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ASIAN DEVELOPMENT BANK
Operations Evaluation Department
ANNUAL REPORT
ON
LOAN AND TECHNICAL ASSISTANCE PORTFOLIO PERFORMANCE
FOR THE YEAR ENDING 31 DECEMBER 2004
In this electronic file, the report is followed by the Management response.
Annual Report
RPE: OTH 2005-06
Annual Report on Loan and
Technical Assistance Portfolio
Performance for the Year Ending
31 December 2004
July 2005
Operations Evaluation Department
Asian Development Bank
ABBREVIATIONS
ADB – Asian Development Bank
ADF – Asian Development Fund
ADO – Asian Development Outlook
APA/AFS – audited project accounts and agency financial statement
AR – Annual Report on Loan and Technical Assistance Portfolio
Performance
BPMSD – Budget, Personnel, and Management Systems Department, ADB
CAPE – country assistance program evaluation
CFS – complementary financing scheme
COPP – Project Coordination and Procurement Division of COSO, ADB
COSO – Central Operations Services Office, ADB
CPRM – Country Portfolio Review Mission
CSP – country strategy and program
CTL – Controller’s Department, ADB
CTLA – Loan Administration Division of CTL, ADB
DEC – Development Effectiveness Committee, ADB Board of Directors
DFI – development finance institution
DMC – developing member country of ADB
EA – executing agency
ECRD – East and Central Asia Department, ADB
ERD – Economics and Research Department, ADB
ESI – 2005 Environmental Sustainability Index by Yale University
EU – European Union
FMCL – fixed-rate multicurrency loan
FSM – Federated States of Micronesia
GDP – gross domestic product
IA – implementing agency
IEI – innovation and efficiency initiative
ISTS II – Information Systems and Technology Strategy (2004–2009)
Lao PDR – Lao People’s Democratic Republic
LBL – LIBOR-based loan
MBL – Market-based loan
MDG – Millennium Development Goal
MfDR – managing for development results
MIC – middle-income country
MKRD – Mekong Department, ADB
NRT – net resource transfer
OCO – Office of Cofinancing Operations, ADB
OCR – Ordinary Capital Resources
ODA – Official Development Assistance
OED – Operations Evaluation Department, ADB
OGC – Office of the General Counsel
PAI – project administration instructions, ADB
PAM – project administration memorandum
PARD – Pacific Department, ADB
PCR – project completion report
PHCO – Philippines Country Office
PIU – project implementation unit
PNG – Papua New Guinea
ii
PPAR – project performance audit report
PPMS – project performance management system
PPR – project performance report
PRC – Peoples’ Republic of China
PSCL – pool-based single currency loan
PSOD – Private Sector Operations Department, ADB
RD – Regional (or Operations) Department, ADB
RM – resident mission, ADB
RMI – Republic of the Marshall Islands
RRP – report and recommendation of the President (project document)
RSDD – Regional and Sustainable Development Department, ADB
SARD – South Asia Department, ADB
SERD – Southeast Asia Department, ADB
SES – special evaluation study
SME – small and medium enterprises
SOTL – Special Office in Timor-Leste, ADB
SPD – Strategy and Policy Department, ADB
SPRM – South Pacific Regional Mission, ADB (Vanuatu)
SPRU – Results Management Unit of SPD, ADB
SPSO – South Pacific Subregional Mission, ADB (Fiji)
TA – technical assistance (ADB grant-funded project)
TCR – technical assistance completion report
TPAR – technical assistance performance audit report
TPR – technical assistance performance report
UN – United Nations
NOTE
In this report, "$" refers to US Dollar.
Director General, Operations Evaluation Department : Bruce Murray
Director, Operations Evaluation Division 1 : R. Keith Leonard
Report Preparation Team Leader : Henry G. Tucker
Operations Evaluation Department
CONTENTS
Executive Summary iii
I. INTRODUCTION 1
II. PORTFOLIO STATISTICS 5
A. Historical Perspective 5
1. Public Sector Operations 6
2. Private Sector Operations 7
B. Public Sector Loan Portfolio 7
1. Portfolio Structure at Year-end 7
2. OCR and ADF Loan Approvals 9
3. Loan Closures and Extensions 18
4. Net Resource Transfers 21
C. Private Sector Portfolio 28
D. Technical Assistance 29
1. The TA Portfolio 29
2. TA Approvals 30
3. TA Closures 32
4. Distribution of TA among DMCs 32
III. PORTFOLIO PERFORMANCE 34
A. Public Sector Portfolio 34
1. Project Performance Report Ratings 34
2. Start-up Indicators 35
3. Contract Awards and Commitments 41
4. Loan Disbursements 44
5. Program Loan Tranche Releases 46
6. Cancellation of Surplus Loan Amounts 47
7. Cost Overruns, and Changes in Scope and Implementation Arrangements 50
8. Audited Project Accounts and Agency Financial Statements 51
9. Project Administration Missions 53
10. Proactivity Index 57
11. Project and Program Completion Reports 57
12. Delegation of Loan Administration to Resident Missions 59
B. Private Sector Portfolio 61
C. Technical Assistance Portfolio 65
1. Portfolio Performance Indicators 65
2. TA Implementation Missions 66
3. TA Completion Reports 68
Henry G. Tucker, senior portfolio evaluation specialist (team leader), was responsible for the
preparation of this report. Additional research support was provided by Ma. Rosa Ortega,
evaluation officer; Ma. Olivia Nuestro, evaluation officer; Christine Infantado, portfolio evaluation
officer; Brian Q. Cafirma, evaluation assistant; and Valerie Pacardo, consultant.
The guidelines formally adopted by the Operations Evaluation Department (OED) on avoiding
conflict of interest in its independent evaluations were observed in the preparation of this report.
To the knowledge of the management of OED, there were no conflicts of interest of the persons
preparing, reviewing, or approving this report.
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IV. STUDIES 71
A. Review of ADB’s Project Frameworks 72
B. Study of Project Cost Estimates 75
1. Introduction 75
2. Discussion 75
3. Conclusion 78
C. Study of the Role of Project Implementation Units 78
1. Background 78
2. Discussion 79
3. Conclusions and Recommendations 81
D. Indications of Premature Board Consideration of Loans 82
1. Introduction 82
2. Discussion 82
3. Conclusions 84
E. Reversing the Decline in ADB’s Relevance as a Development Partner 85
1. The MIC/OCR Partnership Framework 85
2. ADB’s Reform Agenda 86
3. Portfolio Analysis 87
V. CONCLUSIONS AND RECOMMENDATIONS 89
A. Summary of Main Findings 89
1. Public Sector Loan Portfolio 89
2. Technical Assistance Portfolio 93
3. Private Sector Portfolio 94
4. General Conclusions 94
B. Recommendations 95
1. Board Consideration of Loans 95
2. Loan Administration 96
3. The Growing TA Portfolio 96
4. Sector Selectivity and Focus in the CSPs 97
5. Project Monitoring and Evaluation 97
APPENDICES
1. Historical ADB Lending (OCR & ADF) 99
2. Loans Approved 104
3. Status of Program Loan Tranche Releases 107
4. Cancellation of Surplus Loan Proceeds 114
5. Loans with Cost Overruns, Changes in Scope & Implementation Arrangements 118
6. Country Portfolio Performance, by DMC and RD 121
Attachment: Management Response on the Annual Report on Loan and Technical
Assistance Portfolio Performance for the Year Ending 31 December 2004
iii
EXECUTIVE SUMMARY
This is the fourth Annual Report on Loan and Technical Assistance Portfolio
Performance prepared by the Operations Evaluation Department (OED) of the Asian
Development Bank (ADB). The report presents data from operations during 2004. Trend
analyses in most instances have been extended from the 5 years used in previous Annual
Reports to cover the decade 1995–2004.
The portfolio analyses are generally consistent with the findings of other recent and
ongoing efforts, including the consultation missions for the partnership framework for middle
income/ordinary capital resources (MIC/OCR) countries, the findings of the independent
assessment of the effectiveness of the reorganization of the ADB, and the work under the
innovation and efficiency initiative (IEI). The portfolio analyses show that
• there is stagnation in OCR loan approvals;
• there are persistent delays in project implementation;
• there is a growing problem with year-end bunching for loan and technical assistance
(TA) approvals as well as project completion reports (PCRs) and technical assistance
completion reports (TCRs);
• OCR project loan disbursements have declined steadily during the past decade;
• many developing member countries (DMCs) are finding it difficult to meet the conditions
for program loan tranche releases;
• ADB lending is heavily concentrated in a few DMCs—Bangladesh, the People’s
Republic of China (PRC), India, Indonesia, the Republic of Korea, Pakistan, the
Philippines and Thailand together have received 83% of the total;
• in response to falling interest rates, during the past 3 years a few large borrowers have
been prepaying their older and relatively expensive OCR loans;
• the OCR loan prepayments have resulted in negative net resource transfers (NRTs)
from ADB to the DMCs; and
• OCR income fell by 43% during 2001–2004.
These broad trends all support the contention that ADB’s traditional lending products
and systems no longer meet many of the needs of its key clients. The MIC/OCR countries have
clearly indicated the need for more flexibility from ADB with regard to (i) the allocation of loan
and TA resources; (ii) the types of lending instruments offered; (iii) the application of loan
commitment fees, interest rates and repayment periods; (iv) the use of country systems;
(v) the application of various policies and procedures associated with the poverty reduction
strategy, safeguards, etc.; and (vi) addressing the growing demand for support to the private
sector. Unless ADB can address these issues by developing new products and procedures to
meet the DMCs’ development needs, ADB will be threatened with losing relevance as the
premier development institution in the Asia and Pacific Region.
Effective loan administration and good portfolio management are essential for ADB to
fulfill its development mandate. Up to 20% of the ongoing loans and 75% of the ongoing TAs
went without a review mission during 2004. This finding supports the contention of some DMCs
that ADB does not allocate sufficient staff and other resources to project administration. It is also
consistent with the recommendations of the Independent Assessment Panel regarding ADB’s
reorganization in January 2002, and of the MIC/OCR countries that ADB needs to rebuild
following its loss of in-house technical expertise in many sectors by creating positions for senior
sector and technical experts in the Regional Departments (RDs).
iv
Public Sector Loan Portfolio
Loans under Implementation. At year-end 2004, the public sector loan portfolio
comprised 491 ongoing loans providing $32.6 billion in financing (net of cancellations) for
415 projects and programs. This is marginally lower than the 502 loans at year-end 2003 and
marginally higher than the average of 482 loans at year-end during the decade 1995–2004.
The average loan age at year-end 2004 was 3.3 years, compared to 3.4–3.7 years during the
previous 9 years. Overall, the number of loans under implementation has remained fairly
constant during the past decade.
Loan Approvals. During the decade, annual OCR investment loan approvals ranged
from $2.2 to $3.6 billion. The 3-year moving average shows an extended dip in approvals during
the middle of the decade, and recent approvals have been slightly lower than they were at the
start of the decade. There was a wider variation in the annual OCR program loan approvals
which ranged from $0.25 to $4.7 billion. The level of program lending during 2003–2004 was
2.3 times what it was during 1995–1996. The spike in program lending in 1997 reflected the
substantial assistance that ADB provided to help the countries affected by the Asian financial
crisis. The annual Asian Development Fund (ADF) investment loan approvals also exhibited a
relatively wide variation from $0.87 to $1.47 billion, and the trend was similar to that for OCR.
Annual ADF program lending ranged from $75 to $402 million, and the average annual
approvals for the second half of the decade were roughly twice those for the first half. If the
increase in new lending during the Asian financial crisis is factored out, combined OCR and
ADF loan approvals remained stagnant throughout the decade at about $5.2 billion per year.
The upper limit to ADF lending is not under ADB’s control, but depends on the amount of
resources committed by donors during the periodic replenishments. However, substantial
financial headroom is available for ADB to increase OCR lending. The fact that this has not
happened can be explained in large part by (i) the limited demand for OCR loans under the
current conditions, and (ii) ADB’s limited capacity to process new loans.
Effectivity Delays. The average delays in declaring loans effective increased by
44% from 183 days in 1995 to 263 days in 2004. The delays for project loans were longer,
increasing from 191 days in 1995 to 285 days in 2004, while the delays for program loans were
shorter, but still tripled from 50 days in 1995 to 152 days in 2004. This implies that projects are
being brought to the Board for consideration too early. To reduce start-up delays, the RDs
should increase the application of the project readiness filters, and a project-readiness checklist
should be included with the documentation submitted to request approval for loan negotiations.
Bunching. During 2000–2004, 71%–80% of the annual public sector loan approvals
occurred during the fourth quarter, and 36%–51% were approved in December. Also during
2000–2004, 45%–62% of TAs were approved during the fourth quarter. In 2004, 75% of all
public sector loans were approved during the fourth quarter, and 47% during the month of
December. Fourth-quarter loans approved during 1996–2001 required an average of
1.2 months longer to advance from approval to effectivity, and 2.8 months longer to advance
from approval to the first consulting contract, than did projects approved during the rest of the
year. Similarly, 15.5% of the projects approved during the fourth quarter were rated “at risk”
during implementation as compared to 9.5% of the projects approved during the rest of the year.
The evidence suggests that excessive bunching results in some loans being less ready for
implementation. However, various statistical analyses have shown that the sector, type of loan
(project or program), and country are better predictors of success than the quarter of loan
approval. Actions that should help to alleviate bunching include the shifting of ADF allocations to
a biennial cycle, and the proposal to introduce a multiyear cycle for TA allocations.
v
Changes in Project Scope and Implementation Arrangements. The incidence of
changes in project scope and/or implementation arrangements has been relatively steady for
the past decade. The only significant deviation occurred during 2004, when the number of
projects requiring a major change in implementation arrangements jumped to more than twice
the average of the previous 9 years. The incidence of cost overruns remains low, with only
3 projects affected during 2004.
Project Administration. Despite a 34% increase in ADB professional staff from 642 at
end-1995 to 860 at end-2004, the annual number of project administration missions has been
decreasing since 1998. During 2004, up to 20% of the ongoing loan projects were not visited by
a review mission, despite the policy that every project will be reviewed for at least 5 days per
year, and that problem projects be reviewed for at least 10 days per year. However, for those
projects that were reviewed, the average number of missions per project reached a high of
about 1.8 during 2004. During 1998–2001 about 9,000 person-days per year were spent on
project administration missions, and this increased to about 10,000 person-days per year during
2002–2004. The composition of person-days on mission in 2004 was 48% international staff,
21% national officers, 19% administrative staff, and 12% consultants. The increasing delegation
of project administration to the Resident Missions (RMs) and the proposal to start adopting
country systems in the more advanced DMCs and sectors may reduce the need for review
missions from headquarters.
Loans Closed. During the decade, 675 loans were closed, of which 13 (2%) were
terminated after approval but before implementation. Seventy loans were closed during 2004.
Loan Extensions. Delays in project and program implementation are the rule rather
than the exception. Despite nearly four decades of experience, ADB is not able to accurately
forecast the time required to implement projects and programs. More than 86% of the loans
closed during the decade required at least one extension to the loan closing date. More than
60% of the loans had to be extended by more than one year to complete their implementation.
The average extension for the 58 loans that were fully implemented before being closed in 2004
was nearly 2 years. While there are always risks and uncertainties attendant on forecasting
events, the high probability that ADB projects will face significant implementation delays
suggests that ADB needs to change the way it prepares implementation schedules. The critical
path method should be adopted as a tool to prepare realistic project implementation schedules,
to track implementation progress, and to determine the need for extensions to loan closing
dates. The proposed introduction of new lending instruments, such as the multitranche financing
facility, should also reduce the present practice of developing unrealistically short project
implementation schedules.
Project Performance. The project performance report (PPR) is a key document in
ADB’s portfolio management system. The PPR is meant to be updated at least quarterly, and
also after every review mission. It tracks information regarding implementation progress (largely
through input indicators) and the likelihood of achieving the stated development objectives
(indirectly through monitoring the validity of project assumptions and the mitigation of risks). It
also serves as a journal to record problems encountered during implementation, and the actions
taken to resolve them. According to the PPR, the proportion of projects whose performance was
rated satisfactory or better increased from about 78% during 1998–2001 to 86% during
2002–2004. However, OED considers that the current PPR format is deficient in that it does not
track project outputs. There also may be disincentives that discourage staff from reporting some
implementation problems in the PPR. Only 70% of the projects for which PCRs were prepared
during 2001–2004, and only 67% of the projects for which project performance audit reports
vi
(PPARs) were prepared, were rated satisfactory or better. This finding suggests that the PPR
does not capture some of the important factors related to measuring project success. The PPR
system will be upgraded to address these issues under the Information Systems and
Technology Strategy (2004–2009) (ISTS II).
Cancellations. Annual OCR loan cancellations increased from 12% of principal during
1997–2000 to 16% during 2001–2004. ADF loan cancellations averaged 9% for the entire
period. Cancellations exceeded 20% of the approved loan amount for 21% of the loans with
cancellations during 2004. The relatively high rate of cancellations suggests that (i) more
attention is needed to develop more accurate cost estimates during project preparation,
(ii) borrowers have incentives to reduce the project scope or to find alternative lower-cost
financing especially for older and more expensive OCR loans, and (iii) the increasing complexity
of many projects makes them more difficult to implement and that leads to cancellations.
Disbursements and Tranche Releases. Total loan disbursements during 2004 were
$3.45 billion, down for the second straight year and at their lowest level for the decade.
At 17.7%, the disbursement ratio was at its lowest since the beginning of the Asian financial
crisis, indicating that the large, short-term increase in lending and disbursements was no longer
affecting this key portfolio indicator. The backlog of delayed program loan tranche releases
reached a high of $1.24 billion in 2004. The fact that 26 of 31 (84%) of the delayed releases
were for second or third tranches, the oldest dating back to 2001, suggests that while the DMCs
initially committed to the agreed reforms, they subsequently found them difficult to complete or
lost interest in following through, either due to internal resistance or to unrealistic conditions of
the loan. This implies that one or more of the following factors may be at work: (i) DMCs may
lack ownership of and commitment to the reform agenda, (ii) the reform agenda may be overly
complex and ambitious, and (iii) the time and effort required to implement the reform program
may have been underestimated. Delayed program loan tranche releases have exceeded
$1 billion for several years, suggesting that ADB, like other donors, should reexamine the way in
which conditionalities are used.
Net Resource Transfers and Income from Loans. The voluntary prepayment of
$10.5 billion in OCR loans by 5 DMCs during 2002–2004 resulted in a total NRT from ADB to all
DMCs of minus $8.7 billion. Another negative NRT is expected during 2005, due in large part to
the scheduled repayment of $1.7 billion from the Republic of Korea against the $4 billion
emergency program loan made in 1997. Otherwise, prepayments are expected to taper off.
Using cheaper funds to refinance expensive ADB loans is sound financial management on the
part of the DMCs. The large OCR prepayments and stagnant OCR lending levels resulted in a
43% reduction in income from loans (from $1.81 billion to $1.04 billion), and a 38% drop in
ADB’s gross annual income (from $2.24 billion to $1.38 billion) from 2001 to 2004. Given the
current low market interest rates, and the time it takes to realize income from new lending,
ADB’s reduced income levels will persist in the medium to long term. The fall in ADB’s income
will reduce the amounts available to finance the ADF and TA funds, and to transfer funds to
financial reserves.
Summary. The overall picture that emerges from the analysis of the public sector loan
portfolio is not encouraging. Loan approvals increased temporarily during the Asian financial
crisis but have since returned to roughly the same level as a decade ago, and the same is true
of disbursements. The 43% reduction in ADB’s income is likely to persist for many years due to
the current low interest rates and the lack of growth in OCR lending. In addition, ADB’s largest
borrowers have expressed their dissatisfaction with the current menu of loan products, and are
demanding new products with lower transactions costs that will better meet their needs. The fact
vii
that about one fifth of the active loans were not reviewed during 2004, and that international
staff are spending less time reviewing projects in the field, suggests that inadequate attention is
being paid to project administration. Some of ADB’s largest borrowers have expressed
dissatisfaction with ADB’s lack of in-house technical expertise to support many of the projects
funded. And the PPR system appears to seriously underestimate the numbers of problem
projects and projects at risk when compared to the findings of PCRs and PPARs.
The results of the portfolio analyses indicate that ADB needs to take action to improve its
products and services or risk becoming less relevant in the region. A number of actions to
address this issue are being proposed under the IEI.
Private Sector Operations
At year-end 2004, ADB’s total exposure from its private sector operations was at a
record high of $1.46 billion, comprising $485 million (33%) in equity investments, $655 million
(45%) in loans, and $323 million (22%) in guarantees. The first currency swap was also agreed
during 2004 in the amount of $200 million. Infrastructure projects dominate the portfolio in
monetary terms at 51%; followed by funds and capital markets at 22%; financial projects at
18%; and agriculture, marketing and other projects at 9%. Private sector project approvals were
at low during 2001. Since then the trends in annual project approvals, disbursements,
repayments, and divestments have been generally positive, reaching highs during 2004. The
portfolio was performing fairly well at year-end 2004, with 82% of the projects by amount of
exposure and 73% by number given a risk rating of satisfactory or better, while the remainder of
the portfolio was rated from marginal to loss. The calls from the MIC/OCR countries for an
increase in ADB’s private sector operations deserve serious consideration, although this will
require more human resources. Growth in private sector lending also has risk management
implications. The Independent Assessment Panel of the 2002 reorganization recommended
separating the Risk Management Unit from the Private Sector Department. ADB is expected to
take action on this recommendation during 2005.
Technical Assistance Grant Portfolio
At year-end 2004, advisory TAs dominated the portfolio (55% by number and 58% by
cost), followed by regional TAs (25% by number and 13% by cost), and project preparatory TAs
(20% by number and 29% by cost). The performance of about 81% of the ongoing TAs was
rated as satisfactory or better in the TA Performance Report (TPR), while 16% were rated partly
satisfactory, and 3% were rated either unsatisfactory or incomplete. The operations
departments received 86% of the 2004 TA budget, including all of the project preparatory TAs,
while the non-operations departments received 14%, almost entirely for regional TAs.
During the decade 1995–2004, annual TA approvals ranged from a low of 243 in 1998 to
a high of 323 in 2002 and 2004. The total number of ongoing TAs in the portfolio increased by
53% from 663 in 1998 to 1,016 in 2004, while the net amount of the TA portfolio increased by
42% from $485 million to $687 million. There are indications that the TA portfolio growth has
exceeded ADB’s capacity to manage it effectively. The proportion of TAs visited by a review
mission has fallen steadily each year from a high of 66% in 1998 to a low of 25% in 2004. And
despite the significant growth in the TA portfolio, the average annual number of staff days on TA
review missions remained about the same during 1998–2004.
The low level of TA review missions reported in the TPR system during 2004 is cause for
concern. The following may be among the reasons for the low figure: (i) an increase in the
viii
number of small-scale TAs, which require fewer review missions; (ii) an occasional lack of
reporting when a TA is reviewed during a loan administration mission; (iii) unrecorded support
provided by resident missions; and (iv) constraints on staff due to over-programming their
available time. Action is necessary to improve the situation, especially given the recent
proliferation of targeted TA funds provided by other donors for ADB administration. ADB has a
responsibility to manage those funds well.
The recent significant increase in the number of active TAs appears to have been partly
supply driven. The growth of the TA portfolio has exceeded the availability of human resources
in ADB for its proper administration. This situation needs to be addressed by carefully balancing
the processing of new TAs with the availability of staff and other resources that will be needed
for their administration. This should result in a reduction in the number of TAs approved,
because it is unlikely that staff resources will be increased in the short term.
Recommendations
Following is a summary of OED’s recommendations for Management consideration.
They are based on the findings of this portfolio performance review as presented in Chapter V.
1. Timing of Board Consideration of Loans. The significant bunching problem and the
increasingly long periods needed for loans to become effective suggest that some loans
are brought to the Board prematurely. Management needs to change ADB’s incentives
structures, both formal and informal, so that staff will focus on project quality and
achieving development results rather than on having a loan approved during a particular
calendar year. During 2005–2006 Management should (i) add a checklist of the project
readiness filters listed in Project Administration Instruction 1.01 to the documentation
submitted for authorization for loan negotiations, to show which of the readiness filters
have and have not been applied to the loan in question; and (ii) require the
RDs/divisions to submit quarterly status reports to Management and the Board regarding
key project start-up indicators for each loan, including the length of time taken from loan
approval to signing, effectiveness, first disbursement and first consulting contract.
2. Loan Administration. Management should formally recognize that project
administration is as important as project preparation. During 2005–2006, the managing-
for-development-results (MfDR) agenda should be expanded to include specific activities
to improve loan administration and portfolio management. This will involve taking action
to address the issue of ADB’s loss of technical skills in the RDs, increasing staff
coefficients for project supervision, delegating more projects to the RMs consistent with
staffing capacity, and ensuring that each RM has a sector specialist for each sector in
which ADB is substantially engaged. A study to assess the technical strength of the RDs
will be undertaken in the second half of 2005 to follow up on the recommendations of the
Independent Assessment Panel that examined ADB’s reorganization in 2002. As part of
that study, the Budget, Personnel, and Management Systems Department (BPMSD) and
the RDs should clearly define the human resource needs to administer the current and
projected loan and TA portfolios over the next decade, and make explicit provisions in
the 2006–2008 work program and budget framework for adequate staff and resources
for loan and TA administration. Part of this study should assess whether increased use
could be made of country systems and more authority and accountability for loan
administration could be delegated in cases where project performance has been good.
This approach could allow ADB to redeploy limited staff resources to other sectors and
countries where performance problems have been experienced.
ix
3. Managing the TA Portfolio. Indicators show that the TA portfolio has expanded beyond
ADB’s capacity to manage it effectively and ensure that development results are
achieved. The Strategy and Policy Department (SPD) should address the following
questions in their ongoing review of the TA policy: (i) Are stricter limits are needed on the
number new TA approvals to ensure that they will be effectively managed? (ii) What
should division directors do to ensure that complete and accurate information is entered
into the TPR? (iii) What steps should be taken to improve the analytical content of TCRs
and their focus on development results?
4. Sector Selectivity and Focus in the Country Strategy and Program (CSP).
Directions from Management in the 2006–2008 planning directions state that country
assistance programs will be more focused. Greater selectivity and prioritization should
help to improve portfolio quality and ADB’s development impact. The DMCs with the
least-focused portfolios are the transition economies in Central Asia and the Mekong
region. During the early stage of their transition to a market economy they required
broad-based support from the donor community to advance the development process.
However, ADB has been operating in most of these countries for more than a decade.
The RDs need to look for opportunities to focus on fewer sectors when preparing their
next CSP.
5. Project Monitoring and Evaluation. The PPR is the primary tool for identifying problem
projects and projects “at risk”. However, the disparity between the PPR ratings and the
PCR and PPAR ratings casts doubt on the accuracy of the PPR ratings. Major upgrades
to the PPR will be made during the planned implementation of ISTS II from late 2006 to
mid-2008. In the interim, the following actions should be considered to improve the
quality of information that is available to help guide portfolio management decisions:
(i) The regional vice-presidents and regional directors general should issue a clear
statement that the PPR is a project management tool and not just a reporting
mechanism, and that mission leaders must record implementation problems in the PPR
as they arise so that timely remedial action can be taken. (ii) The directors of sector
divisions should ensure that the “Problems” and “Actions Taken” boxes are accurately
filled in each PPR update. (iii) OED will undertake a selective evaluation of the
information included in the PPRs during 2006.
Bruce Murray
Director General
Operations Evaluation Department
I. INTRODUCTION
1. This is the fourth year that the Operations Evaluation Department (OED) has prepared
the Annual Report (AR) on Loan and Technical Assistance Portfolio Performance for the
Development Effectiveness Committee (DEC) of the Board of Directors of the Asian
Development Bank (ADB). The AR 2004 utilizes data compiled primarily by the Project
Coordination and Procurement Division (COPP) of the Central Operations Services Office
(COSO), as well as data from the Controller’s Department (CTL), the Economics and Research
Department (ERD), the Private Sector Operations Department (PSOD), and other sources both
in ADB and external.
2. On 7 July 2004, the DEC met with OED staff to discuss the AR 2003. In its own Annual
Report that was circulated on 30 September 2004 (Sec.M95-04), the DEC requested OED to
monitor actions taken on all of the recommendations in the AR 2003, and prioritized the
following 9 recommendations for Management action:
(i) Management should give very high priority to pilot testing annual reporting on the
production of outputs against projections in selected sectors, which would then
evolve into a results-based performance measure.
(ii) The reasons for the large, overall, negative net resource transfers from ADB to
developing member countries (DMCs) in 2002 and 2003 should be analyzed on a
country basis, to identify corrective action where appropriate.
(iii) In the light of the persistently excessive loan effectiveness delays, the project-
readiness criteria should graduate from being advisory to mandatory.
(iv) Measures of development effectiveness should be specified for private sector
operations during design and monitored during implementation.
(v) The process of delegation to resident missions should be accelerated with
contingent actions, including transfer of resources from headquarters as
appropriate.
(vi) OED should focus a future evaluation on the development effectiveness of
advisory technical assistance (TA).
(vii) More flexibility should be allowed in budget and staff resource reallocation, both
within and across departments, so that projects flagged as being at risk get extra
supervision.
(viii) Project preparatory TA should prepare critical path analyses, and the project
management software used to conduct the critical path analyses should be used
routinely during project implementation.
(ix) ADB and the DMCs should review the conditions and processes they follow, and
increase flexibility in order to speed up processes, lower transactions costs, and
customize responses while not prejudicing development outcomes or good
governance principles.
2
3. A summary of the recommendations from the AR 2003 and the actions taken is provided
in the matrix on the following pages.
4. The rest of this report provides detail on the current status of the loan and technical
assistance portfolios, and on actions taken to implement the recommendations of the AR 2003.
Section II provides information on the size and composition of the loan and TA portfolios at
31 December 2004, the changes in the portfolios that occurred during 2004, and trends in the
portfolios since 1995. Section III presents the results of analyses of portfolio performance.
Section IV discusses several issues related to portfolio performance. Section V contains a
summary of the more important issues that arose from the analyses, and OED’s conclusions
and recommendations regarding those issues. Detailed data additional to that presented in text
tables are provided in Appendixes 1–5; and country-specific data are provided in Appendix 6.
Recommendations from AR 2003 Party Actions Observed
1. ♦ The principal recommendation in the AR 2003 was to pilot test COSO Pilot testing of reporting on the production of outputs against projections has
annual reporting on the production of outputs against projections, & RDs not been carried out to date.
according to standard output classes.
2. Enhance the quality of data in the project frameworks and the RDs BPHR, COPP, and OED cooperated in providing training workshops on the
PPRs. preparation of project frameworks throughout 2004. A study conducted by
OED showed that the quality of frameworks for loan projects improved
substantially during 2000–2004, although frameworks for TAs still are
generally inadequate.
3. Change the criteria and means of determining project ratings in COSO The criteria and means of determining project ratings in the PPR have not yet
the PPR: been updated. The PPR system will be revised and improved as part of the
(i) the criteria for satisfactory, partly satisfactory, and information systems and technology strategy (2004–2009) implementation
unsatisfactory ratings tend to be too accepting of poor from 2006 to 2008.
performance;
(ii) measuring the likelihood of achieving a project’s
development objectives solely by assessing the degree to
which the project framework assumptions are valid and risks
are effectively mitigated, has not worked;
(iii) the PPR currently has no links to important project
documents, such as mission back-to-office report, or to any
graphics showing implementation progress or the production
of outputs.
4. ♦ Make project implementation schedules more realistic by RDs Critical path analysis was not required or used during project preparation
requiring the use of the critical path method during project during 2004.
preparation.
5. ♦ Apply the project readiness criteria more stringently. Resolving RDs Project and program start-up delays are continuing to increase, and the
the loan approval “bunching” problem may also contribute to bunching problem persists. The application of the project-readiness filters in
solving the problem of a lack of project readiness. Project Administration Instruction (PAI) 1.01 remains voluntary.
6. Ensure that surplus loan amounts are cancelled in a timely RDs Loan cancellations are discussed in Section III.A.6. Annual cancellations have
manner. increased to more than 15% of principal per year during the past 4 years.
During 2004, the 61% of cancellations made at loan closing amounted to
12.6% of the approved loan amounts, suggesting that in some cases
cancellations could have been made earlier.
7. ♦ Examine the reasons for the trend to reduced net resource OED An explanation of the large, negative net resource transfers during 2002–2004
transfers. is provided in Section II.B.4. They were due to prepayments of relatively
expensive OCR loans by 5 DMCs, and are expected to continue during 2005,
although at a lower level.
♦ Indicates that the recommendation was prioritized in the DEC’s Annual Report of 30 September 2004.
3
2
4
Recommendations from AR 2003 Party Actions Observed
8. ♦ Provide more flexibility to direct staff and budgets to projects RDs As discussed in Sections III.A.9 and III.C.2, there has been a steadily declining
identified as being at risk. trend in the number of projects reviewed each year—during 2004, up to 20%
of projects and 75% of TAs were not reviewed in the field, and the time spent
by international professional staff on mission has also decreased.
9. A more flexible approach to cost estimation is needed.
10. All RMs could usefully adopt the close tracking and follow-up of RDs,
audit compliance used by the Indonesia RM (among others) to RMs
improve full compliance with the submission of audited project
accounts. Flexibility in determining the due date for compliance
should be removed. This should be a fixed 6 months after the end
of the financial year.
11. ♦ Measures of development effectiveness should be specified for PSOD Efforts to improve the quality of the evaluation of private sector operations
private sector operations during design and monitored during began in 2004 with OED's engagement of a consultant to draft appropriate
implementation. guidelines based primarily on the Good Practice Standards of the Evaluation
Cooperation Group. The consultant has been working with PSOD to improve
the quality of its self-evaluation, particularly in assessing the development
outcome of its operations.
12. ♦ The process of delegation to RMs should be accelerated RDs The number of loans delegated to RMs increased by 43% during 2004, to a
high of 137 at year-end.
13. The country portfolio review process should be improved by RDs
requiring briefer, and more problem- and issue-oriented
background papers, greater participation by headquarters project
staff, more high-level participation by ADB, visiting of selected
problem projects to help illustrate or better understand the
reasons for systemic problems, and more discussion of
development objectives.
14. Further improvement in the management of the TA portfolio COPP, The TPR system is now fully functional; but a more output- or results-based
should be actively pursued. The introduction of the TPR should RDs, focus is still needed. The 37% drop in the number of TAs reviewed in the field
greatly assist in this but a more strategic and results-based focus Offices from 2003 to 2004, and the rapidly growing TA portfolio suggest the need for
to TA resource allocation is also needed. with immediate action to improve TA administration, and perhaps to limit the
TAs processing of new TAs.
ADB = Asian Development Bank; AR = annual report; BPHR = Human Resources Division of the Budget, Personnel and Management Systems Department;
COSO = Central Operations Services Office; COPP = Project Coordination and Procurement Division of COSO; DEC = Development Effectiveness Committee;
DMC = developing member country; OCR = ordinary capital resources; OED = Operations Evaluation Department; PPR = project performance report;
PSOD = Private Sector Operations Department; RD = regional department; RM = resident mission; TA = Technical Assistance; TPR = technical assistance
performance report.
♦ Indicates that the recommendation was prioritized in the DEC’s Annual Report of 30 September 2004.
5
II. PORTFOLIO STATISTICS
5. This section presents the status of ADB’s public and private sector loan portfolios, and
the public sector TA portfolio as of 31 December 2004. Where appropriate the public sector loan
data are disaggregated by (i) funding source—ordinary capital resources (OCR) or the
concessional Asian Development Fund (ADF); (ii) type of lending—investment project loan or
policy-based program loan; (iii) loan classification—poverty focus, theme, and sector; and
(iv) region and DMC. Private sector data are divided into five types of assistance: equity
investment, loan, guarantee, complementary financing scheme (CFS), and currency swaps.
TA data are disaggregated into advisory TA, project preparatory TA, and regional TA.
6. In conducting the trend analyses, in most cases the time frame has been extended to
10 years (1995–2004), and some graphs show a 3-year moving average that smoothes out the
annual variations and makes the trends more apparent. The structures of the public sector loan
and TA portfolios and the private sector portfolio have been influenced by ADB’s response to
various significant events that occurred during the decade. The first and perhaps the most
influential event was the Asian financial crisis of 1997–1998 that led to ADB and other donors
providing massive financial assistance to certain DMCs, including Indonesia, Republic of Korea,
and Thailand. Another highly influential series of events began with the terrorist attack on the
World Trade Center and the Pentagon on 11 September 2001, and has continued with the
ensuing war on terrorism. Those events have resulted in significant increases in aid provided,
especially to Pakistan and Afghanistan. The Indian Ocean tsunami of 26 December 2004 is a
more recent significant event that is having an impact on the portfolios during 2005, especially
with regard to ADF grants and TAs provided to Indonesia and Sri Lanka.
A. Historical Perspective
7. The list of ADB’s DMCs has grown by more than 160% from 16 when ADB was founded
in 1966 to 42 as of 31 December 2004 (Appendix 1, Table A1–4). Each DMC is assigned to
one of four categories that define what types of lending are available to it—OCR loans at
Libor-based rates, ADF loans at highly concessional rates, or a mix of both (Table 1).1 The
DMCs are also eligible to receive TA grants for a variety of purposes. Of the 42 DMCs, Palau as
a new member has not yet been assigned to a borrower category and has received no loans,
and two other new DMCs, Turkmenistan and Timor-Leste, also have yet to receive their first
loan. Four former borrowers—Hong Kong, China; Republic of Korea; Singapore; and
Taipei,China—have “graduated” from ADB assistance and are no longer eligible to borrow. Two
DMCs—Myanmar and Nauru—are currently in default on their loan payments and, therefore,
temporarily ineligible to receive additional loans. Thus, the list of potentially active DMC
borrowers at the close of 2004 included 36 DMCs, of which 20 or 56% had loans approved
during 2004.
8. As of 31 December 2004, ADB had approved a total of 2,041 public sector loans worth
$108 billion for 39 DMCs (Appendix 1), of which 74 loans worth $4.95 billion were approved for
20 DMCs during 2004. Similarly, ADB had approved a total of 4,440 TA grants worth
$2.07 billion, of which 323 TA grants worth $197 million were approved during 2004. And for
private sector operations, ADB had also approved $915 million in equity investments,
$1,911 million in loans, $591 million in guarantees, $636 million in CFS, and $200 million in
currency swaps for a total of $4,253 million in financing for 175 projects. Private sector
1
DMCs are divided into four categories: A—entitled to borrow ADF only; B1—entitled to borrow primarily ADF with
some OCR; B2—entitled to borrow primarily OCR with some ADF; and C—entitled to borrow OCR only.
6
approvals during 2004 were $185 million in equity investments for 12 projects, $347 million in
loans for 6 projects, $75 million in guarantees for 2 projects, and a currency swap of
$200 million.
9. In total, 29 of 36 eligible DMCs (81%) have borrowed from ADB during the past 5 years,
but loan disbursements were made to 30 DMCs during 2004.2
Table 1: ADB Borrower Classifications
Category Eligibility No. Borrowersa
Unassigned 1 Palau
A ADF only 16 Afghanistan, Bhutan, Cambodia, Kiribati, Kyrgyz
Republic, Lao People’s Democratic Republic,
Maldives, Mongolia, Myanmar, Nepal, Samoa,
Solomon Islands, Tajikistan, Timor-Leste, Tuvalu,
Vanuatu
B1 ADF with some 9 Azerbaijan, Bangladesh, Cook Islands, Federated
OCR States of Micronesia, Pakistan, Republic of the
Marshall Islands, Sri Lanka, Tonga, Viet Nam
B2 OCR with some 5 People’s Republic of China, India, Indonesia,
ADF Nauru, Papua New Guinea
C OCR only 7 Fiji Islands, Kazakhstan, Malaysia, Philippines,
Thailand, Turkmenistan, Uzbekistan
Graduated None 4 Hong Kong, China; Republic of Korea; Singapore;
and Taipei,China
Total 42
ADB = Asian Development Bank; ADF = Asian Development Fund; OCR = ordinary capital resources.
a
The 20 DMCs listed in bold received loans in 2004.
Source: Asian Development Bank management information systems.
