. Also, under the transition arrangement during ADF 12, Bhutan and Lao People’s Democratic Republic (Lao PDR) will become ineligible for grants 2 years after they become a gap country. This means that Bhutan and Lao PDR become ineligible for grants starting at the second biennium of ADF 12. The resources freed up from the 20% volume discount were redistributed to Group A DMCs with low risk of debt distress.
b For ADF 12 (2017–2020), the resources available for subregional projects are estimated at $384.56 million annually, of
which 50% is assumed to be in grants. c
Agreed financing for the Disaster Response Facility grant is estimated at $218 million. d
Disaster risk reduction allocations are presented in Table A2.6. Source: Asian Development Bank. 2016. Memo on Indicative Resources Available for Approval in 2017–2019. Manila.
Appendix 2 43
Table A2.6: Indicative Disaster Risk Reduction Resources Available for Approval by Region and Country, 2017–2019
($ million)
2017 2018 2019 Total Region/Country COL ADF Total COL ADF Total COL ADF Total 2017–2019
A. Operations Group 1 27.07 24.84 51.91 27.07 24.84 51.91 26.79 24.73 51.52 155.34
Central and West Asia 9.45 12.22 21.67 9.45 12.22 21.67 9.36 12.18 21.55 64.90 Afghanistan 5.00 5.00 5.00 5.00 5.00 5.00 15.00 Kyrgyz Republic 5.00 5.00 10.00 5.00 5.00 10.00 5.00 5.00 10.00 30.00 Tajikistan 4.45 2.22 6.67 4.45 2.22 6.67 4.36 2.18 6.55 19.90
South Asia 17.62 12.62 30.24 17.62 12.62 30.24 17.42 12.55 29.97 90.45 Bhutan 5.00 5.00 10.00 5.00 5.00 10.00 5.00 5.00 10.00 30.00 Maldives 2.62 2.62 5.24 2.62 2.62 5.24 2.68 2.68 5.35 15.82 Nepal 10.00 5.00 15.00 10.00 5.00 15.00 9.75 4.87 14.62 44.62
B. Operations Group 2 29.07 25.16 54.23 29.07 25.16 54.23 28.94 25.27 54.20 162.66
East Asia
Pacific 8.21 12.23 20.44 8.21 12.23 20.44 8.39 12.49 20.88 61.75 Kiribati 1.15 1.15 1.15 1.15 1.18 1.18 3.48 Marshall Islands 1.05 1.05 1.05 1.05 1.07 1.07 3.16 Nauru 0.90 0.90 0.90 0.90 0.92 0.92 2.71 Samoa 2.35 2.35 4.71 2.35 2.35 4.71 2.41 2.41 4.81 14.22 Solomon Islands 2.52 2.52 5.04 2.52 2.52 5.04 2.58 2.58 5.15 15.24 Tonga 1.72 1.72 3.45 1.72 1.72 3.45 1.76 1.76 3.52 10.41 Tuvalu 0.92 0.92 0.92 0.92 0.94 0.94 2.78 Vanuatu 1.61 1.61 3.22 1.61 1.61 3.22 1.65 1.65 3.29 9.73
Southeast Asia 20.86 12.93 33.79 20.86 12.93 33.79 20.55 12.77 33.32 100.90 Cambodia 9.06 4.53 13.59 9.06 4.53 13.59 8.88 4.44 13.32 40.50 Lao PDR 5.00 5.00 10.00 5.00 5.00 10.00 5.00 5.00 10.00 30.00 Myanmar 6.80 3.40 10.20 6.80 3.40 10.20 6.67 3.33 10.00 30.40
Total (A + B) 56.14 50.00 106.14 56.14 50.00 106.14 55.72 50.00 105.72 318.00 ADF = Asian Development Fund, COL = concessional ordinary capital resources lending, Lao PDR = Lao People’s Democratic Republic. Notes: 1. Numbers may not sum precisely because of rounding. 2. Data reflect half of the projected resources available for approval in 2017–2018 and 2019–2020. 3. Final allocations are subject to available resources for disaster risk reduction. 4. Grant financing for disaster risk reduction is allocated across all concessional assistance-only countries in accordance with their
pro-rata shares in the performance-based allocation (PBA) for concessional assistance-only countries (including base allocations), subject to a 50% portion of their pro-rata share in the PBA for countries at low risk of debt distress and a cap of $20 million per country. The balance in grant resources is redistributed to grant-eligible countries. Additional COL is made available to COL-eligible countries solely for disaster risk reduction. Countries at medium risk of debt distress would receive matching amounts in grant and COL resources, while countries at low risk of debt distress would receive twice as much in COL allocations as they receive in grant allocations.
Source: Asian Development Bank. 2016. Memo on Indicative Resources Available for Approval in 2017–2019. Manila.
44 Appendix 3
STRENGTHENING COFINANCING FRAMEWORK
The Midterm Review of Strategy 2020 reaffirmed the 1:1 cofinancing target to be achieved by 2020.1 This will require concerted efforts during the Work Program and Budget Framework, 2017–2019 to stay on the cofinancing trajectory. In tandem with other efficiency reforms, the Asian Development Bank has been streamlining cofinancing operations, entering into framework agreements with multilateral and bilateral sources, and undertaking enhancements on information technology that will help classify cofinancing requirements by sectors and subsectors. Ongoing initiatives and planned measures are described in Table A3.1 and Table A3.2.
Table A3.1: Expected and Ongoing Impact of Streamlining Measures in 2015
Efficiency Measure Impact Standardization of official cofinancing agreement templates comprising a base template and modular standard clauses to address variations requested by cofinanciers, in close cooperation with OGC. OGC leads in further development of the templates.
(i) Improved clarity to understand and apply ADB business terminology to facilitate negotiations and implementation of cofinancing agreements within and outside ADB.
(ii) Reduced staff time and effort reviewing and commenting on draft cofinancing agreements, particularly for variations requested by cofinanciers.
OCO Website Enhancement (i) Enhancement of search engine (entitled
Search Cofinanciers) to combine search functions in Lotus Notes databases of financing partners (bilateral, multilateral, and other agencies) and financing partnerships (facilities and trust funds) under a one search function.
(ii) Redesign the website for improved navigation and efficient access to information.
(i) Increased usefulness for project teams
since the system will provide them with comprehensive results in a single search engine.
(ii) Improved user satisfaction by reducing their time and effort in searching for needed information.
ADB = Asian Development Bank, OCO = Office of Cofinancing Operations, OGC = Office of the General Counsel. Source: Asian Development Bank.
1 ADB. 2014. Midterm Review of Strategy 2020: Meeting the Challenges of a Transforming Asia and Pacific. Manila.
Appendix 3 45
Table A3.2: Department-Specific Efficiency Measures Planned for 2017
Efficiency Measure Impact Continued Enhancement of CoMS (i) Development of input screen for framework
agreements and conditions.
(ii) Integration of project information from eOperations, mainframe, and OCO projects database into CoMS.
(iii) Automatic report generation of trust fund
details and available balance, mobilization, and commitment schedule.
(i) Direct and faster access to integrated
cofinancing information.
(ii) Improved monitoring and planning of cofinancing contributions and deployment.
(iii) Improved ability to comply with
cofinanciers’ requirements.
(iv) Better and faster responses to requests for cofinancing-related reports.
DFMS Development (i) Work with CTL and OIST in hiring a
consulting firm to prepare a solution to implement the DFMS.
(ii) Provide information and guidance to consultants on cofinancing operations.
(iii) Prepare cofinancing data that will be easy
to migrate to a developed solution.
(i) Integrated databases of financing partner
data, fund commitment, allocation, investment and usage, cofinancing portfolio reporting.
(ii) Unified reporting mechanism for OCO, CTL, and the regional departments.
CTL = Controller’s Department, CoMS = cofinancing management system, DFMS = donor fund management system, OCO = Office of Cofinancing Operations, OIST = Office of Information Systems and Technology. Source: Asian Development Bank.
46 Appendix 4
STATUS OF MIDTERM REVIEW OF STRATEGY 2020 ACTION PLAN
1. The Midterm Review of Strategy 2020 Action Plan1 includes 192 actions, which collectively aim to strengthen operational efficiency and effectiveness, improve internal capacity, respond to the challenging business environment, and sharpen the operational and strategic focus of the Asian Development Bank (ADB). 2. As of 31 July 2016, 134 actions (70%) were considered fully implemented, 13% largely implemented, 13% partially implemented and 4% not implemented.2 A. Strengthening Operational Efficiency and Effectiveness
3. Project implementation. Reforms in this area address project readiness, procurement and disbursement processes, and project management. ADB is implementing a 10-point procurement reform action plan to reduce procurement time, increase administrative efficiency, and maintain sound fiduciary oversight. These reforms are already showing early results by reducing ADB’s approval timelines. The time between ADB’s receipt of the bid evaluation report and approval of contracts $10 million and above has dropped from 57 days in 2013 to 49 days in 2015. However, further measures are needed to reduce the timelines of executing agencies. End-to-end timelines for engaging consultants and contractors still remain long, and a backlog in uncontracted and undisbursed balances must be addressed. ADB is planning second-generation reforms that will involve changes to ADB’s procurement policy and introduce greater flexibility. 4. Delegation of authority to resident missions. Reforms in this area will improve operational efficiency and effectiveness, and enhance responsiveness to clients. Operations teams are adopting models that best suit their country context. ADB’s six largest resident missions have established strong country-based project administration units, which handle most of the country portfolios. In the medium and small resident missions, procurement and project management decisions are also being delegated based on staffing and capacity considerations. Further progress in this area will require greater optimization measures, as well as improved teamwork between departments to deliver services to clients as “one ADB”. Additional budgetary resources will be required in the longer run. Total staff strength (including outposted staff and lent positions) in resident missions rose from 710 at the end of 2014 to 781 as of 31 July 2016. 5. Other operational efficiency measures. ADB is working to improve several business and administrative processes to cut costs and shorten decision-making timelines. In 2016, the ADB Board of Directors approved several measures to simplify documentation and review requirements for various products, as well as streamline approval processes.
B. Enhancing Internal Capacity
6. Human resources. ADB must have a strong mix of high performing and high potential staff with skills aligned to future needs of clients. Reforms to strengthen human resource capacity cover three core activities: talent management, skills audit, and workforce and workload analyses. The assessments of skills and workloads underpin staffing reforms that 1 ADB. 2014. Midterm Review of Strategy 2020 Action Plan. Manila.
2 Actions not implemented are information technology (IT) systems improvement such as information technology
system for cofinanced operations, cloud collaboration, and shared file space for collaborative work. These will be included in Real-Time ADB initiative.