1. Public Sector Operations
10. ADB’s total public sector OCR and ADF loan approvals from 1966 through year-end
2004 are presented in Appendix 1, Tables A1–1 to A1–5. Of the 2,035 loans worth
$108.4 billion that have been approved for 39 DMCs, OCR lending comprised 975 OCR loans
worth $78.2 billion made to 24 DMCs, plus 2 regional loans worth $122 million; and ADF lending
comprised 1,045 loans worth $29.7 billion made to 33 DMCs, plus 13 regional loans worth
$300 million. Of the 39 DMC borrowers, 18 have received both OCR and ADF loans, 6 have
received only OCR loans and 15 have received only ADF loans. The 3 DMCs that have not yet
received any loans joined ADB between 2000 and 2003.
11. Historically, OCR lending has been concentrated on a few relatively large DMCs out of
the 27 that are or have been eligible—just 3 DMCs (PRC, India, and Indonesia) have received
60% of the approved OCR lending, and the top 7 DMCs have received 93%, while 3 eligible
DMCs (Cook Islands, Tonga, and Turkmenistan) have yet to receive any OCR loans. ADF
lending also has been concentrated on relatively few of the 36 DMCs that have been eligible at
some time—just 3 DMCs (Bangladesh, Pakistan, and Sri Lanka) have received nearly 56% of
the approved ADF lending, and the top 11 DMCs have received more than 90%, while 3 eligible
2
Kiribati, Malaysia, and Thailand were still making withdrawals during 2004 against loans approved prior to 2000;
and Azerbaijan (whose first loan was approved in 2003) and Tonga had no withdrawals during 2004.
7
DMCs (PRC, India, and Nauru) have yet to receive any ADF loans. When OCR and ADF
lending are considered together, just 4 DMCs (PRC, India, Indonesia, and Pakistan) have
received nearly 58% of the loan approvals, and the top 11 DMCS have received nearly 91%,
while the 3 DMCs that have joined ADB since 2000 (Palau, Timor-Leste, and Turkmenistan)
have yet to receive any loans.
12. It may at first seem inequitable that only a few DMCs have received the majority of ADB
lending. However, 80% of the DMCs’ total population live in the 4 DMCs that have received
nearly 58% of the loan amounts approved, and more than 93% of the DMCs’ total population
live in the 11 DMCs that have received nearly 91% of the loan approvals. The distribution of
lending has also been skewed by the differing lengths of time that the various DMCs have been
eligible to borrow from ADB, and by their borrowing category, among other factors. As a result, it
would not be correct to suggest that certain DMCs have been or are now receiving a
disproportionate share of ADB assistance without a much more in-depth examination of the
issue.
2. Private Sector Operations
13. Since ADB started private sector operations, a total of $4.25 billion has been approved
for 175 projects in 16 DMCs, divided among five categories of assistance: equity investments
(21%), loans (45%), guarantees (14%), CFS (15%), and currency swaps (5%). Approvals during
2004 amounted to $807 million for projects in 6 DMCs plus 2 regional projects, and a currency
swap with the Philippines for $200 million. At year-end 2004, ADB’s exposure amounted to
$1.46 billion for 97 projects in 15 DMCs, plus the regional projects.
B. Public Sector Loan Portfolio
1. Portfolio Structure at Year-End
14. At year-end 2004, the public sector loan portfolio comprised 491 ongoing loans providing
$32.6 billion in financing (net of cancellations) for 415 projects and programs, down slightly from
the 502 ongoing loans providing $33.0 billion for 435 projects and programs a year earlier. From
the data in Table 2, several trends are evident in the portfolio structure over the past 10 years.
First, the following changes were brought on by the Asian financial crisis of 1997–1998:
(i) There was a sharp but temporary increase of about 20–30% in the value of the
ongoing OCR loan portfolio during 1997–1999, following which it returned to
roughly its pre-Asian financial crisis level in 2002.
(ii) The portfolio of ongoing program loans stood at about $1.5 billion before the
Asian financial crisis, then increased sharply to $6.0 billion in 1997 and to a
maximum of $9.3 billion in 1999, before leveling off again at about $5.0 billion in
2002.
15. While the size of the OCR loan portfolio fluctuated markedly during the 1995–2004
decade, the ADF portfolio remained fairly stable. By the end of the decade, the increase in
program lending seemed to have stabilized and was offset by a gradual decrease of about 10%
in the projects portfolio. The average loan age and the number of active projects also remained
relatively stable during the decade.
8
Table 2: Year-end Public Sector Portfolio of Ongoing Loans
Year 1995a 1996a 1997a 1998 1999a 2000 2001 2002 2003 2004
A. Number of Loans
OCR 185 207 220 221 226 228 220 209 200 181
ADF 242 251 264 257 253 268 281 296 302 310
Total 427 458 484 478 479 496 501 505 502 491
Project 412 442 458 446 446 458 454 455 449 434
Program 15 16 26 32 33 38 47 50 53 57
Total 427 458 484 478 479 496 501 505 502 491
B. Amount of Loans (Net Loan Amount in $ billion)
OCR 21.0 22.6 27.2 28.3 29.0 24.3 24.3 21.9 21.9 21.4
ADF 10.0 10.3 10.2 10.1 9.7 9.5 9.8 10.4 11.1 11.2
Total 31.0 32.9 37.4 38.4 38.7 33.8 34.1 32.3 33.0 32.6
Project 29.4 31.5 31.5 30.1 29.5 28.0 27.7 27.5 27.9 27.4
Program 1.5 1.4 6.0 8.3 9.3 5.8 6.4 4.8 5.0 5.2
Total 30.9 32.9 37.5 38.4 38.8 33.8 34.1 32.3 32.9 32.6
C. Average Loan Age
Years 3.7 3.5 3.4 3.6 3.7 3.6 3.6 3.5 3.4 3.3
D. Active Projects
Number 404 430 444 435 434 444 443 442 435 415
ADF = Asian Development Fund; OCR = ordinary capital resources.
a
Includes one inactive loan.
Source: Project Coordination and Procurement Division.
16. The trends in the sizes of the OCR and ADF public sector loan portfolios, and in the
distribution of funds between investment projects and program lending, are shown in Figure 1.
The 3-year moving average plotted on each graph is used to smooth out year-to-year variation
in the data and make the underlying trends more visible.
17. The structure of the OCR loan portfolio has fluctuated from year to year and has not
shown a steady trend across the decade. The number of active loans was 185 in 1995,
increased to 228 by 2000, and then fell back to 181 in 2004. The total amount of the portfolio
followed a similar pattern, starting at $21.0 billion in 1995, increasing to $29.0 billion in 1999,
and then declining to $21.4 billion in 2004. The average size of the OCR loans has varied
between $105 million and $128 million with no clear trend.
18. The structure of the ADF loan portfolio has changed only marginally since 1995. While
the number of active ADF loans increased by 28% from 242 in 1995 to 310 in 2004, the total
amount of the portfolio increased by just 12% from $10.0 to $11.2 billion, and the average size
of the ADF loans decreased gradually from about $41 to $36 million.
9
Figure 1: Trends in OCR and ADF Lending, and Project and Program Lending
Year-end Public Sector Loan Portfolio - OCR and ADF
45.0
40.0
35.0
30.0 OCR
$ billion
25.0 ADF
OCR 3-yr moving average
20.0
ADF 3-yr moving average
15.0
10.0
5.0
-
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Year
Year-end Public Sector Loan Portfolio - Projects and Programs
45.0
40.0
35.0
30.0
Project
$ billion
25.0
Program
20.0
Project 3-yr moving average
15.0
Program 3-yr moving average
10.0
5.0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Year
ADF = Asian Development Fund; OCR = ordinary capital resources.
Note: Each of the data points on the graphs shows the average of the annual disbursements for that year plus the
previous 2 years.
2. OCR and ADF Loan Approvals
a. OCR and ADF Loan Approvals, 1995–2004
19. From 2003 to 2004, the number of loans approved dropped from 80 to 74, which was
very close to the average of 75 loans/year since 1995. The total value of the loans approved
also decreased by more than 16% from $5.92 billion in 2003 to $4.95 billion in 2004, which was
about 86% of the average of $5.78 billion/year in loan approvals since 1995. As can be seen in
Table 3 and Figure 2, the 2004 loan approvals were the second lowest in 10 years and only
marginally more than the $4.83 billion approved in 1999. Even if the temporarily inflated loan
10
approvals of 1997–1998 (in response to the Asian financial crisis) are removed from the
calculation, the 2004 figure is still only 93% of the $5.32 billion annual average since 1995.
Table 3: Public Sector Loan Approvals—Annual Numbers and Amounts of
Projects and Programs
Loan Approvals 1995 1996 1997a 1998 a 1999 2000 2001 2002 2003 2004 Total
A. OCR
Projects 28 38 35 26 23 27 18 24 26 20 265
Programs 3 1 5 6 7 6 8 8 7 7 58
Total Number 31 39 40 32 30 33 26 32 33 27 323
Projects 3,463 3,240 3,054 2,354 2,192 2,998 2,723 2,598 3,627 2,890 29,139
Programs 500 250 4,695 2,505 1,570 865 1,217 1,300 912 815 14,629
Total ($ million) 3,963 3,490 7,749 4,859 3,762 3,863 3,940 3,898 4,539 3,705 43,768
B. ADF
Projects 35 38 41 22 28 42 35 44 40 38 363
Programs 2 6 8 5 4 6 11 9 7 9 67
Total Number 37 44 49 27 32 48 46 53 47 47 430
Projects 1,380 1,474 1,438 865 946 1,330 995 1,248 1,152 936 11,764
Programs 75 192 182 123 124 237 366 402 228 306 2,235
Total ($ million) 1,455 1,666 1,620 987 1,070 1,567 1,361 1,650 1,379 1,242 13,997
C. OCR and ADF
Projects 63 76 76 48 51 69 53 68 66 58 628
Programs 5 7 13 11 11 12 19 17 14 16 125
Total Number 68 83 89 59 62 81 72 85 80 74 753
Projects 4,843 4,715 4,492 3,219 3,138 4,329 3,718 3,846 4,778 3,825 40,903
Programs 575 442 4,877 2,628 1,694 1,102 1,583 1,702 1,140 1,121 16,864
Total ($ million) 5,418 5,156 9,369 5,846 4,832 5,431 5,301 5,548 5,918 4,947 57,766
ADF = Asian Development Fund; OCR = ordinary capital resources.
a
OCR program lending increased during 1997–1998 in response to the Asian financial crisis.
Source: Project Coordination and Procurement Division.
Figure 2: Trends in Loan Approvals
5,000
4,500
4,000 OCR Project
3,500 ADF Project
OCR Program
$ million
3,000
ADF Program
2,500
OCR Project MA
2,000
ADF Project MA
1,500 OCR Program MA
1,000 ADF Program MA
500
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Year
ADF = Asian Development Fund; MA = 3-year moving average; OCR = ordinary capital resources.
11
20. Several trends are apparent from the annual data presented in Table 3, and from the
3-year moving averages in Figure 2. First, during the Asian financial crisis of 1997–1998, the
average value of the OCR project loans was the lowest at $88 million, while the average value
of the OCR program loans was the highest at $536 million.3 Subsequently, the average value of
the OCR project loans increased by 49% to $131 million during 2002–2004, while the average
value of the OCR program loans decreased by 75% to $136 million. The trends in ADF loan size
have been the opposite of those for OCR loans. ADF project loans were largest at the beginning
of the decade, averaging about $38 million during 1995–1998, and ADF program loans were the
smallest during the Asian financial crisis, averaging $26 million. However, by 2002–2004 the
average ADF project loan had decreased by 29% to $27 million, while the average ADF
program loan had increased by 42% to $37 million.
21. Over the past decade, the increasing size of OCR project loans generally has reflected
the predominance of lending for large infrastructure and other projects for the largest DMCs,
especially the PRC and India. The decreasing size of OCR program loans has been a
readjustment following the massive use of program lending during the Asian financial crisis.
22. For the past decade, nearly 76% of the total loan approvals have been from OCR and
24% have been from ADF. If the $4 billion Asian financial crisis emergency loan to the Republic
of Korea in 1997 were excluded, then the split would be about 69% OCR and 31% ADF. The
annual figures have varied around the 10-year averages, with OCR accounting for as little as
68% of the approvals in 1996 and as much as 83% in 1998; generally, the ratio of OCR to ADF
loan approvals has been fairly constant at about 7:3.
23. The relatively low level of loan approvals in 2004 by itself is not cause for concern,
because it is still within the normal range of variability. However, it is cause for concern when
considered together with the recent decrease in the size of the OCR loan portfolio, due in part to
the large prepayments of OCR loans during 2002–2004 (see Section II.B.4.). The overall
negative net resource transfer (NRT) from ADB to the DMCs is expected to continue for the
fourth year in a row during 2005. Should new OCR lending continue to decrease, the short- to
medium-term effects would include further reductions in OCR income for ADB that might
negatively affect ADF lending and TA projects, because OCR income helps to finance these
products.
b. Loan Approvals by Major Borrowers
24. Of the 34 DMCs borrowing from ADB during the past decade,4 11 have averaged more
than $100 million in loan approvals per year, as shown in Table 4. The top 5 DMCs for the
decade were the PRC with 20% of the total loan approvals, India with 17%, Indonesia with 16%,
Pakistan with 12%, and Thailand with 4%. The next 6 DMCs accounted for 22% of approvals,
and the last 23 DMCs accounted for just 9%.
25. The loan situation is different when looking only at 2004 (Appendix 2). Compared to the
34 DMCs receiving loans since 1995, only 20 DMCs actually had loans approved in 2004, of
which the PRC received nearly 26% of the total amount, followed by India with 24%, Pakistan
with 14%, and the other 17 DMCs sharing 36% of the total amount.
3
This average is skewed by one exceptionally large program loan of $4 billion to the Republic of Korea.
4
The 34 DMCs do not include the Republic of Korea which, despite having graduated from ADB assistance, had two
emergency loans for $4,015 million approved in 1997 due to the Asian financial crisis. Because of their exceptional
nature, those two loans are not included in Table 4 or in this analysis.
12
Table 4: Public Sector Loan Approvals for DMCs Borrowing More Than $100 Million/Year
($ million)
a
Borrower 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Average
1 PRC 1,201 1,032 656 1,162 1,232 872 997 833 1,488 1,260 1,073
2 India 630 600 563 250 625 1,150 1,500 1,164 1,430 1,200 911
3 Indonesia 1,056 920 1,109 1,836 1,020 800 500 767 262 225 849
4 Pakistan 532 583 501 - 403 707 957 1,141 871 709 640
a
5 Thailand 330 330 550 630 364 - - - - - 441
6 Philippines 572 318 342 851 3 470 105 40 184 213 310
7 Bangladesh 227 256 420 184 332 225 298 300 532 230 300
8 Viet Nam 233 303 360 284 220 189 243 234 179 296 254
9 Sri L anka 140 44 162 185 149 209 146 237 275 195 174
a
10 Afghanistan - - - - - - - 167 150 170 162
11 Nepal 40 253 27 105 50 173 95 60 94 110 101
Subtotal 4,960 4,639 4,688 5,487 4,397 4,795 4,841 4,942 5,464 4,608 4,882
23 DMCs 457 517 666 360 435 636 460 606 453 339 493
34 Total 5,418 5,156 5,354 5,846 4,832 5,431 5,301 5,548 5,918 4,947 5,375
DMC = developing member country.
a
The average loan size for Thailand is computed over only 5 years, and that for Afghanistan over only 3 years.
However, the average loan size for all 11 large borrowers is calculated on the full 10 years.
Source: Project Coordination and Procurement Division.
26. The following trends in loan approvals over the past decade are apparent from Table 4
for the major DMC borrowers:
(i) a generally consistent level of approvals for PRC, Bangladesh, and Nepal;
(ii) an increasing level of approvals for India, Pakistan, Sri Lanka, and Afghanistan
(which resumed borrowing in 2002);
(iii) a decreasing level of approvals for Indonesia, Philippines, Thailand (which
stopped borrowing after 1999), and Viet Nam; and
(iv) a decreasing share of loan approvals for the smallest 23 DMCs during the
second half of the decade.
c. Loan Classifications
27. ADB classifies public sector lending in three ways: (i) loans are classified as either
targeted or general interventions depending upon how directly they target poverty alleviation;
(ii) loans are classified in one of 8 thematic areas; and (iii) loans are classified by the primary
sector involved. For the loans approved during 2004, the distribution by poverty and thematic
classifications is shown in Table 5. About 23% of all lending was for targeted interventions,
comprising 12% of OCR lending and 56% of ADF lending; the remainder was allocated to the
general intervention category.
13
Table 5: Poverty and Thematic Classification of Loans and Projects Approved in 2004
OCR Loans ADF Loans Total Loans Projectsa
Loan Classification Amount Amount Amount Amount
Number ($ million) Number ($ million) Number ($ million) Number ($ million)
Targeting Classification
a. Targeted Invervention 7 437.8 24 694.5 31 1,132.3 27 1,132.3
b. General Intervention 20 3,266.7 23 547.5 43 3,814.2 31 3,814.2
Total 27 3,704.5 47 1,242.0 74 4,946.5 58 4,946.5
Thematic Classificationb
a. Sustainable Economic Growth 20 3,041.5 31 826.2 51 3,867.7 38
b. Governance 8 447.8 18 505.5 26 953.3 13
c. Inclusive Social Development 3 253.0 10 357.9 13 610.9 21
d. Environmental Sustainability 4 272.2 3 116.9 7 389.1 6
e. Gender and Development 10 868.0 13 278.6 23 1,146.6 12
f. Private Sector Development 1 200.0 5 108.1 6 308.1 7
g. Regional Cooperation 1 60.0 9 190.0 10 250.0 5
c
h. Capacity Development na
Total 47 5,142.5 89 2,383.2 136 7,525.7 102
ADF = Asian Development Fund; OCR = ordinary capital resources.
a
Some projects include multiple loans.
b
33 of 58 public sector projects have multiple themes (a project may be assigned up to 3 themes).
c
Capacity Development is a new theme effective 1 January 2005.
Source: Project Coordination and Procurement Division, and Poverty Reduction and Social Development Division.
28. A loan or project may be assigned up to three themes, and for loans approved during
2004 the average was about 1.8 themes per loan. Some projects include multiple loans: lending
for sustainable economic growth was a theme of nearly two thirds of the projects approved
during 2004, inclusive social development was a theme of more than one third of the projects,
and both governance and gender and development were themes of more than one fifth of the
projects. Private sector development, environmental sustainability, and regional cooperation
were included as themes of only about a tenth of the projects.
29. The distribution of lending by sector for the past decade is shown in Table 6. The
infrastructure-related sectors (transportation and communication; energy; water supply,
sanitation and waste management; and industry and trade) accounted for $2.76 billion or nearly
48% of total lending. The governance and finance sectors (finance; and law, economic
management, and public policy) accounted for $1.30 billion or nearly 23% of total lending. The
social sectors (education; and health, nutrition, and social protection) accounted for $514 million
or 9% of total lending. The agriculture and natural resources sector accounted for $513 million
or 9% of total lending. And multisector lending accounted for $687 million or 12% of total
lending.
30. Lending to the finance sector during 1997–1998 was inflated by ADB’s $6 billion
response to the Asian financial crisis. This increased the share of lending to that sector from
about 6% to more than 16%, with proportional reductions in the shares of the other sectors. If
that sector-specific emergency lending were removed from the calculations, the finance sector
would rank fifth in lending, below the law, economic management, and public policy sector but
marginally above the education sector.
14
Table 6: Sector Classification of Public Sector Loans Approved During 1995–2004
($ million)
Sector 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Average %
1. Transportation & Communication 970 1,388 933 1,480 918 1,340 1,426 1,673 2,578 1,976 1,468 25.4
2. Finance 503 283 5,271 1,552 41 402 109 895 228 100 938 16.2
3. Energy 1,791 1,077 824 400 719 1,066 663 928 655 707 883 15.3
4. Agriculture & Natural Resources 803 781 499 235 384 663 671 505 392 199 513 8.9
5. Law, Econnomic Management & Public
Policy - 255 116 46 728 100 910 567 300 584 361 6.2
6. Education 358 368 628 133 183 346 249 284 159 278 299 5.2
7. Water Supply, Sanitation & Waste
Management 448 166 437 197 340 170 102 190 617 30 270 4.7
8. Health, Nutrition & Social Protection 31 108 203 825 347 163 48 20 132 273 215 3.7
9. Industry & Trade - 121 - 50 307 404 86 145 170 148 143 2.5
10. Multisector 514 610 458 928 866 777 1,038 340 688 651 687 11.9
Total 5,418 5,156 9,369 5,846 4,832 5,431 5,301 5,548 5,918 4,947 5,777 100.0
Source: Project Coordination and Procurement Division.
31. The 3-year moving averages for annual loan approvals by sector (Figure 3) show that
the most dramatic changes during the decade were the increase in the share of the
transportation and communication sector from nearly 21% of total lending during 1995–1997 to
38% during 2002–2004, and the decrease in the share of the energy sector from 23% of total
lending during 1995–1997 to 14% during 2002–2004. Similarly, the law, economic
management, and public policy sector share of total lending increased from 2% to 9%; while the
agriculture and natural resources sector share fell from 13 to 7%, the financial sector share fell
from 13% to 7%, and the education sector share fell from 9% to 4%.
15
Figure 3: Trends in Public Sector Loan Approvals by Sector
Hard Sectors
3,000
2,500
2,000 Energy
T& C
$ million
1,500 WSSWM
Energy MA
1,000 T & C MA
WSSWM MA
500
-
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Year
MA = 3-year moving average; T & C = transportation & communication; WSSWM = water supply, sanitation and
waste management;
Soft Sectors
6000
5000
ANR
4000
Educ
Fin
$ million
3000 LEP
ANR MA
Educ MA
2000
Fin MA
LEP MA
1000
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Year
ANR = agriculture & natural resources; Educ = education; Fin = finance; LEP = law, economic management &
public policy; MA = 3-year moving average.
Note: Each of the data points on the graphs shows the average of the loan approvals for that year plus the
previous 2 years.
16
d. Sector Focus in DMC Portfolios
32. The distribution of ongoing loans by DMC and sector is presented in Table 7. ADB’s
country assistance program evaluations (CAPEs) have consistently pointed to the need for
more focused assistance programs in most DMCs. Many of the smaller DMCs receive ADB
loans only occasionally (DMCs 17–31 in Table 7), which can make it difficult to have more than
one or two loans per sector. However, it should be possible to develop a clear focus for ADB’s
assistance to the larger DMCs with portfolios of 10 or more ongoing loans (DMCs 1–16 in
Table 7). One simple way to illustrate which DMCs have more focused programs is to graph the
number of loans per sector against the number of sectors for which ADB is providing support for
each DMC, as in Figure 4.
Figure 4: DMC Loan Portfolios Characterized by the Degree of Focus on Specific Sectors
8.0
7.0 PRC Focused
Portfolios PAK
6.0
IND
5.0 SRI
Loans/Sector
BAN INO
4.0
PHI
VIE
3.0 Small NEP
FSM
Portfolios LAO
CAM
2.0 TUV AFG UZB Unfocused
FIJ PNG TAJ
KYG Portfolios
AZE MON
KAZ BHU MLD
1.0 COO RMI SAM
KIR MAL
THA
KIR SOL
-
- 2 4 6 8 10 12
No. of sectors
33. In Figure 4, the DMCs that are on the upper part of the graph are those with the most
homogeneous or well-focused programs, while the DMCs on the lower right side are those with
the most heterogeneous or least focused programs. The data suggest that the PRC and India
have the most focused loan portfolios; and that Cambodia, Lao PDR, Mongolia, Tajikistan,
Uzbekistan, and Viet Nam have the least focused loan portfolios. The 15 DMCs in the “small
portfolio” box have so few active loans (less than 10) that it is difficult to get a meaningful
measure of how well focused the portfolio is. The conclusion drawn from this analysis is that
when the country strategy and program (CSP) is revised for those DMCs with unfocused
portfolios, efforts should be made to strengthen the selectivity and focus of ADB’s operations.
17
34. The Hirschmann-Herfindahl Index (the sum of squared portfolio shares)5 is another test
for the degree of homogeneity in a DMC’s loan portfolio, and the value for each DMC is
provided in the last column of Table 7. The DMCs with the most clearly focused assistance
programs as measured by this Index are, in decreasing order, PRC with 35 loans and an index
of 0.327, India with 32 loans and 0.242, Indonesia with 39 loans and 0.197, and the Philippines
with 27 loans and 0.196. Viet Nam, with 33 loans and an index of 0.117, is a clear example of
an assistance program with no real focus—the 33 loans are dispersed across all 10 sectors,
with no sector receiving less than 2 or more than 6 loans. Other DMCs whose assistance
programs receive relatively low Index values are Cambodia with 24 loans and an index of 0.118;
Mongolia and Tajikistan, which both have 14 loans and an index of 0.143; Pakistan with 61
loans and 0.153; and Lao PDR with 23 loans and 0.164.
Table 7: Distribution of Ongoing Loans by DMC and Sector
Sectors: ANR T&C Edu. En. LEP Fin. WSS HNS I&T Multi Total No. Loans/
DMC Loans Sectors Sector HHI
1 Pakistan 10 8 7 12 6 1 2 2 13 61 9 6.8 0.153
2 Sri Lanka 14 7 5 2 3 5 2 3 5 46 9 5.1 0.164
3 Indonesia 14 1 2 4 5 1 4 2 6 39 9 4.3 0.197
4 PRC 3 18 6 4 4 35 5 7.0 0.327
5 Bangladesh 6 7 4 8 1 1 3 4 34 8 4.3 0.166
6 Viet Nam 6 4 5 2 2 4 3 2 2 3 33 10 3.3 0.117
7 India 11 7 3 2 1 8 32 6 5.3 0.242
8 Philippines 8 2 3 2 1 5 6 27 7 3.9 0.196
9 Cambodia 4 3 4 2 1 2 2 1 2 3 24 10 2.4 0.118
10 Lao PDR 5 5 2 1 2 1 1 1 5 23 9 2.6 0.164
11 Nepal 7 3 3 1 2 1 5 1 23 8 2.9 0.187
12 Uzbekistan 3 2 5 1 1 2 1 1 16 8 2.0 0.180
13 Mongolia 2 2 1 1 2 2 1 3 14 8 1.8 0.143
14 Tajikistan 3 2 1 2 2 1 2 1 14 8 1.8 0.143
15 Kyrgyz Rep 1 4 1 1 1 1 3 12 7 1.7 0.208
16 PNG 3 3 1 2 1 1 11 6 1.8 0.207
17 Maldives 1 2 1 1 1 6 5 1.2 0.222
18 Afghanistan 1 2 3 6 3 2.0 0.389
19 Bhutan 1 1 2 1 5 4 1.3 0.280
20 Micronesia 2 3 5 2 2.5 0.520
21 Samoa 1 1 1 1 4 4 1.0 0.250
22 Kazakhstan 2 1 1 4 3 1.3 0.375
23 Azerbaijan 1 2 3 2 1.5 0.556
24 Fiji Islands 2 1 3 2 1.5 0.556
25 Malaysia 1 1 2 2 1.0 0.500
26 Marshall Is 1 1 2 2 1.0 0.500
27 Solomon Is 1 1 2 2 1.0 0.500
28 Tuvalu 2 2 1 2.0 1.000
29 Cook Is 1 1 1 1.0 1.000
30 Kiribati 1 1 1 1.0 1.000
31 Thailand 1 1 1 1.0 1.000
Total 94 90 52 43 37 31 30 22 20 72 491 10 49.1
Percent 19.1 18.3 10.6 8.8 7.5 6.3 6.1 4.5 4.1 14.7 100.0
ANR = agriculture & natural resources; Edu = education; En = energy; Fin = finance; HHI = Hirschmann-Herfindahl
Index; HNS = health, nutrition & social protection; I&T = industry & trade; LEP = law, economic management, & public
policy; Multi = multiple sectors; T&C = transportation & communication; WSS = water supply, sanitation, & waste
management.
Source: Operations Evaluation Department and Project Coordination and Procurement Division.
5
The Hirschmann-Herfindahl Index formula is: ∑[n/p]^2 where n is the number of loans a DMC has in each sector,
p is the DMC’s total number of loans, and the squares of n/p are summed across all sectors. The maximum index
value of 1 is reached only if all of a DMC’s loans are in a single sector; the minimum index value approaches 0 as
the total number of loans increases and they are spread evenly across all sectors. As the value of p increases, it
generally becomes increasingly difficult to achieve a higher index, so when two DMCs have roughly the same
index, the DMC with the larger number of loans should be considered to have the more homogeneous portfolio.
18
35. The graph in Figure 4 and the Hirschmann-Herfindahl Index indicate the degree to
which the DMCs’ loan portfolios are focused on certain sectors—they do not provide any
causality or explanation for the nature of the portfolios. The least focused country portfolios in
this analysis come from the Central Asian republics in the East and Central Asia Department
and the Indochina countries in the Mekong Department. All of them are transition economies or
post conflict countries. In each case, the DMC is a relatively recent recipient of ADB assistance
for whom ADB’s initial strategy was to provide broad-based support across many sectors,
resulting in an unfocused portfolio. However, these DMC portfolios would be expected to
become more focused as the initial broad-based assistance strategy is gradually replaced by an
emphasis on certain sectors.
3. Loan Closures and Extensions
36. There have been 675 loans closed during the past decade, as shown in Table 8. Each
year some loans are closed retroactive to previous years, and only those closed retroactively
during 2004 and up to 31 March 2005 are shown in the second row of Table 8. It is likely that
additional loans will be closed retroactively during 2005, and those will be reflected in the AR
2005.
Table 8: Numbers of Loans Closed by Year
Loan Closings 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Total
Closed during the year 51 48 62 60 64 78 62 82 66 64 637
a
Closed retroactively 3 17 5 25
b
Terminated after approval
Not signed - 1 - 2 - 1 2 3 - - 9
Signed but not effective 1 - - - 2 - - - - 1 4
Subtotal 1 1 - 2 2 1 2 3 - 1 13
Total Loans Closed 52 49 62 62 66 79 64 88 83 70 675
a
During 2004, 3 loans were closed retroactive to 2002, and 17 retroactive to 2003; and as of 31 March 2005, 5 loans
already had been closed retroactive to 2004. Loans closed retroactively prior to 2004 are included in the first row
figures.
b
Occasionally an approved loan is terminated before implementation begins.
Source: Operations Evaluation Department and Project Coordination and Procurement Division.
37. Some loans that are approved by ADB never reach implementation either because they
are never signed by the government, or because they are never declared effective by ADB. This
has happened 13 times since 1995, accounting for less than 2% of the loans closed during the
decade.
38. During the past decade, delays in implementation and overly optimistic implementation
schedules were the norm. Less than 14% of loans were closed within the original time frame.
The vast majority of loans (more than 86%) required an extension to the original loan closing
date, and 69% required multiple extensions (2–7). The mean number of extensions per loan
was 2.2 (Table 9). The 9 loans closed during 2004 that did not require an extension were
4 program loans of which 3 were completed and one was cancelled half completed; and
5 project loans of which 2 were cancelled without any disbursement, and 3 were cancelled with
only minor disbursements. Of the remaining 56 loans that were implemented, 53 project loans
required an average extension of more than 2 years (a range of 3–62 months), and 3 program
loans required an average extension of 1 year and 9 months (a range of 12–31 months).
19
Table 9: Numbers of Extensions to the Loan Closing Date for Closed Loans
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Average %
a
Total Loans Closed 52 49 62 62 66 79 64 88 83 65 67.0
Loans Without Extension 5 5 4 9 14 9 11 16 9 9 9.1 13.6
% Without Extension 9.6 10.2 6.5 14.5 21.2 11.4 17.2 18.2 10.8 13.8 13.6
1 Extension 5 6 13 12 10 18 10 17 19 7 11.7 17.5
2 Extensions 16 18 20 22 24 29 24 23 22 21 21.9 32.7
3 Extensions 10 12 15 11 11 12 12 10 20 17 13.0 19.4
4 Extensions 14 6 5 7 4 8 2 16 8 7 7.7 11.5
5 Extensions 2 - 3 1 2 3 2 5 3 3 2.4 3.6
6 Extensions - 2 1 - 1 - 3 - 2 1 1.0 1.5
7 Extensions - - 1 - - - - 1 - - 0.2 0.3
Loans With Extensions 47 44 58 53 52 70 53 72 74 56 57.9 86.4
% With Extension 90.4 89.8 93.5 85.5 78.8 88.6 82.8 81.8 89.2 86.2 86.4
a
Not including retroactively closed loans.
Source: Operations Evaluation Department and Project Coordination and Procurement Division.
39. Some projects are supported by more than one loan. As shown in Table 10, less than
14% of the 641 projects closed during the past decade have not required an extension of the
loan closing date, while 25% of the projects required an extension of less than one year, and
more than 61% required an extension of more than one year.
Table 10: Length of Extensions for Closed Projects
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Average
Number of Projects Closed 49 48 59 59 62 77 61 86 78 62 641
Projects Without Extension 5 5 5 10 12 10 10 14 8 9 88
% Without Extension 10.2 10.4 8.5 16.9 19.4 13.0 16.4 16.3 10.3 14.5 13.7
Extensions <365 Days 9 11 12 14 13 25 15 19 30 12 160
% <365 days 18.4 22.9 20.3 23.7 21.0 32.5 24.6 22.1 38.5 19.4 25.0
Extensions >365 Days 35 32 42 35 37 42 36 53 40 41 393
% >365 days 71.4 66.7 71.2 59.3 59.7 54.5 59.0 61.6 51.3 66.1 61.3
Projects With Extensions 44 43 54 49 50 67 51 72 70 53 553
% With Extensions 89.8 89.6 91.5 83.1 80.6 87.0 83.6 83.7 89.7 85.5 86.3
Source: Operations Evaluation Department and Project Coordination and Procurement Division.
40. The average length of the total loan extension granted for the 58 loans that were fully or
largely implemented and closed during 2004 was 702 days or 1.9 years.6 The data in Table 11
show that the average loan extensions have been highly variable across DMCs and years for
loans closed since 1999, ranging from a low of 80 days or 0.2 years for the Kyrgyz Republic in
2004 to a high of 2,013 days or 5.5 years for India in 2001.
41. Based on explanations provided by regional departments, the causes of extended
implementation can be grouped into six interrelated categories: (i) start-up delays due to a lack
of readiness by the DMC; (ii) cumbersome and time-consuming procedures;7 (iii) shortages of
counterpart funds; (iv) project design flaws, including unrealistic implementation schedules and
the need to redesign and make a change in scope or implementation arrangements;
(v) political interventions; and (vi) other factors. The relative importance of these factors varies
6
The 7 loans that were closed during 2004 with no disbursements or with only minor disbursements (less than 5% of
the loan amount) were not included in the calculation.
7
For example, resettlement issues can become a major cause of implementation delays due to arduous procedures.
20
among countries, sectors, and executing agencies (EAs). Another factor that should be added
to the list is the desire on the part of many DMCs to fully utilize surplus funds remaining in
project accounts, especially from ADF loans. Start-up delays have been among the most
common factors leading to loan extensions, and the time lost early is rarely made up.
Table 11: Average Delays in Loan Closings by DMC and Year
(in days)a
DMC 1999 2000 2001 2002 2003 2004
1 Bangladesh 585 748 1,435 745 556 608
2 Bhutan - 462 929 - 173 -
3 Cambodia - 260 - 182 351 -
4 PRC 511 439 325 433 441 495
5 India 1,400 943 2,013 1,213 620 -
6 Indonesia 620 690 484 717 1,026 693
7 Kazakhstan - - - 503 - 214
8 Kyrgyz Republic 204 - 597 456 702 80
9 Lao PDR 521 - 360 1,298 879 400
10 Malaysia - 549 944 - 220 -
11 Mongolia 799 232 558 173 190 631
12 Nepal 1,392 628 1,058 517 - 795
13 Pakistan 1,429 1,347 568 1,159 1,133 849
14 PNG - 1,172 1,122 1,598 165 774
15 Philippines 913 827 903 1,394 422 851
16 RMI - 364 802 682 527 -
17 Sri Lanka 589 264 492 - 962 692
18 Thailand 393 - 460 706 303 1,181
19 Viet Nam - 609 605 690 1,002 1,215
DMC = developing member country.
a
This table includes only DMCs with 5 or more loans closed during 1999–2004; for 2004, the data
are based on 55 loans that were implemented in full or in part, and exclude 7 loans that were
cancelled without any disbursements or with only very minor disbursements, as well as
3 loans to DMCs with fewer than 5 loans closed during the reporting period.
Source: Project Coordination and Procurement Division.
42. The following causes for implementation delays and loan extensions were discussed in
AR 2003 (para. 17–25) and remained relevant during 2004:
(i) cumbersome and time-consuming procedures, from both the DMCs and ADB;
(ii) underestimates of the time required for approval processes by DMCs and ADB;
(iii) project design teams making insufficient use of experienced EA staff;
(iv) shortages of counterpart funds and delays in releasing counterpart funds;
(v) the need for changes in project scope;
(vi) political involvement in decision making; and
(vii) too frequent transfers of key project personnel by EAs and ADB.
43. The following facts drawn from Tables 8–10 suggest that ADB needs to prepare more
realistic and reasonable project and program implementation plans, and to do more to anticipate
and mitigate problems that are likely to arise before and during implementation:
(i) 86–87% of loans and projects require extensions to be completed;
(ii) loans require about 2.2 extensions on average, and some require up to 7; and
(iii) more than 60% of projects must be extended by more than a year to be
completed.
21
44. Additional efforts need to be made to reduce the need for loan extensions. To avoid the
start-up delays common to many projects that subsequently necessitate extensions of the loan
closing dates, regional department project officers and division directors should make stronger
efforts to ensure that the EAs will be ready to implement a project soon after it has been
approved to reduce the front-end delays that have plagued many projects. This issue is
discussed in more detail in Section III. A. 2. More attention is also needed during project
preparation to anticipating and mitigating potential implementation problems.
45. As recommended in the AR 2003, the preparation of realistic implementation schedules
could be improved by much wider use of management tools, such as the critical path method
during design and implementation. 8 The critical path method identifies the minimum time
required to complete a project based on the logical sequencing of actions and events. It involves
identifying important project milestones and the actions required to reach them, and applying
best estimate of the time required to complete each action. Best estimates of the time needed to
complete a project are then derived by adding two standard deviations to the minimum estimate
calculated along the critical path.
46. Critical path computer programs are readily available and easy to use. 9 Once the
network of actions and milestones has been created using the method, it becomes an
interactive project management tool during implementation. The actual times taken for various
actions are entered into the program to revise the implementation schedule as work progresses;
and tracking the milestones reached provides a measure of implementation progress.
4. Net Resource Transfers
47. A large negative NRT from ADB to the DMCs of $5.30 billion was noted in the AR 2003,
and the DEC requested further analysis of the issue. There have now been significant negative
NRTs for 3 consecutive years, for a total of about $8.73 billion. Tables 12 and 13 show that the
primary cause has been the large OCR loan prepayments made by 5 DMCs—PRC, India,
Republic of Korea, Pakistan, and Thailand. It is normal to have some loan prepayments each
year, and 11 different DMCs have made loan prepayments at least once during the past
10 years. Several DMCs with either relatively mature loan portfolios (Kazakhstan, Republic of
Korea, Malaysia, and Thailand) or reduced borrowing levels (Papua New Guinea and the
Philippines), have also been experiencing regular negative NRTs even without making loan
prepayments. However, it is the large amounts of the prepayments over the past 3 years that
has caused an overall negative NRT. Without the prepayments there would have been an
overall positive NRT from ADB to the DMCs of about $600–700 million for each of the 3 years.
8
The first critical path method introductory workshops for mission leaders were held during 2–3 June 2005.
9
ADB uses a program called MS Project for the critical path method.
22
Table 12: OCR Loan Prepayments by DMC, and Overall Net Resource Transfer
($ million)
Country Cat. 2002 2003 2004 Total
1 India B2 237.6 1,525.9 1,265.5 3,029.0
2 PRC B2 458.6 2,129.8 235.0 2,823.4
3 Korea, Republic of Grad 0.0 2,023.1 12.9 2,036.0
4 Thailand C 1,275.6 181.9 84.4 1,541.9
5 Pakistan B1 - 3.8 1,108.7 1,112.5
6 Kazakhstan C - - 78.5 78.5
7 Malaysia C - 19.4 4.8 24.1
8 Philippines C 5.3 - - 5.3
9 Uzbekistan C - - 0.6 0.6
Total Prepayments 1,977.1 5,883.8 2,790.5 10,651.4
Net Resource Transfers (1,363.2) (5,295.8) (2,071.3) (8,730.3)
Cat. = borrower category; DMC = developing member country; Grad = graduated economy.
Source: Loan Administration Division.