Appendix 4 47
reflect the human resource changes currently needed, as well as those required in the medium term to deliver on ADB’s expanded lending capacity. Measures are being undertaken to support the delegation of authority to resident missions by strengthening staff and implementation capacity. ADB is also focusing on fragile and conflict-affected situations, which are recipients of concessional assistance. 7. Information technology. In 2016, ADB has completed the simplification of eOperations, a system that tracks project processing and implementation information. Several other reforms have been initiated to improve information technology (IT) capacity, including (i) the introduction of the client portal to facilitate faster disbursements; and (ii) the development of an end-to-end procurement review system to track the timelines for procurement decision-making. Efforts are ongoing to provide better IT services in resident missions. Early successes include increased internet capacity through the use of local providers and wireless connectivity in resident missions. Other proposed reforms include enhancement of the current mainframe and the introduction of applications to track the use of all trust fund and cofinancing facilities. C. Responding to the Changing Business Environment
8. Financial resources. To remain relevant in a competitive development financing landscape, ADB needs a certain scale of operations. A groundbreaking measure successfully completed in May 2015 is the combination of the Asian Development Fund’s equity and lending operations with the ordinary capital resources balance sheet, effective in January 2017. According to baseline scenarios, this can raise ADB’s annual financing commitments by up to 40% on aggregate and by up to 70% in the poorer countries during 2017–2026. ADB is developing a sound project pipeline that can be supported by this strong lending capacity. As a result of these efforts, lending reached record levels in 2016. Reforms that will help achieve ambitious cofinancing targets and enhance public–private partnerships are also being implemented. 9. Private sector operations. ADB seeks to improve the flexibility of private sector operations and develop innovative products offerings for such operations. Most of the first-generation of reforms in this area have been completed. Key measures include the introduction of an economic capital planning model to improve resource allocations to ADB’s Private Sector Operations Department and provide greater flexibility in the planning process, and streamlining procedures to speed up the approvals of small and highly developmental projects. Other reforms include improvements to risk transfers and local currency solutions, and enhancement to ADB’s guarantees. Further measures will be needed to cement these gains and achieve ambitious corporate targets. 10. Knowledge management. These measures, part of the Finance++ initiatives,3 will help ADB respond to the changing needs of clients, particularly middle-income countries. Key actions already undertaken include a realignment of the knowledge departments and the reconfiguration and strengthening of sector and thematic practice groups. The reconfigured practice groups have a mandate to provide (i) strategic operational support, including upstream support to complex and innovative projects; (ii) knowledge management and knowledge sharing, including forging global partnerships with centers of excellence; and (iii) human resource and talent management support, including staff recruitment and sharing.
3 Finance++ refers to combination of ADB's own finance and leveraging resources through partnership as well as
providing knowledge to developing member countries to maximize and accelerate development effectiveness.
48 Appendix 4
D. Sharpening Strategic and Operational Focus
11. Operational and action plans. ADB is preparing operational and action plans to guide operations in priority sectors. The operational plans for social protection, health, agriculture and natural resources, and inclusive business have been approved. Work on the operational and action plans for the finance sector, regional cooperation and integration, and capacity development is under way. In place of the information and communication technology plan, as envisaged under the midterm review action plan, an analytical paper providing inputs towards the preparation of Strategy 2030 has been prepared. 12. Operational resource targets. Efforts are ongoing to expand ADB lending in selected areas (including education, health, regional cooperation and integration, clean energy, and agriculture) in line with the targets in the midterm review action plan. Projections show that almost all targets are expected to be met, although more work is needed to meet the health sector target of 3%–5% of total financing. 13. Engagement with middle-income countries. An approach for ADB’s engagement with upper middle-income countries was developed in 2015 under the midterm review action plan. ADB plans to engage with them strategically as clients, active contributors to regional development, and important collaborators and partners. 14. ADB has taken significant steps to implement the internal reforms agreed under the midterm review action plan. Some of these reforms are already showing positive results. The action plan is a change platform, rather than a check-list of actions, and reforms are an evolving process. Additional reforms will be considered over time, and the current reforms will be adjusted in response to implementation experience and changing business needs.
Appendix 5 49
PORTFOLIO ACTIONS PROPOSED BY ADB’S REGIONAL DEPARTMENTS, 2016
The following are the committed actions of the regional departments for 2016: Central and West Asia Department
(i) Pay greater attention to project design improvements before project approvals. (ii) Proactively collaborate within the department and with other support offices and/or
departments to sustain capacity assistance to executing and/or implementing agencies on better understanding of the Asian Development Bank (ADB) procedures and requirements.
(iii) Improve headquarters project review missions to align with planned country portfolio review or tripartite portfolio review missions led by resident missions to facilitate greater sector-focused review during country-level discussions.
(iv) Strengthen joint venture arrangement with greater attention to sector-focused portfolio management.
(v) Ensure each executing agency deploys an international procurement specialist for the project management and/or implementation unit to improve the quality and speed of bid evaluations. Also, continue making efforts in simplifying and expediting the process of government’s approvals of procurement documents.
East Asia Department
(i) Monitor service standards on disbursements and ensure strong coordination between People’s Republic of China (PRC) Resident Mission and sector division.
(ii) Enforce the project readiness criteria and undertake pre-implementation arrangements, particularly on procurement and safeguards, especially approval of first bidding documents and revised resettlement plans, in parallel with loan signing and effectiveness.
(iii) Delegate procurement review of headquarters-administered projects to PRC resident mission procurement unit to support the low capacity of executing and/or implementing agencies at the county level.
(iv) Increase project delegation to PRC and Mongolia resident missions. (v) Monitor procurement milestones and strengthen contract management. (vi) Ensure timely recruitment of consultants, and implementation of land acquisition and
resettlement. (vii) Engage national procurement officers as mission members during project preparation,
and enhance the procurement capacity of executing and/or implementing agencies.
Pacific Department (i) Continue to implement the Pacific Project Implementation Action Plan. (ii) Encourage the use of project design advance for category A projects. Enhance project
readiness at the project concept stage and complete project readiness checklist before seeking project approval.
(iii) Implement regional capacity development technical assistance (TA) to (a) provide capacity building programs for executing agency staff, (b) deploy on-the-job problem solving teams to rapidly assist executing agencies, (c) support portfolio management activities and business opportunity seminars, and (d) introduce a new business process with “one consultant for one project” approach.
(iv) Establish a monitoring framework to track and report on progress in improving project performance.
50 Appendix 5
South Asia Department (i) Delegate 65% of project administration to resident missions. Implement the delegation
plan for the India and Bangladesh resident missions. (ii) Reduce the active TA portfolio to 150 TA projects, and undisbursed TA amount by
20%. (iii) Establish TA (project preparation) facility. (iv) Reduce overall procurement lead time by 50%. (v) Deliver larger projects with better procurement packaging. (vi) Increase Procurement Accreditation Skills Scheme accreditation to 50% of project
administration unit staff in all units with project (infrastructure) investments. (vii) Achieve 100% procurement readiness and fine-tune the project readiness compliance
form with more stringent procurement and other readiness requirements.
Southeast Asia Department (i) Accelerate outposting of staff. (ii) Continue dialogue with developing member countries to strengthen official
development assistance management and increase readiness to shift to country systems.
(iii) Transfer 40 projects from headquarters to resident missions as part of the Midterm Review of Strategy 2020 Action Plan.1
(iv) Provide additional resources in resident missions targeted for additional project delegation to increase project administration, procurement, disbursement, safeguards, and financial management capacity.
(v) Strengthen resident mission and headquarters divisions’ teamwork as “One ADB” by linking processing and administration teams, and by facilitating greater dialogue and exchange of lessons and experiences through sector focal point network groups.
(vi) Make greater effort to comply with readiness filters, and strengthen advance actions.
1 ADB. 2014. Midterm Review of Strategy 2020 Action Plan. Manila.
Appendix 6 51
UPDATE ON MIDTERM REVIEW PROCUREMENT ACTIONS (10-POINT ACTION PLAN) IMPLEMENTATION AND PROCUREMENT REFORMS
1. New procurement risk assessments. Eight country assessments have been completed: Bangladesh, Cambodia, Fiji, India (power grid), Indonesia, Pakistan, Timor-Leste, and Viet Nam. Five are currently under review: Lao People’s Democratic Republic, Myanmar, Nepal, Sri Lanka, and Tajikistan. Twenty country assessments are to be initiated.1 2. New international competitive bidding thresholds. The revised international competitive bidding thresholds have been adopted by 26 members of the Asian Development Bank (ADB). 3. New prior review limits and post review (sampling). New risk-based prior review limits are available for all ongoing and new projects (42 projects have adopted these since September 2014). In March 2015, the ADB Board of Directors approved the amendments to ADB’s Procurement Guidelines in April 2015 for mainstreaming e-procurement and post review (sampling).2 Five projects in 4 countries (Cambodia, India, Indonesia, and Sri Lanka) have adopted post review (sampling). 4. New procurement committee and regional department procurement decision-making authorities. The revised decision-making authorities are in effect and have delivered significant efficiency gains. In 2015, 184 approvals of contracts exceeding $10 million benefited from these improvements. 5. Project procurement classification. In 2015, 41 projects were classified as category A (complex), or those requiring specialized procurement support from ADB’s Operation Services and Financial Management Department (OSFMD) during project processing. 6. Launch of full procurement review system. This information technology-based review system was launched on 1 January 2015 for transactions of $10 million or more, and 559 transactions were using the system (from 2015 to April 2016). 7. Agreed master bidding documents during project preparation. To facilitate smoother implementation and greater consistency during the bidding process by the executing agencies, 31 projects have adopted master bidding documents. 8. New streamlined procurement committee process. Six senior staff have been outposted to resident missions in Bangladesh, India, People’s Republic of China, Pakistan, Uzbekistan, and Viet Nam with delegated authority to sign off on transactions up to $40 million on behalf of OSFMD directors. In addition, four OSFMD staff provide exclusive support to the front offices of Central and West Asia Department, Pacific Department, South Asia Department, and Southeast Asia Department. This has resulted in decreasing the procurement turnaround time from the receipt of a borrower’s recommendation to ADB until approval from 58 days in 2014 to 49 days in 2015 (for contracts exceeding $10 million). Two outpostings will be fielded in the India Resident Mission and the Pacific Subregional Office in 2016.
1 Procurement risk assessments will be initiated for the following countries: Afghanistan, People’s Republic of China,
Cook Islands, Kazakhstan, Kiribati, Marshall Islands, Federated States of Micronesia, Mongolia, Nauru, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, Uzbekistan, and Vanuatu; as well as India (Karnataka, Rajasthan, and the National Highways Authority of India).
2 ADB. 2015. Procurement Guidelines. Manila. Available: http://www.adb.org/sites/default/files/institutional-
document/31482/procurement-guidelines-april-2015.pdf
52 Appendix 6
9. New procurement approval form. All procurement submissions are made using an electronic template for simpler and streamlined data entry by regional departments directly into the procurement review system. 10. Consulting Services Reforms. The Consulting Services Unit and the position of head of consulting services were established on 1 April 2015. All consulting services functions were streamlined under a single reporting structure to (i) lead reform efforts, (ii) strengthen direction on policy reform, (iii) streamline decision making, and (iv) ensure greater consistency of advice by OSFMD on consulting services.
Appendix 7 53
WORKFORCE ANALYSIS
A. 2015 Workforce Analysis: Update on Implementation of its Findings
1. The Asian Development Bank (ADB) undertook a comprehensive bank-wide workforce analysis in 2015. For the first time, the workforce analysis covered all operational, direct operational support, and indirect operational support departments. Through recall surveys, focus group discussions, and meetings with experienced mission leaders, the workforce analysis established a database on staff time use and derived staff-time coefficients depicting the time required to undertake major departmental outputs. Combined with the available databases on operational pipelines and implementation portfolio of project, program, and technical assistance (TA), the staff-time coefficients were able to assess the staffing requirements for the Work Program and Budget Framework (WPBF), 2016–2018. 2. The findings of the 2015 workforce analysis indicated that scaling up of operations would require additional staff resources. For 2016–2018, the base case scale-up scenario would require about 290 additional staff, while the stronger pipeline scenario would require 430. The workforce analysis also noted substantial scope for staff optimization, including through measures such as redeployment of staff and/or positions, conversion of administrative assistant positions to analyst positions, operations efficiency improvements, and delegation of projects and programs to large and medium-size resident missions. The potential for additional optimization gains was identified if staff making limited contributions were separated and their positions deployed for priority needs. The workforce analysis estimated that staff optimization measures could offset the need for as many as 160 new staff positions, which would reduce the net need for new staff positions to 130 for the base case and 270 for the stronger pipeline scenarios (Table A7). Moreover, the 2015 workforce analysis also advocated for a more strategic and flexible position management system.