Table 13: NRT and Loan Prepayments by DMC during 2004
($ million)
Amount Total Amount
Country Cat. Disbursed Repaid NRT Prepaid
1 PRC B2 635.7 626.0 9.7 (235.0)
2 India B2 401.6 1,437.4 (1,035.9) (1,265.5)
3 Kazakhstan C 30.0 115.5 (85.5) (78.5)
4 Korea Grad 0.0 66.8 (66.8) (12.9)
5 Malaysia C 3.9 63.4 (59.5) (4.8)
6 Pakistan B1 638.8 1,497.2 (858.4) (1,108.7)
7 Thailand C 36.8 145.0 (108.1) (84.4)
8 Uzbekistan C 89.3 18.5 70.8 (0.6)
Total 1,836.2 3,969.8 (2,133.6) (2,790.5)
Cat. = borrower category; DMC = developing member country; Grad = graduated economy;
NRT = net resource transfer.
Source: Loan Administration Division.
48. In response to the DEC’s request for further analysis of the negative NRT, the following
important issues need to be considered:
(i) the reasons why a few DMCs have made large prepayments on their ADB loans;
(ii) the likelihood that the trend in prepayments will continue;
(iii) the likelihood that there will be another large negative NRT in 2005;
(iv) the current and likely future effects of the negative NRTs on ADB operations;
(v) the effects of the negative NRTs on individual DMCs; and
(vi) what, if anything, ADB should be doing about all of the above.
49. A major cause of the overall negative NRT for the past 3 years has been the accelerated
prepayment of OCR loans that carry relatively high interest rates compared to the current
market rates.10 For example, with reference to Table 14, the Libor $ rate has been less than
10
Prepayments are of concern only for OCR loans; concessional ADF loans are rarely prepaid because they are still
quite cheap.
23
2.0% since 2002, which is very low compared to the 2004 applicable rates for fixed-rate
multicurrency loans (FMCLs, 10.25–11.00%) and pool-based single currency dollar loans
(PSCLs, 6.29–6.31%). The Libor ¥ rate is currently 0.07%, which is also quite low compared to
the applicable rates for PSCL ¥ loans (1.93–2.46%). Under these conditions, it makes good
financial sense for DMCs to refinance their debt. With the current supportive environment for
low-cost debt refinancing, prepayments are likely to continue at least in 2005, although at a
slower rate than in 2004. While 8 DMCs have been refinancing ADB loans for the past 3 years,
other DMCs also carry relatively expensive OCR loans, but either have not had access to the
financial markets to be able to refinance, or have just not seized the opportunity.
Table 14: 2004 OCR Loan Prepayments and Applicable Interest Rates
Loan Types Numbers Approval Dates Applicable Prepayments
Prepaid Interest Rates ($ million)
FMCL 5 (2 DMCs) 1982–1984 10.25–11.00 % 142.2
LBL 1 (1 DMC) 1999 1.77 % 1.2
MBL 2 (2 DMCs) 1998–2000 1.78–3.54 % 37.8
PSCL $ 19 (7 DMCs) 1994–2000 6.29–6.31 % 1,431.1
PSCL ¥ 14 (2 DMCs) 1986–1991 1.93–2.46 % 1,178.2
All 41 (8 DMCs) 1982–2000 2,790.5
DMC = developing member country; FMCL = fixed-rate multicurrency loan; LBL = Libor-based loan;
MBL = market-based loan; OCR = ordinary capital resources; PSCL = pool-based single currency
loan (dollar or yen).
Source: Loan Administration Division.
50. As a development partner focused on reducing poverty in the Asia and Pacific region,
ADB should not discourage the prepayment of expensive loans. It is a sound financial decision
on a DMC’s part. It helps to free up fiscal space to allocate more domestic funds to support
poverty reduction and other fiscal expenditures that will contribute to the achievement of the
Millennium Development Goals (MDGs).
51. It is expected that there will be another significant negative NRT from ADB to the DMCs
during 2005 for two reasons. First, several DMCs are likely to continue their OCR loan
prepayments this year, although at a reduced rate. Second, the regular loan payments due in
2005 are inflated by the final $1.7 billion scheduled repayment from the Republic of Korea
against the $4.0 billion emergency loan approved during the Asian financial crisis, of which
$3.4 billion was actually disbursed. The NRT situation should improve considerably starting in
2006, as loan prepayments are expected to continue to decline, and there are no more major
loan repayments scheduled like that from the Republic of Korea this year.
52. The recent OCR loan prepayments have contributed to a drop of nearly 43% in ADB’s
income from loans (from $1,814 to $1,042 million), and a drop of more than 38% in ADB’s gross
annual income (from $2,239 to $1,379 million) during 2001–2004, as shown in Table 15. The
drop in income has resulted in a reduction in the funds available for the annual technical
assistance program and ADF resources, and for other operational purposes.
53. The DMCs that have been able to access low-cost financing to prepay their more
expensive OCR loans are benefiting from the reduced debt load. However, the situation may be
somewhat different for DMCs that have not been refinancing their relatively expensive OCR
loans. Not counting the DMCs that have been prepaying their loans, Table 16 shows that
24
10 DMCs have had a negative NRT for at least 3 of the past 5 years (Myanmar and Nauru have
been in default for several years).
Table 15: Trend in ADB Income, 2001–2004
($ million)
ADB Income 2001 2002 2003 2004
Loans 1,814 1,710 1,383 1,042
Other sources 425 350 357 337
Total 2,239 2,060 1,740 1,379
Expenses 1,523 1,306 1,124 990
Adjustments 147 225 (178) 41
Net Income 863 979 438 431
ADB = Asian Development Bank
Source: ADB Annual Reports and Loan Administration Division.
Table 16: DMCs with a Recent Persistent Negative NRT Not Due to Loan Prepayments
($ ‘000)
DMC 2000 2001 2002 2003 2004 Total
1 Fiji Islands (2,902) (2,739) (2,982) 922 4,111 (3,590)
2 Indonesia 29,430 (44,257) 115,964 (402,068) (253,733) (554,664)
3 Myanmar 0 0 0 (1,436) 0 (1,436)
4 Nauru (73) (72) 0 0 0 (145)
5 Nepal 67,587 25,556 (9,256) (6,505) (23,347) 54,035
6 Papua New Guinea (17,596) 13,292 (16,949) (17,720) (14,677) (53,650)
7 Philippines (174,400) (75,720) (193,332) (42,210) (218,390) (704,052)
8 Samoa (2,092) 1,605 (1,215) (812) (174) (2,688)
9 Solomon Islands (456) (796) 0 (2,983) (710) (4,945)
10 Vanuatu 9,938 2,129 (236) (841) (918) 10,072
DMC = developing member country; NRT = net resource transfer
Source: Loan Administration Division.
54. In the following paragraphs, the potential impact of a recurring negative NRT from ADB
is considered for the 10 DMCs in Table 16.
a. Fiji Islands
55. The Fiji Islands’ key development partners include Australia, PRC, Japan, New Zealand,
the European Union (EU), and United Nations (UN) agencies. The country receives relatively
little official development assistance (ODA) on a per capita basis, and during 2003 funding
agencies provided only F$61 million in grants. According to the CSP update
2005–2007, from 1970 to 2004 ADB approved 15 OCR loans worth $217 million and 72 TA
grants worth $23.1 million; and a sixteenth loan for $25 million was approved in March 2005.
According to the Asian Development Outlook (ADO) 2005, at year-end 2004 central government
debt stood at 46.4% of gross domestic product (GDP) of which more than 90% was domestic,
and it is unlikely that the 2006 target for debt of less that 40% of GDP will be reached. In
addition, the growth rate is expected to slow to 3% in 2005, down from 3.8% in 2004 and 5% in
2003. The Fiji Islands had a negative NRT from ADB for 8 consecutive years, 1995–2002,
although it turned positive again for 2003 and 2004. With three loans approved in 2002, 2003,
and 2005, it is unlikely that the country will experience a negative NRT from ADB for several
more years.
25
b. Indonesia
56. During 2001–2003, about 90% of ODA came from bilateral donors, led by Japan and the
USA, with ADB ranked second behind the International Development Association (IDA) among
multilateral donors. Since 1969, ADB has approved 215 OCR loans worth $18.2 billion and
56 ADF loans worth $1.42 billion; and the outstanding loan balance at 31 December 2004
amounted to $8.22 billion OCR and $853 million ADF. Indonesia has had a negative NRT for
6 of the past 10 years, averaging about $67.2 million/year, including a very large negative NRT
of $1.20 billion in 1996 due to prepayments. According to the ADO 2004, “The stock of total
external debt at end-2003 leveled off at about 65% of GDP, at around $135 billion, with public
external debt equivalent to 38.5% of GDP. The level of debt is well below that reached during
the Asian financial crisis and is scheduled to gradually decline to sustainable levels over
2005–2007.” Thus, the negative NRT from ADB at this time does not present a significant
danger to the Indonesian economy.
c. Myanmar
57. In 1973–1986, ADB approved 32 loans worth $530.9 million to Myanmar, including
2 OCR loans worth $6.6 million and 30 ADF loans worth $524.3 million. Myanmar has paid off
the OCR loans, but is currently in default on the ADF loans. According to ADO 2004, Myanmar
has been facing problems due to a hardening of international trade and investment sanctions, a
high inflation rate, trouble in the banking sector and the collapse of private finance companies,
and underinvestment in social sectors and basic infrastructure, etc. The current situation
precludes additional ADB lending to Myanmar for the time being.
d. Nauru
58. According to ADO 2004, “A complete collapse of the economy has been averted by the
continuing support of external sources, particularly Australia’s humanitarian and development
assistance;” and, “The medium-term outlook is very bleak, particularly in light of the
government’s lack of commitment to confront the drastic structural changes essential for
reversing the economic decline and bringing back political stability.” According to ADO 2005, the
situation has improved somewhat because “the 2004/05 budget approved by Parliament …
represents a fundamental change in approach to fiscal management. It explicitly acknowledges
that the country is in financial crisis and accordingly aims at ensuring that expenditures are
reduced and controlled within limits set by realistic, medium-term projections of revenues and
grants.” Nauru has received only one OCR loan from ADB, worth $5.0 million, disbursed in
1999. The government made payments against the loan during 2000–2001, but has since been
in default, and the outstanding loan balance at 31 December 2004 amounted to $2.3 million.
The current situation precludes additional ADB lending to Nauru for the time being.
e. Nepal
59. During 2001–2003, roughly two thirds of ODA came from bilateral donors, and ADB
ranked second behind the IDA among multilateral donors. Since 1969, ADB has approved
5 OCR loans worth $48.6 million and 109 ADF loans worth $2,166 million; the outstanding loan
balance at 31 December 2004 amounted to $34.2 million OCR and $1,352 million ADF. Nepal
has experienced a negative NRT from ADB for the past 3 years, averaging about
$13.0 million/year. Nepal’s repayments to ADB are relatively small when compared to the net
ODA that averaged $409 million during 2001–2003; and according to the ADO 2004, “External
debt is still manageable.” However, the key concern for Nepal now is how the government will
26
manage the continuing insurgency and security problems that threaten the nation. The situation
is still tenuous as “The Royal proclamation on 1 February 2005 and the imposition of emergency
rule have increased political uncertainty.” (ADO 2005)
f. Papua New Guinea
60. More than 90% of ODA in PNG comes from bilateral donors, especially Australia, and
ADB ranks second behind the EU among multilateral donors. Since 1971, ADB has approved
24 OCR loans worth $463 million and 33 ADF loans worth $411 million; and the outstanding
loan balances at 31 December 2004 amounted to $174 million OCR and $308 million ADF.
PNG has experienced a negative NRT from ADB for 8 of the past 10 years, averaging about
$7.98 million/year. According to ADO 2005, “The economy grew at a modest rate in 2004,
inflation fell substantially, and financial conditions improved. The outlook is for continued modest
economic growth, provided that fiscal gains are consolidated and structural reforms … are
implemented.”
g. The Philippines
61. During 2001–2003, about 94% of ODA came from bilateral donors, led by Japan, and
ADB ranked second behind the EU among multilateral donors. Since 1969, ADB has approved
152 OCR loans worth $7,510 million and 40 ADF loans worth $1.11 billion; and the outstanding
loan balances at 31 December 2004 amounted to $2.75 billion OCR and $966 million ADF.
During 2004, interest payments to ADB came to $132 million or just 2.8% of the $4.74 billion in
total interest payments on the national government’s total debt. The Philippines outstanding
debt to ADB accounts for about 4.5% of the total. The Philippines has experienced a negative
NRT from ADB for 9 of the past 10 years, averaging about $134 million/year. According to a
recent ADB study, the Government debt situation is not sustainable; debt servicing accounted
for more than 24% of national government expenditures during 2000–2003,11 and jumped to
31.5% during 2004. The study showed that the Government is playing a weakly feasible debt
Ponzi game, wherein new borrowing is used to service old debts. The CSP update 2004–2006
states that a more balanced fiscal position, institutional strengthening, and policy reforms are
fundamental to achieving the MDGs. The Government has been slow to undertake necessary
reforms. It has made some progress in reducing the fiscal deficit, but continues to be
constrained in providing the budget cover and counterpart funding that is necessary to mobilize
the loan funding potentially available from ADB.12 The CSP states that, “The persistent annual
negative net resource transfers since 1998 from ADB to the government, despite evident large
financing needs, reflects ADB’s difficulty to respond to a client in fiscal distress.”
h. Samoa
62. During 2001–2003, about 70% of ODA came from bilateral donors, led by Japan and
Australia, and ADB ranked second behind the IDA among multilateral donors. Since 1969, ADB
has approved 30 ADF loans worth $122 million, and the outstanding loan balance at
31 December 2004 amounted to $89.1 million. Samoa has experienced a negative
NRT from ADB for 7 of the past 9 years, averaging about $0.533 million/year. The
government’s largely concessional external debt was reduced from 69.2% of GDP
11
Duo Qin, et al. 2005. Empirical Assessment of Sustainability and Feasibility of Government Debt: The Philippines
Case. ERD Working Paper No. 64. ADB.
12
According to the CSP update 2004–2006, the Philippines is expected to access only about $100–150 million/year
in ADB loans during 2004–2006, although the lending program targets processing 15 loans for a total of $712
million.
27
in 2000 to 49.4% in 2003. Samoa is not currently experiencing any fiscal crisis, and the trend to
reduce the external debt burden (including ADB loans) relative to GDP is appropriate.
i. Solomon Islands
63. During 2002–2003, about 87% of ODA came from bilateral donors led by Australia
(whereas the figure for 2001 was only 45%), and ADB ranked second behind IDA among
multilateral donors. Since 1976, ADB has approved 16 ADF loans worth $79.3 million,
and the outstanding loan balance at 31 December 2004 amounted to $50.0 million.
Solomon Islands has experienced a negative NRT from ADB for 5 of the past 6 years,
averaging about $0.987 million/year. The ADO 2004 reported that the law and order
situation substantially improved after the arrival of a multicountry regional assistance mission in
July 2003; however, the total official and informal debt was estimated at about 140% of GDP
and the government remained unable to service all of its debt. Without the considerable
budget support received from Australia and New Zealand over the past few years, it is
uncertain whether the government would have been able to continue its ADF loan
repayments, and in fact it had been in default on ADF loans from July 1995 to March 1998, and
again from September 2001 to September 2003. Sanctions imposed due to the
default (e.g., no new loan approval and no disbursement on existing loans) were one of the
direct causes of the negative NRT. While the situation has been improving, it is still
somewhat precarious. ADO 2005 notes that, “Against a background of improving
political stability, primary product exports led economic growth of almost 5% in 2004,
while inflation fell to single digits, public finances improved further, and financial sector
stress declined.”
j. Vanuatu
64. During 2001–2003, about 80% of ODA came from bilateral donors, led by Australia, and
ADB ranked third among the multilateral donors. Since 1982, ADB has approved 9 ADF
loans worth $51.3 million, and the outstanding loan balance at 31 December 2004 amounted
to $53.7 million. Vanuatu has experienced a negative NRT from ADB for the
past 3 years, averaging about $0.665 million/year, which is relatively small. According to ADO
2005, “Growth in 2004 was modest in a macroeconomic environment of low inflation,
improving public finances, and rising foreign reserves.” Barring any shocks due to poor
weather conditions (tropical cyclone Ivy did some damage in February 2004) or drops in world
commodity prices, the negative NRT from ADB should not present a problem.
65. Conclusions. The overall large negative NRT of the past 3 years has been due
primarily to the external refinancing of relatively expensive OCR loans by 5 DMCs with large
borrowings, and this situation is likely to continue for several more years, although at a slower
pace, if interest rates remain depressed. The negative NRT should be a matter of concern to
ADB due to (i) the strong negative impact it has had on income from OCR loans, and (ii) the
strong signal it is sending that OCR lending may not be meeting the current needs of the DMCs.
However, the 5 DMCs making large prepayments of OCR loans have improved their fiscal
positions. Nevertheless, several DMCs are threatened with problems due to a persistent net
negative NRT from ADB, but this is related to their generally precarious financial positions, and
is not due to OCR loan prepayments. Specifically, the situation in Nauru, Nepal, PNG,
Philippines, and Solomon Islands should continue to be closely monitored, although in each
case the debt service burden due to ADB loans is only a small part of the national total. Note
that in the case of Nepal there is very little OCR lending involved, and there is only ADF lending
to Solomon Islands.
28
C. Private Sector Portfolio
66. From ADB’s first private sector investment in 1983 until year-end 2004, the
Private Sector Operations Department (PSOD) had had 175 projects approved by the
Board of Directors, including 151 projects in 15 DMCs and 24 regional projects, for a total of
$4.25 billion. ADB’s total exposure at year-end 2004 was $1.46 billion, comprising
$485 million (33%) in equity exposure, $655 million (45%) in loan exposure, and
$323 million (22%) in guarantee exposure, as shown in Table 17. Of the $497 million
in outstanding loans, $491 million (99%) is from OCR funds and only $6.1 million (1%) is from
ADF funds; while all of the equity investments are from OCR funds.
Table 17: Summary of Private Sector Operations by Type of Project as of end-2004
($ million)
a b Outstanding c
Approved Exposure Undisbursed
Private Sector Portfolio $ % $ % $ % $ %
Equity 915 21.5 485 33.2 310 28.8 175 45.5
Loans 1,911 44.9 655 44.8 497 46.1 158 40.9
Guarantees 566 13.3 323 22.1 270 25.1 53 13.6
Guarantor on Record 25 0.6 - - - - - -
Complementary Financing
Scheme 636 14.9 - - - - - -
Currency Swap 200 4.7 - - - - - -
Total 4,253 100.0 1,463 100.0 1,077 100.0 386 100.0
DMC = developing member country.
a
Cumulative, net of full cancellations.
b
Exposure = outstanding portfolio + undisbursed commitments.
c
Undisbursed commitments are undisbursed obligations of ADB based on signed legal documents.
Source: Private Sector Operations Department.
67. As of 31 December 2004, there were 97 ongoing private sector projects, including
79 projects spread across 15 DMCs, plus 18 regional projects (Table 18).
Table 18: Private sector project exposure by DMC
DMC Projects $ million %
1 India 17 229.0 15.7
2 Sri Lanka 5 209.3 14.3
3 Bangladesh 5 196.0 13.4
4 PRC 9 155.4 10.6
5 Thailand 6 152.7 10.4
6 Viet Nam 5 148.1 10.1
7 Philippines 13 82.6 5.6
8 Nepal 3 35.2 2.4
9 Pakistan 6 30.2 2.1
10 Indonesia 3 17.9 1.2
11 Mongoliaa 1 6.0 0.4
12 Bhutan 1 5.5 0.4
13 Afghanistana 3 1.7 0.1
14 Malaysia 1 0.1 0.0
15 Samoaa 1 - -
Subtotal 79 1,269.7 86.8
Regional 18 193.2 13.2
Total 97 1,462.8 100.0
DMC = developing member country.
a
Includes approved projects that are not yet effective.
Source: Private Sector Operations Department.
29
D. Technical Assistance
1. The TA Portfolio
68. TAs are prepared and carried out by the RDs and certain other departments and offices
including the COSO, ERD, Office of Cofinancing Operations (OCO), OED, Office of the General
Counsel (OGC), PSOD, and the Regional and Sustainable Development Department (RSDD).
TA operations are divided into three general types: project preparatory TA carried out by the
operations departments, advisory and operational (advisory TA), and regional TA, both of which
are carried out by both operations and non-operations departments and offices.
69. The total number of ongoing TAs in the portfolio has been increasing fairly steadily by
about 7.3% per annum, from 663 TAs at end-1998 to 1,016 TAs at end-2004 (Table 19 and
Figure 5). The net amount of the portfolio has been increasing at the slower rate of 6.0% per
annum from $485 million to $687 million. As a result, the average TA amount has decreased
from about $730,000 in 1998 to about $676,000 in 2004. For 2004, advisory TAs dominated
with 55% by number, followed by regional TAs with 25%, and project preparatory TAs with 20%,
which is roughly characteristic of the split across the 7 years. Most of the portfolio increase is
due to the increasing numbers of ongoing advisory TAs and also regional TAs administered by
the RDs (see Table 20).
Table 19: TA Portfolio at Year End by Type and Amount
Ongoing TAs 1998 1999 2000 2001 2002 2003 2004
Advisory 393 410 379 439 466 492 558
Project Preparatory 115 131 115 121 172 173 203
Regional 155 135 217 183 188 213 255
Total (by number) 663 676 711 743 826 878 1,016
Net Amount ($ million) 485 492 563 579 559 587 687
Source: Project Coordination and Procurement Division.
Figure 5: Year-end Portfolio of Ongoing TAs
1,200
1,000
800 Total
Number
Advisory TA
600
Preparatory TA
400 Regional TA
200
-
1998 1999 2000 2001 2002 2003 2004
Year
TA = technical assistance.
30
2. TA Approvals
70. The number of TAs approved each year since 1995 has varied from a low of 243 in 1998
to a high of 323 in 2002 and again in 2004. The total budget for approved TAs has varied from a
low of $143 million in 1995 to a high of $197 million in 2004 (Table 20). While there were no
clear trends in the annual TA numbers or budgets approved during 1995–2001, there was a
clear increase in both the TA numbers and budgets approved from 2001 to 2002. The following
are the major changes between the annual TA approvals during 1995–2001 and during
2002–2004.
a. Operations Departments (RDs)
(i) an increase in the share of the total TA budget from 84% to 86%;
(ii) a 22% increase in the number of TAs approved and in the TA
budget;
(iii) significant increases in the annual numbers of regional TAs (67%),
project preparatory TAs (20%), and advisory TAs (16%) approved;
(iv) significant increases in the annual budgets for regional TAs (24%),
project preparatory TAs (28%), and advisory TAs (20%);
b. Non-Operations Departments
(i) a decrease in the share of the total TA budget from 16% to 14%;
(ii) a 22% decrease in the number of TAs approved, and a 4%
increase in the TA budget;
(iii) a 62% decrease in the annual number of advisory TAs, but no
change in the number of regional TAs;
(iv) an 81% decrease in the advisory TA budget, and a 60% increase
in the regional TA budget.
Table 20: TA Approvals by Number and Amount, and by Type and Year
Technical Assistance 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Total
By Number of TAs
Advisory 152 141 137 113 144 152 121 149 159 169 1,437
Preparatory 74 69 74 53 70 57 62 87 73 76 695
Regional 16 20 23 20 24 35 23 35 42 38 276
Operations Depts. 242 230 234 186 238 244 206 271 274 283 2,408
Advisory 17 16 26 15 22 19 20 11 5 6 157
Preparatory - - 1 - - - - - - - 1
Regional 35 34 32 42 50 38 27 41 34 34 367
Non-Operations Depts. 52 50 59 57 72 57 47 52 39 40 525
Total Number 294 280 293 243 310 301 253 323 313 323 2,933
By Amount ($ million)
Advisory 83.6 72.9 71.6 73.2 81.6 83.1 66.0 89.3 76.7 106.3 804.3
Preparatory 34.0 35.0 41.9 33.5 36.7 33.1 38.8 46.9 45.9 46.2 391.9
Regional 7.1 22.3 18.5 17.1 17.7 20.4 13.8 19.3 22.4 20.3 179.1
Operations Depts. 124.7 130.2 131.9 123.9 136.1 136.6 118.6 155.5 145.0 172.8 1,375.3
Advisory 5.2 6.7 12.3 7.2 12.6 17.9 9.8 2.3 1.7 1.8 77.4
Preparatory - - 0.2 - - - - - - - 0.2
Regional 12.9 14.8 8.9 17.1 18.7 14.4 15.6 21.3 28.5 22.0 174.4
Non-Operations Depts 18.1 21.6 21.4 24.3 31.3 32.3 25.5 23.6 30.2 23.8 251.9
Total Amount 142.8 151.8 153.3 148.2 167.3 168.9 144.1 179.0 175.2 196.6 1,627.2
TA = technical assistance.
Source: Project Coordination and Procurement Division.
31
71. Among the RDs, the shares of the annual TA budgets allocated to advisory TAs (58%),
project preparatory TAs (29%), and regional TAs (13%) have remained fairly steady for the past
decade. However, there has been a significant change in the average number of project
preparatory TAs approved—during 1995–2001 an average of 66 project preparatory TAs were
approved each year, but during 2002–2004 that number increased by 20% to 79. This suggests
that the number of loan projects under implementation will gradually increase, and that RDs
need to make sure that the extra resources required to administer the larger portfolio will be
available. The average numbers of advisory TAs and regional TAs approved each year also
increased by 23% from 160 to 197, and the RDs also need to ensure that resources required to
administer these will be available (Figure 6).
Figure 6: Technical Assistance Approvals among the Regional Departments
300
250
200 Total
Number
Advisory TA
150
Preparatory TA
100 Regional TA
50
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Year
TA = technical assistance.
72. In the non-operations departments, there has been a major reallocation of resources
from advisory TAs to regional TAs. During 1995–2001, about 60% of the TA budget was
allocated for regional TAs and 40% for advisory TAs, but during 2002–2004 the allocation
shifted to 93% for regional TAs and 7% for advisory TAs. The average number of TAs approved
each year also dropped from 56 during 1995–2001 to 44 during 2002–2004.
73. Annual TA approvals by sector are shown in Table 21 for the past decade. The more
obvious trends in the data include the following:
(i) Only the regional and multisector TA sectors showed an increase in the
proportion of total TA approvals by amount across the decade.
(ii) Finance TAs peaked in 1997 in response to the Asian financial crisis, and TAs for
law, economic management, and public policy peaked immediately thereafter
during 1999–2001.
(iii) While all of the other sectors showed a general decreasing trend in their shares
of TA approvals across the decade, none of the decreases was very pronounced,
and the year-to-year changes within each sector were variable.
32
Table 21: TA Approvals by Year and Sector
($ million)
Sector 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Average
Law, Economic Mgt. & Public Policy 24.4 20.8 30.5 27.9 44.4 35.8 42.1 31.5 36.5 28.6 32.2
Agriculture & Natural Resources 22.6 26.0 16.2 14.7 19.9 25.0 15.1 17.1 17.4 27.2 20.1
Transportation & Communication 12.3 15.2 15.6 12.1 13.9 14.9 11.2 18.1 12.7 15.9 14.2
Finance 9.9 8.7 18.7 15.7 15.6 15.4 10.7 15.6 11.5 10.3 13.2
Energy 13.6 11.3 11.4 11.1 10.1 8.8 9.0 10.0 13.1 15.1 11.3
Education 8.1 11.0 10.6 6.0 5.1 9.6 3.4 8.0 5.7 8.3 7.6
Water Supply, Sanitation & Waste Mgt. 6.6 5.1 6.0 6.9 5.8 4.0 6.5 6.4 5.8 9.1 6.2
Industry and Trade 6.1 5.8 4.1 5.0 2.3 8.9 3.8 9.7 6.0 7.8 6.0
Health, Nutrition & Social Protection 6.8 2.2 5.1 6.5 6.5 7.1 4.8 3.0 11.4 4.7 5.8
Multisector 12.4 8.8 7.6 8.0 7.3 4.5 8.1 19.0 4.3 27.4 10.7
Regional 20.0 37.1 27.5 34.3 36.5 34.8 29.5 40.6 50.9 42.3 35.3
Total 142.8 151.8 153.3 148.2 167.3 168.9 144.1 179.0 175.2 196.6 162.7
Source: Project Coordination and Procurement Division.
3. TA Closures
74. There were 1,016 ongoing TAs at the end of 2004. Also, 168 TAs were completed and
300 were financially closed during 2004. It has often taken considerable time to financially close
completed TAs due to delays in the submission or processing of the consultants’ final claims. In
addition, many TAs were not financially closed immediately after completion so that the division
responsible could utilize residual funds for related activities. These issues are being addressed
by changes to the procedures to close TA accounts, and should not be such a problem in the
future.
4. Distribution of TA among DMCs
75. The allocation of TA resources among DMCs for the past decade is shown in Table 22,
with details provided for the 18 DMCs that received at least 1% of the TA approvals during the
past 3 years (2002–2004). There has been a fairly steady increase in the total annual TA
approvals across the decade from $143 million in 1995 to $197 million in 2004 (an increase of
3.6% per annum). In 2004, there was a very large increase in the TA provided to Pakistan and a
relatively large amount of TA also was provided to Afghanistan beginning in 2002. This parallels
the increases in loans to Afghanistan to support the post conflict reconstruction efforts, and to
Pakistan in support of the continuing war on terrorism.
76. Several trends have developed in the allocation of TA during the decade, as illustrated in
Figure 7. From the graphs of the 3-year moving averages, it is clear that the shares of TA
resources approved for the 18 largest TA recipients and for regional TAs have been increasing,
while the shares approved for the 18 smallest TA recipients have been decreasing. If these
trends continue, there could be detrimental effects on ADB’s assistance programs to some of
the smallest DMCs, including many Pacific DMCs and the Maldives, for whom TA can make up
a significant part of the assistance program.
33
Table 22: TA Approvals by DMC and Year
($ million)
DMC 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 %a
1. Indonesia 11.1 13.1 10.2 11.3 11.3 13.4 15.9 19.1 12.5 17.6 8.9
2. Pakistan 2.9 5.5 6.5 3.9 2.1 7.2 6.6 7.7 10.0 28.9 8.5
3. PRC 18.4 13.1 19.4 23.5 19.9 16.7 12.4 13.2 13.0 16.7 7.8
4. Afghanistan - - - - - - - 15.1 10.5 13.6 7.1
5. India 5.1 7.6 6.3 4.5 7.2 9.5 8.0 13.2 14.7 11.2 7.1
6. Viet Nam 11.0 10.1 9.5 5.9 10.3 9.1 8.4 9.3 8.6 7.7 4.6
7. Cambodia 9.8 9.4 1.9 1.4 6.7 4.4 6.8 6.5 6.3 4.6 3.2
8. Philippines 6.1 6.6 7.6 6.5 7.3 6.4 7.6 6.6 4.4 6.0 3.1
9. Bangladesh 5.5 9.5 8.1 4.8 7.4 4.6 4.9 4.9 5.1 6.3 3.0
10. Sri Lanka 3.9 2.2 7.1 7.2 7.9 6.7 4.1 4.8 5.4 4.0 2.6
11. Lao PDR 5.4 5.4 5.1 4.8 5.9 7.7 5.2 3.7 3.3 6.1 2.4
12. Nepal 2.8 4.3 6.3 3.8 4.4 7.3 4.0 3.9 4.2 3.2 2.0
13. Uzbekistan - 1.7 4.4 4.7 3.7 3.3 2.3 4.0 3.2 2.5 1.8
14. Tajikistan - - - 1.7 3.8 4.9 2.1 2.7 3.4 2.8 1.6
15. Kyrgyz Rep. 6.0 2.3 3.6 3.9 2.9 4.3 2.2 2.7 1.1 3.9 1.4
16. Mongolia 6.0 5.7 7.4 2.2 4.1 3.6 3.8 3.5 1.3 2.7 1.4
17. Azerbaijan - - - - - - 2.0 0.7 2.4 2.6 1.0
18. Kazakhstan 6.0 3.0 3.1 0.8 1.6 2.8 1.5 2.1 1.8 1.7 1.0
Subtotal 99.8 99.4 106.4 90.8 106.5 111.9 97.7 123.6 111.0 141.9 68.4
b
18 DMCs 23.1 15.2 19.4 23.1 24.4 22.1 16.9 14.8 13.3 12.4 7.3
Regional TA 20.0 37.1 27.5 34.3 36.5 34.8 29.5 40.6 50.9 42.3 24.3
Total 142.8 151.8 153.3 148.2 167.3 168.9 144.1 179.0 175.2 196.6 100.0
DMC = developing member country; TA = technical assistance.
a
The share of total amount of TA approvals during 2002–2004.
b
Six DMCs received no TA—the 4 graduated DMCs plus Myanmar and Palau.
Source: Project Coordination and Procurement Division.
Figure 7: 3-year Moving Averages Illustrating Trends in TA Approvals
($ million)
200
180
160
140
18 Top DMCs
120
Number
18 Bottom DMCs
100
Regional TA
80
Total TA
60
40
20
-
1997 1998 1999 2000 2001 2002 2003 2004
Year
DMC = developing member country; TA = technical assistance.
34
III. PORTFOLIO PERFORMANCE
A. Public Sector Portfolio
1. Project Performance Report Ratings13
77. The PPR is an important part of ADB’s project performance monitoring system (PPMS).
The PPR is updated following each project mission, at the end of every quarter, and at other
times as appropriate. In the PPR, the project is rated separately on the actual implementation
progress and on the likelihood that the development objectives will be achieved, using a four-
level scale: highly satisfactory (HS), satisfactory (S), partly satisfactory (PS), and unsatisfactory
(U). All projects with a PS or U rating are considered to be “problem projects” and projects with
4 or more “flags” marked among 11 rating criteria are also considered to be “potential problem
projects.” Problem projects and potential problem projects both fall into the category of “projects
at risk,” which should receive extra attention through ADB missions and other means until such
time as their performance improves enough to earn them at least an S rating.
78. At year-end 2004, the PPR rating for a large majority of projects was satisfactory or
better with regard to implementation progress (88%) and the likelihood of attaining the
development objectives (97%), as shown in Table 23. From the data presented in Table 24, the
proportion of projects rated as satisfactory or better at year-end has been fairly stable for the
past three years at about 86–87%, while the proportions of problem projects and projects at risk
also have been relatively stable at 13–14% and 14–16%, respectively. There was a small
increase in the proportion of projects rated unsatisfactory during 2003 and 2004.
Table 23: 2004 Project Performance Ratings
(% of projects)
Rating
Rating Category HS S PS U
Implementation Progress 4.5 83.9 6.1 5.5
Development Objectives 1.8 95.5 2.0 0.6
a
Combined Rating 0.6 86.8 7.1 5.5
HS = highly satisfactory; S = satisfactory; PS = partly satisfactory; U = unsatisfactory.
a
The lower of the implementation progress and development objectives ratings.
Source: Project Coordination and Procurement Division.
13
An interdepartmental working group was constituted in 2004 under the direction of COPP to review ADB’s PPMS.
Recommendations to improve the PPR are expected during 2005.
35
Table 24: Trends in Portfolio Ratings
(% of projects)
Rating 1998 1999 2000 2001 2002 2003 2004
Highly Satisfactory 2.5 3.2 1.8 1.2 1.0 0.6 0.6
Satisfactory 76.8 75.0 75.4 78.4 85.0 85.7 86.8
Partly Satisfactory 11.9 17.3 19.4 15.8 11.3 8.0 7.1
Unsatisfactory 8.8 4.6 3.4 4.6 2.8 5.8 5.5
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0
a
Problem Projects 20.7 21.9 22.8 20.4 14.1 13.8 12.6
b
Potential Problems - - - 6.0 2.0 0.8 1.4
At Risk 20.7 21.9 22.8 26.4 16.1 14.6 14.0
a
A combination of partly satisfactory and unsatisfactory projects.
b
Projects rated satisfactory or better, but with four or more potential problems flagged.
Source: Project Coordination and Procurement Division.
79. As presented in Table 25, for the past 3 years the shares of the loan portfolio rated as
problem projects (15–17%) and as projects at risk (17–18%) in terms of the aggregate loan
amounts were somewhat greater than the corresponding shares in terms of loan numbers. This
implies that projects with larger loans have a slightly higher likelihood of becoming problem
projects.
Table 25: Trends in Loan Portfolio Ratings by Amount and % of Total
($ million)
Ratings by $ Amounts 1998 1999 2000 2001 2002 2003 2004
Highly Satisfactory 4,803 5,571 516 604 341 91 111
Satisfactory 26,073 22,644 22,905 25,109 26,986 27,206 27,357
Partly Satisfactory 4,937 8,702 7,566 7,094 4,185 3,498 2,850
Unsatisfactory 2,668 1,831 2,800 1,313 821 2,172 2,332
Total 38,482 38,748 33,786 34,121 32,334 32,966 32,649
Problem Projects 7,606 10,533 10,366 8,407 5,007 5,669 5,181
Potential Problems - - - 1,680 594 387 382
At Risk 7,606 10,533 10,366 10,087 5,601 6,056 5,563
Ratings by % of $ Amounts
Highly Satisfactory 12.5 14.4 1.5 1.8 1.1 0.3 0.3
Satisfactory 67.8 58.4 67.8 73.6 83.5 82.5 83.8
Partly Satisfactory 12.8 22.5 22.4 20.8 12.9 10.6 8.7
Unsatisfactory 6.9 4.7 8.3 3.8 2.5 6.6 7.1
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Problem Projects 19.8 27.2 30.7 24.6 15.5 17.2 15.9
Potential Problems - - - 4.9 1.8 1.2 1.2
At Risk 19.8 27.2 30.7 29.6 17.3 18.4 17.0
Source: Project Coordination and Procurement Division.
2. Start-up Indicators
80. Loan approval by ADB’s Board of Directors means that loan processing has been
completed and the project or program is essentially ready for implementation from ADB’s
perspective. However, before implementation can actually begin, the loan still must be signed
by ADB and the borrower, and declared effective by ADB once the conditionalities have been
met. Delays during this start-up period leave committed resources unutilized, so the goal is to
have the loan signed and declared effective as quickly as possible following approval. Loan
36
signing would normally be expected within about one month from approval, and the standard
loan agreement provides for 90 days from loan signing to loan effectiveness. However, the
average time taken from approval to effectiveness for all loans has increased by 24% from
about 206 days or 6.8 months during 1995–1997 to 255 days or 8.4 months during 2002–2004
(Table 26). Thus, on average it takes about twice as long as expected to make a loan effective.
There was an increase of 31% from 218 to 285 days for project loans and an increase of
73% from 81 to 141 days for program loans. The changes have not been steady and gradual,
but despite the large fluctuations from year to year, the increasing trends are clearly visible in
Figure 8.
Table 26: Average Start-up Times for Loans Made Effective by Year
(in days)
Item 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Average
Project Loans (number) 52 57 76 67 60 42 55 59 55 70 59
Approval to Signing 101 87 123 100 121 98 97 120 117 150 111
Signing to Effectiveness 89 110 142 114 111 101 130 180 152 135 126
Total 191 197 265 214 232 199 227 301 270 285 238
Program Loans (number) 3 5 11 15 10 10 14 18 14 14 11
Approval to Signing 15 23 80 47 15 58 51 42 44 66 44
Signing to Effectiveness 35 48 44 22 13 30 21 48 135 86 48
Total 50 71 123 69 28 88 72 90 180 152 92
OCR Loans (number) 25 30 46 38 39 22 25 30 20 37 31
Approval to Signing 107 113 142 76 97 104 91 145 118 165 116
Signing to Effectiveness 82 108 117 85 88 74 99 103 150 122 103
Total 190 222 258 161 185 178 189 248 268 287 219
ADF Loans (number) 30 32 41 44 31 30 44 47 49 47 40
Approval to Signing 88 52 90 103 117 80 86 74 96 114 90
Signing to Effectiveness 90 103 144 107 110 97 113 179 148 130 122
Total 177 155 234 210 226 178 199 253 244 244 212
All Loans (number) 55 62 87 82 70 52 69 77 69 84 71
Approval to Signing 97 82 117 91 106 90 88 102 103 136 101
Signing to Effectiveness 86 105 130 97 97 88 108 149 149 127 114
Total 183 187 247 187 203 178 196 251 251 263 215
ADF = Asian Development Fund; OCR = ordinary capital resources.
Note: This table includes 2 loans in 2004 that were not previously captured in the Project Coordination and
Procurement Division quarterly reports.
Source: Project Coordination and Procurement Division.
37
Figure 8: Average Time Taken from Loan Approval to Loan Effectiveness
(in days)
350
300
250
All Loans
200
Days
Projects
150
Programs
100
50
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Year
81. The lengthening start-up delays come despite the recommended application of various
project-readiness filters and may indicate that many projects continue to be approved before the
borrowers are ready to implement them. The project-readiness filters are good practices that
mission leaders and projects divisions are encouraged (but not required) to complete prior to
loan negotiations.14 These good practices include
(i) having the Project Implementation Unit (PIU) fully established, including the
appointment of the project manager, project accountant, and procurement
specialist;
(ii) obtaining government approval for the project monitoring and evaluation
indicators;
(iii) completing an assessment of the executive agency’s financial management
capacity; and making final arrangements for financial, procurement, and audit
systems;
(iv) having the funding for the first year of project implementation allocated in the
government’s annual budget;
(v) preparing bidding documents for the first full year of project implementation;
(vi) having resettlement plans finalized by the executive agency and approved by
ADB, and securing land and rights of way for the first year of project
implementation;
(vii) preparatory actions to recruit project consultants; and
(viii) finalizing the project administration memorandum.
82. In their Final Report on the Effectiveness of ADB’s Reorganization, the independent
assessment panel proposed that the director general of the concerned RD should certify that
each project is ready for Board consideration. It was subsequently confirmed that this proposal
could be implemented fairly quickly by requiring the director general of the RD to submit a
14
The project-readiness filters are described in the Project Administration Instructions, Section 1.01 C. 1.
38
memorandum to Management regarding each project to certify its readiness. 15 A simple
checklist comprising the project-readiness filters and other readiness criteria could be easily
attached to the memorandum. With regard to the readiness filters, one of three boxes could be
checked: yes, no, or not applicable. Of course, it would not be required that all of the readiness
filters be completed before Board consideration, but it would be useful to know which were
completed and which were not.
83. Every year, ADB sets clear lending targets for each RD and sector division. It is the need
to meet these lending targets that is generally accepted as the cause for the persistent
“bunching” phenomenon—the tendency for an abnormally large proportion of projects to be
approved during the fourth quarter each year. The inference is that the year-end rush to
approve loans to meet the annual lending targets results in many loans being approved without
regard to the readiness of the borrower to sign the loan or of the executing agency to implement
the project or program. A move toward multiyear allocations and lending targets should help to
reduce bunching in the future.
84. Other factors contributing to start-up delays may include such issues as the application
of increasingly complex conditions for effectiveness in more complex projects, and the fact that
more projects are being prepared by inexperienced mission leaders.
85. The average time taken from approval to signing for all loans during 2004 was 136 days,
a 46% increase from the average of 93 days required during 1995–2003. The average time
taken from loan signing to effectiveness during 2004 was 127 days, which was an improvement
on the average of 149 days required during 2002–2003, but still 41% longer than the 90 days
stipulated in the loan agreements.
86. At the end of each year there is a carry-over to the next year of loans that have been
approved or signed, but have not yet been made effective, as shown in Table 27. The average
annual carry-over of about 68 loans is larger than would be expected, and is for the most part
due to bunching.
Table 27: Annual Numbers of Loans Made Effective or Approved but Not Yet Effective
Loan Status 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Average
Approved but Not Signed 33 52 56 31 26 50 51 64 57 48 46.8
Signed but Awaiting Effectivity 22 22 18 18 13 22 22 14 32 32 21.5
Total 55 74 74 49 39 72 73 78 89 80 68.3
Declared Effective
Number 55 62 87 82 70 52 69 77 69 84 71
Amount ($ million) 3,919 5,375 9,380 6,142 5,716 3,973 4,707 5,265 4,451 5,686 5,462
Source: Project Coordination and Procurement Division.
87. The analysis of the time taken between loan approval to signing and then to
effectiveness for the 70 project loans and 14 program loans made effective during 2004 is
presented in Table 28. The average time to effectiveness for the project loans was 285 days or
9.5 months (the project norm), while median was about 250 days; the shortest time was 1 day
for an OCR loan to India processed by the Governance, Finance, and Trade Division of the
South Asia Department (SARD), and the longest time was 796 days for an ADF loan to Pakistan
15
Memorandum dated 27 January 2005 from directors general of the Budget, Personnel, and Management Systems
Department and Strategy and Policy Department to the President, regarding follow-up actions to the Final Report of
the Independent Assessment Panel on the Effectiveness of ADB’s Reorganization.
39
Table 28: Time from Approval to Effectiveness for Project and Program Loans in 2004
(in days)
PROJECTS No. % $ million % Ap-Sg Sg-Ef Ap-Ef x Norm
Loans Declared Effective 70 4,566.2 150 135 285 1.00
By Source of Funds
Asian Development Fund 41 58.6 1,130.7 24.8 113 134 246 0.86
Ordinary Capital Resources 29 41.4 3,435.5 75.2 204 136 340 1.19
By Regional Department
South Asia 27 38.6 1,566.3 34.3 112 139 251 0.88
Mekong 11 15.7 374.4 8.2 137 147 284 1.00
Pacific 3 4.3 75.6 1.7 162 130 292 1.02
East and Central Asia 22 31.4 2,062.5 45.2 187 113 300 1.05
Southeast Asia 7 10.0 487.4 10.7 200 168 368 1.29
By Sector Division
Governance & Finance 11 15.7 205.3 4.5 90 106 196 0.69
Energy 3 4.3 231.4 5.1 76 145 221 0.77
Transport & Communications 11 15.7 1,696.1 37.1 136 108 244 0.86
Social Sectors 22 31.4 835.4 18.3 127 133 260 0.91
Agriculture, Environment & Natural Resources 9 12.9 329.7 7.2 167 166 332 1.17
Infrastructure 9 12.9 1,140.9 25.0 297 200 498 1.75
Pacific Headquarters 3 4.3 75.6 1.7 162 130 292 1.02
Indonesia RM 1 1.4 25.8 0.6 3 1 4 0.01
Uzbekistan RM 1 1.4 26.0 0.6 354 37 391 1.37
From Approval to Effectiveness
Fastest Loan = 1 day - 1 1 0.00
1 - 30 days 5 7.1 79.3 1.7
31 - 91 days 3 4.3 86.2 1.9
92 - 182 days 12 17.1 268.1 5.9
183 - 365 days 27 38.6 1,843.4 40.4
366 - 547 days 17 24.3 1,552.0 34.0
548 - 730 days 5 7.1 693.2 15.2
> 730 days 1 1.4 44.0 1.0
Slowest Loan = 796 days 455 341 796 2.79
PROGRAMS No. % $ million % Ap-Sg Sg-Ef Ap-Ef x Norm
Loans Declared Effective 14 1,119.8 66 86 152 1.00
By Source of Funds
Asian Development Fund 6 42.9 213.7 19.1 121 107 227 1.49
Ordinary Capital Resources 8 57.1 906.0 80.9 25 71 96 0.63
By Regional Department
Southeast Asia 1 7.1 200.0 17.9 3 1 4 0.03
South Asia 10 71.4 873.5 78.0 37 88 126 0.83
East and Central Asia 2 14.3 19.3 1.7 97 152 248 1.63
Mekong 1 7.1 26.9 2.4 350 22 372 2.45
Pacific 0 0.0 - 0.0 - - - -
By Sector Division
Governance & Finance 7 50.0 513.7 45.9 45 82 126 0.83
Agriculture, Environment & Natural Resources 2 14.3 83.1 7.4 176 11 187 1.23
Social Sectors 3 21.4 222.9 19.9 82 129 211 1.39
Energy 1 7.1 100.0 8.9 8 228 236 1.55
Transport & Communications 0 0.0 - 0.0 -
Infrastructure 0 0.0 - 0.0 -
Pacific Headquarters 0 0.0 - 0.0 -
Indonesia RM 1 7.1 200.0 17.9 3 1 4 0.03
Uzbekistan RM 0 0.0 - 0.0 -
From Approval to Effectiveness
Fastest Loan = 1 day 1 - 1 0.01
1 - 30 days 5 35.7 542.4 48.4
31 - 91 days 0 0.0 - 0.0
92 - 182 days 4 28.6 282.3 25.2
183 - 365 days 3 21.4 263.5 23.5
366 - 547 days 2 14.3 31.5 2.8
548 - 730 days 0 0.0 - 0.0
> 730 days 0 0.0 - 0.0
Slowest Loan = 391 days 137 254 391 2.57
Ap-Ef = approval to effectiveness; Ap-Sg = approval to signing; RM = resident mission; Sg-Ef = signing to
effectiveness; x Norm = factor x the average number of days for loans to be made effective.
Note: The East and Central Asia and South Asia departments have separate energy divisions and transport and
communications divisions, while The Mekong, Pacific, and Southeast Asia departments have an infrastructure
division.
Source: Asian Development Bank management information systems.
40
processed by the Social Sectors Division of SARD. In contrast, the average time to
effectiveness for the program loans was 152 days or 5.0 months (the program norm), while the
median was about 139 days, the shortest time was 1 day for an ADF loan to Afghanistan
processed by the Agriculture, Environment, and Natural Resources Division of SARD, and the
longest time was 391 days for an ADF loan to Tajikistan processed by the Governance,
Finance, and Trade Division of the East and Central Asia Department (ECRD). The average
time to effectiveness for all project and program loans was 263 days.
a. Project Loans during 2004
88. For project loans, the average time taken from approval to effectiveness at 246 days for
41 ADF loans was 14% shorter than the norm of 285 days, and the average time for OCR loans
was 19% longer than the norm at 340 days. This was the largest differential (94 days) between
ADF and OCR loans for the past decade, and the second year in a row that OCR loans took
longer than ADF loans to become effective. On average it took about 91 days longer for OCR
loans than for ADF loans to proceed from loan approval to signing, but the average time from
signing to effectiveness was essentially the same.
89. The average OCR project loan at about $119 million was 4.3 times larger than the
average ADF loan of almost $27 million. There was a strong positive correlation between the
size of loan and the length of time taken to effectiveness: loans declared effective within
182 days averaged $21.7 million; those taking 183–365 days averaged $68.3 million; and those
taking 366–730 days averaged $102 million.
90. There were significant differences in the length of the average start-up time among the
RDs: SARD had the shortest average time for 27 loans of 251 days (12% shorter than the
norm); while the Mekong Department (MKRD) with 11 loans, Pacific Department (PARD) with
3 loans and ECRD with 22 loans were close to the norm of 285 days; and the Southeast Asia
Department (SERD) with 7 loans had the longest average time at 368 days (29% longer than
the norm). In other words, while all RDs appear to be sending loans to the Board prematurely,
the problems are most evident in SERD where it takes about 1 year on average to declare a
loan effective.
91. There were even greater differences among the sector divisions. Governance and
finance divisions with 11 loans had the shortest start-up times, averaging 196 days (31% shorter
than the norm); followed by energy divisions in ECRD and SARD with 3 loans at 221 days
(23% shorter); transport and communications divisions, also in ECRD and SARD, with 11 loans
at 244 days (14% shorter); and social sectors divisions with 22 loans at 260 days (9% shorter).
The agriculture, environment, and natural resources divisions needed longer periods to make
projects effective (9 loans at 332 days, or 17% longer than the norm), as did the infrastructure
divisions in MKRD, PARD, and SERD (9 loans at 498 days, or 75% longer than the norm).16
b. Program Loans during 2004
92. For program loans, the average time taken from approval to effectiveness at 227 days
for ADF loans was 49% longer than the norm of 152 days, and the average time for OCR loans
was 37% shorter than the norm at 96 days. The average OCR program loan at about $113
million was 3.2 times larger than the average ADF program loan at almost $36 million. Unlike
16
ECRD and SARD have separate energy and transport and communications divisions; while energy, transport, and
communications projects are the responsibility of an infrastructure division in MKRD, PARD, and SERD.
41
project loans, there was a negative correlation between the size of program loan and the length
of time taken to effectiveness: 5 loans declared effective within 30 days averaged $108 million,
4 loans taking 92–182 days averaged $70.6 million, 3 loans taking 183–365 days averaged
$87.8 million, and 2 loans taking 366–547 days averaged $15.8 million.
93. There were significant differences in the length of the average start-up time for program
loans among the RDs: SERD had the shortest time for 1 loan at 4 days (97% shorter than the
norm); SARD had an average time of 126 days for 10 loans (17% shorter); ECRD had an
average time of 248 days for 2 loans (63% longer than the norm); and MKRD had the longest
time for 1 loan at 372 days (145% longer). No PARD program loans became effective in 2004.
94. There were also significant differences in the length of the average start-up time for
program loans among the sector divisions. Governance and finance divisions had the shortest
start-up times for 7 loans at 126 days (17% shorter than the norm); followed by agriculture,
environment, and natural resources divisions with 2 loans at 187 days (23% longer than the
norm); social sectors divisions with 3 loans at 211 days (39% longer); and energy divisions with
1 loan at 236 days (55% longer). The transport and communications divisions and infrastructure
divisions had no program loans that became effective in 2004.
3. Contract Awards and Commitments for Projects
95. As shown in Figure 9, SERD and ECRD were the best performers during 2004,
achieving 110% and 104%, respectively, of their contract awards and commitments targets.
MKRD was next with an 83% achievement rate, while SARD and PARD achieved only 69% and
67%, respectively, of their targets. In SERD, the overall achievement was quite high due to the
over-achievement of contract awards and commitments in Indonesia. In ECRD, the targets were
exceeded in PRC, Kyrgyz Republic, and Mongolia. In MKRD, achievement was lowest in
Cambodia, but also fell short of expectations in Viet Nam and Lao PDR. In PARD, the
performance in all 9 DMCs fell short of the targets, and was less than 10% in 4 DMCs. In SARD,
targets were exceeded in Afghanistan and Bhutan, but performance was relatively poor in India,
Nepal, Pakistan, and especially Maldives.
96. There were also large differences in the achievement of OCR and ADF projections
between the RDs. Targets were exceeded for OCR projects in MKRD, SERD and ECRD, but
were not achieved in PARD and especially SARD. Targets were exceeded for ADF projects in
SERD and ECRD, but were not achieved in SARD, MKRD and especially PARD.
42
Figure 9: Achievement of Projected Contract Awards and Commitments
140
120
100
80
Percent
60
40
0
MKRD SARD ECRD SERD PARD Total
OCR ADF Total
ADF = Asian Development Fund; ECRD = East and Central Asia Department;
MKRD = Mekong Department; OCR = ordinary capital resources; PARD = Pacific Department;
SARD = South Asia Department; SERD = Southeast Asia Department.
Source: Project Coordination and Procurement Division.
97. As shown in Table 29, there was no change in the contract award ratio from 2003 to
2004, and for both years it was somewhat below the average for the past decade.17 Assuming
that the typical ADB project is implemented for 5 or 6 years, and that contract awards and
commitments are spread evenly across the implementation period, 18 the expected contract
award ratio would be 16.7–20.0%. Based on these assumptions, the contract award ratio has
been somewhat smaller than expected during 2003 and 2004, although the average of the
ratios for the past decade is well within the expected range.
Table 29: Contract Award Ratio for Loan Projects
Item 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Average
Contract Award /
Commitment Ratio (%) 24.1 20.0 19.5 15.8 21.4 17.7 13.0 17.9 14.6 14.6 17.8
Note: 1995 ratio based on 1999 year-end run, 1996 ratio based on 2000 year-end run, 1997–2000 ratio
based on 2001 year-end run.
Source: Project Coordination and Procurement Division.
98. A clear declining trend is apparent in the 3-year moving average for the annual contract
award ratios, shown in Figure 10. This implies that the average actual project implementation
17
The contract award ratio is the percentage of actual contract awards and commitments to funds available for
contract awards and commitments. The latter include new amounts from loans approved during the year. A change
could reflect a change in the awards and commitments, or a change in the amount available, or a combination of
both. Other things being equal, a higher figure represents better performance in the sense that a higher proportion
of the funds available have been awarded or committed.
18
These assumptions would be approximated for a sufficiently large portfolio of projects spanning a number of years,
if the general structure of the projects were similar from year to year.
43
period has been getting longer, either as part of the project design or due to extensions required
during implementation. This trend is closely related to the observed increase in loan closing
delays and provides additional evidence that project schedules tend to be unrealistically short.
Figure 10: Contract Award Ratio 3-year Moving Average
25
20
Percent
15
10
5
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Years
Note: Each annual data point represents the average of the contract award ratios for that year plus the
previous two years.
99. As shown in Figure 11, the contract award ratio varied substantially among DMCs
during 2004 as it did in previous years. Of the 27 DMCs, 12 had a contract award ratio in the
expected range of 16.7–25%; 5 had ratios that were larger than expected; and 10 had ratios
that were smaller than expected. The larger ratios suggest either shorter planned project
implementation periods or accelerated implementation, while the smaller ratios suggest either
longer planned project implementation periods or delayed implementation.
Figure 11: Country Contract Award Ratios
70
60
50
40
(%)
30
20
10
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Vi
Ky gh
D
Ph
In
pu az
C
, P Fi
Ba
U
N
Fe
ar
pl
a,
M
eo
si
na
P
ne
hi
o
ro
La
C
ic
M
Note: For a country for whom the weighted average project implementation period is 4–6 years, the contract
award ratio should lie within 16.7–25.0% as shown on the graph.
Source: Project Coordination and Procurement Division.
44
4. Loan Disbursements
100. At $3.45 billion, the total loan disbursements for 2004 declined for the second straight
year, and were also at their lowest level for the past decade, even though they reached 96% of
the annual target as shown in Table 30. Disbursements during 2004 were 78% of the annual
average since 1995, although much of that difference was due to the inflated disbursements of
program loans provided during 1997–1999 in response to the Asian financial crisis.
Disbursements for project loans at 98% of projections fared somewhat better than those for
program loans at 91% of projections. Similarly, OCR disbursements at 102% of projections were
better than ADF disbursements at 84% of projections.
Table 30: Annual Loan Disbursements: Projected vs. Actual
($ million)
Disbursements 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Average
A. By Type of Lending
Project, Projected 3,204 3,339 3,463 3,151 3,062 2,917 2,942 2,417 2,644 2,359 2,950
Project, Actual 3,249 3,544 3,772 3,403 3,087 3,020 3,014 2,446 2,579 2,315 3,043
Achievement (%) 101 106 109 108 101 104 102 101 98 98 103
Program, Projected 81 249 349 2,370 2,658 1,442 1,262 1,608 1,107 1,247 1,237
Program, Actual 238 212 2,620 3,280 1,674 938 809 1,700 1,125 1,139 1,373
Achievement (%) 294 85 751 138 63 65 64 106 102 91 111
B. By Source of Funds
OCR, Projected 2,214 2,353 2,616 4,347 4,438 3,262 3,089 2,970 2,605 2,350 3,024
OCR, Actual 2,342 2,521 5,237 5,539 3,647 2,823 2,799 3,011 2,575 2,399 3,289
Achievement (%) 106 107 200 127 82 87 91 101 99 102 109
ADF, Projected 1,071 1,235 1,196 1,175 1,282 1,097 1,115 1,055 1,145 1,256 1,163
ADF, Actual 1,145 1,234 1,154 1,144 1,114 1,135 1,024 1,136 1,129 1,055 1,127
Achievement (%) 107 100 96 97 87 104 92 108 99 84 97
C. Total Disbursements
Projected 3,285 3,588 3,812 5,522 5,720 4,359 4,204 4,025 3,751 3,606 4,187
Actual 3,487 3,755 6,392 6,683 4,761 3,958 3,823 4,147 3,704 3,454 4,416
Achievement (%) 106 105 168 121 83 91 91 103 99 96 105
ADF = Asian Development Fund; OCR = ordinary capital resources.
Source: Project Coordination and Procurement Division.
101. The data in Table 30 exhibit some clear trends when the 3-year moving averages are
examined as shown in Figure 12. First, there has been a steady decline in the average annual
disbursements for project loans, from $3.57 billion for 1996–1998 to $2.45 billion for 2002–2004,
a decrease of 32%. That decline has been mirrored in the graphs for OCR and total
disbursements. Second, the peak of $2.53 billion in average annual disbursements for program
loans during 1997–1999 also shows up clearly on the graphs for OCR and total disbursements.
Program loan disbursements subsequently started a slow but steady rise from $1.14 billion
during 1999–2001 to $1.32 billion during 2002–2004. Third, the average annual ADF
disbursements have remained steady at around $1.10 billion.
102. There is a decreasing trend of disbursements from the OCR loans that historically have
provided the major share of ADB’s annual income. If it were not for the sharp increase in
program lending during the Asian financial crisis, and a sustained higher level of program
lending since the crisis, the decrease in OCR lending would have been even sharper. This
evidence supports the contention that ADB needs to develop new products, services, and
procedures to better meet the changing needs of the middle-income, developing member
countries. ADB is addressing the issue through the innovation and efficiency initiative and other
efforts.
45
Figure 12: 3-year Moving Averages of Annual Disbursements
7,000
6,000
5,000
($ million)
4,000
3,000
2,000
1,000
-
1997 1998 1999 2000 2001 2002 2003 2004
Project loans Program loans OCR ADF Total
ADF = Asian Development Fund; OCR = ordinary capital resources.
Note: Each of the data points on the graphs shows the average of the annual
disbursements for that year plus the previous 2 years.
103. Since 1995, about 69% of loan disbursements have been for projects and 31% for
programs; about 75% of loan disbursements have been from OCR and 25% from ADF
(Table 31). The share of program loan disbursements increased tremendously during
1997–1999 in response to the Asian financial crisis, and has averaged about 30% of
disbursements since 2000 compared to only 6% during 1995–1996 (Figure 13). This will require
some adjustment if the policy to cap program lending at 20% of total lending is to be followed.
Table 31: Loan Disbursements by Type of Loan and Source of Funds
Disbursements 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Average
A. Total ($ million)
Disbursements 3,487 3,755 6,392 6,683 4,761 3,958 3,823 4,147 3,704 3,454 4,416
B. By Type of Loan
Projects (%) 93.2 94.4 59.0 50.9 64.8 76.3 78.8 59.0 69.6 67.0 68.9
Programs (%) 6.8 5.6 41.0 49.1 35.2 23.7 21.2 41.0 30.4 33.0 31.1
C. By Source of Funds
OCR (%) 67.2 67.1 81.9 82.9 76.6 71.3 73.2 72.6 69.5 69.4 74.5
ADF (%) 32.8 32.9 18.1 17.1 23.4 28.7 26.8 27.4 30.5 30.6 25.5
ADF = Asian Development Fund; OCR = ordinary capital resources.
Source: Project Coordination and Procurement Division.
46
Figure 13: Loan Disbursements by Type of Loan
8,000
7,000
6,000
$ million
5,000 Total
4,000 Projects
3,000 Programs
2,000
1,000
-
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Year
104. The disbursement ratios for 2004 and 1996, at 17.7%, were the lowest during the past
decade, and well below the average of 21.4% for the decade (Table 32).
Table 32: Annual Disbursement Ratios
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Average
Disbursement ratio 18.4 17.7 25.2 29.3 22.2 20.5 20.5 22.2 20.2 17.7 21.4
Source: Project Coordination and Procurement Division.
5. Program Loan Tranche Releases
105. According to the original loan schedules, there were to have been 35 tranche releases
worth $1.52 billion from 33 program loans during 2004 (Appendix 3). In addition, there should
have been 22 delayed tranche releases worth $829 million from 21 program loans that had
originally been scheduled for disbursement during 2001–2003, for a total of 57 tranche releases
worth $2.35 billion. However, there were only 27 tranche releases (47% of the target), of which
16 were originally scheduled during 2004, 8 during 2003, 2 during 2002, and 1 early release that
was originally scheduled during 2005. Thus, 31 previously scheduled tranche releases were
delayed until at least 2005—19 of 36 tranche releases (53%) planned for 2004, 9 tranche
releases originally scheduled during 2003, 2 originally scheduled during 2002, and 1 originally
scheduled during 2001.
106. The 27 tranche releases during 2004 came to a total of $1.14 billion disbursed to
13 DMCs. 19 The top 3 loan recipients were Pakistan with 9 tranche releases totaling
$536 million (47%), Indonesia with 3 tranche releases totaling $248 million (22%), and the
Philippines with 1 tranche release of $75.0 million (7%).
19
One additional tranche release of $5.8 million was authorized for Tajikistan in December 2004, but not released
until January 2005. This has been the 28th tranche release for 14 DMCs.
47
107. Of the 27 tranche releases made during 2004, 14 were first tranches, 1 was an incentive
tranche, 11 were second tranches, and 1 was a third tranche. Nine of the releases were for the
final tranche of a program loan, following which the loan account was to be closed. Only 7 of the
tranches were released on schedule (26%), 13 were released with a delay of 1–12 months
(48%), 5 with a delay of 13–24 months (19%), and 2 with a delay of 25–36 months (7%).
108. The 31 delayed tranche releases at the end of 2004 came to a total of $1.24 billion
committed to 13 DMCs. The top three DMCs in terms of delayed tranche releases were
Pakistan with 8 delayed tranche releases worth $520 million (42%), Indonesia with 3 delayed
tranche releases worth $300 million (24%), and India with 2 delayed tranche releases worth
$160 million (13%).
109. Of the 31 delayed tranche releases at year-end 2004, 3 are first tranches, 2 are
incentive tranches, 21 are second tranches, and 5 are third tranches. Seventeen of the delayed
releases are for the final tranche of a program loan. As of January 2005, 19 of the tranches had
been delayed by 1–12 months (61%), 10 had been delayed by 13–24 months (32%), 1 had
been delayed by 25–36 months (3%) and 1 by 37–48 months (3%).
110. At year-end 2004, the potential program loan tranche releases for 2005 comprised
27 delayed tranche releases from 2001–2004 worth a total of $1.19 billion, plus 21 regularly
scheduled tranche releases worth $543 million, for a total of 48 tranche releases from 41 loans
worth $1.74 billion in aggregate. This does not include potential disbursements from any new
program loans that will be approved during 2005. If recent trends hold, it is likely that the actual
disbursements in 2005 will be considerably smaller.
111. The figures presented here suggest that there is a recurring problem with overly
optimistic estimates of the speed with which the DMCs can meet the requirements for program
loan tranche releases, especially second and subsequent tranches. Recently, the carry-over of
delayed tranche releases from year to year has been quite large, averaging more than
$1 billion, about 40% of which have been delayed by a year or more.
112. The reasons that program lending often runs into difficulty have been examined. 20
Policy-based aid should be provided to nurture policy reform in credible reformers—those
countries that are committed to pursue the reforms independently of the incentives provided by
donors. Conditionality does not work unless there is strong domestic support for reform, and
ex-ante conditionality appears to be largely ineffective in practice. This would explain the poor
performance of program lending in many DMCs. Outcome-based conditionality is presented as
an alternative to ex-ante conditionality, mainly because it promotes greater ownership and
accountability.
6. Cancellation of Surplus Loan Amounts
113. Every year a portion of the approved loan portfolio is cancelled for various reasons, with
the ultimate aim of making the resource commitments better fit the needs of the projects. The
cancellation of surplus loan amounts is in the borrower’s interest because it reduces their loan
charges. It is also in ADB’s interest because it makes unutilized resources available to finance
other development operations. However, the average loan cancellation of more than $1 billion
20
Quibria, M.G. 2004. Development Effectiveness—What Does Recent Research Tell Us? OED Working Paper No.
1, ADB, Manila.
48
per year for the past decade implies the imposition of costs to both ADB and the DMCs
involved, due to the demands on staff and other transaction costs.
114. Because it is impossible to know precisely and in advance all costs associated with a
planned project, all project loans include an allowance for contingencies in addition to the
estimated costs. The allowance for contingencies should be sufficient to cover expected but
indeterminate costs, such as price increases, plus a limited level of unforeseen additional costs
during the project implementation period. The system is designed to avoid the time-consuming
and sometime arduous process of sourcing, allocating, and releasing the additional funds often
needed to complete a project. When functioning as intended, it should result in a relatively small
surplus loan amount (generally less than the full allowance for contingencies) at the end of most
projects. However, external factors—such as the significant currency devaluations experienced
by many DMCs during the Asian financial crisis—can result in surplus loan amounts that are
even larger than the contingencies provided; and unusual cost increases brought on by events
such as oil price shocks can also result in the need for additional funds over and above the
contingencies allowance.
115. The amounts and percentages of the annual loan cancellations since 1995 are provided
in Table 33. For the past 8 years, the proportions of annual OCR loan cancellations have been
10–17% of the principal amount, and have been 15% or higher for the past 4 years. In the same
period, annual ADF loan cancellations were 3.2–14.7%, and have been increasing after a
minimum in 2001.
116. During 1999–2004, the percentage of loan funds cancelled has been consistently higher
for OCR loans than for ADF loans, averaging 14.3% for the former and 7.2% for the latter.
Factors contributing to this difference may include (i) the average OCR loan is about 4–5 times
larger than the average ADF loan; and (ii) ADF loans are significantly less expensive than OCR
loans, so there is a stronger incentive for the borrower to find ways to make the maximum use
of ADF loans.
Table 33: Public Sector Loan Cancellations by Source of Funds
($ million)
Source of Funds 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Average
OCR
Principal - - 4,743 9,910 6,800 10,016 5,943 6,519 5,450 5,208 6,824
Cancellation 237 699 491 1,330 858 1,051 892 1,012 924 794 919
% Cancelled - - 10.4 13.4 12.6 10.5 15.0 15.5 17.0 15.2 13.7
ADF
Principal - - 1,521 2,203 1,687 1,586 1,695 1,711 1,586 2,249 1,780
Cancellation 155 179 174 325 116 97 54 125 152 229 159
% Cancelled - - 11.4 14.7 6.9 6.1 3.2 7.3 9.6 10.2 8.7
OCR and ADF
Principal - - 6,264 12,114 8,487 11,602 7,637 8,230 7,036 7,457 8,603
Cancellation 392 878 665 1,655 974 1,149 946 1,137 1,076 1,023 1,078
% Cancelled - - 10.6 13.7 11.5 9.9 12.4 13.8 15.3 13.7 12.6
ADF = Asian Development Fund; OCR = ordinary capital resources.
Source: Project Coordination and Procurement Division.
49
117. During 2004, a total of $1.03 billion or 13.7% in surplus funds was cancelled from
111 loans (including 1 private sector loan) whose principal amount was $7.50 billion.21 Details of
the cancellations are presented in Appendix 4 and summarized in Table 34.
Table 34: Loan Cancellations by Department and Division (2004)
Approved Cancellation
Loans with Amount Total Cancellation
Division & Department Cancellations ($ million) ($ million) (%)
Agriculture, Natural Resources & Environment 9 345.53 83.81 24.3
Governance & Finance 2 153.00 148.57 97.1
Energy, and Transport & Communications 13 1,714.15 335.48 19.6
Social Sectors 2 84.05 10.44 12.4
Total South Asia 26 2,296.73 578.30 25.2
Agriculture, Natural Resources & Environment 19 670.76 73.28 10.9
Governance & Finance 2 47.85 5.76 12.0
Energy, Transport & Communications 5 864.40 98.40 11.4
Social Sectors 16 1,011.62 111.96 11.1
Total Southeast Asia 42 2,594.63 289.41 11.2
Agriculture, Natural Resources & Environment 3 26.19 3.23 12.3
Governance & Finance 4 428.96 6.74 1.6
Energy, Transport & Communications 6 625.28 51.93 8.3
Social Sectors 7 277.16 16.17 5.8
Total East & Central Asia 20 1,357.59 78.08 5.8
Agriculture, Natural Resources & Environment 4 110.22 26.26 23.8
Governance & Finance 1 4.50 0.0
Infrastructure 7 671.56 32.87 4.9
Social Sectors 6 390.84 13.95 3.6
Total Mekong 18 1,177.12 73.08 6.2
Headquarters 3 28.33 3.75 13.2
Total Pacific 3 28.33 3.75 13.2
Infrastructure 1 40.00 2.54 6.3
Total Private Sector 1 40.00 2.54 6.3
Grand Total 111 7,497.40 1,025.52 13.7
Source: Project Coordination and Procurement Division.
118. The following highlights for 2004 are drawn from the data in Appendix 4:
(i) Of the 111 loans with 124 cancellations in total, 23 loans (21%) had cancellations
that were greater than 20% of the approved loan amount, including one total loan
cancellation.
(ii) The two largest cancellations were for about $147 million each, 5 were for more
than $20 million each, and 17 were for more than $10 million each.
(iii) 52 OCR loans worth $5.22 billion had $796 million or 15.2% in cancellations.
(iv) 59 ADF loans worth $225 billion had $229 million or 10.2% in cancellations.
(v) By number, SERD had the most cancellations—49 cancellations for 42 loans,
followed by SARD with 28 cancellations for 27 loans, ECRD with 22 cancellations
for 20 loans, MKRD with 21 cancellations for 18 loans, PARD with
3 cancellations for 3 loans, and PSOD with one cancellation.
(vi) The divisions with the largest cancellations were the Transport and
Communications and Energy divisions of SARD, with a combined $335 million
21
Thirteen of the loans had two cancellations each during 2004.
50
cancelled from 13 loans; followed by the Governance, Finance, and Trade
Division of SARD with $149 million from 3 loans, the Social Sectors Division of
SERD with $111 million from 16 loans, and the Infrastructure Division of SERD
with $98 million from 5 loans.
119. The most common reasons cited for the loan cancellations were:
(i) loan closing, 61%;
(ii) local currency depreciation, 12%;
(iii) change in project scope, 7%;
(iv) cost under-run, 6%;
(v) change in financing arrangements, 2%; and
(vi) others, 12%.
120. Loan closing does not explain the cancellation of loan funds—it simply indicates that
some loan funds remained unutilized at the end of project implementation. In most cases, some
of the contingency allocation was not utilized, which is to be expected for most projects;
however, for those cases where the final cancellation is more than just the contingency amount,
it would be useful to explain the excess. In the future, instead of using the term “loan closing,” it
would be more informative to use “cancellation of unutilized contingency at closing” when the
cancelled amount is less than the original contingency allocation, and to provide additional
explanation when it is more than the original contingency allocation.22
121. Of the 124 cancellations of loan funds worth $1.03 billion made during 2004,
76 cancellations or 61% were made at loan closing. The total amount cancelled at loan closing
came to $577 million or nearly 13 % of the total approved amounts of $4.56 billion for the
69 loans involved, which would be fairly close to the amount budgeted for contingencies in
many projects. However, the amount cancelled at closing was greater than 10% of the approved
loan amount for 17 of the 69 loans (about 25%), and this suggests that for some of those loans
earlier attention to cancellations might have been in order.
7. Cost Overruns, and Changes in Scope and Implementation Arrangements
122. Data on project cost overruns and changes in project scope and implementation
arrangements during 2004 are presented in Appendix 5. According to the data in Table 35, the
annual occurrence of project cost overruns and changes in scope or implementation
arrangements has been relatively steady for the past decade. The only deviations from the norm
in 2004 were the significant increase in the number of loans with a major change in
implementation arrangements, and the larger than usual numbers of loans with multiple
changes in scope or implementation arrangements.
22
As and example, the Governance, Finance, and Trade Division of SARD provides a good explanation for the
cancellation of L1796-PAK: SME Trade Enhancement Finance. Use of the Foreign Currency Export Facility (FCEF)
was very low due to a fundamental change in the market environment that saw a steep downward trend in interest
rates, stable exchange rates for the rupee, and increasing confidence in the rupee. In this environment, FCEF was
not competitive, utilization by small and medium enterprises remained insignificant, and the Government decided to
prepay the loan as part of its debt restructuring program.
51
Table 35: Numbers of Loans with Changes in Cost, Scope
or Implementation Arrangements
Type of Change 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Average
Cost Overruns 2 4 6 5 6 4 4 3 1 3 3.8
Project Scope a 39 36 41 51 49 49 39 38 47 45 43.4
Major Change 15 14 15 14 13 21 9 12 14 14 14.1
Minor Change 25 22 26 38 36 28 30 26 33 35 29.9
Implementation
Arrangements a 18 25 34 32 37 31 24 26 31 40 29.8
Major Change 7 4 10 3 8 6 3 10 5 16 7.2
Minor Change 12 23 24 31 29 25 21 16 26 30 23.7
a
The number of loans with changes in scope or implementation arrangements is less than the sum of the
major and minor changes for a particular year when some loans have had multiple changes.
Source: Asian Development Bank management information systems; regional department reports.
123. The causes of and responses to the cost overruns for the three loans during 2004 were:
(i) 1832-COO(SF): Waste Management, Cook Islands. Cause: currency exchange
rate fluctuations; action: the shortfall is being funded by the Government.
(ii) 1820-NEP(SF): Melamchi Water Supply, Nepal. Cause: tunnel design
modifications due to problems discovered during additional geological
explorations, and increased risk contingencies due to the security situation;
action: discussed between donors and the Government, and the latter is seeking
the additional funds.
(iii) 1921-TUV(SF): Maritime Training, Tuvalu. Cause: higher than expected bids
for civil works due to a minor change in scope, large depreciation of the US dollar
against the Australian dollar, and increased prices; action: supplementary loan
2088-TUV(SF) approved.
124. Cost overruns have not been a major problem during the past decade. The continuing
low numbers of projects with cost overruns suggests that the practice of providing contingency
budgets to cover expected and unexpected cost increases and additional project costs has
been working. However, the continuing relatively large amounts of annual loan cancellations
(Section III.A.6.) suggests that allowances for contingencies may have been too high at least for
some types of projects. To save borrowers the extra costs associated with unnecessarily large
loan commitments, projects divisions should look more critically at this issue during loan
processing, and carefully review the recent trends in the use of contingency funds for similar
projects (similar DMCs and sectors).23
8. Audited Project Accounts and Agency Financial Statements
125. Many EAs continue to have difficulty in submitting their audited project accounts and
agency financial statements on time as shown in Table 36. There was full compliance in about
50–60% of the cases each year since 1995. The projects that were in full compliance plus those
that complied late made up nearly 75% of all projects in the decade, while those that did not
comply or only partly complied made up the remaining 25%. Performance during 2004 was
better than average for the decade, but slightly worse than 2003 for noncompliance and partial
23
Under the innovation and efficiency initiative, ADB is also looking into the possibility of introducing a multitranche
financing facility that would eliminate excessive loan commitment charges.
52
compliance. Of the 52 projects that complied late during 2004, 51 were less than 6 months late,
and 1 was between 6 months and a year late.
Table 36: Submissions of Audited Project Accounts and Agency Financial Statements
Item 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Average
Loans Due (number) 294 285 275 290 326 309 335 317 297 284 301
Fully Complied (%) 48.6 55.8 56.0 61.0 62.9 63.4 39.7 60.9 55.6 61.6 56.6
Complied Late (%) - 4.2 15.6 14.5 21.2 23.9 31.3 22.4 25.9 18.3 17.7
Subtotal 48.6 60.0 71.6 75.5 84.1 87.3 71.0 83.3 81.5 79.9 74.3
Partly Complied (%) 28.2 20.7 9.1 12.4 5.2 6.8 6.9 4.4 4.0 4.9 10.3
Not Complied (%) 23.1 19.3 19.3 12.1 10.7 5.8 22.1 12.3 14.5 15.1 15.4
Subtotal 51.3 40.0 28.4 24.5 15.9 12.6 29.0 16.7 18.5 20.0 25.7
AFS = agency financial statement; APA = audited project account.
Fully complied: the EA(s) have submitted acceptable audited accounts by the due date, which may be from
6 to 12 months after the end of the financial year.
Complied late: acceptable audited accounts submitted by EA(s) after the due date.
Partly complied: only some of several EAs have submitted acceptable audited accounts by the due date.
Source: Project Coordination and Procurement Division.
126. During 2004, only 7 DMCs with a total of 22 loans were in full compliance: Cook Islands,
Kazakhstan, Malaysia, Republic of the Marshall Islands, Mongolia, Tajikistan, and Thailand.
Other high performers were: Bhutan and Fiji Islands, with either full compliance or late
compliance on all of their loans; Indonesia, with 24 of 25 loans in full compliance and one in
partial compliance; and PRC, with 17 of 19 loans in full compliance, late compliance on 1, and
partial compliance on 1.
127. The DMCs with the largest numbers of loans either in noncompliance or partial
compliance were Sri Lanka with 8, Viet Nam with 6, Bangladesh and Pakistan with 5 each, India
with 4, and Papua New Guinea with 3. ADB has a resident mission in each of these countries.
ADB should engage in policy dialogue with the government of each country to develop an action
plan to increase compliance. Greater use of private auditors could be considered.