Table A7: 2015 Workforce Analysis Findings on Staffing Requirements for 2016–2018 (no. of staff)
Scenario 2016 2017 and 2018 Total
IS/NS ASa IS/NS AS
a IS/NS AS
a All %
Base case Gross Requirements 76 36 104 74 180 110 290 Requirements Met through
Optimization 40 20 50 50 90 70 160 55
Net Requirements 36 16 54 24 90 40 130 45 Stronger Pipeline
Gross Requirements 88 48 192 102 280 150 430 Requirements Met through
Optimization 40 20 50 50 90 70 160 37
Net Requirements 48 28 142 52 190 80 270 63 AS = administrative staff, IS/NS = international staff and national staff, no. = number. a Reference is to analyst.
Source: Asian Development Bank estimates.
B. Meeting 2016 Staffing Requirements
3. New staff positions and optimization. A two-pronged staffing strategy was adopted for 2016: (i) “optimize first” for the departments with potential to benefit from redeployment of staff and positions, and (ii) “new positions” for departments and resident missions with limited potential to benefit from the redeployments.
54 Appendix 7
4. Staff optimization. Implementation of optimization measures started in 2015 and is being pursued vigorously. Progress against individual targets for 2016 is on track with full-year achievements expected to meet or exceed the targets for 2016. Noteworthy achievements include the following:
(i) Redeployment. As of end August 2016, 14 international staff and national staff and/or positions had been redeployed across the operations departments, and 16 international staff and national staff and/or positions had been redeployed to other divisions or resident missions within their original operational departments. In addition, four international staff and national staff positions had been redeployed to the Office of Anticorruption and Integrity to strengthen the integrity due diligence of sovereign and nonsovereign operations, the Sustainable Development and Climate Change Department to strengthen Climate Change and Disaster Risk Management, and to the Office of Administrative Services to head the Procurement and Contracts Administration Unit. Although targets had not been set for redeployment of administrative staff (analyst) positions, 21 administrative staff (analyst) positions have been redeployed across departments and another 4 to other divisions or resident missions within their original operational departments. Moreover, 17 administrative staff (administrative) positions were converted to administrative staff (analyst) positions, exceeding the target of 15 for 2016.
(ii) Delegation of project. The delegation of projects and programs to medium-
sized and large resident missions is also on track; 38 projects and programs have been delegated, exceeding the target of 30. Delegation of some projects to small resident missions is in addition to these.
(iii) Operational efficiency measures. Operational efficiency measures approved
as part of the Operational Efficiency paper are either being implemented or in the process of being rolled out. The full impact of these efficiency measures will be realized in 2017 when they are expected to offset the need for up to 40 staff.
(iv) Early separation program. Optimization measures also include an early
separation program and deployment of the freed up positions for the priority needs. The program was approved in third quarter of 2016 after a comprehensive design phase. Implementation is ongoing and is expected to be completed in 2016, following which deployment of vacated positions will be initiated.
5. New positions. New positions provided through the 2016 budget were mainly for supporting nonsovereign operations (Private Sector Operations Department, Office of Risk Management, Office of Public–Private Partnership, Office of the General Counsel, and Operations Services and Financial Management Department) and strengthening resident missions. Of the 52 new positions provided, 18 were international staff, 18 were national staff, and 16 were administrative staff (analysts). 6. Augmented staff resources. Through redeployments and new positions, priority departments were able to substantially augment their needs for additional staff. As of the end of August 2016, the operations, direct operations support, and priority indirect operations support departments had received 91 positions (52 new and 39 redeployed), of which 54 were international and national staff positions and another 37 were administrative staff positions
Appendix 7 55
(Figure A7.1). Of the augmented capacity, 45 international staff and national staff and 18 administrative staff positions are based at the headquarters; 9 international staff and national staff and 19 administrative staff positions are in resident missions (Figure A7.2).
Figure A7.1: Department Breakdown of Augmented Staff Capacity in 2016 through Redeployeda and New Positions, as of end August 2016
(no. of staff)
AS = administrative staff, IS = international staff, no. = number, NS = national staff, OPPP = Office of Public–Private Partnership, PSOD = Private Sector Operations Department. a Excludes redeployments across the divisions but within the original departments.
Source: Asian Development Bank estimates.
Figure A7.2: Location Breakdown of Augmented Staff Capacity in 2016 through Redeployeda and New Positions, as of end August 2016
(no. of staff)
AS = administrative staff, IS = international staff, no. = number, NS = national staff. a Excludes redeployments across the divisions but within the original departments.
Source: Asian Development Bank estimates. 7. Realignment of staff positions within departments allowed for additional capacity augmentation for the divisions and resident missions with heavy workloads. As of the end of August 2016, 16 international staff and national staff positions and 4 administrative staff
0
20
40
60
80
100
RegionalDepartments
PSOD OPPP Direct OperationsSupport
Others All
IS and NS (New) AS (New) IS and NS (Optimization) AS (Optimization)no. of staff
0
20
40
60
80
100
Headquarters Resident Missions All
IS and NS (New) AS (New) IS and NS (Optimization) AS (Optimization)
no. of staff
56 Appendix 7
positions had been converted and redeployed within the departments. Capacity will be augmented further once the positions freed up through the early separation program are deployed for priority needs. C. Improvements in the Workforce Planning and Management.
8. A key finding of the 2015 workforce analysis was the need for improvements in the current system of workforce planning and management. The most significant recommendations included (i) introducing a strategic workforce planning framework, informed by an annual workforce analysis; and (ii) improving the headcount and position management systems.
(i) Strategic workforce planning framework and workforce analysis. Substantial progress has been made in introducing a strategic workforce planning framework. Strategic departmental staffing plans—a key component of the strategic workforce planning framework—are being rolled out. As a basis for analyzing the medium-term staffing requirements, the workforce analysis has been mainstreamed as an annual exercise. As work on various human resource reforms proceeds, the plans will be developed further to encompass other workforce-related aspects such as career management, mobility, and succession planning.