128. The best performing sectors with the highest percentages of full compliance and late
compliance during 2004 were industry and trade (100%); transport and communications (93%);
and health, nutrition, and social protection (90%). The worst performing sectors with the highest
percentages of partial compliance and noncompliance were law, economic management and
public policy (54%), and finance (42%).
129. There are several reasons for the low rate of full compliance. The relative importance of
these varies among countries and EAs. Reasons commonly cited include the following:
(i) Delays in preparation of EA financial statements because of the time taken
to “close the books.” This can be caused by such factors as the time taken to
consolidate accounts where systems are not integrated and the time taken to
resolve tax matters and other financial issues. Also, ADB’s requirements for
project accounts are sometimes different from the borrower’s requirements in its
chart of accounts, and this can create the need for duplicate accounting systems.
A lack of capacity for financial management is an important reality in a number of
countries.
(ii) Delays in the conduct of audits. In some cases, ADB sets less strict deadlines
for due date of submission and, according to some audit authorities, less rigorous
follow-up than other funding agencies, with the result that a lower priority is
53
accorded to ADB projects. Also cited was a lack of advance notice given to the
auditor general’s office, particularly for new loans.
(iii) Delayed management letter. Auditors may complete a draft audit relatively
quickly, but the need for agreement between the auditor and the EA on the
content of the auditor’s management letter and the EA’s response to the
management letter can lead to extended dialogue and delays in audit submission
to ADB.
(iv) Constitutional requirements. Requiring parliamentary consideration of audited
accounts before their release can also cause delays.
130. Compliance with the requirement to submit audited accounts by the due date is only one
issue. Equally important, but not assessed here, are the issues of the quality of the audited
accounts and the use made of these to improve both project performance and development
outcomes.24 Close monitoring and follow-up by resident missions, provided that they have the
requisite staff skills and capacity, can be a particularly effective method to improve the EAs’
performance and the quality of the audited project accounts and agency financial statements.
ADB should continue to provide TA to improve the EAs’ financial management and auditing
capacity, and provide other training in this sector where needed.
131. Some suggestions to reduce delays in the annual submission of some audited project
accounts are (i) to specify in the loan agreement the date to close the project books each year;
and (ii) if there is a need for a management letter from the auditor, it should be clearly stated in
a loan covenant so that the EA will know exactly what is required.
9. Project Administration Missions
132. There were 435 active projects on 1 January 2003, another 70 project loans were made
effective during the year, and 84 loans were closed (20 of them retroactively to 2003 and 2002).
Thus a maximum of 485 projects were active for at least a part of 2004 and eligible for project
administration missions of some type, from inception missions to project completion missions.
According to the data presented in Table 37 and Figure 14, 386 projects were reviewed during
2004, or about 80% of the projects that were eligible. Including all of the project and portfolio-
related missions, there was an average of about 1.8 missions per project reviewed during 2004.
The following general trends are evident in the data in the table and in the figure.
(i) The number of project administration missions per year has been decreasing
since 1998; however, the number of missions per project has been increasing
due to the lower numbers of projects reviewed, beginning in 2001.
(ii) The total number of person-days on mission has been increasing; however, the
total number of professional staff days on mission has been decreasing while the
use of consultants has been increasing.
(iii) The total number of ADB support staff days on mission (split between national
officers and administrative staff since 2003) has increased sharply since 1998.
24
The experience of OED staff when they were assigned to the RDs was that ADB did not rigorously assess the
quality of the audits or provide feedback to the EAs in a systematic manner.
54
Table 37: Project Administration Missions
Item 1998 1999 2000 2001 2002 2003 2004 Average
Projects Reviewed 621 611 592 419 408 394 386 490
Administration Missions 861 809 711 663 704 676 690 731
Missions per Project 1.39 1.32 1.20 1.58 1.73 1.72 1.79 1.49
Person-days on Mission
ADB Professional Staff 7,686 6,958 6,223 5,832 7,142 5,223 5,045 6,301
ADB Support Staff 1,621 1,715 1,963 2,139 2,238 - - 1,935
ADB National Officers - - - - - 1,711 2,230 1,971
ADB Administrative Staff - - - - - 1,905 1,996 1,950
Total ADB Personnel 9,307 8,673 8,186 7,971 9,380 8,839 9,270 8,804
Consultants na na 421 1,252 1,041 1,161 1,195 1,014
Total Person-days 9,307 8,673 8,607 9,223 10,421 10,000 10,465 9,528
Person-days per Project 15.0 14.2 14.5 22.0 25.5 25.4 27.1 19.4
Notes: (i) For one project that includes 2 loans in 2 countries, missions to both countries are counted as one;
(ii) the category of ADB support staff was split between national officers and administrative staff beginning
in 2003; and (iii) data on consultants on missions are available beginning in 2000.
Source: Project Coordination and Procurement Division.
Figure 14: Project Administration Missions by Type of Personnel
12,000
10,000
Consultant
8,000
Person-Days
Admin
6,000 National
Support
4,000
Professional
2,000
0
1998 1999 2000 2001 2002 2003 2004
Year
Mission Personnel Types: Admin = ADB administrative staff; Consultant = independent
consultant; National = ADB national officer; Support = ADB support staff; Professional = ADB
professional staff. Support staff includes national officers and administrative staff.
133. From 1995 to 2004 ADB increased its number of professional staff by 34% from 642 to
860. At the same time, the number of active loans increased by 15% from 427 in 1995 to 491 in
2004, and the number of active projects increased by 3% from 404 in 1995 to 415 in 2004. The
maximum numbers of loans and projects in the intervening years were somewhat higher—the
maximum number of loans was 505 in 2002, and the maxim number of projects was 444 in
1997 and 2000. However, as shown in Figure 15, the ratios of the numbers of professional staff
to the numbers of loans and projects decreased from 1995 to 1997, and then increased every
year from 1997 to 2004. The ratio of the number of professional staff to loans increased by
17% from 1.50 in 1995 to 1.75 in 2004. Similarly, the ratio of the number of professional staff to
projects increased by 30% from 1.59 in 1995 to 2.07 in 2004. Given the increasing ratios of the
numbers of professional staff to loans and projects, and the 18% decrease in the reported
number of professional staff days on review mission from 1995 to 2004, it is clear that the added
staff have not been used to increase project administration in the field.
55
Figure 15: Ratios of Numbers of Professional Staff to Loans and Projects
1,000 2.50
900
800 2.00
700
600 1.50
Number
Ratio
500
400 1.00
300
200 0.50
100
- -
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Year
Prof Staff Loans Projects Prof Staff/Loan Prof Staff/Project
Prof Staff = ADB professional staff.
134. In Table 38, the 2004 mission data are disaggregated by type of mission undertaken
and by DMC. Of the 9 mission types listed, 6 are clearly focused on project administration, while
the other 3 either address the DMC’s loan portfolio in general or are focused on a very narrow
aspect of portfolio administration (loan disbursement missions). Of the 692 missions, 649 or
almost 94% were project administration missions, and 43 or about 6% were other missions.
135. The attention in terms of the number of person-days on mission per project ranged from
lows of 5 and 8 days for projects in Tuvalu and Solomon Islands, respectively, to a high of
44.5 days for projects in Kazakhstan, and averaged 27 person-days per project overall.
136. Among the RDs, SARD had the most missions at 251 and the highest number of person-
days on mission per project reviewed at 30.4; while SERD with 135 missions, ECRD with
132 missions, and MKRD with 136 missions, all averaged 24.5–26.8 person days per project;
and PARD with only 38 missions averaged 21.9 person days per project.
56
Table 38: Missions by Type and DMC during 2004
Project Administration Missions a Sub- Other Missions Sub- Mission No. Person- P-D per
b
Borrower PI PR MTR SPA PRA PCR Total CPR CPIA LD Total Total Projectc Days d Project
e
Tajikistan 3 15 - - - 1 19 1 1 - 2 21 11 188 17.1
e
Uzbekistan 3 11 1 1 - - 16 1 - - 1 17 11 244 22.2
Azerbaijan 1 - - - - - 1 - - - - 1 1 24 24.0
Kyrgyz Republic 2 18 1 - - 1 22 1 1 - 2 24 13 321 24.7
Mongolia 1 10 2 2 - 1 16 - 1 1 2 18 10 279 27.9
PRC 8 19 3 - - 14 44 1 1 2 4 48 38 1,075 28.3
Kazakhstan - 1 2 - - - 3 - - - - 3 2 89 44.5
ECRD Total 18 74 9 3 - 17 121 4 4 3 11 132 86 2,220 25.8
Percent 18.6% 25.6% 19.1% 22.2% 21.2%
Lao PDR 4 25 3 2 - 1 35 1 - - 1 36 19 449 23.6
Thailand - 3 - - - 2 5 - - - - 5 3 73 24.3
Cambodia 3 24 2 3 - 3 35 1 1 2 4 39 21 514 24.5
Viet Nam 7 40 1 2 - 4 54 1 - 1 2 56 29 891 30.7
MKRD Total 14 92 6 7 - 10 129 3 1 3 7 136 72 1,927 26.8
Percent 19.9% 16.3% 19.7% 18.6% 18.4%
Tuvalu - - - - 1 - 1 - - - - 1 1 5 5.0
Solomon Islands 1 - - - - - 1 - - - - 1 1 8 8.0
Kiribati - 1 - - - - 1 - - - - 1 1 11 11.0
Samoa 1 2 - 1 - 1 5 - - - - 5 4 47 11.8
Fiji Islands - 2 - - - - 2 - - - - 2 2 26 13.0
Marshall Islands 1 1 - - - 2 4 1 - - 1 5 4 92 23.0
Papua New Guinea 1 8 1 3 - 1 14 1 1 - 2 16 9 262 29.1
FSM 1 4 - - - - 5 - - - - 5 2 59 29.5
Cook Islands - 1 1 - - - 2 - - - - 2 1 37 37.0
PARD Total 5 19 2 4 1 4 35 2 1 - 3 38 25 547 21.9
Percent 5.4% 7.0% 5.5% 6.5% 5.2%
Afghanistan 2 1 - - - - 3 - - - - 3 2 24 12.0
Bhutan 1 6 1 - - - 8 1 - - 1 9 5 85 17.0
Maldives 1 5 - - - 1 7 1 - 1 2 9 5 101 20.2
Sri Lanka 3 23 5 6 - 3 40 1 1 2 4 44 28 714 25.5
Nepal 2 26 2 - - 3 33 1 - - 1 34 19 588 30.9
Bangladesh 3 23 1 2 - 3 32 1 1 1 3 35 21 682 32.5
Pakistan 6 36 1 3 - 5 51 1 - 1 2 53 31 1,026 33.1
India 4 41 9 1 1 3 59 1 1 3 5 64 21 790 37.6
SARD Total 22 161 19 12 1 18 233 7 3 8 18 251 132 4,010 30.4
Percent 35.9% 41.9% 36.3% 34.1% 38.3%
Malaysia - 2 - - - 1 3 - - - - 3 3 60 20.0
Indonesia 2 56 3 9 - 7 77 1 - 1 2 79 42 1,031 24.5
Philippines 2 37 2 4 - 6 51 2 - - 2 53 27 670 24.8
SERD Total 4 95 5 13 - 14 131 3 - 1 4 135 72 1,761 24.5
Percent 20.2% 9.3% 19.5% 18.6% 16.8%
Total 63 441 41 39 2 63 649 19 9 15 43 692 387 10,465 27.0
ECRD = East and Central Asia Department; FSM = Federated States of Micronesia; PARD = Pacific Department;
PD = person days; SARD = South Asia Department; SERD = Southeast Asia Department.
Note: Mission types are defined in Project Administration Instructions 6.02. Project administration missions are
inception (PI), review (PR), mid-term review (MTR), special administration (SPA), reappraisal (PRA), and completion
(PCR); other related missions include: country portfolio review (CPR), country project implementation and
administration (CPIA), and loan disbursement (LD).
a
A mission that covers several projects is counted individually under each project.
b
Includes multiple loan disbursement reviews in a country.
c
Excludes projects reviewed by PCR or CPIA, which were concurrently reviewed by the missions.
d
Mission personnel may include professional staff, national officers, administrative staff, and consultants.
e
Project 35096 comprises loans 1977-TAJ and 1976-UZB; missions, both covering two countries, are reported
individually.
Source: Project performance reports; regional departments.
57
10. Proactivity Index
137. The proactivity index is defined as the percentage of projects at risk (those rated partly
satisfactory, unsatisfactory, or potential problem) at the beginning of a specific period (in this
case the calendar year) that have been upgraded, suspended, closed, or partly or fully
cancelled, so that they are no longer listed as projects at risk at the end of the period.25 The
index is a measure of the effectiveness of project management. The index has been on a
generally increasing trend during 2000–2004 as shown in Table 39.
Table 39: Proactivity Index since 2001
2001 2002 2003 2004
Proactivity Index (%) 59.0 67.4 63.0 72.6
Note: the “at risk” concept was introduced in 2001.
Source: Project Coordination and Procurement Division.
11. Project and Program Completion Reports
138. As specified in each Loan Agreement, the EA is obligated to prepare a PCR and submit
it to ADB within 3–6 months of project or program completion. The suggested topics to be
covered by the EA’s PCR are outlined in the Project Administration Instructions (PAI 6.07,
Appendixes 5 and 6). According to PAI 6.07, the sector division or resident mission responsible
for each project must also prepare a PCR, usually within 12–24 months of project completion, in
the appropriate format prescribed in the appendixes to PAI 6.07. Because they are expected to
be prepared for all public sector projects, the PCRs provide a more complete coverage and
earlier assessment of performance than post-evaluation reports, which have been prepared for
about 40% of project loans and 100% of program loans, usually about 3–4 years after project or
program completion. PCRs are an important part of ADB’s self-evaluation system and project
performance improvement framework, and it is important that the PCR program be completed in
full and on time.
139. As shown in Table 40, the RDs together achieved nearly 94% of their planned PCR
program during 2004. SERD and ECRD either completed or exceeded their 2004 targets;
SARD, PARD, and PSOD came within 1 PCR of meeting their targets; and MKRD achieved
only 75% of the target (3 PCRs short).
Table 40: 2004 Project and Program Completion Reports by Department
2004 PCRs SERD ECRD SARD PARD MKRD PSOD Total
Targeted 17 18 22 8 12 3 80
Completed 18 18 21 7 9 2 75
% 106 100 95 88 75 67 94
ECRD = East and Central Asia Department; MKRD = Mekong Department;
PARD = Pacific Department; PCR = project completion report; PSOD = Private Sector
Operations Department; SARD = South Asia Department; SERD = Southeast Asia
Department.
Source: Project Coordination and Procurement Division.
25
The proactivity index would be 0% if all of the projects at risk at the beginning of the year were still at risk at the end
of the year, and it would be 100% if none of the projects at risk at the beginning of the year were still at risk at the
end of the year.
58
140. As shown in Table 41 and Figure 16, the rate of achievement of PCRs has improved
every year since reaching a minimum of 71% in 2000, and the 94% achieved in 2004 was a new
high. There was an increase in the targeted number of PCRs beginning in 1999. During
1995–1998 the annual target averaged about 52 PCRs, but during 1999–2004 it averaged
about 77 PCRs, an increase of nearly 50%.
Table 41: Project and Program Completion Reports
PCRs 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Average
Targeted 56 49 51 53 72 72 83 81 74 80 67
Completed 46 45 49 48 62 51 61 68 67 75 57
% 82 92 96 91 86 71 73 84 91 94 85
PCR = project/program completion report.
Source: Project Coordination and Procurement Division.
Figure 16: Project and Program Completion Reports
120
100
80
Number
or 60
Percent
40
20
-
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Planned PCR Actual PCR % of Planned
PCR = project/program completion report.
141. A more in-depth assessment of the PCRs was presented in the AR 2003 (paras. 66–70).
The highlights from that discussion included:
(i) The number of planned but uncompleted PCRs each year may be significantly
higher than shown in the annual shortfall in Table 41, because some additional
unplanned PCRs are always completed.
(ii) When a planned PCR is not completed during a year, it is not always included in
the target for the ensuing year.
(iii) Although PAI 6.07 calls for the preparation of the PCR within 12–24 months after
the completion of project implementation, significant numbers of PCRs are
prepared 3–5 or more years after completion; in fact, for the 192 projects closed
during 1999–2001, only 159 or about 83% had PCRs prepared within 2 years of
loan closing.
(iv) The disconnect ratio, a measure of the inconsistency of evaluation findings
between the final PPR and the PCR, showed that ratings differed for more than a
59
third of the PCRs prepared in 2003, although more project ratings were upgraded
in the PCRs than were downgraded.
142. Project ratings have been compared for projects for which both a PCR and a Project
Performance Audit Report (PPAR) were prepared during the past decade. For the 160 projects
for which both reports were prepared during 1995–2000, the PCR and PPAR ratings were
somewhat consistent, as shown in Table 42. For the 160 projects, the PCR and PPAR ratings
were the same for 117 projects (73.1%), while the PPAR rating was higher than the PCR rating
for 13 projects (disconnect ratio of 8.1%) and lower than the PCR rating for 30 projects
(disconnect ratio of 18.8%).
Table 42: Comparison of PCR and PPAR Ratings during 1995–2000
PCRs PPAR Rating (numbers)
Rating Number HS,GS,S PS U
HS,GS,S 112 86 24 2
PS 44 12 28 4
U 4 0 1 3
Total 160 98 53 9
PCR = project completion report; PPAR = project performance audit report.
Note: PCRs and PPARs prepared until 2000 used a 3-level rating system: GS = generally
satisfactory; PS = partly satisfactory; U = unsatisfactory. Starting in 2001 it was changed to a
4-level rating system; HS = highly satisfactory; S = satisfactory; PS = partly satisfactory; and
U = unsatisfactory.
Source: Operations Evaluation Department and Project Coordination and Procurement Division.
143. For the 33 projects for which both a PCR and a PPAR were prepared during 2001–2004,
the PCR and PPAR ratings were generally consistent, as shown in Table 43. For the
33 projects, the PCR and PPAR ratings were the same for 27 projects (81.8%), while the PPAR
rating was higher than the PCR rating for 3 projects (disconnect ratio of 9.1%) and lower than
the PCR rating for 3 projects (disconnect ratio of 9.1%). The lower disconnect ratios between
PCRs and PPARs beginning in 2001 may be due in part to the revised rating system introduced
that year, and in part to more in-depth reviews on the part of OED.
Table 43: Comparison of PCR and PPAR Ratings during 2001–2004
PCRs PPAR Rating (numbers)
Rating Number HS,S PS U
HS,S 23 20 3 0
PS 9 2 7 0
U 1 0 1 0
Total 33 22 11 0
PCR = project completion report; PPAR = project performance audit report.
Note: PCRs and PPARs prepared starting in 2001 used a 4-level rating system: HS = highly
satisfactory; S = satisfactory; PS = partly satisfactory; and U = unsatisfactory.
Source: Operations Evaluation Department and Project Coordination and Procurement Division.
12. Delegation of Loan Administration to Resident Missions
144. During 2004, ADB had RMs operational in 17 DMCs, plus a country office for the
Philippines (PHCO) located at ADB headquarters in Manila, a South Pacific Regional Mission
(SPRM) in Vanuatu, a South Pacific Subregional Office (SPSO) in the Fiji Islands, and a Special
60
Office in Timor-Leste (SOTL).26 The RMs in Tajikistan and Afghanistan are likely to have loans
delegated for administration in the future. The administration of loans to the Philippines will
remain with the sector divisions at ADB headquarters. No loans have been approved to date for
Timor-Leste, and SOTL would need substantial upgrading before it would have the capacity to
administer any loans. Of the 19 country and regional offices (not counting PHCO and SOTL),
14 RMs plus the SPRM were administering a total of 137 loans as of 31 December 2004
(Table 44), or 30.6% of the 447 active loans made to those DMCs.
145. SARD has delegated the largest number of loans to the RMs for administration at 79 and
the highest percentage of loans at 39%, followed by SERD at 15 loans for 39%, PARD at
8 loans for 26%, MKRD at 19 loans for 24%, and ECRD at 16 loans for 17%. The RMs in
Bangladesh and India are both administering 59% of the active loans to those DMCs.
Table 44: Resident Mission Active Loan Portfolios
(as of 31 December 2004)
Active Delegated Loans Closing
Department and DMC Loans Loans % 2004 2005
ECRD
1 China, People’s Rep. 35 9 25.7 - 1
2 Kazakhstan 4 1 25.0 - -
3 Kyrgyz Republic 12 1 8.3 - -
4 Mongolia 14 1 7.1 - -
5 Tajikistan 14 - - - -
6 Uzbekistan 16 4 25.0 1 1
ECRD Total 95 16 16.8 1 2
Percent 11.7
MKRD
1 Cambodia 24 5 20.8 1 3
2 Lao PDR 23 2 8.7 - 1
3 Viet Nam 33 12 36.4 3 5
MKRD Total 80 19 23.8 4 9
Percent 13.9
PARD
1 Papua New Guinea 11 - - - -
2 South Pacific Region 20 8 40.0 1 3
PARD Total 31 8 25.8 1 3
Percent 5.8
SARD
1 Afghanistan 6 - - - -
2 Bangladesh 34 20 58.8 - 5
3 India 32 19 59.4 - 2
4 Nepal 23 7 30.4 - 4
5 Pakistan 61 20 32.8 2 7
6 Sri Lanka 46 13 28.3 3 2
SARD Total 202 79 39.1 5 20
Percent 57.7
SERD
1 Indonesia 39 15 38.5 1 4
SERD Total 39 15 38.5 1 4
Percent 10.9
Grand Total 447 137 30.6 12 38
DMC = developing member country; ECRD = East and Central Asia Department; MKRD = Mekong
Department; PARD = Pacific Department; PCR = project completion report; PSOD = Private Sector
Operations Department; SARD = South Asia Department; SERD = Southeast Asia Department.
Source: project performance reports.
26
An agreement to establish a resident mission in Thailand was signed with the Royal Thai Government on 2 March
2005.
61
146. Most of the delegated loans are project loans, although the list for 2004 also included
several program loans and development finance institution (DFI) loans. Twelve of the 137 loans
(9%) delegated to RMs were scheduled for closing during 2004, and it is likely that many of
them will be closed retroactively to 2004. Another 40 loans (26%) are scheduled to be closed
during 2005, although implementation for some of them probably will be extended until 2006 or
later due to delayed project start-up and slow implementation.
147. As shown in Table 45, both the numbers of loans and the proportion of loans under RM
administration have been increasing fairly steadily for the past few years. This trend is expected
to continue as the capacity of the RMs is built up, and as more RMs (specifically in Afghanistan
and Tajikistan) take on loan administration responsibilities.
Table 45: Delegation of Loans to Resident Missions at Year-end
1999 2000 2001 2002 2003 2004
Number of active loans for all DMCs 478 496 501 505 502 491
No. of loans under RM administration 80 72 88 87 96 137
No. of loans delegated to RMs during the year 23 11 30 21 27 49
Loans administered by RMs (%) 16.7 14.5 17.6 17.2 19.1 27.9
DMC = developing member country; RM = resident mission.
Source: Project Coordination and Procurement Division.
B. Private Sector Portfolio
148. ADB’s total private sector portfolio exposure increased by 56% from 2000 to 2004, and
reached a high of $1.46 billion at year-end 2004 (Table 46). During 2000–2001, the largest
exposure was in equity investments followed by loans and then guarantees. That situation
changed beginning in 2002 with the largest exposure in loans, followed by equity investments
and guarantees. At year-end 2004, ADB had no exposure as guarantor on record, in
complementary financing schemes, or in currency swaps with DMCs.
62
Table 46: Private Sector Portfolio Status at Year-end
($ million)
Private Sector Operations 2000 2001 2002 2003 2004
Projects under Administration 100 99 91 89 97
a
Total Portfolio Exposure
Equity Investments 485 659 403 415 485
Loans 335 398 620 558 655
Guarantees 115 214 217 251 323
Total 935 1,271 1,240 1,224 1,463
Exposure by Sector
Infrastructure 322 593 627 582 747
Funds and Capital Markets 269 250 278 232 325
Financial 199 261 186 269 258
Agriculture, Manufacturing, Others 145 167 149 141 134
Total 935 1,271 1,240 1,224 1,463
Exposure by Risk Rating
RR-1 Strong 43 36 26 17 13
RR-2 Good 242 177 167 155 146
RR-3 Satisfactory 365 792 748 740 1,037
RR-4 Marginal 119 61 113 83 133
RR-5 Substandard 31 72 79 125 46
RR-6 Doubtful 99 97 76 76 60
RR-7 Loss 36 36 31 28 27
Total 935 1,271 1,240 1,224 1,463
Disbursements
Equity 61 17 8 29 41
Loan 23 51 55 113 109
Total 84 68 63 143 151
Repayments and Divestments
Equity Divestments (3) 5 9 18 40
Loan Repayments 59 55 45 47 82
Total 56 60 54 64 122
Source: Private Sector Operations Department.
149. Projects in the infrastructure sector have dominated the private sector portfolio in terms
of value, followed by projects in funds and capital markets, projects in the finance sector, and
finally projects in the agriculture, manufacturing, and others “sector.” A large majority of private
sector projects continues to have acceptable risk ratings of satisfactory or better each year.27 At
year-end 2004, 82% of the portfolio was rated as satisfactory or better, 12% as marginal or
substandard, and 6% as doubtful or loss. Disbursements have been increasing since 2002, as
have repayments and divestments.
150. Private sector project approvals reached a record high of $807 million in 2004 as shown
in Table 47. This was a 43% increase over the $563 million approved in 2003. The rapid
increase in private sector project approvals since 2001 underscores the need for ADB to
strengthen its risk management. In 2005, the Risk Management Unit will be separated from and
made independent of PSOD, and will report directly to the Steering Committee (i.e., the Credit
Committee). This would be consistent with the recommendation of the independent panel that
assessed the effectiveness of ADB’s 2002 reorganization.
27
ADB strengthened its analysis of exposure by risk rating in 2003.
63
Table 47: Board Approvals by Year, and Cumulative since Commencement
(net of cancellations)
2000 2001 2002 2003 2004 Cumulative
Board Approvals No. $ million No. $ million No. $ million No. $ million No. $ million No. $ million
Projects
Infrastructure Finance 4 197.0 2 17.5 3 170.0 3 357.0 4 205.0 68 2,273.8
Financial Markets 7 178.7 4 50.4 4 35.5 5 205.7 12 602.2 107 1,979.2
Total 11 375.7 6 67.9 7 205.5 8 562.7 16 807.2 175 4,253.1
Type of Investment
Loan 4 152.0 4 37.5 4 110.0 5 187.0 6 346.9 86 1,910.9
Equity 6 77.7 3 30.4 3 35.5 2 35.7 12 185.0 129 874.5
Equity Underwriting - - - - - - - - - 5 40.5
Compl. Fin. Scheme 2 45.0 - - - - 1 100.0 - - 23 635.8
Guarantee 2 101.0 - - 2 60.0 3 240.0 2 75.3 8 591.3
Currency Swap - - - - - - - 1 200.0 1 200.0
Total 14 375.7 7 67.9 9 205.5 11 562.7 21 807.2 252 4,253.1
Note: The $60 million in guarantees in 2002 includes a $25 million Guarantee on Record.
Source: Private Sector Operations Department.
151. Projects in the infrastructure sector have dominated the private sector portfolio
throughout in terms of value and accounted for about 51% of ADB’s total exposure in 2004,
followed by projects in funds and capital markets at 22%, projects in the financial sector at 18%,
and projects in the agriculture, manufacturing, and other sectors at 9% (Table 48). However, in
terms of numbers of projects, the funds and capital markets sector dominated with about 40% in
2004, followed by finance with 27%, infrastructure with 23%, and agriculture, manufacturing,
and others with 10%. The infrastructure projects are typically the largest with an average ADB
exposure of about $34 million each in 2004, followed by agriculture, manufacturing, and other
projects averaging about $13 million, finance projects averaging about $10, and funds and
capital markets projects averaging about $8 million.
Table 48: Private Sector Project Exposure by Sector
Number of Amount Average
Sector Projects % ($ million) % ($ million)
Infrastructure 22 22.7 746.9 51.1 33.9
Funds and Capital Markets 39 40.2 324.6 22.2 8.3
Financial 26 26.8 257.5 17.6 9.9
Agriculture, Manufacturing, Others 10 10.3 133.9 9.2 13.4
Total 97 100.0 1,462.8 100.0 15.1
Source: Private Sector Operations Department.
152. As of 31 December 2004, the portfolio of projects was performing fairly well with nearly
82% of the projects by amount of exposure and 73% by number given a risk rating of
satisfactory or better, and 18% by amount of exposure and 27% by number rated from marginal
to loss (Table 49). Seven companies were in arrears for nearly $33.8 million on their loan
payments, comprising $21.6 million in principal payments and $12.2 million in interest and
charges. In addition, one company was in arrears for $46.4 million on 3 loans foreclosed during
2003, comprising $17.9 million in principal payments and $28.5 million in interest and charges.
No projects were written down or written off during 2004.
64
Table 49: Private Sector Project Exposure by Level of Risk
Risk Rating Projects % $ million %
1 Strong 3 3.1 13.5 0.9
2 Good 8 8.2 146.3 10.0
3 Satisfactory 60 61.9 1,037.4 70.9
4 Marginal 12 12.4 132.7 9.1
5 Substandard 6 6.2 45.6 3.1
6 Doubtful 5 5.2 60.0 4.1
7 Loss 3 3.1 27.5 1.9
Total 97 100.0 1,462.8 100.0
Source: Private Sector Operations Department.
153. ADB’s cash flows from private sector loan and equity operations for the past 5 years are
shown in Table 50. Total disbursements reached a 5-year high in 2004 at $151 million, of which
$109 million or 72% was for loans and $41 million or 28% was for equity investments. Total
receipts also reached a 5-year high in 2004 at $169 million, of which $82 million or 49% was
from loan repayments, $48 million or 28% was from equity divestments, and $39 million or
23% was from interest and other loan payments and dividends and other equity income.
Table 50: Cash Flows from Private Sector Operations
($ million)
Private Sector Operations 2000 2001 2002 2003 2004
Loan Operations
Disbursements 61 51 55 113 109
Principal Repayments (59) (48) (51) (49) (82)
Interest & Other Payments (30) (33) (25) (24) (25)
Net Resource Transfers (28) (31) (20) 41 2
Equity Investments
Disbursements 23 14 8 29 41
Investment Disposal or Sale (23) (5) (14) (39) (48)
Dividends and Other Income (9) (14) (10) (15) (14)
Net Resource Transfers (9) (5) (17) (25) (21)
Total Disbursements 84 65 63 142 151
Total Receipts (121) (100) (100) (127) (169)
Source: Controller’s Department.
154. PSOD’s annual PCR targets and achievements have varied during the decade
1995–2004 (Table 51). Almost half of the total targeted PCRs were scheduled during
1999–2000. During the decade, PSOD completed two thirds of its annual PCR programs on
average. Since 2001, PSOD has come within 1 PCR of completing each annual program.
Table 51: PSOD Project Completion Reports
PCRs 1995a 1996 1997 1998 1999 2000 2001 2002 2003 2004 Total
Targeted 3 2 1 1 9 10 7 5 2 3 43
Completed 3 2 1 0 6 4 6 4 1 2 29
Percent 100 100 100 0 67 40 86 80 50 67 67
PCR = project completion report; PSOD = Private Sector Operations Department.
a
The PCR target for 1995 is assumed to be 3.
Source: Asian Development Bank management information systems.
65
C. Technical Assistance Portfolio
1. Portfolio Performance Indicators
155. The TA portfolio at 31 December 2004 comprised 1,016 ongoing TAs and 168 TAs that
were physically completed but not yet financially closed, for a total of 1,184 active TAs.28 The
number of ongoing TAs has grown by just over 50% from 663 at the end of 1998 to 1,016 at the
end of 2004. Several input indicators for the TA portfolio are provided in Table 52. The numbers
of approved TAs that were not yet signed (137), and TAs that were signed and awaiting the
fielding of consultants (265), were unusually large at the end of 2004. These indicators should
be monitored because they hint at possible problems with DMC support and ADB administration
for some TAs. On the positive side, the number of TAs completed but not financially closed
(168) was at its lowest level for the past decade. This is a good sign because completed TAs
that have not been closed tie up unutilized TA funds that should be recycled into new TAs as
quickly as possible, especially when limited TA funds are in high demand.29
Table 52: Trends in the TA Portfolio
TA Stage 1998 1999 2000 2001 2002 2003 2004
TAs Approved 235 303 289 246 312 307 304
Not Yet Signed (at 31 Dec) 72 99 80 87 113 103 137
Awaiting Consultants (at 31 Dec) 82 90 84 54 66 73 265
Completed 232 237 218 134 195 190 168
Completed but Not Closed (at 31 Dec) 407 446 292 321 394 300 168
Closed 545 266 408 188 170 347 300
Funds Canceled ($ million) 31.7 16.8 25.3 7.5 10.1 17.8 16.7
Ongoing TAs (at 31 Dec) 663 676 711 743 826 878 1,016
TA = technical assistance.
a
May include TAs approved in prior years.
b
Refers to TAs reported as completed in status reports prepared by Divisions and Offices.
c
The number of TAs completed but not closed may include TAs reported as completed in prior
years but still not financially closed.
Source: Project Coordination and Procurement Division.
156. The TA Performance Report (TPR), which is analogous to the PPR for loan projects and
programs, became fully operational during 2004. This will strengthen ADB’s TA management
system by making previously unavailable data on TAs readily available to staff and
management on a demand basis. A summary of the TA ratings by department and office as
recorded in the TPRs at year-end 2004 is provided in Table 53. For both operations and
non-operations departments, the performance of 81% of all ongoing TAs was rated as
satisfactory or better. For the operations departments, the performance of 13% of TAs was
rated as partly satisfactory, 4% as unsatisfactory, and 3% of TAs had incomplete ratings. For
the non-operations departments, the performance of 16% of TAs was rated as partly
satisfactory, 2% as unsatisfactory, and 1% had incomplete ratings.
28
Ongoing TAs include (i) those that have been approved by ADB but not yet signed by the DMC; (ii) those that have
been approved and signed, but are awaiting the fielding of consultants; and (iii) those whose consultants have
been fielded and are under implementation but not yet physically completed. Active TAs are all ongoing TAs plus
those TAs that have been physically completed but have not yet been financially closed.
29
ADB has improved the internal incentives for closing TAs by allocating the cancelled amounts to the user division
as additional TA indicative program funds.
66
Table 53: TA Ratings by Department and Office
(as of 31 December 2004)
Active Revised Ongoing Performance Ratings
TA Ratings No. $ million No. $ million HS S PS U Inc
Operations
ECRD 248 145.39 198 110.85 - 169 18 6 5
MKRD 190 125.14 165 111.13 - 144 17 2 2
PARD 134 62.62 130 57.91 - 95 19 6 10
PSOD 1 0.15 1 0.15 - 1 - - -
SARD 314 228.23 273 208.36 - 215 42 11 5
SERD 121 87.78 100 73.60 - 75 15 8 2
OPS Total 1,008 649.31 867 562.00 - 699 111 33 24
% 86.0 86.6 - 80.6 12.8 3.8 2.8
Non-Operations
BPMS 1 0.73 1 0.73 - 1 - - -
COSO 12 6.01 10 4.81 - 8 1 1 -
CTL 4 0.70 4 0.70 - 3 1 - -
ERD 23 9.78 20 7.58 2 15 3 - -
OAG 3 1.65 - - - - - - -
OED 7 7.14 5 4.70 - 5 - - -
OGC 31 16.33 21 11.89 - 17 3 1 -
REMU 13 5.56 10 4.03 2 7 1 - -
RSDD 80 96.57 76 89.34 - 58 15 1 2
SPD 2 0.85 2 0.85 1 1 - - -
Non-OPS Total 176 145.30 149 124.61 5 115 24 3 2
% 84.7 85.8 3.4 77.2 16.1 2.0 1.3
Grand Total 1,184 794.61 1,016 686.61 5 814 135 36 26
% 85.8 86.4 0.5 80.1 13.3 3.5 2.6
Operations: ECRD = East and Central Asia Department; MKRD = Mekong Department; OPS = operations
departments; PARD = Pacific Department; PSOD = Private Sector Operations Department; SARD = South Asia
Department; SERD = Southeast Asia Department.
Non-operations: BPMS = Budget, Personnel and Management Systems Department; COSO = Central
Operations Services Office; CTL = Controller’s Department; ERD = Economics and Research Department;
OAG = Office of the Auditor General; OED = Operations Evaluation Department; OGC = Office of the General
Counsel; REMU = Regional Economic Monitoring Unit; RSDD = Regional and Sustainable Development
Department; SPD = Strategy and Policy Department.
Ratings: HS = highly satisfactory; S = satisfactory; PS = partly satisfactory; U = unsatisfactory; Inc = incomplete.
TA = technical assistance.
Source: Technical assistance performance reports.
157. OED has not undertaken independent verification of the TA ratings in the TPR. The
proportion of highly successful and successful ratings in the TPRs (81%) is consistent with the
ratings given in the 163 TA completion reports (TCRs) prepared during 2004, of which 28 TAs
were rated highly successful and another 104 were rated successful for a combined total of
81%. However, both the TPR and TCR ratings are inconsistent with the ratings of 98 TA
performance audit reports (TPARs) prepared during 2001–2004 wherein 9 TAs were rated
highly successful and another 48 were rated successful for a combined total of 58%. This
suggests that both the TPRs and TCRs may be rating some TAs too highly.
2. TA Implementation Missions
158. From 2003 to 2004 the number of TA implementation missions fell by 46% from 712 to
just 387. As a result only 249 or 25% of the 1,016 ongoing TAs had one or more review
missions, down from 45% the previous year. However, if the 137 TAs that were not yet signed
and the 265 TAs awaiting the fielding of consultants at 31 December 2004 are deducted from
the list of ongoing TAs, and the 168 TAs completed during 2004 are added back in, then 32% of
the 782 TAs under active implementation during at least part of 2004 had at least one mission.
The average number of review missions per TA reviewed (1.6) and staff days per review
67
mission (9.9) during 2004 were down only marginally compared to the previous 3 years
(Table 54).
Table 54: TA Review Missions
TA Reviews 1998 1999 2000 2001 2002 2003 2004
Ongoing TAs 663 676 711 743 826 878 1,016
a
TA Implementation Missions 578 560 465 593 636 712 387
No. TAs Reviewed 434 415 374 347 372 396 249
% of TAs Reviewed 65.5 61.4 52.6 46.7 45.0 45.1 24.5
Missions per TA Reviewed 1.3 1.3 1.2 1.7 1.7 1.8 1.6
Staff-days on TA Missions 3,763 3,543 2,669 3,341 3,501 4,056 2,464
Staff-days per TA Reviewed 8.7 8.5 7.1 9.6 9.4 10.2 9.9
TA = technical assistance.
a
Inception, review, and special TA review missions.
Source: Project Coordination and Procurement Division.
159. Of the 387 TA missions undertaken during 2004, 20% were inception missions,
67% were implementation review missions, and 13% were special review missions.
160. A worrisome trend has developed over the past 7 years: the number of ongoing TAs has
grown steadily from 663 in 1998 to 1,016 in 2004, yet each year an increasing percentage of
those TAs has gone without a review mission (Figure 17). The limited coverage of TAs by
review missions during 2004 strongly suggests that ADB is not devoting sufficient resources to
TA administration. This may be one reason for the disappointing results documented in many
OED assessments of TAs. The solution to this problem involves reducing the number of TAs in
the portfolio to bring it more in line with the capacity of the various divisions to manage and
supervise effectively. This would be consistent with Management’s guidance for the 2006–2008
program.
Figure 17: TAs with a Review Mission
1,200
1,000
Number of TAs
800
Ongoing
600
Reviewed
400
200
-
1998 1999 2000 2001 2002 2003 2004
Year
TA = technical assistance.
68
161. A question was raised in AR 2003 as to whether ADB keeps an appropriate balance
when allocating staff time to review missions for loans and TAs. It was pointed out that
5,233 professional staff days were spent on missions administering a loan portfolio worth
$33 billion, as compared to 3,713 staff days on missions administering a TA portfolio worth
$0.6 billion. The issue raised here is whether ADB has adequate resources to allocate to
administering a TA program that has been growing very quickly for the past 5 years.30 This will
be one of the issues addressed by an OED special evaluation study (SES) on TAs scheduled
for 2005. The SES will also include an examination of how well advisory TAs, project
preparatory TAs, and regional TAs have been administered during the past 5 years by
examining the relationship, if any, between the degree of TA supervision through
implementation missions and the degree of success as evaluated in the TCR.