(ii) Headcount and position management system. ADB plans to shift from a fixed
headcount management system to a dynamic headcount management system to introduce more flexibility. Under the proposed system, the headcount ceilings will be determined and adjusted periodically based on the budget allocation and utilization. The proposed change will streamline the conversion of positions from one staff category to another. Currently, the conversions are constrained by the fixed headcount ceilings within the individual categories. Moreover, the proposed change will allow for advance recruitments and advance onboarding of staff for the following year, in case of low budget utilization in a given year. The proposed changes will also allow for smoother transitions between outgoing and incoming staff by allowing overlaps and will provide a basis for batch recruitments. The proposed improvements are being finalized and are expected to be in place by the end of 2016.
D. 2016 Workforce Analysis
Approach and Methodology 1.
9. The approach and methodology is consistent with that used in the 2015 exercise. For the operations departments and direct operations support departments, staff-time coefficients were used to estimate the staffing requirements for key operational deliverables, including projects, programs, TA, and country programming. For the 2015 exercise, staff-time coefficients for processing roles for projects, programs, and TA were based on the ideal requirements and adjusted for the country category (Groups A, B, and C, as well as fragile and conflict-affected situations).1 On the other hand, staff-time coefficients for implementation roles for the projects, programs, and TA were based on the average staff time that is being allocated. Realizing that
1 Each financing modality represents a different level of effort for processing and implementation. As such,
coefficients were developed for each major financing modality, including investment projects, sector projects, multitranche financing facilities, sector development programs, policy-based loans, and results based loans.
Appendix 7 57
the average coefficients for implementation could underrepresent the actual implementation needs, the coefficients used for 2016 workforce analysis provide for (i) additional implementation focus on the ongoing projects in their first 3 years of implementation, and (ii) additional implementation requirements for projects and programs in the pipeline for 2017–2019 approval. 10. For nonoperational outputs, data on trends in the individual department’s deliverables and staffing requirements for their major outputs was collected and analyzed. Over time, the collected data will help establish a 3-year benchmark for major nonoperational outputs.
Key Findings 2.
11. Operations are projected to grow at a higher trajectory. As discussed in the main text of this document, operations are envisaged to grow at a higher growth trajectory than was envisaged by the WPBF, 2016–2018 base case scenario. The annual number of projects and programs for approval in 2018–2019 will average about 54% higher than in 2015 and about 17% higher than envisaged by the WPBF, 2016–2018 base case scenario for 2018. All the regional departments have stronger pipelines: the Central and West Asia Department’s pipeline of projects and programs is 24% higher, by number, than the WPBF, 2016–2018 base case for 2018; the East Asia Department’s is 8% higher; the Pacific Department’s is 53% higher; the South Asia Department’s is 8% higher; and the Southeast Asia Department’s is 21% higher (Figure A7.3). Growth in operational pipelines is most significant for the Pacific Department and Central and West Asia Department, both of which already had high levels of workload in 2014 and under the 2016–2018 base case scenario. Higher growth trajectory also has direct implications on the workload of direct operations support departments, such as Controller’s Department, Economic Research and Regional Cooperation Department, Office of the General Counsel, Operations Services and Financial Management Department, and Sustainable Development and Climate Change Department.
Figure A7.3: Comparison of Operational Pipelines: WPBF, 2016–2018 Base Case versus WPBF, 2017–2019
(no. of projects)
CWRD = Central and West Asia Department, EARD = East Asia Department, no. = number, PARD = Pacific Department, SARD = South Asia Department, SERD = Southeast Asia Department, WPBF = work program and budget framework. Source: Asian Development Bank estimates.
0
50
100
150
200
2017 (WPBF, 2016–2018
Base Case)
2017 (WPBF, 2017–2019)
2018 (WPBF, 2016–2018
Base Case)
2018 (WPBF, 2017–2019)
CWRD EARD PARD SARD SERD PSOD
58 Appendix 7
12. Workload-staffing imbalances have significantly declined. The 2015 workforce analysis had found that some sector divisions in the operations departments had high processing workloads relative to available staffing, while others had relatively lighter workloads relative to available staffing. An analysis of the 2014 project and program processing workload indicated an average workload of 0.28 projects and programs per international staff, with 8 sector divisions above the average and 11 below the average. An ideal processing workload would have been 0.33 projects and programs per international staff, i.e., on average an international staff would process a project or program every 3 years.2 The analysis had found that 15 sector divisions were below and 9 sector divisions were higher than the ideal workload, which indicated scope for rebalancing the resources between sector divisions. 13. An analysis of the 2017–2019 operational pipelines indicates a significant increase in the processing workload for all sector divisions in the regional departments, the result of scaling up in the operations and staff optimization. Operational pipelines indicate that without an influx of additional staff positions, there will be a substantial level of stress across the regional departments. Analysis indicates that the average workload of 21 sector divisions is expected to exceed the ideal workload, with 6 of the sector divisions reporting workload to be double that of the ideal level. At the same time, only 4 of the sector divisions are expected to have processing workload of less than the ideal workload (Figure A7.4). This suggests modest scope for meeting the scaling up requirements through redeployment of positions and/or staff from these divisions. Furthermore, all the sector divisions with lighter workloads are in departments that have other sector divisions with workloads exceeding the ideal level, which indicates that any excess capacity can be absorbed within the concerned departments.
Figure A7.4: Processing Workload for Sector Divisions in Regional Departments, 2017–2019
(no. of projects and programs per international staff position)
no. = number. Source: Asian Development Bank estimates.
2 The first year is for implementing and guiding the work of TA consultants for feasibility studies and project and
program design. The second year is for finalizing project design and project and program processing. The third year is for inception and initial implementation activities, including awarding of consultant and contractor contracts.
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0.50
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0.70
0.80
0.90
A B C D E F G H I J K L M N O P Q R S T U V W X Y
Average Annual Workload for 2017-2019 2014 Average Workload Desired Workload
Appendix 7 59
14. Improved focus on implementation quality may not be possible without additional staff resources. The 2016 workforce analysis found that most sector divisions with substantial project and program implementation workloads also have high project and program processing workloads. Of the sector divisions with a higher implementation workload per international staff, 12 also have processing workloads exceeding 0.4 projects and programs per international staff (Figure A7.5 [bars depicted in red]). While low contract award and disbursement ratios can be caused by a range of factors, a sector division is likely to have difficulty improving its implementation performance, when the demand for new projects and programs from developing member countries for their staff is also high. 15. Another indicator that may help gauge the level of implementation workload is the frequency and average length of the project review missions. In 2015, sector divisions fielded an average of 1.45 review missions per project and program in their portfolio, which is understandable given the desired frequency of two review missions in a project’s first 3 years of implementation, and one review mission in later years. However, the average length of the review missions have been short—an average of 4 international staff days for all types of missions, with 5 days for inception missions, and 6 days for midterm review missions. While the need for longer project review missions at critical stages such as inception and midterm review are desirable, lengthening such missions may be difficult to manage without the availability of additional staff resources in the concerned divisions.
16. Implementation workload of nonsovereign operations is another area of concern where portfolio is to grow by 34% between 2016 and 2019 in numbers. Without additional staff positions dedicated to implementation roles, workload is likewise expected to increase, when current ratio of 16 projects per international staff position is already high. Workload stress is further compounded by high vacancy and turnover ratios in the Private Sector Operations Department.
Figure A7.5: Implementation Workload for Sector Divisions in Regional Departments, as of end June 2016
(no. of projects and programs per international staff position)
no. = number. Note: Dotted red bars depict the sector divisions that have high processing workload. Source: Asian Development Bank estimates.
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0.20
0.40
0.60
0.80
1.00
1.20
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1.80
A B C D E F G H I J K L M N O P Q R S T U V W X Y
60 Appendix 8
OPPORTUNITIES FOR SAVINGS AND EFFICIENCY
1. The Asian Development Bank (ADB) has met its operations targets with minimal increases in resources in recent years, demonstrating resource efficiency and cost effectivity. In addition, the combination of the Asian Development Fund lending operations and the ordinary capital resources balance sheet in 2017 is viewed as an innovation that will vastly improve ADB’s efficient use of financial resources. 2. While striving to maintain this momentum in efficiency, ADB needs to adequately resource itself to deliver the 2017–2019 work program and institutional priorities. ADB envisages several reforms to generate savings and promote efficiency during the 2017–2019 planning period. 3. Information technology reforms. The Real-Time ADB program includes the automation, simplification, and integration of key systems including those for nonsovereign and sovereign operations, financial management (treasury, risk management, and donor fund management), institutional procurement, and human resources. This will be supported by modern knowledge management and collaboration tools; faster and easier to use reports and dashboards; increased organizational resiliency through cloud and mobility services that allow staff to work anywhere, anytime, and from any device; stronger cybersecurity; improved information technology services; and support to the field offices. These reforms are projected to (i) drive greater agility and mobility, (ii) improve collaboration, (iii) elevate data quality and consistency, (iv) replace manual processes, (v) reduce heavy reliance on paperwork, (vi) increase resiliency, and (vii) reduce operational risk. Productivity and efficiency gains will be reflected in resource savings and cost avoidance across ADB after the initial investment and stabilization phases of these reforms. For example, automation through nonsovereign operations system is expected to result in cost savings equivalent to 27 full time staff over the next 5 years, and the new institutional procurement system is expected to reduce transaction costs through standardization, streamlining and automation. 4. Business travel. ADB has reduced business travel costs since the introduction of 2014 business travel reform. Effective 2017, ADB will further streamline business travel processing through a policy update and enhancement of the system. About 1,000 working days of staff time are estimated to be saved. Areas for future review in the medium term include corporate credit card and other payment solutions, as well as simplification of the daily subsistence allowance scheme. 5. Operational efficiency. ADB rolled out enhanced operational efficiency initiatives1 and reforms in the country partnership strategy2 in 2016—all with elements of simplified and streamlined business processes, and delegated decision making. ADB’s Operations Manual and Project Administration Instructions are being updated to reflect these changes. Board document templates are being tailored to provide more focus, clarity, and brevity for a range of ADB’s financing modalities. The savings from the efficiency measures approved in 2015 helped to moderate volume growth. Savings from the new efficiency measures (i.e., technical assistance [TA] reforms and an initiative to mitigate the bunching of projects at the end of the year) are estimated to offset foreseen budgetary pressures of the WPBF, 2017–2019.
1 ADB. 2015. Enhancing Operational Efficiency of the Asian Development Bank. Manila
2 ADB. 2015. Reforming the Country Partnership Strategy. Manila
Appendix 8 61
6. Procurement reforms. Implementation of the 10-point procurement reform action plan under the midterm review has given encouraging results. Ten country risk assessments have been completed. Twenty six developing member countries have adopted the revised thresholds for international competitive bidding. The New Procurement Committee and regional department decision authorities have been implemented by all regional departments. The information technology-based procurement review system has been mainstreamed with 272 transactions already using it in 2016. Post review (sampling) has been adopted in 5 projects in 4 countries. Forty seven projects were classified as Category ‘A’ for “hands on” support by procurement specialists. Thirty two projects have adopted master bidding documents. Recruitment time for TA consulting firms has reduced from 263 days in 2014 to 237 days in 2015. The overall time for procurement decision has come down by 16% in the first 6 months of 2016 and time taken by ADB has reduced by 28%. ADB is now working on the second phase of procurement reforms which is likely to further reduce total procurement time, enhance quality and improve delivery systems. 7. Knowledge management. Knowledge underpins all ADB’s operations. ADB’s tacit knowledge includes the skills, ideas and experiences of ADB staff. Tacit knowledge is further developed and shared through daily interactions with DMCs, and is reflected in the assistance that ADB provides. ADB will also deliver specific knowledge products and services which are tangible components of ADB's knowledge work and able to be counted. ADB is working to substantially improve knowledge solutions for its developing member countries. The sector and thematic groups strengthen ADB’s partnerships with centers of excellence, promote sharing of knowledge, and provide technical inputs and advice to operations departments. Nonoperations departments such as the Office of Anticorruption and Integrity, Office of the General Counsel, Office of Risk Management, Operations Services and Financial Management Department, and Treasury Department are expected to contribute to knowledge sharing in their specific areas of expertise. ADB introduced reporting guidelines for knowledge products and services in 2016. The guidelines focus on five types of knowledge products and services, i.e., flagships, technical studies, working papers, policy briefs, and op-eds. ADB will be selective in recognizing knowledge products and services as flagships, and will identify measures to reduce printed publications as it pursues a “digital first” approach to sharing knowledge. 8. Enhanced budget planning and management. To improve budget planning and resource management, ADB in July 2016 started implementing measures to enhance the flexibility of budgetary resources and increase transparency and accountability of resource use by user departments.3
(i) Enhanced budget management flexibility. In July 2016, ADB rolled out enhanced budget management flexibility measures, which empowered business units by delegating authority to transfer budget funds between and across select expense items. This provides added fungibility among budget items and allows business units to reallocate savings promptly to priority activities, ensuring efficient execution and optimal use of budgetary resources.