3. TA Completion Reports
162. The TCR, like the PCR, is an important part of ADB’s performance management system.
The TCR target for 2004 was somewhat lower than for the previous two years, but the overall
completion rate at 98% was the highest during the past decade (Table 55). The graphs of the
3-year moving averages of TCR targets and actual completions (Figure 18) show the steadily
increasing trends in the TCR program: the average annual TCR target during 2002–2004 at
182 TCRs was 81% higher than the target of 101 TCRs only 7 years earlier during 1995–1997.
The graph of the percentage of the target TCR program actually completed each year
approximates a sine wave varying between 70% and 85%. This suggests that there has been a
periodic focus on bringing TCRs up to date at roughly 5–6 year intervals, with less attention paid
in the interim.
Table 55: Technical Assistance Completion Reports
TCRs 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Average
Targeted 84 94 125 128 154 152 140 179 201 166 142.3
Completed 51 89 94 107 122 106 101 121 166 163 112.0
% 60.7 94.7 75.0 83.6 79.0 70.0 72.0 67.6 82.6 98.2 78.7
TCR = technical assistance completion report.
Source: Project Coordination and Procurement Division.
30
In March 2005, Management established a Task Force on TA Reform to accelerate the reform process, and to
propose options for improvements in TA management.
69
Figure 18: Technical Assistance Completion Report Program
(by number)
200
180
160
140
120 Target
Number
or 100 Actual
Percent 80 Percent
60
40
20
-
1997 1998 1999 2000 2001 2002 2003 2004
TCR 3-year Moving Averages
TCR = technical assistance completion report.
Note: the 3-year moving average is computed as the average of the annual values for the year
indicated plus the previous 2 years.
163. As shown in Table 56, all the RDs exceeded their TCR targets in 2004. The overall TCR
shortfall was due to missed targets by several of the non-operations departments, particularly
OGC, BPMSD, REMU, and OAG. The TCR annual target can be exceeded if (i) more TAs are
completed during the year than originally estimated—TA implementation should be physically
completed before the TCR is prepared, but the TA does not need to be financially closed; and
(ii) TCRs originally planned for the previous year have been delayed, but have not been
included in the current year’s target.
Table 56: 2004 Technical Assistance Completion Reports by Department or Office
Operations Departments Non-Operations Departments
2004 MKRD SARD ECRD PARD SERD RSDD ERD OGC BPMSD REMU OAG OED Total
Targeted 24 29 28 23 18 21 7 8 1 5 2 1 167
Completed 27 31 31 24 19 18 7 2 - 2 1 1 163
% 112.5 106.9 110.7 104.3 105.6 85.7 100.0 25.0 0.0 40.0 50.0 100.0 97.6
Operations: ECRD = East and Central Asia Department; MKRD = Mekong Department; OPS = operations
departments; PARD = Pacific Department; PSOD = Private Sector Operations Department; SARD = South Asia
Department; SERD = Southeast Asia Department.
Non-operations: BPMSD = Budget, Personnel and Management Systems Department; COSO = Central Operations
Services Office; CTL = Controller’s Department; ERD = Economics and Research Department; OAG = Office of the
Auditor General; OED = Operations Evaluation Department; OGC = Office of the General Counsel; REMU = Regional
Economic Monitoring Unit; RSDD = Regional and Sustainable Development Department.
Source: Project Coordination and Procurement Division.
164. Divisions and departments prepare quarterly schedules for TCR preparation each year.
The situation in 2004 was typical of previous years and illustrates a basic problem with the TCR
program (Table 57). Whereas the preparation of the TCRs is usually scheduled fairly evenly
across the year, due to their relatively low priority few are completed during the first and second
70
quarters because attention is focused on other work, and there is a rushed attempt to complete
the program during the third and fourth quarters. However, later in the year the TCR program
must also compete for time with the loan processing program as it enters the “bunching
season,” and with other work that also needs to be completed within the year. The consequence
may be a tendency to produce lower quality TCRs later in the year, which will also be examined
in the planned SES. Overall, OED does not believe that the TCRs add significant value by
documenting TA impacts and lessons learned, or that they command the attention of senior
ADB staff and Management.
Table 57: The 2004 TCR program
(numbers)
TCRs Q1 Q2 Q3 Q4 2004
Target 34 67 34 32 167
Actual 14 44 50 55 163
% 41.2 65.7 147.1 171.9 97.6
Q = quarter (of the year); TCR = technical assistance completion report.
Source: Asian Development Bank management information systems.
71
IV. STUDIES
165. Each year, OED examines several issues related to portfolio performance in detail and
discusses them in the annual report. Some of the issues are examined through studies
conducted specifically for the Annual Report, while other studies are undertaken in response to
requests from various departments and offices of ADB. This year, the Annual Report includes
discussions of the following issues.
• The issue of the large negative net resource transfers from ADB to the DMCs starting in
2002 was highlighted in the AR 2003. In response to a request from the DEC, OED
looked further into the causes of the negative net resource transfers, as discussed in
Section II.B.4.
• Previous OED studies of the quality of project frameworks prepared during 2000 and
2002 showed that the large majority of the frameworks prepared for loans and TAs were
substandard. Given the current focus on managing for development results (MfDR), and
the key role of the project framework (now termed the design and monitoring framework)
in project preparation as well as monitoring and evaluation, a follow-up study was
undertaken late in 2004 to see what progress has been made. The results of the study
are discussed in Section IV.A.
• ADB has always had a problem with accurately estimating project costs. Project cost
deviations are considered significant when they are more than 20% of the cost estimate,
either overruns or underruns. In 2004, OED completed a Special Evaluation Study on
Project Cost Estimates that examined the major causes of project cost deviations and
recommended ways to improve the reliability of project cost estimates. This is discussed
in Section IV.B.
• The question of the role and efficiency of project implementation units (PIUs), especially
with regard to capacity building, has been hotly debated by the World Bank and other
multilateral and bilateral development institutions in recent years. In response to a
request from RSDD, OED undertook a Special Evaluation Study of the Role of Project
Implementation Units during 2004, which is discussed in Section IV.C.
• “Bunching” and project readiness have emerged as important topics due to the
excessive bunching of loan approvals that has occurred since 2000. OED has examined
the issue and the results are presented in Section IV.D.
• The results of this year’s portfolio performance review suggest that ADB has been losing
relevance as a development partner for some DMCs. The evidence suggesting the
decline in relevance and what action ADB is taking on the issues are discussed in
Section IV.E.
72
A. A Review of ADB’s Project Design and Monitoring Frameworks
1. Background
166. ADB has taken a series of actions to improve the delivery of services to its DMCs. The
actions included the endorsement of the Millennium Development Goals (MDGs) in 2002; the
development of an action plan for MfDR for 2003–2006; the creation of a more independent
evaluation office by having OED report directly to the Board of Directors beginning in 2004; the
establishment of the Results Management Unit (SPRU) in the Strategy and Policy Department
in 2004; and the approval of the project performance management system (PPMS) action plan
in April 2004. These and other actions have been designed, among other things, to increase the
focus on results rather than inputs in ADB’s country programs and projects, and to ensure that
the results are aligned with the DMCs’ own national agendas.
167. The project design and monitoring framework (formerly the project or program
framework) is an important tool for ensuring quality-at-entry for projects and programs. The
framework summarizes the proposed project and/or program design, specifies measurable
indicators and targets to be monitored during implementation, and identifies key assumptions
that must hold true and risks that may need mitigation to ensure project success. The
framework is included as an appendix in every Report and Recommendation of the President
(RRP) and TA paper. The information from the framework is transcribed into other PPMS
documentation, including the project administration memorandum (PAM), the PPR or TPR, the
PCR or TCR, and the PPAR. Thus, the framework is supposed to play a key role in ADB’s
results-based approach to providing development assistance.
168. Late in 2004, OED contracted a study of the quality of the frameworks prepared for all of
the public sector project and program loans, advisory TAs, and regional TAs approved during
2004; along with a sample of those RETAs and ADTAs approved during 2000 and 2002. The
study was for the most part a repeat of similar studies done for loan frameworks in November
2000 and November 2002. Using essentially the same process, analytical procedure, and rating
scale that was used in 2000 and 2002 ensured that the data from the three studies would be
comparable.
169. The quality of the frameworks was assessed, and the content and utility of data in the
frameworks was reviewed, rated and commented upon. The primary focus of the review was the
design summary statement at the top three levels of the framework: the goal or impact, the
purpose or outcome, and the outputs or deliverables. The review also analyzed the performance
indicators and targets at each level, as well as the statements of assumptions and risks.
170. The four-level rating scale is summarized in Table 58. Although the ratings use an
ordinal scale, it is possible to compare the overall quality of the frameworks between years by
examining the percentages that achieve each rating, and also by using the average of the points
earned by the loans and TAs examined.
73
Table 58: Criteria Used in Rating the Project Design and Monitoring Frameworks
Points Rating Criteria
3 Highly Satisfactory All of the design summary statements are at the appropriate level of the framework,
and they are succinct and clear; the indicators and targets are relevant and
measurable; and the timing is clearly stated and realistic (except at the output level)
2 Satisfactory Most of the summary statements are at the appropriate level, and most are clearly
and succinctly stated; the indicators and targets are measurable for the most part;
and the timing is generally stated and appropriate.
1 Partly Satisfactory Some of the design summary statements are at the appropriate level, and some
may be unclear or run-on statements (using “by” or “through”, etc.); some or all of
the indicators and targets are vague and may not be measurable; and the timing for
the most part is either missing or inappropriate.
0 Unacceptable None of the design summary statements are at the appropriate level, and they may
not be clearly stated; the indicators and targets are either inappropriate or missing;
and the timing is either inappropriate or missing.
2. Findings
171. The results of the framework studies during 2000, 2002 and 2004 are summarized in
Table 59. Frameworks rated as highly satisfactory or satisfactory are considered acceptable.
Table 59: Proportions of Project Framework Statements Rated Satisfactory or Better
(percent)
Frameworks 2000 2002 2004
Number of Loans Examined 25 25 56
Goal (Impact) 28 20 68
Purpose (Outcome) 36 32 68
Output - - 96
Number of Regional TAs Examined 25 26 66
Goal (Impact) 12 0 14
Purpose (Outcome) 8 4 21
Output 48 58 85
Number of Advisory TAs Examined 52 52 130
Goal (Impact) 21 12 29
Purpose (Outcome) 19 12 23
Output 65 73 75
Note: - = not rated; TA = technical assistance.
172. About one third of the loan frameworks examined during 2000 and 2002 were rated
satisfactory or better at the purpose or outcome level, and about one quarter were satisfactory
at the goal or impact level. Thus, beginning with the project design process and carrying over
into project implementation, most of the loan projects reviewed in 2000 and 2002 did not have a
clearly stated purpose with clear and measurable indicators and targets, and realistic timing. A
review of the PPRs from 2000 and 2002 showed that a majority of the loans fared considerably
better with clear and succinct output statements that included clear and measurable indicators,
targets and timeframes. In other words, the project documents were for the most part clear
about what the various project components should accomplish, but much more vague about
how the components would work together to achieve the overall purpose of the project and how
that would be measured.
173. By 2004 about two thirds of the loan frameworks were of acceptable quality; they
contained clear design statements not only at the output level but also at the purpose and goal
level, with clear and measurable indicators and targets specified. This is a very positive
74
outcome, and these improvements should contribute to more successful project implementation,
and also facilitate monitoring and evaluation during and after implementation.
174. The situation is very different with regard to the TA frameworks. Of those examined from
2000 and 2002, very few had goal and purpose statements that were rated as satisfactory or
better, while about half had output statements that were rated as satisfactory or better. The
situation showed some improvement in 2004, with more than three quarters of the output
statements rated as satisfactory or better; however, less than a quarter of the goal and purpose
statements were rated as satisfactory or better.
175. The reasons for the continuing poor performance in the preparation of TA frameworks
are a matter of conjecture, but may include the following:
(i) TA frameworks may receive inadequate attention because they are perceived to
be less important than loan frameworks;
(ii) staff responsible for TA preparation may receive less support from other staff and
consultants (compared to the project team for a loan);
(iii) the time allocated for TA preparation may be too short;
(iv) the current large numbers of TAs being processed annually may exceed staff
capacity in some divisions;
(v) some TAs may be prepared on the basis of inadequate problem analysis, leading
to difficulties in specifying expected outcomes;
(vi) TA preparation in operations departments is sometimes assigned to relatively
inexperienced staff;
(vii) staff preparing TAs for non-operations divisions may not be experienced mission
leaders; and
(viii) it may be difficult to specify expected results for TAs focused on areas such as
capacity building.
176. The problem needs attention. Not only are the scarce TA resources in high demand, but
ADB now manages a number of TA funds provided by other donors and has an obligation to
ensure that they are used to the best effect.
3. Conclusions and Recommendations
177. This study of design and monitoring frameworks has shown that the long-term emphasis
on PPMS training for ADB staff and the provision of assistance with framework preparation
through a “help desk” have improved the quality of most frameworks for loan projects to an
acceptable level. However, most TA frameworks continue to be of poor quality. Thus the in-
house training programs on the preparation of the design and monitoring framework should
continue to be offered on a regular basis, especially for new and less experienced staff. The
other recommendations of the study follow:
• PPMS awareness training should be mandatory for all new staff before they are allowed
to assume project and program design responsibilities, for all current staff operations
departments who have not yet attended the training, and for any staff of non-operations
departments who may be involved in the preparation of TAs.
• Several staff in each operations division and resident mission should be provided more
in-depth training to qualify as PPMS specialists, so that they may provide assistance to
other ADB staff (as well as project staff and consultants) in the preparation of design and
75
monitoring frameworks and their transcription into the PAM and PPR/TPR, and provide
PPMS quality assurance for the division or resident mission.
• Each individual responsible for preparing a design and monitoring framework should be
required to attest to its quality by signing off on a standardized framework checklist.
• A reference file of design and monitoring frameworks that exhibit best practices should
be created for each sector.
178. Staff can gain an understanding of the principles of design and monitoring framework
preparation from the 2–3 day in-house training program that is regularly organized by ADB’s
Human Resources Division and conducted by the Project Coordination and Procurement
Division (COPP). However, the ability to prepare a high-quality framework requires practice, and
not all staff can be expected to master the art through attendance at an introductory course
followed by occasional attempts at framework preparation (rarely would a staff be involved in
preparing more than one or two frameworks in a year). Therefore, the assignment of collateral
duties in PPMS quality control to properly trained staff at the division level is a realistic approach
to solving the problem of poorly prepared design and monitoring frameworks.
B. Study of Project Cost Estimates
1. Introduction
179. Project cost overruns and underruns have been an issue in ADB operations for many
years. Cost overruns require the sourcing of additional funds, which can place difficult loads on
national budgets and ADB resources. Overruns also can result in project implementation delays
and delayed income streams, and sometimes they reduce the chance of project success. Loan
savings and cancellations due to cost underruns also can adversely affect both DMC and ADB
operations. For DMCs and ADB, loan savings represent funds that could have been used more
productively to finance additional projects. Loan savings also mean that the DMC may have
incurred direct losses due to the payment of higher than necessary commitment fees. In
general, from ADB’s perspective both cost overruns and underruns indicate an inefficient
allocation of scarce resources.
180. During 2004, OED completed a special evaluation study (SES) on project cost estimates
to (i) determine the major causes of cost underruns and overruns; (ii) assess the contributions of
various major factors to the cost variations, especially the problem of inaccurate project cost
estimations prepared at loan appraisal; and (iii) recommend ways to improve the reliability of
cost estimates and to share the risk of unpredictable changes in project costs.
181. For the purposes of the SES, cost underruns and overruns were defined as major if
there was a minimum of 20% divergence between the loan appraisal cost estimate and the
actual expenditure.
2. Discussion
182. The SES examined 962 projects approved from 1970–1996 and for which PCRs had
been prepared (Figure 19). 31 Of those projects, 52% had significant (20% or more) cost
underruns or overruns. Large cost overruns (averaging about 40%) were the predominant
problem for projects approved during 1970–1984. In contrast, cost underruns (at an unweighted
average of about 13%) were the predominant problem for projects approved during 1985–1996,
31
The 962 projects did not include projects with program loans and DFI loans.
76
and that situation has continued to the present time. The SES also analyzed the PCRs for
220 investment projects completed during 1996–2003. This analysis showed that about 56% of
the projects had minor cost variations, while only 9% had major cost overruns and 35% had
major cost underruns.
Figure 19: Occurrence of Major Cost Variations for 962 Projects
Proportion of Projects by Cost Variation Category and by Year of
Approval
100% 6%
7%
12%
90% 18%
26%
80%
37%
31%
70% 66%
21% 59% 34%
60%
Percent
50%
40%
30% 7% 57% 57%
53% 48%
20% 34%
27%
10%
0%
1970-1974 1975-1979 1980-1984 1985-1989 1990-1996 Total (1970-
1996)
Year of Approval
Cost variation <20% Cost underrun >20% Cost overrun > 20%
183. The SES concluded that the preponderance of cost overruns in projects up to 1984 was
in large part due to the increasing price of oil as well as materials and equipment. ADB projects
implemented during those early years tended to have relatively large civil works components,
which made price inflation an important factor.
184. The SES also concluded that the preponderance of cost underruns since 1985 has been
due to (i) a trend to prepare projects with relatively smaller civil works components and to
prepare more complicated projects; (ii) the absence of unanticipated price increases, such as
occurred during the 1970s with regard to oil as well as materials and equipment;
(iii) the inadequate time and resources allocated for accurate cost estimation during project
preparation, which has led to “safe” cost estimating practices with built-in slack; (iv) pressure on
staff to inflate loans to meet ADB’s lending targets; and (v) perverse incentives for staff to
overestimate costs in order to avoid the arduous process of having to prepare a supplementary
loan.
185. The occurrence of major cost variations was examined by sector. Cost overruns were
more frequent among projects in the transport and communications sector and other (minor)
sectors; cost underruns were more frequent among projects in the agriculture and natural
resources, energy, and social infrastructure sectors. The preponderance of large infrastructure
projects in ADB’s portfolio during the 1970s and early 1980s helps to explain why projects with
cost overruns predominated up to 1984. Similarly, the swing during the 1980s to include more
77
projects focused on agriculture, rural development, and social infrastructure and welfare in the
portfolio helps to explain the why projects with cost underruns have predominated since 1985.
186. The analysis of the 220 projects completed during 1996–2003 also revealed distinct
differences with regard to the occurrence of major project cost variations among the DMCs.
More than 20% of the projects in two DMCs (PRC and Lao PDR) have had major cost overruns.
In contrast, more than 40% of the projects in six other DMCs (India, Indonesia, Malaysia, Nepal,
Pakistan, and Thailand) have had major cost underruns. A third group of countries (including
Mongolia and Sri Lanka) has had relatively few projects with major cost variations (less than
20% of projects). In general, significant cost variations have occurred more frequently on
projects in large borrowing countries than in small borrowing countries.
187. At the project level, the SES found a negative correlation between the total project cost
and the accuracy of the project cost estimate. Actual base costs on average remained close to
the appraisal estimates. The costs of civil works were often underestimated. However, many
“other” cost categories such as equipment and goods, and institutional development and
training, were generally overestimated, as were price contingencies and interest during
construction. Statistically significant positive correlations were found between the level of cost
underruns and the proportion of local costs in total costs, the proportion of the local currency
component, the proportion for costs other than civil works, and the proportion of costs allocated
to operations and maintenance.
188. The SES cited exchange rate fluctuations and/or depreciation of the local currency as
the main reasons for cost underruns (44%), followed by lower than anticipated prices during
implementation (32%). An inaccurate estimate of the base cost at appraisal was mentioned as a
reason for underruns in almost one third of the projects.
189. The 1995 change of guidelines for estimating price contingencies, when applied
properly, reduced the influence of exchange rate fluctuations. These guidelines take into
account both inflation and currency depreciation. However, application of the guidelines has
been inconsistent.
190. The SES recommendations were: (i) staff time and other resource allocations need to be
more realistic to improve project designs; (ii) cost estimates should include more rigorous
consideration of inflation and depreciation factors; (iii) cost estimates for civil works and
operations and maintenance need to be made more realistic; (iv) ADB should consider
introducing two-part project loans—an initial loan to cover base costs, and a follow-up loan to
cover contingencies and minor overruns;32 (v) ADB should prepare special guidelines for the
use of “engineering loans” for large or complex engineering projects that require detailed
designs;33 (vi) ADB needs to pay more attention to and allocate sufficient resources for project
administration; and (vii) project cost estimates should be updated periodically during
implementation.
32
Both loans would be approved simultaneously, but only the loan to cover project base costs would be signed
initially, and the second loan (whose upper limit would be set at approval) to cover contingencies and minor cost
overruns would be signed later, at an appropriate time and for an appropriate amount. Another alternative would be
to approve multiple loans for a large project, but sign them sequentially as they are needed during implementation.
33
Engineering loans are loans specifically for the preparation of detailed project designs for infrastructure projects.
The actual project loan is prepared based on the designs and cost estimates produced by the engineering loan.
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3. Conclusions
191. The SES demonstrated that ADB continues to have a chronic problem with inaccurate
project cost estimates. During 1970–1984, cost underestimates were the more significant
problem, but during 1985–1996 the major problem became one of cost overestimates. The
persistence of cost overestimates since 1996 is clearly supported by the increasing trend in
public sector loan cancellations from an average of nearly 12% of the net loan principal per
annum during 1997–1999 to more than 14% per annum during 2002–2004 (see Section III.A.6).
192. The SES recommendations have contributed to the SPD decision of October 2004 to
initiate a review of ADB’s policy on supplementary financing, which was last revised in 1988. A
concept paper regarding the review was approved on 22 December 2004, and a draft working
paper was circulated in May 2005. OED staff members were included in the team established
for the review. The working paper prepared for Board consideration draws on the findings of this
study, and recommends major changes to both the policy on supplementary financing and
additional financing. The review is expected to lead a Board policy paper on the same subject
later in 2005, which is compatible with the on-going innovation and efficiency initiative (IEI), and
the middle-income and OCR countries partnership framework. ADB is also examining the
possibility of introducing a multitranche financial facility that should significantly reduce loan
commitment fees as well as the occurrence of major cost overruns and underruns.
C. Study of the Role of Project Implementation Units
1. Background
193. During 2004, OED conducted a special evaluation study (SES) on the role of the project
implementation unit (PIU) in ADB loan projects.34 The SES focused primarily on the efficiency of
the PIUs with regard to project implementation and on their role in capacity building for the
government’s executing agency (EA) and/or implementing agency (IA). For the SES, the term
“project implementation unit” was considered a generic term that referred to any type of special
staffing or “ring-fencing” arrangements made by an EA or IA to manage and implement a
specific project.
194. The PIU debate revolves around the observations that the PIUs supported by external
agencies tend to have high direct and indirect costs, they have a propensity to develop into
parallel organizations, and they dilute central government policy through their allegiance to
donor agendas. PIUs, although widely used in order to improve efficiency, are alleged by some
to be less efficient than assumed. Representatives of some DMCs have questioned whether
PIUs sometimes result more in capacity substitution than capacity development, whether they
sometimes reduce the project management capacity of the EA and IA, and even reduce
government ownership of projects. To address these and other issues, the SES investigated the
effects of PIUs on project implementation efficiency and on capacity development, and
examined ways of simultaneously improving project implementation efficiency and management
capacity of the EA and IA.
195. The SES methodology included file studies and the analysis of relevant databases at
ADB; a survey of ongoing projects through a mailed questionnaire; and missions to six DMCs to
34
ADB. 2005. The Role of Project Implementation Units. A Special Evaluation Study prepared by the Operations
Evaluation Department. Manila.
79
discuss the issues with the government (including EAs and IAs), other donors, and various
stakeholders.
2. Discussion
196. PIUs are commonly used to manage the planning and implementation of large capital
projects in both developing and developed countries. PIUs are also used to clearly assign
authority and accountability for the project. In many cases, PIUs are used to manage an
agency’s temporarily inflated need for skilled human resources during the project
implementation or construction period.
197. Although it would be reasonable to expect that an agency would rely progressively less
on dedicated management structures as its institutional capacity developed over time, the SES
found that the use of PIUs for investment projects has not been decreasing. It is only in the
energy sector—where many state-owned enterprises have developed into matrix-structured
organizations suitable for project implementation without the need for temporary management
arrangements—that significant numbers of investment projects are implemented without formal
PIUs, although even there project management consultants are often engaged.
198. The study found that about 90% of ADB’s investment projects (including sector projects)
are managed using some type of PIU. Almost a sixth of the PIUs were staffed by EA or IA
personnel; a little more than half were staffed with a mix of EA or IA personnel, along with
contractual staff and consultants; and about a third were fully staffed by contractual staff and
consultants. About 44% of the PIUs studied were established as temporary arrangements that
would be dissolved on completion of the project; 18% of the PIUs would be (re)absorbed by the
EA or IA, and the PIU staff would be retained as permanent staff; 12% of the PIUs were
considered permanent, and their staff were expected to continue to manage new projects after
the current projects were completed; and 26% of the PIUs were facing an uncertain future
following project completion. Overall, around half of all PIUs were judged to be largely
integrated with the agencies responsible for the project.
199. The use and composition of the PIU depends on (i) the funding agency, (ii) the nature of
the parent executing or implementing agencies, (iii) the type of project, and (iv) the country
context. ADB projects are much larger than most projects funded by bilateral donor agencies or
nongovernmental organizations, and need more special management arrangements. ADB
usually insists on the establishment of a PIU before loan effectivity, but normally leaves the
agency to structure and staff the PIU in a manner that is consistent with local conditions. ADB
policies and safeguard demands have increased the tasks of PIUs over the years. The degree
to which this represents direct and indirect costs for DMCs depends on the nature of the project.
The policies and procedures can cause delays or extra costs. However, it is believed that these
policies and procedures promote good practice in project management and often contribute to
improved project output. ADB’s requirements may not be higher than those of most other
funding agencies. The SES concluded that project management costs are not excessively
high—around 5% of total costs on average.
200. ADB generally needs to reduce the time taken to respond to the EA, IA, and PIU on
project matters. This will require allocating more staff resources for project administration.
Delegating more responsibility to resident missions for project administration may be a cost-
effective way of improving this area. ADB may also need to increase the number of technical
specialists on staff as was recommended by a recent assessment of the effectiveness of ADB’s
reorganization of 2002. As mentioned, ADB is working on a variety of initiatives that will change
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project implementation processes, such as the middle-income and OCR countries partnership
framework, and the innovation and efficiency initiative, which deals with business processes.
These initiatives are designed to cut transaction costs and to delegate authority and
accountability to DMCs.
201. Changing EA and IA characteristics have contributed to the persistence of PIUs. At
present, most ADB projects are executed by regular government agencies rather than by
project-oriented state-owned enterprises. The moves made by some national governments to
downsize beginning in the 1990s has also reduced their capacity to implement donor-assisted
projects, and therefore increased their reliance on temporary PIU arrangements. The trend
toward decentralization in many DMCs has led to an increasing involvement of subnational
agencies that tend to have lower capacity for project management and, thus, rely more on PIUs.
202. The trends toward increasing complexity and scope in many investment projects, and
the introduction of innovative approaches, have contributed to the persisting reliance on
externally staffed and financed PIUs. For example, ADB often includes policy and other reform
components, and capacity development components, in projects that previously would have had
simpler infrastructure development components. ADB is also financing more social sector
projects than previously, usually with government agencies that have less experience in
infrastructure construction.
203. The project management context in many DMCs remains problematic. In some DMCs, it
is extremely difficult to recruit additional government staff. In such DMCs, the civil service
systems have not adapted to the needs of donor-assisted projects and may continue to work
against the flexible recruitment of staff into government positions or the reassignment of internal
staff to projects. Experienced project administrators with proven track records are scarce
commodities in many DMCs, and may not meet demand where and when there are many
donor-assisted projects. This, coupled with the increasing size, quality, and competitiveness of
the domestic consulting industry, has led some governments to rely more on outsourcing to the
private sector and on externally staffed PIUs. The use of consultants and contractual staff is
allegedly favored by corrupt government officials looking for kickbacks. The growing awareness
of the influence of corruption on projects in certain countries has led external agencies,
including ADB, to “ring fence” their projects to reduce opportunities for corruption. All of the
factors mentioned here favor the continued use of PIUs despite attempts by ADB and other
donors to encourage incorporation of their projects into the regular EA or IA operations.
204. Many of the donor and executing agencies visited during the SES missions to 6 DMCs
reported that they saw no easy alternative to PIUs. The continuing dominance of the PIU across
the portfolio suggests that PIUs are fundamentally efficient for investment projects of the type
typically financed by ADB. The relative efficiency and effectiveness of project implementation
with and without PIUs was difficult to establish as most of the arrangements without formal PIUs
were found only in the energy sector. The SES found little evidence to corroborate the
assumption that project implementation is significantly more efficient without a PIU, and it also
found little evidence to suggest that one type of PIU was more efficient than another. Externally
staffed PIUs on the whole seem slightly more efficient for infrastructure projects, and internally
staffed PIUs somewhat more for projects that include a focus on the operation and maintenance
of infrastructure and public service delivery.
205. The SES found that PIU contractual staff were generally used to fill gaps in the capacity
and skills of agency personnel, and that PIU consultants were generally used for operational
81
and advisory or training-related tasks, and occasionally to substitute for agency staff.35 In some
cases, the EA or IA actually wound up competing for staff with the PIU, and there were many
cases of government agency staff leaving the service to become consultants. The SES showed
that while donor-assisted projects with PIUs increased the project management capacity of
many EAs and IAs, there were also signs of capacity erosion in some other EAs and IAs. More
than 40% of the respondents to the SES survey did not confirm that the project improved their
project management capacity.
206. The SES supports the argument that DMC governments should introduce performance
management systems in their agencies, combined with incentives for their staff to work in PIUs
or with the project. Agencies dealing with repetitive projects through separate PIUs should
consider adjusting their organizational structures to better integrate project management
systems.
3. Conclusions and Recommendations
207. The main conclusion of the SES is that due to their efficiency PIUs are a generally
legitimate and justifiable implementation arrangement for capital investment projects of the type
that dominate ADB’s loan portfolio. PIUs are primarily used as a mechanism to implement
projects and to create capital assets, rather than as a tool to build human or institutional
capacity. In principle, ADB should strive to implement its projects within the government
structures, and if necessary through PIUs, preferably of the integrated type, with due regard for
the loan modality, government policies, country systems, and project efficiency. To reduce the
risk that separate PIUs might undermine agency capacity in certain circumstances, particular
attention needs to be paid to (i) avoiding overlaps with the functions of the parent agency,
(ii) ensuring the proper staff composition, and (iii) establishing an exit strategy at the beginning.
Another conclusion is that there is no single best practice implementation arrangement that is
appropriate to all projects. Finding the best solution depends on a careful analysis of the
executing agency, the project, and the country conditions.
208. The SES recommendations were:
(i) ADB should more systematically assess the potential effects of project
implementation arrangements on agency capacity. Where possible, the potential
of such arrangements for developing project management capacity should be
maximized.
(ii) The project implementation arrangement should be chosen following careful
analysis of project, agency, and country contexts.
(iii) If the loan modality and government preferences require the establishment of a
PIU, ADB should encourage internal staffing for the unit.
(iv) In cases where separate PIUs are more efficient, the risk that they would
undermine the parent agency’s project management capacity needs to be
assessed as a standard practice and mitigated.
(v) In each case where a separate PIU is planned, ADB and the EA should agree on
their exit strategy and/or transformation for the operational and maintenance
phases of the project.
35
PIU consultants were usually hired through firms or, occasionally, as individuals, with ADB’s concurrence needed if
the funding came from the loan. Contractual staff are hired as individuals by the executing or implementing agency,
on conditions set by the agency. Usually the salaries are not very different for those with comparative expertise in
the government service. ADB is not involved in hiring contractual staff.
82
(vi) The cost of project management and the development of capacity to manage
projects should be more systematically analyzed during project preparation. Loan
financing of project administration costs should be well justified.
(vii) The focus at the stage of Board approval should be on the readiness of projects,
so that delays in establishing implementation mechanisms do not become a
reason for subsequent delays. If country systems do not allow the establishment
of PIUs before Board consideration, ADB should enter into policy dialogue to see
if this situation can be changed, pointing out the cost of delays to the borrower in
financial terms.
(viii) Country portfolio reviews should monitor the effects of implementation
arrangements on capacity development.
209. The SES identified a set of good practices for project implementation arrangements and
a checklist to guide ADB staff in the institutional analysis to help determine the need for, and
nature of, PIUs. This material is designed to improve the capacity-building impact of PIUs. A
number of follow-up actions are proposed, focusing on integration of the practices and checklist
in staff guidelines on project processing and administration; and, in the interim period, on their
distribution to ADB staff members in various departments, and integration in training programs
that ADB runs for staff members of executing agencies.
D. Indications of Premature Board Consideration of Loans
1. Introduction
210. In ADB, bunching generally refers to the year-end rush to meet annual targets with
regard to lending and other work program items, although it can also be applied to activities that
occur with unusually high frequency at other times of the year. In order to spread workloads
fairly evenly, the achievement of major milestones such as the Board’s approval of loans and
the circulation of PCRs and TCRs are normally scheduled throughout the year in work programs
at every level from the department to the individual staff. However, bunching persists at ADB.
For example, during 2000–2004 between 71–80% of public sector loans were approved during
the fourth quarter. Similarly, during 2004 only 19% of the planned TCRs were scheduled for the
fourth quarter, yet 34% of the TCRs were actually completed during that quarter.
2. Discussion
211. The causes and/or effects of bunching have been examined by COPP, the Board, the
Economics and Research Department (ERD), and OED. 36 From an examination of projects
approved during 1996–2001, COPP’s conclusion was that projects approved during the fourth
quarter were less ready for implementation than projects approved during the rest of the year.
This was based on statistical analyses that showed that fourth quarter projects took longer than
did other projects to proceed
(i) from approval to effectivity, by 1.2 months;
(ii) signing to effectivity, by 0.9 month;
(iii) approval to first disbursement, by 2.8 months; and
(iv) approval to first consulting contract, by 2.8 months.
36
(i) COSO memorandum to VPO2 dated 10 March 2004 on Impact of Bunching on Project Readiness and Project
Quality. (ii) Discussion paper dated 20 May 2005 for the ADB Board and Management Retreat on Bunching of
Loan Proposal’. (iii) Memorandum from the Chief Economist to OED dated 2 June 2005 on Is There a Statistically-
Significant Relationship between Bunching and Project Quality. (iv) OED’s 2005 Annual Evaluation Review.
83
212. COPP’s analyses also showed that Q4 projects were more likely to be rated at risk in
the PPR (Figure 20),37 although the relationship was weaker.
Figure 20: Proportion of Loans Rated At Risk by the Quarter of Board Approval
25
20
15
Percent
10
5
0
1996 1997 1998 1999 2000 2001 2002
Year
Q1-3 Loans Q4 Loans
The proportions for 1996–2001 are computed from data as of year-end 2003; those for 2002
are from data as of year-end 2004.
Q1-3 loans were approved during the first 3 quarters of each year; Q4 loans were approved
during the fourth quarter.
213. The discussion paper prepared for the Board retreat on bunching quoted COPP’s
results, but then went further to point out that bunching is an issue not just for loan approvals,
but also for TA papers, PCRs, and TCRs during Q4, and country strategies and programs
(CSPs) during the third quarter. It also reviewed the causes of bunching and divided the factors
into process and design issues, planning and systematic issues, and DMC procedures and
timetables. It pointed out that ADB’s practice of making annual allocations of ADF, Technical
Assistance Special Fund (TASF) and Japan Special Fund (JSF) resources contributed to the
problem, as did the preparation of annual staff work plans. The discussion paper also presented
the following measures that should help to alleviate bunching:
(i) ADF allocations are shifting to a biennial cycle starting in 2005;
(ii) a pilot test to shift the TA program to a multiyear cycle is planned;
(iii) a 3-year plan is being drawn up to get resident missions more involved with
project processing;
(iv) proposals have been prepared to increase flexibility in ADB’s business
processes, including increasing the use of country systems where appropriate;
(v) action is expected on the independent assessment panel’s recommendation that
project designs be simplified;
(vi) the use of “project filters” (distinct from the project readiness filters in the PAI)
prior to loan negotiations is under consideration; and
(vii) increasing efforts to harmonize the procedures used by ADB and other donors.
37
COPP’s original calculations of the percentages during 1996–2001 have been corrected in Figure 16, and the
percentages for 2002 have been added.
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214. ERD used the stepwise regression method to demonstrate that the sector, recipient
country classification, type of loan, and decade of approval were better predictors of project
success than the quarter of loan approval. In this analysis the quarter of approval was not
statistically significant and dropped out of the model, leading to the conclusion that the quarter
of approval is not a predictor of project quality or success. ERD’s results indicated the following:
(i) projects in the agriculture, finance and social infrastructure sectors are more
likely to be partly successful or unsuccessful than projects in other sectors;
(ii) program loans are twice as likely to be partly successful or unsuccessful as
compared to project loans;
(iii) projects in DMCs eligible for soft loans (categories A, B1 and B2) are more likely
to be partly successful or unsuccessful than are loans to DMCs that are eligible
only for OCR lending (category C); and
(iv) the quality of the projects approved during the 1990s was significantly better than
for those approved during the 1970s and 1980s.
215. The relationship between bunching and project quality is discussed in some detail in
OED’s 2005 Annual Evaluation Review. OED’s analysis compared the success ratings reported
in PPARs and PCRs for projects approved during each quarter. The results showed that there
was no statistically significant relationship between the quarter of approval and the likelihood of
success for projects and programs approved during the 1970s and the 1980s. However, for
projects approved during the 1990s, the projects approved during the second and third quarters
were more likely to be successful than those approved during the first and fourth quarters.38 The
determinants of a project’s success or failure are many and complex. Project quality is more
strongly related to the sector and country characteristics than to the quarter of approval. Other
factors that influence project success include the economic environment in which the project is
being implemented, the policy environment, and the strength of the executing agency.
Nevertheless, there is some information to suggest that there may be a relationship between
bunching and project quality.
3. Conclusions
216. For every year since 2000, more than 70% of the public sector loans were approved
during the fourth quarter. Although bunching is not the most important determinant of project
quality, some evidence suggests that bunching may pose a risk for project quality, and it is
associated with longer times needed to make loans effective. OED is concerned because
bunching has become much worse since 2000. As stated in OED’s 2005 Annual Evaluation
Review, a prudent management should mitigate the potential risk of reduced project success
rates by taking corrective action to alleviate bunching. Because many factors contribute to
bunching, action is also needed in many areas to mitigate the problem and bring it under
control. Increased use of project readiness filters to ensure that projects are not brought to the
Board prematurely would relieve some of OED’s concerns about bunching. The following are
among the actions that are being implemented, planned or considered:
(i) reducing project complexity,
(ii) streamlining and improving the efficiency of loan processing,
(iii) increasing the use of summary procedures,
(iv) introducing videoconferencing for some loan negotiations,
38
The ERD disagrees that there is a relationship between bunching and project quality. ERD’s analysis on this issue
is given in Appendix 4 of OED’s 2005 Annual Evaluation Review.
85
(v) changing from an annual processing cycle to a multi-year cycle,
(vi) increasing alignment with the country’s own strategies,
(vii) increasing use of country systems and standards, and
(viii) increasing sector staff assignments to RMs.
217. OED will monitor the actions taken to manage bunching, including the use of project
readiness filters, and report on their effectiveness in future Annual Reports.
E. Reversing the Decline in ADB’s Relevance as a Development Partner
218. The following trends revealed by the portfolio analysis for this report suggest that ADB
has been losing relevance as a development partner in the Asia and Pacific region:
• from 1995 to 2004, the portfolios of ongoing public sector OCR and ADF loans increased
in nominal terms by only 1.9% and 12% respectively (the portfolios grew significantly
larger during 1997–1999 with emergency lending in response to the Asian financial crisis,
but then shrunk again during 2001–2004 as the economically stronger DMCs prepaid
their relatively expensive OCR loans);
• from 1995–1997 to 2002–2004, annual OCR and ADF project loan approvals decreased
by 6.6% and 29% respectively; and
• OCR disbursements in 2004 were only 2.4% more than in 1995, and ADF
disbursements in 2004 were 7.9% less than in 1995.
219. Some of the causes of these trends were brought out in discussions during the recent
missions to several DMCs for the MIC/OCR partnership framework. ADB is also taking actions
that should reverse the trends under the reform agenda and the innovation and efficiency
initiative. More detailed discussions of the issues are presented in the follow sections.
1. The MIC/OCR Partnership Framework
220. During November–December 2004, SPD conducted missions to PRC, India, and
Pakistan to discuss the partnership framework for middle-income and OCR countries
(MIC/OCR). The wide range of issues raised by three of ADB’s major clients underlines the
need for ADB to develop a new paradigm for doing business with the MIC/OCR countries. The
analyses of the loan and TA portfolios presented in this AR 2004 provide clear evidence to
support the contention that ADB is becoming a less relevant development partner for the
MIC/OCR countries as summarized below.
221. The following are among the major issues raised:
(i) OCR operations need to be differentiated from ADF operations.
(ii) ADB needs to develop a new operational paradigm for OCR that emphasizes
country leadership, building on country systems, and a flexible and responsive
approach to meet the various needs of the MIC/OCR.
(iii) ADB needs to rebuild its core competencies in most sectors and with regard to
regional issues in order to fulfill its mandate as a regional think-tank and to
support regional development initiatives.
222. The following were among the specific concerns and criticisms voiced by PRC, India,
and Pakistan during the missions:
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(i) ADB’s heavy reliance on external consultants perpetuates the traditional
approach and hinders the opportunity for ADB to build, update, and modernize
the in-house expertise and knowledge that DMCs seek in a regional partner.
(ii) ADB’s operational procedures often impose irrelevant requirements and overlook
alternatives and country systems; and policy and procedural rigidity have
intensified as the attention of ADB staff has been diverted from core sectoral and
technical issues by safeguard policies, project costing concerns, etc.
(iii) There is an imbalance between the attention and resources ADB dedicates to
project processing and project implementation, i.e., the low level of staff
resources dedicated to project implementation, inexperience of some mission
leaders, frequent staff turnover, poor quality of some consultants, and inflexibility
in implementation, all of which reduce operational effectiveness.
(iv) ADB’s potential advantage to catalyze public-private sector partnerships is
hampered by the limited staffing and sector focus of private sector operations.
(v) The OCR framework, terms, and conditions are generally relevant for revenue-
generating traditional investments, but not for new and non-traditional types of
operations, institution building and non-revenue investments that require more
process-oriented, flexible, and slow-disbursing approaches.
(vi) ADB’s traditional OCR products are often too inflexible, costly, and slow in
delivery to meet MIC/OCR needs.
(vii) Resident mission staff tend to be deficient in critical skills such as procurement,
consulting services, and legal issues.
223. All of these issues and concerns are leading to a growing fatigue among DMCs with
regard to the standard operating principles and products of ADB and other international financial
institutions. ADB needs to respond by changing the way it conducts business. The bureaucratic
approach needs to give way to a more professional and private sector orientation. Business as
usual is not a long-term option for ADB.
2. ADB’s Reform Agenda
224. As stated in the August 2004 paper, ADB’s Reform Agenda Today, the Reform Agenda
commits ADB to deliver specific outputs related to internal changes and realignment with regard
to reinforcing knowledge management, improving operational policies and strategies, refining
organizational processes and structure, and improving human resources management. The
following are among the specific outputs and activities included in the Reform Agenda:
(i) Implementation of the 2004 MfDR action plan, one of the key reform initiatives, is
aimed at enhancing results orientation at all levels—institutional, country, sector,
and project (coordinated by SPRU).
(ii) Implementation of the knowledge management action plan (2004–2007) to
improve ADB’s management of knowledge services and products, update
business processes and information technology solutions, and expand
knowledge sharing with external stakeholders (coordinated by RSDD).
(iii) Making improvements to the operational policies and strategies, including a
review of all of ADB’s policies and strategies and their implementation
(coordinated by SPD).
(iv) Continuing initiatives to update the business processes to increase operational
efficiency, including an independent assessment of the reorganization of 2002
and its impact on ADB’s development effectiveness (coordinated by BPMSD and
SPD).
87
(v) Making improvements to ADB’s human resources management and staff
incentives (coordinated by BPMSD).
225. The paper also states that ADB must commit to mobilizing and managing financial
resources more efficiently, and ensure that adequate financial and human resources are
available for the implementation and continued refinement of the reform agenda.
3. Portfolio Analysis
226. The current portfolio analysis provides evidence to support the relevance and extent of
the problems raised by PRC, India, and Pakistan during the MIC/OCR partnership framework
missions. It also suggests that ADB’s Reform Agenda should be expanded in certain areas. A
few examples are provided below.
227. First, the MIC/OCR countries’ declining interest in borrowing OCR is borne out by the
stagnation in project lending and declining disbursements over the past decade. The
$2.40 billion of OCR disbursed during 2004 was only marginally above the $2.34 billion
disbursed during 1995. Even in nominal terms this is a no-growth scenario, and in real terms
there is a clear declining trend, which was only temporarily masked by the large increases in
program lending in response to the Asian financial crisis. The trend in OCR project lending
(net of cancellations) has been clearly downward. The program loan share of total annual
disbursements, which was only 6–7% during 1995–1996, jumped to 49% during 1998, and was
still 33% during 2004.
228. Second, the failure of program lending to achieve stated objectives within the original
time schedules is evidenced by the carryover from 2004 to 2005 of 31 delayed tranche releases
for a total of $1.24 billion. ADB needs to reexamine its use of conditionality (loan covenants) in
light of the ongoing debate among international donors regarding the relevance and
effectiveness of donor imposed conditionality in program lending. As Quibria noted,39 ex ante
conditionality appears to be largely ineffective in practice, and the use of outcome-based
conditionality may prove more effective because it promotes greater DMC ownership and
accountability.
229. Third, the portfolio analysis supports the DMCs’ contention that there is an imbalance
between the attention and resources ADB dedicates to project processing and project
implementation. The findings include: (i) the time spent by ADB’s international staff on project
administration missions has declined substantially in recent years, (ii) there was no review
mission during 2004 for up to 20% of the active projects, and (iii) PPTA approvals have
increased during the past 3 years.
230. The ongoing review of the partnership framework for MIC/OCR DMCs is a positive step
on the part of Management. However, the key to maintaining ADB’s relevance and role as a
major development partner depends on the responses to the difficult challenges posed by the
DMCs. Some of the more important challenges are (i) the need to introduce new development
assistance instruments and procedures to meet the needs especially of the MIC/OCR countries,
(ii) the need to rebuild ADB’s core of technical expertise in many sectors, and
(iii) the need to build staff capacity to provide adequate attention to project administration.
39
Quibria, M.G. October 2004. Development Effectiveness—What Does Recent Research Tell Us? OED Working
Paper No. 1. ADB, Manila.
88
231. Two papers on Pilot Financing Instruments and Modalities and Cost Sharing and
Eligibility of Expenditures for Asian Development Bank Financing were discussed by the Board
in June 2005. The first paper presented six specific options to address the need for new
development assistance instruments and procedures, and recommended pilot testing each of
the options for a period of three years. The second paper requested Board approval for specific
changes to ADB’s policy on cost sharing and expenditure eligibility rules. The changes would
provide greater simplicity and uniformity with regard to cost sharing and expenditure eligibility,
harmonize ADB’s project financing with other development partners, and move toward
increasing reliance on country systems.
232. ADB’s reform agenda focuses on issues like improving staff efficiency and strengthening
front-end project activities, including shifting to results oriented CSPs and improving the design
and monitoring frameworks for projects. While these activities are important, they are not
sufficient. The current MfDR agenda should be broadened to place more emphasis on project
administration and portfolio management.
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V. CONCLUSIONS AND RECOMMENDATIONS
A. Summary of Main Findings
1. Public Sector Loan Portfolio
233. The following data provide some historical background with regard to the public sector
loan portfolio up to year-end 2004:
• 35 of 42 DMCs were eligible to borrow at year-end 2004 (of the other 7 DMCs, 4 had
graduated, 2 were in default on loan payments, and 1 was a new ADB member and had
not yet been assigned to a borrower category).
• 34 DMCs borrowed during the decade 1995–2004, and 20 borrowed during 2004;
• 3 DMCs that joined ADB since 2000 had yet to withdraw loan funds at year-end 2004,
although the first loan was approved for one of them.
234. At year-end 2004, the public sector loan portfolio comprised 491 active loans for
415 ongoing projects and programs, with a net loan amount of $32.6 billion, comprising
• 181 OCR loans for $21.4 billion and 310 ADF loans for $11.2 billion; or
• 434 project loans for $27.4 billion and 57 program loans for $5.2 billion.
235. The analysis of the public sector loan portfolio during the decade 1995–2004 showed the
following trends.
236. Increasing Concentration of Lending. During the decade, of the 34 DMCs that
borrowed from ADB, four received nearly 65% of the total loan approvals by amount (PRC
[20%], India [17%], Indonesia [16%], and Pakistan [12%]); while the total annual amount
borrowed by the 23 smallest borrowers gradually decreased.
237. Sector Trends. Changes in the sectoral distribution of public sector loan approvals
since 1995 are shown in Table 60. At year-end 2004, transportation and communication had
replaced finance as the sector receiving the largest share of loan approvals at 38%. The energy
sector remained in second place with 14% of loan approvals, followed by multisector loans at
10%. The law, economic management, and public policy sector rose from eighth place to fourth
with 9% of loan approvals. The financial sector saw the largest reduction in its share of lending,
from 30% to just 7%, which reflected a return to normalcy after the large-scale lending provided
during the Asian financial crisis. The agriculture and natural resources sector and education
sector saw smaller lending share reductions; while the share of lending in the water supply,
sanitation and waste management sector remained essentially unchanged.
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Table 60: The Sectoral Distribution of Loan Approvals
Share of Total Loan Approvals by Amount: 3-year Average (%)
Sector 1995–1997 2002–2004 Trend
1. Transportation and Communication 16.5 37.9 ↑↑
2. Energy 18.5 14.0 ↓
3. Law, Economic Management, and Public Policy 1.9 8.8 ↑↑
4. Finance 30.4 7.5 ↓↓
5. Agriculture and Natural Resources 10.4 6.7 ↓
6. Water Supply, Sanitation, and Waste Management 5.3 5.1 ↔
7. Education 6.8 4.4 ↓
8. Industry and Trade 0.6 2.8 ↑
9. Health, Nutrition, and Social Protection 1.7 2.6 ↑
10. Multisector 7.9 10.2 ↑
Total 100.0 100.0
Note: The up arrow (↑) indicates an increasing trend in the share of lending, the sideways
arrow (↔) indicates no change, and the down arrow (↓) indicates a decreasing trend in the
share of lending.
Source: Asian Development Bank management information systems.
238. Stagnant Lending. The $4.95 billion in loan approvals during 2004 was the second
lowest annual total during the past decade and only marginally above the 1999 approvals.
Similarly, the $3.71 billion in OCR approvals was also the second lowest annual total during the
past decade and only slightly above the 1996 approvals; and the $1.24 billion in ADF approvals
was the third lowest during the decade. These results reconfirm the importance of developing
new products and services to meet the changing needs of the DMCs, as is proposed under the
current innovation and efficiency initiative and MIC/OCR country partnership framework.
239. Increasing Project Start-up Delays. Loan signing is usually expected within a few
weeks of Board approval, and ADB’s standard time allocation from loan signing to effectiveness
is 90 days. The actual time taken from loan approval to signing and effectiveness gradually
increased by 44% from an average of 183 days for loans made effective in 1995 to 263 days for
loans made effective in 2004. As in other years, there was considerable variation in the time it
took for loans to be made effective in 2004. Project loans took 1–796 days and program loans
1–391 days to become effective after approval. There were some significant differences among
the RDs, sector divisions, and types of loans with regard to the time taken from loan approval to
effectiveness. The largest difference was between project loans in the governance and finance
divisions (averaging 196 days) and project loans in the infrastructure divisions (averaging 498
days). These results highlight the need for the RDs to pay more attention to the project-
readiness filters found in PAI 1.01.
240. Bunching. In ADB, the term “bunching” normally refers to the disproportionately large
number of loans being brought to the Board for approval during the fourth quarter of each year.
However, bunching also occurs with respect to TA approvals, the completion of PCRs and
TCRs, and contract awards and disbursements. During 2000–2004, 71–80% of the annual
public sector loan approvals occurred during the fourth quarter, and 36–51% were approved in
December. Also during this period, 45–62% of TAs were approved during the fourth quarter.
During 2004, 75% of all public sector loans were approved during the fourth quarter, and
47% during the month of December. Evidence suggests that loans approved during fourth
quarter bunching have been less ready for implementation. For example, COSO showed that
projects approved during the fourth quarter in 1996–2001 required an average of 1.2 months
longer to advance from approval to effectivity, and 2.8 months longer to advance from approval
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to the first consulting contract, than did projects approved during the rest of the year.40 COSO
also showed that bunching may adversely affect project quality: projects approved during the
fourth quarter had a 15.5% chance of being rated “at risk” during implementation compared with
a 9.5% chance for projects approved during the rest of the year. Actions that should help to
alleviate bunching are being taken, such as the shifting of ADF allocations to a biennial cycle,
and the proposal to introduce a multiyear cycle for TA allocations.
241. Increasing Loan Cancellations. During 2002–2004, OCR loan cancellations were the
highest since 1997 at just under 16% of the outstanding principal, and ADF loan cancellations
were just over 9% of the outstanding principal. Insufficient attention to preparing accurate cost
estimates during project formulation, the tendency to overestimate costs in order to preclude the
need for supplementary loan financing, and the borrowers’ desire to minimize commitment fees
and other loan charges are among the factors contributing to the high rate of cancellations. The
first two issues could be addressed by simplifying project designs. The last issue is being
addressed by the proposal to introduce a multitranche financing facility under the innovation and
efficiency initiative.
242. Decreasing Coverage of Project Administration Missions. The number of person-
days/year on project administration missions and the average number of missions per project
reviewed increased gradually over the past few years. However, up to 20% of the active
projects were not visited by a review mission during 2004, and the number of professional staff
days on project administration missions declined by 18% from 1995 to 2004. This has happened
despite ADB’s 25% increase in total staff and 34% increase in professional staff from 1995 to
2004. It is a cause for concern because ADB’s policy has been that every project should be
reviewed by missions in the field for at least 5 days per year, and problem projects for at least
10 days per year. The increasing trend to delegate project administration to the RMs is
expected to result in more frequent contact between ADB project officers and executing agency
staff. The proposal to gradually adopt country systems where appropriate should also reduce
the frequency of ADB review missions for projects in the more advanced DMCs and sectors.
243. Increasing Delegation to RMs. As the number of RMs increased during the decade, so
did the number of loans delegated to them for administration, reaching a high of 137 delegated
loans during 2004 (about 31% of the active portfolio). The total number of staff assigned to
ADB’s field offices—including 19 resident missions and 9 other offices—increased by 159%
from 150 in 1998 to 388 in 2004. This is a positive trend—the AR 2003 found that delegated
loans tended to perform better than loans administered from headquarters. RM staff generally
have more knowledge of the country and cultural settings in which the projects are
implemented, and have important national and local language skills. Their proximity also allows
them to work more closely with the government and executing agency during project
implementation.
244. Continuing Need for Loan Extensions. Only 14% of the loans closed during the
decade were closed within the originally planned time frame; the remainder required 1–7
extensions to the loan closing date. The mean number of extensions per loan was 2.2, and 61%
of the loans were extended for more than 1 year. The implication is that ADB and the borrowers
have not yet learned to make realistic estimates of the time required to implement projects and
programs. The RDs need to learn from experience to prepare longer, more realistic project
implementation schedules, and to use the best-practice tools in doing so. One such tool, the
40
COSO memorandum dated 10 March 2004 regarding Impact of Bunching on Project Readiness and Project
Quality.
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critical path method, has been applied routinely on large and complex projects in the public and
private sectors for many decades. A critical path computer program (MS Project) is available at
ADB, but is rarely used by ADB staff. Its use as a project planning and management tool should
be institutionalized at ADB.
245. Need for Improvements in Project Evaluation. The proportion of ongoing projects
rated satisfactory or better in the PPR at year-end was fairly stable for the past 3 years at
86–87%. The proportions of problem projects and projects at risk were also relatively stable at
13–14% and 14–16%, respectively. However, of the 160 projects for which both PCRs and
PPARs were prepared during 1995–2004, 61–70% were rated as satisfactory each year, while
27–33% were rated as partly satisfactory, and less than 6% as unsatisfactory. The difference
between the PPR ratings and the PCR and PPAR ratings suggests that the PPR system is not
yet identifying all of the potential problem projects. More accurate information is needed to guide
portfolio management and to allow timely action to resolve problems. One reason is that the
PPR tracks only inputs and not outputs, and uses the validity of assumptions and the mitigation
of risks identified in the project framework as a weak proxy to track the likelihood of attaining the
intended development objectives. COPP plans to upgrade the PPR system, but that must await
the planned implementation of ISTS II from the last quarter of 2006 to the first quarter of 2008.
246. Weak Disbursements. Total loan disbursements increased from $3.49 billion in 1995 to
a temporary high of $6.68 billion in 1998 due to the large amount of quick-disbursing program
lending provided during the Asian financial crisis, and then fell back to $3.45 billion in 2004. The
stagnant trend in disbursements, after factoring out the impact of the Asian financial crisis,
mirrors the lack of growth in lending. Project loan disbursements declined by 32% from
$3.57 billion/year during 1996–1998 to $2.45 billion/year during 2002–2004. Program loan
tranche releases jumped from about $0.25 billion/year (6% of total disbursements) during
1995–1996 to $2.53 billion/year (42%) during 1997–1999 and then fell to $1.32 billion/year
(35%) during 2002–2004. The carry-over of delayed tranche releases exceeded $1.0 billion at
year-end 2003 and 2004, and 40% of that was delayed by a year or more. These trends indicate
the need for ADB to introduce new products and services to meet the changing needs of many
DMCs, as requested by the DMCs involved in the review of the MIC/OCR country partnership
framework and as proposed under the innovation and efficiency initiative. They also indicate the
need for more realistic scheduling of tranche releases during loan preparation.
247. The 3-year moving average for the contract award ratio fell from 21.2% during
1995–1997 to 15.7% during 2002–2004. The disbursement ratio started at 18% during
1995–1996, peaked at 29% in 1998 due to emergency assistance provided during the Asian
financial crisis, and then fell to 19% during 2003–2004. These ratios confirm that ADB’s project
and program implementation schedules continue to be unrealistically short, and support the
recommendation to use best-practice tools, such as the critical path method to prepare more
realistic schedules.
248. Continuing Negative Net Resource Transfers. During 2002–2004, nine DMCs made
$10.65 billion in loan prepayments that resulted in a cumulative negative NRT for ADB of
$8.73 billion. Five major OCR borrowers accounted for more than 99% of the prepayments; in
declining order they were India, PRC, the Republic of Korea, Thailand, and Pakistan. Another
sizeable negative NRT is anticipated during 2005 due to large scheduled loan repayments and
expected additional OCR loan prepayments. The DMCs made sound financial decisions when
prepaying their relatively expensive pre-Libor-based OCR loans, but the effect has been to
reduce ADB’s annual income from loans by 43% and annual gross income by 38% from 2001 to
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2004. This trend underscores the need for ADB to introduce new products and services to
increase its public and private sector lending.
249. While it is beyond the scope of this report to suggest ways for ADB to compensate for
the reduced income stream over the next decade due to the recent OCR prepayments, the
potential impact on ADB operations must be noted. The reduced income levels will persist for at
least the medium term. As a result, ADB will have fewer resources with which to top up the ADF
and TA funds, which could have a limiting effect on some of those operations.
2. Technical Assistance Portfolio
250. The analysis of the TA portfolio during the decade 1995–2004 identified the following
trends:
• The number of ongoing TAs in the portfolio at year-end increased steadily from 663 in
1998 to 1,016 in 2004.
• The number of TAs approved increased from 288 per year during 1999–2001
($161 million/year) to 320 per year during 2002–2004 ($184 million/year).
• The share of TA resources allocated to regional TAs increased from nearly 19% during
1995–1997 to more than 24% during 2002–2004. There was also an increase in the
share of TA allocated to the top DMC TA recipients, and a decrease in the share
allocated to the DMCs that received the least amount of TA.
• The number of TA implementation missions fell by 46% from 712 in 2003 to 387 in 2004,
and the share of the ongoing TAs with at least one review mission per year fell from
45% to 25% (although many small-scale TAs, and TAs on the verge of closing may not
require review missions). This indicates that ADB probably is not allocating sufficient
resources to supervising TA implementation, which may be contributing to the
disappointing results documented in many TA evaluations.
• The numbers of TA completion reports prepared each year increased steadily from 51 in
1995 to 165/year during 2003–2004. Although TCRs are usually scheduled throughout
the year, most are actually completed during the third and fourth quarters.
• According to the TPR system, the 1,016 ongoing TAs at 31 December 2004 had the
following performance ratings: 0.5% highly satisfactory, 80.1% satisfactory, 13.3% partly
satisfactory, 3.5% unsatisfactory, and 2.6% incomplete rating. Based on the results of its
evaluations, OED is concerned that the TPR ratings may be biased upwards.
251. The picture that emerges from the analysis of the TA portfolio is mixed. The growth in TA
resources enables ADB to provide more assistance to its DMCs in more areas. However, the
low number of TA review missions fielded and the relatively small percentage of TAs reviewed
during 2004 suggest that the growing number of TAs under implementation has exceeded the
capacity of ADB staff to manage and supervise them effectively. Approving TAs does not by
itself achieve development results. Active ADB staff involvement during TA implementation is an
important determinant in achieving the intended results. These findings support the suggestion
that a cap should be put on the number of TAs processed by the RDs each year, to keep the
number under implementation within their capacity to manage.
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3. Private Sector Portfolio
252. The private sector portfolio is still small compared to the public sector portfolio, but it has
grown significantly in recent years. The following trends are apparent from the analysis of the
private sector portfolio during the decade 1995–2004:
• In contrast to the stagnation in the public sector portfolio, ADB’s private sector portfolio
grew by 56% from $0.94 billion in 2000 $1.46 billion in 2004, of which 51% went for
infrastructure projects, 22% for funds and capital markets projects, 18% projects in the
financial sector, and 9% for projects in the agriculture, manufacturing, and other sectors.
• The private sector portfolio expanded to include 79 projects in 15 DMCs plus 18 regional
projects at year-end 2004.
• Disbursements reached a 5-year high of $151 million during 2004, repayments and
divestments also reached a 5-year high of $122 million, and dividends received topped
$10.5 million.
• Loans have dominated the private sector portfolio, accounting for 45% of total approvals,
with equity investments second at 21%. Various guarantees make up much of the
remainder of the portfolio, and the first currency swap was approved in 2004.
• The risk assessment system indicated that the portfolio was performing fairly well at
year-end 2004, with 82% of the projects by amount given a risk rating of satisfactory or
better.
253. The growth in the private sector portfolio is encouraging. Currently there are many more
opportunities for ADB to be engaged with the private sector than was the case during earlier
times, and proposals have been prepared to expand private sector operations. However, the
continued growth of ADB’s private sector operations will require additional staff and other
resources.
4. General Conclusions
254. The analyses of the loan and TA portfolios revealed issues and trends that raised
concerns that ADB may be losing relevance as a development partner in the Asia and Pacific
region. The problems have been recognized under ADB’s reform agenda, and some remedial
actions already are underway or are being planned under the innovation and efficiency initiative.
For example, in June 2005, the Board discussed a working paper on Pilot Financing
Instruments and Modalities. The paper addressed the need for ADB to introduce new lending
products and procedures to meet the evolving needs of the MIC/OCR countries.41 The proposed
multitranche financing facility would address (i) borrowers’ concerns regarding commitment
fees, (ii) the increasing loan cancellations, and (iii) the prevalence of unrealistically short project
implementation schedules. Other initiatives would address the problem of stagnant lending by
expanding ADB financing to include local governments and SOEs, and by initiating local
currency lending operations.42
41
The paper presents pilot concepts for (i) a multitranche financing facility, (ii) a financing facility for subsovereign
and nonsovereign public sector financing, (iii) local currency financing, (iv) a refinancing facility, and (v) new forms
of cofinancing through active financial syndications and risk sharing with commercial financing partners.
42
A working paper on Local Currency Lending was forwarded to the Board in May 2005. The paper notes that local
currency operations would be expected to be in addition to foreign currency operations, and thus increase ADB’s
total lending operations.
95
255. In June 2005, the Board also discussed another working paper entitled Cost Sharing and
Eligibility of Expenditures for Asian Development Bank Financing: A New Approach. The paper
recommends important changes to ADB’s policy on cost sharing and eligibility rules to bring
them more in line with the other MDBs, and to improve service to the DMCs through increasing
use of country systems as and where appropriate. Changes will be formalized in the operations
manual as they are approved.
B. Recommendations
256. Based on the review of the loan and technical assistance portfolio herein, OED has
identified five central issues that ADB needs to address: (i) some loans are presented
prematurely to the Board for approval; (ii) inadequate attention is paid to the administration of
some loans; (iii) there are problems managing the growing TA portfolio; (iv) some DMCs have
poorly focused loan portfolios; and (v) there is a continuing need for improvements in the project
(design and monitoring) frameworks, and the PPR system needs to be upgraded. The following
recommendations address these central issues.
1. Board Consideration of Loans
257. To some extent, bunching is inherent in ADB’s annual planning and budgeting cycle. It is
largely the result of strong institutional incentives to have loans and TAs approved during the
year in which they were scheduled, in order to meet annual targets. However, bunching has
been more serious since 2000. During 2004, 75% of all public sector loans were approved by
the Board in the fourth quarter and 47.5% in the month of December.
258. Bunching and the “approval culture” at ADB have several implications that may
adversely affect project quality. First, for a project whose processing falls behind schedule, there
is an incentive to cut corners during preparation in order to get the project approved before
year-end. Second, bunching puts a heavy burden on project reviewers and quality-control
mechanisms, such that errors and deficiencies in project design may go unnoticed. Third,
bunching is focused on meeting ADB targets and ignores the needs and schedules of the
borrowers and their governments.
259. ADB has made attempts, most notably in the early 1990s, to resolve the bunching
problem, but with only short-lived success. Given the excessive bunching at year-end 2004,
Management needs to take the lead in changing ADB’s incentives structures, both formal and
informal, so that staff will focus on project quality and achieving development results rather than
on meeting an arbitrary deadline. OED recommends that Management take the following
actions during 2005 and 2006:
(i) place more emphasis on the project-readiness filters by adding a checklist to the
documentation submitted for loan approval to show which of the readiness filters
have and have not been applied to the loan in question; and
(ii) require the RDs/divisions to submit quarterly status reports to Management
regarding key project start-up indicators for each loan, including the length of
time taken from loan approval to signing, effectiveness, first disbursement, and
first consulting contract.
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2. Loan Administration
260. OED is concerned that inadequate resources are being devoted to loan administration
and portfolio management. The fact that up to 20% of active loans were not reviewed during
2004 is a cause for concern and is not consistent with best practice. The problem may be
slightly overstated, because recent increases in RM capacity and in the number of loans
delegated to RMs for administration suggest that many projects receive attention in addition to
formal review missions.
261. Strong leadership from Management during the early to mid-1990s resulted in
improvements in project administration. However, the findings presented in this report indicate
that loan and TA administration are now a lower priority and receive less attention than needed.
With the new focus on MfDR, Management needs to take concrete action to formally recognize
that project administration is as important as loan processing when it comes to achieving
development results. It should be recognized that project administration and project preparation
require somewhat different skill sets, and that not every professional (international) staff
member in the RDs need be expected to do both jobs. Given the increasing numbers of active
loans and ongoing projects over the past decade, BPHR and the RDs should undertake a study
to define clearly the staff needs for loan and project administration vs. loan and project
preparation, and to adjust staff allocations to RDs and RMs as appropriate.
262. The MfDR agenda recognizes that monitoring and evaluation are important means to
improve development results. However, ADB’s MfDR agenda has not yet focused on this issue,
and during 2005–2006 it should be expanded to include specific activities to improve loan
administration and portfolio management. This is not expected to be budget neutral. It will
involve taking action to address the issue of ADB’s loss of technical skills in the RDs, increasing
staff coefficients for project supervision, delegating more projects to the RMs consistent with
staffing capacity, and ensuring that each RM has a sector specialist for each sector in which
ADB is substantially engaged. Although ADB has added about 150 new professional staff
positions over the past 5 years, the staff increase has not been reflected in an increase in loan
administration efforts. The reorganization of RSDD as of 1 July 2005, and the reassignment of a
number of professional staff to the RDs should contribute to alleviating the situation.
263. A study to assess the technical strength of the RDs will be undertaken in the second half
of 2005 to address the recommendations of the independent assessment panel that examined
ADB’s 2002 reorganization. As part of that study, BPMSD and the RDs should clearly define the
personnel needs to administer the loan and TA portfolios for the next decade, and make explicit
provisions in the 2006–2008 work program and budget framework to devote adequate staff and
resources to loan and TA administration.
3. The Growing TA Portfolio
264. The year-end number of ongoing TAs in the portfolio increased by 53% from 1998 to
2004. On average, 320 new TAs were approved each year during 2002–2004, and the portfolio
at the start of 2005 had 1,016 ongoing TAs. Although the TPRs showed that the implementation
of 80% of the ongoing TAs was rated as satisfactory, OED believes that the TA portfolio has
expanded beyond ADB’s capacity to effectively manage it and ensure that development results
are achieved. The indicators of inadequate TA supervision include (i) the number of TA review
missions fell by 46% from 712 in 2003 to 387 in 2004, and (ii) the proportion of ongoing TAs
with at least one mission fell from 45% in 2003 to 25% in 2004. SPD should consider the
following in their ongoing review of the TA policy:
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(i) whether or not stricter limits are needed on the number of new TA approvals to
ensure that they will be effectively managed—this is consistent with directions
from Management contained in the 2006–2008 planning directions and resource
parameters;
(ii) what actions division directors should take to ensure that complete and accurate
information is entered into the TPR; and
(iii) what steps should be taken to improve the analytical content of TCRs and their
focus on development results, including changing the format of the TCR to
require an evaluation of the TA goal and purpose, in addition to inputs and
outputs.
4. Sector Selectivity and Focus in the CSPs
265. Directions from Management in the 2006–2008 planning directions, comments at the
Board, and the conclusions of several CAPEs have consistently pointed to the need for more
focused assistance programs. The issue is not so much a question of the absolute number of
sectors in which ADB is involved. Rather, it is a question of ADB’s resources and expertise to
manage the program to achieve development results. Greater selectivity and prioritization
should help to improve the quality of the loan portfolio and ADB’s development impact.
266. Analysis of the DMC portfolios since 1995 identified eight countries with relatively
unfocused portfolios—four in ECRD (Kyrgyz Republic, Mongolia, Tajikistan, and Uzbekistan),
three in MKRD (Cambodia, Lao PDR, and Viet Nam) and one in SARD (Nepal). Most of these
DMCs are transition economies for which ADB’s initial strategy was to provide broad-based
support across many sectors to advance the development process. Their absorptive capacity in
each sector was limited, and a narrowly focused strategy would have limited ADB lending when
significant assistance from the donor community was needed to help finance the cost of the
transition to a market economy. Nevertheless, ADB has now had a decade of experience in
many of these DMCs. When preparing future CSPs for these DMCs, the RDs should assess
whether more focused portfolios would increase ADB’s development effectiveness. A shift in a
DMC’s sector priorities that is reflected in the CSP may also result in a portfolio that is
temporarily less focused.
5. Project Monitoring and Evaluation
267. Information and feedback are essential for good portfolio management and for managing
for development results. Senior staff and Management need accurate and timely information on
which projects in the active portfolio are, or may become, problems projects, so that adequate
resources may be allocated to resolve or mitigate the problems. The PPR is the primary tool for
identifying problem projects and projects in the “at risk” category. However, the disparity
between PPR ratings (about 85% of ongoing projects were rated satisfactory at year-end 2004)
and PCR and PPAR ratings (less than 70% of projects with both a PCR and a PPAR completed
during the past 10 years were rated satisfactory) casts doubt on the accuracy of the PPR
ratings.
268. OED recognizes that major changes in the PPR will await the implementation of ISTS II
over the next few years.43 However, it is appropriate for COSO, in consultation with the RDs,
43
According to OIST, the portfolio administration system (including the PPR) that will be developed under ISTS II is
dependent on the completion of the project processing and management system and the portfolio monitoring and
management system. The current implementation plan begins during the fourth quarter of 2006 and runs through
the second quarter of 2008.
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to begin now to define the improvements that will be made to the PPR under ISTS II. The plan
to upgrade the PPR should be clear as to what will be tracked and how with regard to project
outputs, and what other improvements will be made to track the likelihood of attaining the
project’s development objectives. It should also be clear on whether mission back-to-office
reports and/or memorandums of understanding and other documents, such as the executing
agency’s progress reports, will be linked to the PPR for ready reference.
269. The following actions should also be considered in the near term to improve the quality
of information that is available to help guide portfolio management decisions:
(i) the regional vice-presidents and regional directors general should issue a clear
statement that the PPR is a project management tool and not just a reporting
mechanism, and that mission leaders must record implementation problems in
the PPR as they arise so that timely remedial action can be taken; and
(ii) the directors of sector divisions should ensure that the “Problems” and “Actions
Taken” boxes are accurately filled in at each PPR update.
270. OED’s evaluation of project (design and monitoring) frameworks has shown that the
PPMS action plan is yielding positive results. However, ADB has not yet achieved the goal of
universal satisfactory frameworks, and it is important to continue to monitor their quality. OED
will continue to assess independently the quality of loan and TA frameworks during 2005.
Thereafter, monitoring should be undertaken by COPP.
HISTORICAL ADB LENDING (OCR AND ADF)
Table A1-1: ADB lending (OCR and ADF) by DMC.
There is a total of 42 DMCs to whom ADB has either made loans in the past, or who currently qualify for loans from either OCR or ADF resources.
Membership First OCR Last OCR Number Total Amount First ADF Last ADF Number Total Amount OCR + Total Amount
DMC Reg. Cat. % % % % % %
Year Loan Loan of Loans ($ million) Loan Loan of Loans ($ million) ADF ($ million)
1 Afghanistan SA A 1966 Dec 70 Dec 04 15 1.4 582.28 1.9 15 0.7 582.28 0.5
2 Azerbaijan EC B1 1999 Dec 04 Dec 04 1 0.1 10.00 0.0 Dec 03 Dec 04 2 0.2 42.00 0.1 3 0.1 52.00 0.0
3 Bangladesh SA B1 1973 Jun 73 Dec 04 10 1.0 600.90 0.8 Jun 73 Dec 04 148 13.9 6,831.79 22.8 158 7.7 7,432.69 6.9
4 Bhutan SA A 1982 Sep 83 Sep 03 19 1.8 111.16 0.4 19 0.9 111.16 0.1
5 Cambodia MK A 1966 Apr 70 Dec 04 33 3.1 784.64 2.6 33 1.6 784.64 0.7
6 China, People’s Rep. of EC B2 1986 Oct 87 Dec 04 110 11.2 14,759.38 18.8 110 5.4 14,759.38 13.6
7 Cook Islands PA B1 1976 Aug 80 Jul 01 12 1.1 26.67 0.1 12 0.6 26.67 0.0
8 Fiji Islands PA C 1970 Feb 72 Dec 03 15 1.5 224.90 0.3 15 0.7 224.90 0.2
9 Hong Kong, China EC Grad 1969 Apr 72 Feb 80 5 0.5 101.50 0.1 5 0.2 101.50 0.1
10 India SA B2 1966 Apr 86 Dec 04 83 8.5 14,258.20 18.2 83 4.1 14,258.20 13.2
11 Indonesia SE B2 1966 Nov 73 Dec 04 199 20.3 18,078.27 23.1 Jun 69 Dec 04 56 5.3 1,422.54 4.7 255 12.5 19,500.81 18.0
12 Kazakhstan EC C 1994 Dec 94 Sep 03 9 0.9 389.60 0.5 Dec 94 Dec 97 4 0.4 60.00 0.2 13 0.6 449.60 0.4
13 Kiribati PA A 1974 Nov 76 Dec 98 6 0.6 15.14 0.1 6 0.3 15.14 0.0
14 Korea, Rep. of EC Grad 1966 Sep 68 Dec 97 81 8.3 6,334.63 8.1 Mar 72 Mar 72 1 0.1 3.70 0.0 82 4.0 6,338.33 5.8
15 Kyrgyz Republic EC A 1994 Dec 94 Nov 04 22 2.1 545.50 1.8 22 1.1 545.50 0.5
16 Lao PDR MK A 1966 Mar 70 Jul 04 60 5.6 1,070.24 3.6 60 2.9 1,070.24 1.0
17 Malaysia SE C 1966 Sep 68 Dec 97 76 7.8 1,984.24 2.5 Sep 70 Sep 70 1 0.1 3.30 0.0 77 3.8 1,987.54 1.8
18 Maldives SA A 1978 Jun 81 Dec 03 13 1.2 83.68 0.3 13 0.6 83.68 0.1
19 Marshall Islands PA B1 1990 Jun 01 Jun 01 1 0.1 4.00 0.0 Sep 91 Nov 02 11 1.0 74.13 0.2 12 0.6 78.13 0.1
20 Micronesia, FS PA B1 1990 Nov 04 Nov 04 1 0.1 4.80 0.0 Oct 93 Nov 04 7 0.7 70.34 0.2 8 0.4 75.14 0.1
21 Mongolia EC A 1991 Oct 91 Jul 04 35 3.3 605.84 2.0 35 1.7 605.84 0.6
22 Myanmar MK A 1973 Dec 73 Dec 73 2 0.2 6.60 0.0 Dec 73 Feb 86 30 2.8 524.26 1.7 32 1.6 530.86 0.5
23 Nauru PA B2 1991 Dec 98 Dec 98 1 0.1 5.00 0.0 1 0.0 5.00 0.0
24 Nepal SA A 1966 Dec 70 Dec 70 1 0.1 2.00 0.0 Dec 69 Dec 04 108 10.2 2,163.43 7.2 109 5.3 2,165.43 2.0
25 Pakistan SA B1 1966 Dec 68 Dec 04 80 8.2 7,145.62 9.1 Oct 72 Dec 04 138 13.0 6,871.52 22.9 218 10.7 14,017.14 12.9
26 Palau PA U 2003 0 0.0 0.00 0.0
27 Papua New Guinea PA B2 1971 Nov 77 Dec 01 24 2.5 462.69 0.6 Dec 71 Mar 04 33 3.1 411.30 1.4 57 2.8 873.99 0.8
28 Philippines SE C 1966 Mar 69 Dec 04 137 14.0 7,040.03 9.0 Nov 69 Jan 98 40 3.8 1,108.67 3.7 177 8.7 8,148.71 7.5
29 Samoa PA A 1966 Dec 69 Nov 03 30 2.8 121.92 0.4 30 1.5 121.92 0.1
30 Singapore SE Grad 1966 Jun 69 Nov 80 14 1.4 178.08 0.2 Dec 70 Dec 70 1 0.1 3.00 0.0 15 0.7 181.08 0.2
31 Solomon Islands PA A 1973 Dec 76 Dec 00 17 1.6 79.31 0.3 17 0.8 79.31 0.1
32 Sri Lanka SA B1 1966 Jul 68 Dec 04 17 1.7 375.34 0.5 Oct 69 Dec 04 106 10.0 3,002.91 10.0 123 6.0 3,378.25 3.1
33 Taipei,China EC Grad 1966 Nov 68 Dec 71 13 1.3 100.39 0.1 13 0.6 100.39 0.1
34 Tajikstan EC A 1998 Dec 98 Dec 04 14 1.3 203.64 0.7 14 0.7 203.64 0.2
35 Thailand MK C 1966 Jan 68 Dec 99 75 7.7 5,244.51 6.7 Dec 73 Dec 81 6 0.6 72.10 0.2 81 4.0 5,316.61 4.9
36 Timor-Leste PA A 2002 0 0.0 0.00 0.0
37 Tonga PA B1 1972 Nov 73 May 02 16 1.5 57.79 0.2 16 0.8 57.79 0.1
38 Turkmenistan EC C 2000 0 0.0 0.00 0.0
39 Tuvalu PA A 1993 Jul 99 Aug 04 3 0.3 7.82 0.0 3 0.1 7.82 0.0
40 Uzbekistan EC B2 1995 Dec 96 Sep 04 17 1.7 769.70 1.0 Dec 97 Dec 97 1 0.1 20.00 0.1 18 0.9 789.70 0.7
41 Vanuatu PA A 1981 Dec 82 Apr 99 9 0.8 51.25 0.2 9 0.4 51.25 0.0
42 Viet Nam MK B1 1966 Sep 73 Dec 04 4 0.4 163.93 0.2 Dec 70 Dec 04 53 5.0 2,688.74 9.0 57 2.8 2,852.67 2.6
Subtotal 976 99.8 78,244.31 99.8 1,050 98.8 29,720.59 99.0 2,026 99.3 107,964.90 99.6
Regional EC Oct 00 Dec 02 2 0.2 122.00 0.2 Oct 00 Nov 04 6 0.6 68.20 0.2 8 0.4 190.20 0.2
MK Dec 98 Dec 02 7 0.7 232.00 0.8 7 0.3 232.00 0.2
PA 0 0.00
SA 0 0.00
SE 0 0.00
Subtotal 2 0.2 122.00 0.2 13 1.2 300.20 1.0 15 0.7 422.20 0.4
Total Jan 68 Dec 04 978 100.0 78,366.31 100.0 Jun 69 Dec 04 1,063 100.0 30,020.79 100.0 2,041 100.0 108,387.10 100.0
Appendix 1
1 U = Unclassified: PAL 24 DMCs have taken OCR loans 33 DMCs have taken ADF loans
16 A = ADF only: AFG, BHU, CAM, KIR, KYR, LAO, MAL, MON, 21 DMCs are in categories eligible for OCR loans [B1, B2, C] 31 DMCs are in categories eligible for ADF loans [A, B1, B2]
MYA, NEP, SAM, SOL, TAJ, TIM, TUV, VAN 15 DMCs have taken an OCR loan since 1 Jan 2000 4 DMCs in A, B, B2 currently ineligible for ADF
9 B1 = ADF with OCR: AZE, BAN, COO, FSM, PAK, RMI, SRI, TON, VIE DMCs have active OCR loans 23 DMCs have taken an ADF loan since 1 Jan 2000
6 B2 = OCR with ADF: PRC, IND, INO, NAU, PNG, UZB 2 Number of Regional OCR loans since 2000 DMCs have active ADF loans
6 C = OCR only: FIJ, KAZ, MAL, PHI, THA, TUR 13 Number of Regional ADF loans since 1998
4 Grad = Graduated: HKG, KOR, SIN, TAI
99
42 Total
100
Table A1-2: ADB lending (OCR and ADF) arranged by DMC category.