(ii) Incentives for better budget planning. ADB is introducing further incentives to departments for prudent budget planning and efficient use of resources. The incentive measures are (a) reporting budget utilization status by department for increased transparency and accountability, (b) recognizing departments with good budget planning and performance relative to their work programs, and
3 Reference to departments include offices.
62 Appendix 8
(c) shortening the accrual period for staff consultant costs. More realistic budget estimates and less variance between budget and actual spending are envisaged.
(iii) Improved budget management information systems. Since May 2016, an
automated departmental budget utilization status report from the budget monitoring and control system is sent to the heads of departments and budget coordinators monthly and quarterly. Such notifications increase managerial awareness. ADB is further refining and upgrading the user interface, accessibility, and reporting capability of the budget monitoring and control system to expedite Management’s decision making on resources allocation, deployment, and monitoring.
9. Time management system. About 62% of ADB’s internal administrative expenses are staff related. The time management system offers a valuable automated management tool when properly structured for monitoring, analyzing, and optimizing use the of staff resources. ADB intends to enhance the system to align it with the workforce analysis activity categories, replacing periodic staff time surveys, and enable real-time monitoring and tracking of staff time spent by major activity. The system input requirements will be simplified with a view to roll out the enhanced system across ADB in 2017. 10. These improvements reflect a significant institutional effort to prepare for a higher and more efficient level of operations by using staff time more productively and elevating service quality.
Appendix 9 63
INDICATIVE WORK PROGRAM: SUMMARY OF SELECTED DELIVERABLES
Key Outputs
2016 2017 Average
2018–2019
A. New Projects Amount ($ million) 17,680 18,715 19,965 No. of Approvals 158 179 185
Public Sector Operationsa
Amount ($ million) 15,080 15,815 16,615 No. of Approvals 127 145 146
Private Sector Operations Amount ($ million) 2,600 2,900 3,350 No. of Approvals 31 34 39
1. Investment Projects Amount ($ million) 12,939 14,256 14,811 No. of Approvals 122 149 148
2. Policy-Based Lending Amount ($ million) 2,737 3,273 2,466 No. of Approvals 18 17 20
3. Results-Based Lending Amount ($ million) 1,491 700 1,338 No. of Approvals 6 2 5
4. Sector Development Programs Amount ($ million) 279 451 1,330 No. of Approvals 4 5 12
5. Project Design Advance Amount ($ million) 23 9 5 No. of Approvals 5 3 1
6. Technical Assistance Loans Amount ($ million) 211 26 15 No. of Approvals 3 3 1
B. Multitranche Financing Facilities 1. Facilities
Amount ($ million) 7,841 7,070 7,229 No. of Approvals 10 13 15
2. Periodic Financing Requests Amount ($ million) 4,110 4,912 5,215 No. of Approvals 23 29 35
C. Portfolio Management 1. Ongoing Projects at Year-End (no.) 878 947 1,062
Regional Departments 684 731 813 Private Sector Operations Department 194 216 249
2. Contract Awards ($ million) 9,361 10,400 11,200 3. Disbursements ($ million) 12,128 12,800 14,000 4. Project Completion Reports (no.) 55 77 87
D. Cofinancing Operations ($ million) 12,300 14,300 17,550
64 Appendix 9
Key Outputs
2016 2017 Average
2018–2019
E. Technical Assistance Operations Portfolio (no.) 901 861 788 New Approvals ($ million) 375 420 437 No. of New Approvals 310 296 176 1. Transaction
c 170 143 77
2. Knowledge and Supportd 140 153 99
F. Transaction Advisory Services (no.) 1. New Mandates 4 4 3 2. Mandates under Implementation 5 9 11
G. Knowledge Products (no.)e 651 455 247
1. Regional Departments 408 225 79 2. Other Departments 243 230 168
H. Country and Regional Strategies and Operations Business Plans (no.)
1. Country Partnership and Regional Cooperation Strategies
7 11 5
2. Country and Regional Operation Business Plans 41 39 38
no. = number. Note: The indicative work program is as of 30 June 2016. It will be revisited during preparation of the staff’s annual results-based work plans. a
Includes periodic financing requests but not multitranche financing facilities. b Refers to the proportion of projects administered by resident missions.
c Transaction technical assistance (TA) is directly related to loan, guarantee, equity investment, or transactional
advisory service operations of the Asian Development Bank (ADB). It is used to (i) prepare projects that ADB intends to finance under its sovereign and nonsovereign operations, (ii) deliver outputs or mitigate the risks that are identified in the design and monitoring framework of an ongoing ADB-financed or ADB-administered project, or (iii) develop public–private partnerships under transaction advisory services.
d Knowledge and support TA indirectly support ADB-financed operations.
e Using new typology introduced in April 2016. This appendix reports the five types of knowledge products:
flagship, technical studies, working papers, policy briefs, and op-ed articles. Figures include knowledge products and services funded by TA and not funded by TA.
Source: Asian Development Bank estimates.