DMCs are divided among 4 categories (A, B1, B2, C) according to the types of loans for which they qualify; but note that Palau and Timor-Leste have not been classified, and 4 DMCs have graduated.
Membership First OCR Last OCR Number Total Amount First ADF Last ADF Number Total Amount OCR + Total Amount
DMC Reg. Cat. % % % % % %
Year Loan Loan of Loans ($ million) Loan Loan of Loans ($ million) ADF ($ million)
Appendix 1
1 Palau PA U 2003 0 0.0 0.00 0.0 0 0.0 0.00 0.0 0 0.0 0.00 0.0
Subtotal 0 0.0 0.00 0.0 0 0.0 0.00 0.0 0 0.0 0.00 0.0
2 Afghanistan SA A 1966 Dec 70 Dec 04 15 1.4 582.28 1.9 15 0.7 582.28 0.5
3 Bhutan SA A 1982 Sep 83 Sep 03 19 1.8 111.16 0.4 19 0.9 111.16 0.1
4 Cambodia MK A 1966 Apr 70 Dec 04 33 3.1 784.64 2.6 33 1.6 784.64 0.7
5 Kiribati PA A 1974 Nov 76 Dec 98 6 0.6 15.14 0.1 6 0.3 15.14 0.0
6 Kyrgyz Republic EC A 1994 Dec 94 Nov 04 22 2.1 545.50 1.8 22 1.1 545.50 0.5
7 Lao PDR MK A 1966 Mar 70 Jul 04 60 5.6 1,070.24 3.6 60 2.9 1,070.24 1.0
8 Maldives SA A 1978 Jun 81 Dec 03 13 1.2 83.68 0.3 13 0.6 83.68 0.1
9 Mongolia EC A 1991 Oct 91 Jul 04 35 3.3 605.84 2.0 35 1.7 605.84 0.6
10 Myanmar MK A 1973 Dec 73 Dec 73 2 0.2 6.60 0.0 Dec 73 Feb 86 30 2.8 524.26 1.7 32 1.6 530.86 0.5
11 Nepal SA A 1966 Dec 70 Dec 70 1 0.1 2.00 0.0 Dec 69 Dec 04 108 10.2 2,163.43 7.2 109 5.3 2,165.43 2.0
12 Samoa PA A 1966 Dec 69 Nov 03 30 2.8 121.92 0.4 30 1.5 121.92 0.1
13 Solomon Islands PA A 1973 Dec 76 Dec 00 17 1.6 79.31 0.3 17 0.8 79.31 0.1
14 Tajikstan EC A 1998 Dec 98 Dec 04 14 1.3 203.64 0.7 14 0.7 203.64 0.2
15 Timor-Leste PA A 2002 0 0.0 0.00 0.0 0 0.0 0.00 0.0 0 0.0 0.00 0.0
16 Tuvalu PA A 1993 Jul 99 Aug 04 3 0.3 7.82 0.0 3 0.1 7.82 0.0
17 Vanuatu PA A 1981 Dec 82 Apr 99 9 0.8 51.25 0.2 9 0.4 51.25 0.0
Subtotal 3 0.3 8.60 0.0 414 38.9 6,950.10 23.2 417 20.4 6,958.70 6.4
18 Azerbaijan EC B1 1999 Dec 04 Dec 04 1 0.1 10.00 0.0 Dec 03 Dec 04 2 0.2 42.00 0.1 3 0.1 52.00 0.0
19 Bangladesh SA B1 1973 Jun 73 Dec 04 10 1.0 600.90 0.8 Jun 73 Dec 04 148 13.9 6,831.79 22.8 158 7.7 7,432.69 6.9
20 Cook Islands PA B1 1976 Aug 80 Jul 01 12 1.1 26.67 0.1 12 0.6 26.67 0.0
21 Marshall Islands PA B1 1990 Jun 01 Jun 01 1 0.1 4.00 0.0 Sep 91 Nov 02 11 1.0 74.13 0.2 12 0.6 78.13 0.1
22 Micronesia, FS PA B1 1990 Nov 04 Nov 04 1 0.1 4.80 0.0 Oct 93 Nov 04 7 0.7 70.34 0.2 8 0.4 75.14 0.1
23 Pakistan SA B1 1966 Dec 68 Dec 04 80 8.2 7,145.62 9.1 Oct 72 Dec 04 138 13.0 6,871.52 22.9 218 10.7 14,017.14 12.9
24 Sri Lanka SA B1 1966 Jul 68 Dec 04 17 1.7 375.34 0.5 Oct 69 Dec 04 106 10.0 3,002.91 10.0 123 6.0 3,378.25 3.1
25 Tonga PA B1 1972 Nov 73 May 02 16 1.5 57.79 0.2 16 0.8 57.79 0.1
26 Viet Nam MK B1 1966 Sep 73 Dec 04 4 0.4 163.93 0.2 Dec 70 Dec 04 53 5.0 2,688.74 9.0 57 2.8 2,852.67 2.6
Subtotal 114 11.7 8,304.59 10.6 493 46.4 19,665.88 65.5 607 29.7 27,970.46 25.8
27 China, People’s Rep. of EC B2 1986 Oct 87 Dec 04 110 11.2 14,759.38 18.8 110 5.4 14,759.38 13.6
28 India SA B2 1966 Apr 86 Dec 04 83 8.5 14,258.20 18.2 83 4.1 14,258.20 13.2
29 Indonesia SE B2 1966 Nov 73 Dec 04 199 20.3 18,078.27 23.1 Jun 69 Dec 04 56 5.3 1,422.54 4.7 255 12.5 19,500.81 18.0
30 Nauru PA B2 1991 Dec 98 Dec 98 1 0.1 5.00 0.0 1 0.0 5.00 0.0
31 Papua New Guinea PA B2 1971 Nov 77 Dec 01 24 2.5 462.69 0.6 Dec 71 Mar 04 33 3.1 411.30 1.4 57 2.8 873.99 0.8
32 Uzbekistan EC C 1995 Dec 96 Sep 04 17 1.7 769.70 1.0 Dec 97 Dec 97 1 0.1 20.00 0.1 18 0.9 789.70 0.7
Subtotal 434 44.4 48,333.25 61.7 90 8.5 1,853.84 6.2 524 25.7 50,187.08 46.3
33 Fiji Islands PA C 1970 Feb 72 Dec 03 15 1.5 224.90 0.3 15 0.7 224.90 0.2
34 Kazakhstan EC C 1994 Dec 94 Sep 03 9 0.9 389.60 0.5 Dec 94 Dec 97 4 0.4 60.00 0.2 13 0.6 449.60 0.4
35 Malaysia SE C 1966 Sep 68 Dec 97 76 7.8 1,984.24 2.5 Sep 70 Sep 70 1 0.1 3.30 0.0 77 3.8 1,987.54 1.8
36 Philippines SE C 1966 Mar 69 Dec 04 137 14.0 7,040.03 9.0 Nov 69 Jan 98 40 3.8 1,108.67 3.7 177 8.7 8,148.71 7.5
37 Thailand MK C 1966 Jan 68 Dec 99 75 7.7 5,244.51 6.7 Dec 73 Dec 81 6 0.6 72.10 0.2 81 4.0 5,316.61 4.9
38 Turkmenistan EC C 2000 0 0.0 0.00 0.0
Subtotal 312 31.9 14,883.28 19.0 51 4.8 1,244.07 4.1 363 17.8 16,127.35 14.9
39 Hong Kong, China EC Grad 1969 Apr 72 Feb 80 5 0.5 101.50 0.1 5 0.2 101.50 0.1
40 Korea, Rep. of EC Grad 1966 Sep 68 Dec 97 81 8.3 6,334.63 8.1 Mar 72 Mar 72 1 0.1 3.70 0.0 82 4.0 6,338.33 5.8
41 Singapore SE Grad 1966 Jun 69 Nov 80 14 1.4 178.08 0.2 Dec 70 Dec 70 1 0.1 3.00 0.0 15 0.7 181.08 0.2
42 Taipei,China EC Grad 1966 Nov 68 Dec 71 13 1.3 100.39 0.1 13 0.6 100.39 0.1
Subtotal 113 11.6 6,714.60 8.6 2 0.2 6.70 0.0 115 5.6 6,721.30 6.2
Regional EC Oct 00 Dec 02 2 0.2 122.00 0.2 Oct 00 Nov 04 6 0.6 68.20 0.2 8 0.4 190.20 0.2
MK Dec 98 Dec 02 7 0.7 232.00 0.8 7 0.3 232.00 0.2
PA 0 0.00
SA 0 0.00
SE 0 0.00
Subtotal 2 0.2 122.00 0.2 13 1.2 300.20 1.0 15 0.7 422.20 0.4
Total Jan 68 Dec 04 978 100.0 78,366.31 100.0 Jun 69 Dec 04 1,063 100.0 30,020.79 100.0 2,041 100.0 108,387.10 100.0
1 U = Unclassified: PAL 24 DMCs have taken OCR loans 33 DMCs have taken ADF loans
16 A = ADF only: AFG, BHU, CAM, KIR, KYR, LAO, MAL, MON, 21 DMCs are in categories eligible for OCR loans [B1, B2, C] 31 DMCs are in categories eligible for ADF loans [A, B1, B2]
MYA, NEP, SAM, SOL, TAJ, TIM, TUV, VAN 15 DMCs have taken an OCR loan since 1 Jan 2000 4 DMCs in A, B, B2 currently ineligible for ADF
9 B1 = ADF with OCR: AZE, BAN, COO, FSM, PAK, RMI, SRI, TON, VIE DMCs have active OCR loans 23 DMCs have taken an ADF loan since 1 Jan 2000
6 B2 = OCR with ADF: PRC, IND, INO, NAU, PNG, UZB 2 Number of Regional OCR loans since 2000 DMCs have active ADF loans
6 C = OCR only: FIJ, KAZ, MAL, PHI, THA, TUR 13 Number of Regional ADF loans since 1998
4 Grad = Graduated: HKG, KOR, SIN, TAI
42 Total
Table A1-3: ADB lending (OCR and ADF) arranged by the $ amount of OCR loans provided.
ADB has provided $78,244 million in OCR loans to 24 DMCs; the top 3 DMCs have received 60% of the OCR loans, and the top 7 DMCs have received 93% of the OCR loans.
Membership First OCR Last OCR Number Cum Total Amount Cum First ADF Last ADF Number Cum Total Amount Cum OCR + Cum Total Amount ($ Cum
DMC Reg. Cat. % % % % % %
Year Loan Loan of Loans % ($ million) % Loan Loan of Loans % ($ million) % ADF % million) %
1 Indonesia SE B2 1966 Nov 73 Dec 04 199 20.3 20.3 18,078.27 23.1 23.1 Jun 69 Dec 04 56 5.3 5.3 1,422.54 4.7 4.7 255 12.5 12.5 19,500.81 18.0 18.0
2 China, People’s Rep. of EC B2 1986 Oct 87 Dec 04 110 11.2 31.6 14,759.38 18.8 41.9 5.3 4.7 110 5.4 17.9 14,759.38 13.6 31.6
3 India SA B2 1966 Apr 86 Dec 04 83 8.5 40.1 14,258.20 18.2 60.1 5.3 4.7 83 4.1 22.0 14,258.20 13.2 44.8
4 Pakistan SA B1 1966 Dec 68 Dec 04 80 8.2 48.3 7,145.62 9.1 69.2 Oct 72 Dec 04 138 13.0 18.3 6,871.52 22.9 27.6 218 10.7 32.6 14,017.14 12.9 57.7
5 Philippines SE C 1966 Mar 69 Dec 04 137 14.0 62.3 7,040.03 9.0 78.2 Nov 69 Jan 98 40 3.8 22.0 1,108.67 3.7 31.3 177 8.7 41.3 8,148.71 7.5 65.2
6 Korea, Rep. of EC Grad 1966 Sep 68 Dec 97 81 8.3 70.6 6,334.63 8.1 86.3 Mar 72 Mar 72 1 0.1 22.1 3.70 0.0 31.3 82 4.0 45.3 6,338.33 5.8 71.1
7 Thailand MK C 1966 Jan 68 Dec 99 75 7.7 78.2 5,244.51 6.7 93.0 Dec 73 Dec 81 6 0.6 22.7 72.10 0.2 31.6 81 4.0 49.3 5,316.61 4.9 76.0
8 Malaysia SE C 1966 Sep 68 Dec 97 76 7.8 86.0 1,984.24 2.5 95.5 Sep 70 Sep 70 1 0.1 22.8 3.30 0.0 31.6 77 3.8 53.1 1,987.54 1.8 77.8
9 Uzbekistan EC B2 1995 Dec 96 Sep 04 17 1.7 87.7 769.70 1.0 96.5 Dec 97 Dec 97 1 0.1 22.9 20.00 0.1 31.7 18 0.9 53.9 789.70 0.7 78.5
10 Bangladesh SA B1 1973 Jun 73 Dec 04 10 1.0 88.8 600.90 0.8 97.3 Jun 73 Dec 04 148 13.9 36.8 6,831.79 22.8 54.4 158 7.7 61.7 7,432.69 6.9 85.4
11 Papua New Guinea PA B2 1971 Nov 77 Dec 01 24 2.5 91.2 462.69 0.6 97.8 Dec 71 Mar 04 33 3.1 39.9 411.30 1.4 55.8 57 2.8 64.5 873.99 0.8 86.2
12 Kazakhstan EC C 1994 Dec 94 Sep 03 9 0.9 92.1 389.60 0.5 98.3 Dec 94 Dec 97 4 0.4 40.3 60.00 0.2 56.0 13 0.6 65.1 449.60 0.4 86.6
13 Sri Lanka SA B1 1966 Jul 68 Dec 04 17 1.7 93.9 375.34 0.5 98.8 Oct 69 Dec 04 106 10.0 50.2 3,002.91 10.0 66.0 123 6.0 71.1 3,378.25 3.1 89.7
14 Fiji Islands PA C 1970 Feb 72 Dec 03 15 1.5 95.4 224.90 0.3 99.1 50.2 66.0 15 0.7 71.9 224.90 0.2 89.9
15 Singapore SE Grad 1966 Jun 69 Nov 80 14 1.4 96.8 178.08 0.2 99.3 Dec 70 Dec 70 1 0.1 50.3 3.00 0.0 66.0 15 0.7 72.6 181.08 0.2 90.1
16 Viet Nam MK B1 1966 Sep 73 Dec 04 4 0.4 97.2 163.93 0.2 99.5 Dec 70 Dec 04 53 5.0 55.3 2,688.74 9.0 74.9 57 2.8 75.4 2,852.67 2.6 92.7
17 Hong Kong, China EC Grad 1969 Apr 72 Feb 80 5 0.5 97.8 101.50 0.1 99.7 55.3 74.9 5 0.2 75.6 101.50 0.1 92.8
18 Taipei,China EC Grad 1966 Nov 68 Dec 71 13 1.3 99.1 100.39 0.1 99.8 55.3 74.9 13 0.6 76.3 100.39 0.1 92.9
19 Azerbaijan EC B1 1999 Dec 04 Dec 04 1 0.1 99.2 10.00 0.0 99.8 Dec 03 Dec 04 2 0.2 55.5 42.00 0.1 75.1 3 0.1 76.4 52.00 0.0 93.0
20 Myanmar MK A 1973 Dec 73 Dec 73 2 0.2 99.4 6.60 0.0 99.8 Dec 73 Feb 86 30 2.8 58.3 524.26 1.7 76.8 32 1.6 78.0 530.86 0.5 93.5
21 Nauru PA B2 1991 Dec 98 Dec 98 1 0.1 99.5 5.00 0.0 99.8 58.3 76.8 1 0.0 78.0 5.00 0.0 93.5
22 Micronesia, FS PA B1 1990 Nov 04 Nov 04 1 0.1 99.6 4.80 0.0 99.8 Oct 93 Nov 04 7 0.7 59.0 70.34 0.2 77.1 8 0.4 78.4 75.14 0.1 93.5
23 Marshall Islands PA B1 1990 Jun 01 Jun 01 1 0.1 99.7 4.00 0.0 99.8 Sep 91 Nov 02 11 1.0 60.0 74.13 0.2 77.3 12 0.6 79.0 78.13 0.1 93.6
24 Nepal SA A 1966 Dec 70 Dec 70 1 0.1 99.8 2.00 0.0 99.8 Dec 69 Dec 04 108 10.2 70.2 2,163.43 7.2 84.5 109 5.3 84.4 2,165.43 2.0 95.6
25 Cook Islands PA B1 1976 Eligible 0 0.0 0.00 0.0 Aug 80 Jul 01 12 1.1 26.67 0.1 12 0.6 26.67 0.0
26 Tonga PA B1 1972 Eligible 0 0.0 0.00 0.0 Nov 73 May 02 16 1.5 57.79 0.2 16 0.8 57.79 0.1
27 Turkmenistan EC C 2000 Eligible 0 0.0 0.00 0.0 0 0.0 0.00 0.0
28 Afghanistan SA A 1966 Dec 70 Dec 04 15 1.4 582.28 1.9 15 0.7 582.28 0.5
29 Bhutan SA A 1982 Sep 83 Sep 03 19 1.8 111.16 0.4 19 0.9 111.16 0.1
30 Cambodia MK A 1966 Apr 70 Dec 04 33 3.1 784.64 2.6 33 1.6 784.64 0.7
31 Kiribati PA A 1974 Nov 76 Dec 98 6 0.6 15.14 0.1 6 0.3 15.14 0.0
32 Kyrgyz Republic EC A 1994 Dec 94 Nov 04 22 2.1 545.50 1.8 22 1.1 545.50 0.5
33 Lao PDR MK A 1966 Mar 70 Jul 04 60 5.6 1,070.24 3.6 60 2.9 1,070.24 1.0
34 Maldives SA A 1978 Jun 81 Dec 03 13 1.2 83.68 0.3 13 0.6 83.68 0.1
35 Mongolia EC A 1991 Oct 91 Jul 04 35 3.3 605.84 2.0 35 1.7 605.84 0.6
36 Palau PA U 2003 0 0.0 0.00 0.0
37 Samoa PA A 1966 Dec 69 Nov 03 30 2.8 121.92 0.4 30 1.5 121.92 0.1
38 Solomon Islands PA A 1973 Dec 76 Dec 00 17 1.6 79.31 0.3 17 0.8 79.31 0.1
39 Tajikstan EC A 1998 Dec 98 Dec 04 14 1.3 203.64 0.7 14 0.7 203.64 0.2
40 Timor-Leste PA A 2002 0 0.0 0.00 0.0
41 Tuvalu PA A 1993 Jul 99 Aug 04 3 0.3 7.82 0.0 3 0.1 7.82 0.0
42 Vanuatu PA A 1981 Dec 82 Apr 99 9 0.8 51.25 0.2 9 0.4 51.25 0.0
Subtotal 976 99.8 78,244.31 99.8 1,050 98.8 29,720.59 99.0 2,026 99.3 107,964.90 99.6
Regional EC Oct 00 Dec 02 2 0.2 122.00 0.2 Oct 00 Nov 04 6 0.6 68.20 0.2 8 0.4 190.20 0.2
MK Dec 98 Dec 02 7 0.7 232.00 0.8 7 0.3 232.00 0.2
PA 0 0.00
SA 0 0.00
SE 0 0.00
Subtotal 2 0.2 122.00 0.2 13 1.2 300.20 1.0 15 0.7 422.20 0.4
Total Jan 68 Dec 04 978 100 78,366.31 100 Jun 69 Dec 04 1,063 100 30,020.79 100 2,041 100.0 108,387.10 100.0
1 U = Unclassified: PAL 24 DMCs have taken OCR loans 33 DMCs have taken ADF loans
16 A = ADF only: AFG, BHU, CAM, KIR, KYR, LAO, MAL, MON, 21 DMCs are in categories eligible for OCR loans [B1, B2, C] 31 DMCs are in categories eligible for ADF loans [A, B1, B2]
MYA, NEP, SAM, SOL, TAJ, TIM, TUV, VAN 15 DMCs have taken an OCR loan since 1 Jan 2000 4 DMCs in A, B, B2 currently ineligible for ADF
Appendix 1
9 B1 = ADF with OCR: AZE, BAN, COO, FSM, PAK, RMI, SRI, TON, VIE DMCs have active OCR loans 23 DMCs have taken an ADF loan since 1 Jan 2000
6 B2 = OCR with ADF: PRC, IND, INO, NAU, PNG, UZB 2 Number of Regional OCR loans since 2000 DMCs have active ADF loans
6 C = OCR only: FIJ, KAZ, MAL, PHI, THA, TUR 13 Number of Regional ADF loans since 1998
4 Grad = Graduated: HKG, KOR, SIN, TAI
42 Total
101
102
Table A1-4: ADB lending (OCR and ADF) arranged by the $ amount of ADF loans provided.
ADB has provided $29,721 million in ADF loans to 33 DMCs; the top 3 DMCs have received 56% of the ADF loans, and the top 11 DMCs have received 90% of the ADF loans.
Membership First OCR Last OCR Number Cum Total Amount Cum First ADF Last ADF Number Cum Total Amount Cum OCR + Cum Total Amount Cum
DMC Reg. Cat. % % % % % %
Year Loan Loan of Loans % ($ million) % Loan Loan of Loans % ($ million) % ADF % ($ million) %
Appendix 1
1 Pakistan SA B1 1966 Dec 68 Dec 04 80 8.2 8.2 7,145.62 9.1 9.1 Oct 72 Dec 04 138 13.0 13.0 6,871.52 22.9 22.9 218 10.7 10.7 14,017.14 12.9 12.9
2 Bangladesh SA B1 1973 Jun 73 Dec 04 10 1.0 9.2 600.90 0.8 9.9 Jun 73 Dec 04 148 13.9 26.9 6,831.79 22.8 45.6 158 7.7 18.4 7,432.69 6.9 19.8
3 Sri Lanka SA B1 1966 Jul 68 Dec 04 17 1.7 10.9 375.34 0.5 10.4 Oct 69 Dec 04 106 10.0 36.9 3,002.91 10.0 55.6 123 6.0 24.4 3,378.25 3.1 22.9
4 Viet Nam MK B1 1966 Sep 73 Dec 04 4 0.4 11.3 163.93 0.2 10.6 Dec 70 Dec 04 53 5.0 41.9 2,688.74 9.0 64.6 57 2.8 27.2 2,852.67 2.6 25.5
5 Nepal SA A 1966 Dec 70 Dec 70 1 0.1 11.5 2.00 0.0 10.6 Dec 69 Dec 04 108 10.2 52.0 2,163.43 7.2 71.8 109 5.3 32.6 2,165.43 2.0 27.5
6 Indonesia SE B2 1966 Nov 73 Dec 04 199 20.3 31.8 18,078.27 23.1 33.6 Jun 69 Dec 04 56 5.3 57.3 1,422.54 4.7 76.6 255 12.5 45.1 19,500.81 18.0 45.5
7 Philippines SE C 1966 Mar 69 Dec 04 137 14.0 45.8 7,040.03 9.0 42.6 Nov 69 Jan 98 40 3.8 61.1 1,108.67 3.7 80.2 177 8.7 53.7 8,148.71 7.5 53.0
8 Lao PDR MK A 1966 45.8 42.6 Mar 70 Jul 04 60 5.6 66.7 1,070.24 3.6 83.8 60 2.9 56.7 1,070.24 1.0 54.0
9 Cambodia MK A 1966 45.8 42.6 Apr 70 Dec 04 33 3.1 69.8 784.64 2.6 86.4 33 1.6 58.3 784.64 0.7 54.8
10 Mongolia EC A 1991 45.8 42.6 Oct 91 Jul 04 35 3.3 73.1 605.84 2.0 88.4 35 1.7 60.0 605.84 0.6 55.3
11 Afghanistan SA A 1966 45.8 42.6 Dec 70 Dec 04 15 1.4 74.5 582.28 1.9 90.4 15 0.7 60.8 582.28 0.5 55.9
12 Kyrgyz Republic EC A 1994 45.8 42.6 Dec 94 Nov 04 22 2.1 76.6 545.50 1.8 92.2 22 1.1 61.8 545.50 0.5 56.4
13 Myanmar MK A 1973 Dec 73 Dec 73 2 0.2 46.0 6.60 0.0 42.6 Dec 73 Feb 86 30 2.8 79.4 524.26 1.7 93.9 32 1.6 63.4 530.86 0.5 56.8
14 Papua New Guinea PA B2 1971 Nov 77 Dec 01 24 2.5 48.5 462.69 0.6 43.2 Dec 71 Mar 04 33 3.1 82.5 411.30 1.4 95.3 57 2.8 66.2 873.99 0.8 57.7
15 Tajikstan EC A 1998 48.5 43.2 Dec 98 Dec 04 14 1.3 83.8 203.64 0.7 96.0 14 0.7 66.9 203.64 0.2 57.8
16 Samoa PA A 1966 48.5 43.2 Dec 69 Nov 03 30 2.8 86.6 121.92 0.4 96.4 30 1.5 68.3 121.92 0.1 58.0
17 Bhutan SA A 1982 48.5 43.2 Sep 83 Sep 03 19 1.8 88.4 111.16 0.4 96.8 19 0.9 69.3 111.16 0.1 58.1
18 Maldives SA A 1978 48.5 43.2 Jun 81 Dec 03 13 1.2 89.7 83.68 0.3 97.0 13 0.6 69.9 83.68 0.1 58.1
19 Solomon Islands PA A 1973 48.5 43.2 Dec 76 Dec 00 17 1.6 91.3 79.31 0.3 97.3 17 0.8 70.7 79.31 0.1 58.2
20 Marshall Islands PA B1 1990 Jun 01 Jun 01 1 0.1 48.6 4.00 0.0 43.2 Sep 91 Nov 02 11 1.0 92.3 74.13 0.2 97.6 12 0.6 71.3 78.13 0.1 58.3
21 Thailand MK C 1966 Jan 68 Dec 99 75 7.7 56.2 5,244.51 6.7 49.9 Dec 73 Dec 81 6 0.6 92.9 72.10 0.2 97.8 81 4.0 75.3 5,316.61 4.9 63.2
22 Micronesia, FS PA B1 1990 Nov 04 Nov 04 1 0.1 56.3 4.80 0.0 49.9 Oct 93 Nov 04 7 0.7 93.5 70.34 0.2 98.0 8 0.4 75.7 75.14 0.1 63.3
23 Kazakhstan EC C 1994 Dec 94 Sep 03 9 0.9 57.3 389.60 0.5 50.4 Dec 94 Dec 97 4 0.4 93.9 60.00 0.2 98.2 13 0.6 76.3 449.60 0.4 63.7
24 Tonga PA B1 1972 Eligible 0 0.0 57.3 0.00 0.0 50.4 Nov 73 May 02 16 1.5 95.4 57.79 0.2 98.4 16 0.8 77.1 57.79 0.1 63.7
25 Vanuatu PA A 1981 57.3 50.4 Dec 82 Apr 99 9 0.8 96.2 51.25 0.2 98.6 9 0.4 77.6 51.25 0.0 63.8
26 Azerbaijan EC B1 1999 Dec 04 Dec 04 1 0.1 57.4 10.00 0.0 50.4 Dec 03 Dec 04 2 0.2 96.4 42.00 0.1 98.7 3 0.1 77.7 52.00 0.0 63.8
27 Cook Islands PA B1 1976 Eligible 0 0.0 57.4 0.00 0.0 50.4 Aug 80 Jul 01 12 1.1 97.6 26.67 0.1 98.8 12 0.6 78.3 26.67 0.0 63.8
28 Uzbekistan EC B2 1995 Dec 96 Sep 04 17 1.7 59.1 769.70 1.0 51.4 Dec 97 Dec 97 1 0.1 97.6 20.00 0.1 98.9 18 0.9 79.2 789.70 0.7 64.6
29 Kiribati PA A 1974 59.1 51.4 Nov 76 Dec 98 6 0.6 98.2 15.14 0.1 98.9 6 0.3 79.5 15.14 0.0 64.6
30 Tuvalu PA A 1993 59.1 51.4 Jul 99 Aug 04 3 0.3 98.5 7.82 0.0 99.0 3 0.1 79.6 7.82 0.0 64.6
31 Korea, Rep. of EC Grad 1966 Sep 68 Dec 97 81 8.3 67.4 6,334.63 8.1 59.5 Mar 72 Mar 72 1 0.1 98.6 3.70 0.0 99.0 82 4.0 83.6 6,338.33 5.8 70.4
32 Malaysia SE C 1966 Sep 68 Dec 97 76 7.8 75.2 1,984.24 2.5 62.0 Sep 70 Sep 70 1 0.1 98.7 3.30 0.0 99.0 77 3.8 87.4 1,987.54 1.8 72.3
33 Singapore SE Grad 1966 Jun 69 Nov 80 14 1.4 76.6 178.08 0.2 62.3 Dec 70 Dec 70 1 0.1 98.8 3.00 0.0 99.0 15 0.7 88.1 181.08 0.2 72.4
34 China, People’s Rep. of EC B2 1986 Oct 87 Dec 04 110 11.2 14,759.38 18.8 Eligible 0 0.0 0.00 0.0 110 5.4 14,759.38 13.6
35 India SA B2 1966 Apr 86 Dec 04 83 8.5 14,258.20 18.2 Eligible 0 0.0 0.00 0.0 83 4.1 14,258.20 13.2
36 Nauru PA B2 1991 Dec 98 Dec 98 1 0.1 5.00 0.0 Eligible 0 0.0 0.00 0.0 1 0.0 5.00 0.0
37 Fiji Islands PA C 1970 Feb 72 Dec 03 15 1.5 224.90 0.3 15 0.7 224.90 0.2
38 Hong Kong, China EC Grad 1969 Apr 72 Feb 80 5 0.5 101.50 0.1 5 0.2 101.50 0.1
39 Palau PA U 2003 0 0.0 0.00 0.0
40 Taipei,China EC Grad 1966 Nov 68 Dec 71 13 1.3 100.39 0.1 13 0.6 100.39 0.1
41 Timor-Leste PA A 2002 0 0.0 0.00 0.0
42 Turkmenistan EC C 2000 Eligible 0 0.0 0.00 0.0 0 0.0 0.00 0.0
Subtotal 976 99.8 78,244.31 99.8 1,050 98.8 29,720.59 99.0 2,026 99.3 107,964.90 99.6
Regional EC Oct 00 Dec 02 2 0.2 122.00 0.2 Oct 00 Nov 04 6 0.6 68.20 0.2 8 0.4 190.20 0.2
MK Dec 98 Dec 02 7 0.7 232.00 0.8 7 0.3 232.00 0.2
PA 0 0.00
SA 0 0.00
SE 0 0.00
Subtotal 2 0.2 122.00 0.2 13 1.3 300.20 1.0 15 0.7 422.20 0.4
Total Jan 68 Dec 04 978 100 78,366.31 100 Jun 69 Dec 04 1,063 100 30,020.79 100 2,041 100.0 108,387.10 100.0
1 U = Unclassified: PAL 24 DMCs have taken OCR loans 33 DMCs have taken ADF loans
16 A = ADF only: AFG, BHU, CAM, KIR, KYR, LAO, MAL, MON, 21 DMCs are in categories eligible for OCR loans [B1, B2, C] 31 DMCs are in categories eligible for ADF loans [A, B1, B2]
MYA, NEP, SAM, SOL, TAJ, TIM, TUV, VAN 15 DMCs have taken an OCR loan since 1 Jan 2000 4 DMCs in A, B, B2 currently ineligible for ADF
9 B1 = ADF with OCR: AZE, BAN, COO, FSM, PAK, RMI, SRI, TON, VIE DMCs have active OCR loans 23 DMCs have taken an ADF loan since 1 Jan 2000
6 B2 = OCR with ADF: PRC, IND, INO, NAU, PNG, UZB 2 Number of Regional OCR loans since 2000 DMCs have active ADF loans
6 C = OCR only: FIJ, KAZ, MAL, PHI, THA, TUR 13 Number of Regional ADF loans since 1998
4 Grad = Graduated: HKG, KOR, SIN, TAI
42 Total
Table A1-5: ADB lending (OCR and ADF) arranged by the total $ amount of OCR and ADF loans provided.
ADB has provided $107,965 million in OCR and ADF loans to 39 DMCs; the top 4 DMCs have received 58% of the total, and the top 11 DMCs have received 91% of the total.
Membership First OCR Last OCR Number Cum Total Amount Cum First ADF Last ADF Number Cum Total Amount Cum OCR + Cum Total Amount ($ Cum
DMC Reg. Cat. % % % % % %
Year Loan Loan of Loans % ($ million) % Loan Loan of Loans % ($ million) % ADF % million) %
1 Indonesia SE B2 1966 Nov 73 Dec 04 199 20.3 20.3 18,078.27 23.1 23.1 Jun 69 Dec 04 56 5.3 5.3 1,422.54 4.7 4.7 255 12.5 12.5 19,500.81 18.0 18.0
2 China, People’s Rep. of EC B2 1986 Oct 87 Dec 04 110 11.2 31.6 14,759.38 18.8 41.9 5.3 4.7 110 5.4 17.9 14,759.38 13.6 31.6
3 India SA B2 1966 Apr 86 Dec 04 83 8.5 40.1 14,258.20 18.2 60.1 5.3 4.7 83 4.1 22.0 14,258.20 13.2 44.8
4 Pakistan SA B1 1966 Dec 68 Dec 04 80 8.2 48.3 7,145.62 9.1 69.2 Oct 72 Dec 04 138 13.0 18.3 6,871.52 22.9 27.6 218 10.7 32.6 14,017.14 12.9 57.7
5 Philippines SE C 1966 Mar 69 Dec 04 137 14.0 62.3 7,040.03 9.0 78.2 Nov 69 Jan 98 40 3.8 22.0 1,108.67 3.7 31.3 177 8.7 41.3 8,148.71 7.5 65.2
6 Bangladesh SA B1 1973 Jun 73 Dec 04 10 1.0 63.3 600.90 0.8 79.0 Jun 73 Dec 04 148 13.9 35.9 6,831.79 22.8 54.1 158 7.7 49.0 7,432.69 6.9 72.1
7 Korea, Rep. of EC Grad 1966 Sep 68 Dec 97 81 8.3 71.6 6,334.63 8.1 87.0 Mar 72 Mar 72 1 0.1 36.0 3.70 0.0 54.1 82 4.0 53.1 6,338.33 5.8 77.9
8 Thailand MK C 1966 Jan 68 Dec 99 75 7.7 79.2 5,244.51 6.7 93.7 Dec 73 Dec 81 6 0.6 36.6 72.10 0.2 54.3 81 4.0 57.0 5,316.61 4.9 82.8
9 Sri Lanka SA B1 1966 Jul 68 Dec 04 17 1.7 81.0 375.34 0.5 94.2 Oct 69 Dec 04 106 10.0 46.6 3,002.91 10.0 64.3 123 6.0 63.1 3,378.25 3.1 85.9
10 Viet Nam MK B1 1966 Sep 73 Dec 04 4 0.4 81.4 163.93 0.2 94.4 Dec 70 Dec 04 53 5.0 51.6 2,688.74 9.0 73.3 57 2.8 65.9 2,852.67 2.6 88.6
11 Nepal SA A 1966 Dec 70 Dec 70 1 0.1 81.5 2.00 0.0 94.4 Dec 69 Dec 04 108 10.2 61.7 2,163.43 7.2 80.5 109 5.3 71.2 2,165.43 2.0 90.6
12 Malaysia SE C 1966 Sep 68 Dec 97 76 7.8 89.3 1,984.24 2.5 97.0 Sep 70 Sep 70 1 0.1 61.8 3.30 0.0 80.5 77 3.8 75.0 1,987.54 1.8 92.4
13 Lao PDR MK A 1966 89.3 97.0 Mar 70 Jul 04 60 5.6 67.5 1,070.24 3.6 84.1 60 2.9 77.9 1,070.24 1.0 93.4
14 Papua New Guinea PA B2 1971 Nov 77 Dec 01 24 2.5 91.7 462.69 0.6 97.6 Dec 71 Mar 04 33 3.1 70.6 411.30 1.4 85.4 57 2.8 80.7 873.99 0.8 94.2
15 Uzbekistan EC B2 1995 Dec 96 Sep 04 17 1.7 93.5 769.70 1.0 98.5 Dec 97 Dec 97 1 0.1 70.6 20.00 0.1 85.5 18 0.9 81.6 789.70 0.7 94.9
16 Cambodia MK A 1966 93.5 98.5 Apr 70 Dec 04 33 3.1 73.8 784.64 2.6 88.1 33 1.6 83.2 784.64 0.7 95.7
17 Mongolia EC A 1991 93.5 98.5 Oct 91 Jul 04 35 3.3 77.0 605.84 2.0 90.1 35 1.7 84.9 605.84 0.6 96.2
18 Afghanistan SA A 1966 93.5 98.5 Dec 70 Dec 04 15 1.4 78.5 582.28 1.9 92.1 15 0.7 85.6 582.28 0.5 96.7
19 Kyrgyz Republic EC A 1994 93.5 98.5 Dec 94 Nov 04 22 2.1 80.5 545.50 1.8 93.9 22 1.1 86.7 545.50 0.5 97.3
20 Myanmar MK A 1973 Dec 73 Dec 73 2 0.2 93.7 6.60 0.0 98.5 Dec 73 Feb 86 30 2.8 83.3 524.26 1.7 95.6 32 1.6 88.3 530.86 0.5 97.7
21 Kazakhstan EC C 1994 Dec 94 Sep 03 9 0.9 94.6 389.60 0.5 99.0 Dec 94 Dec 97 4 0.4 83.7 60.00 0.2 95.8 13 0.6 88.9 449.60 0.4 98.2
22 Fiji Islands PA C 1970 Feb 72 Dec 03 15 1.5 96.1 224.90 0.3 99.3 83.7 95.8 15 0.7 89.7 224.90 0.2 98.4
23 Tajikstan EC A 1998 96.1 99.3 Dec 98 Dec 04 14 1.3 85.0 203.64 0.7 96.5 14 0.7 90.3 203.64 0.2 98.6
24 Singapore SE Grad 1966 Jun 69 Nov 80 14 1.4 97.5 178.08 0.2 99.6 Dec 70 Dec 70 1 0.1 85.1 3.00 0.0 96.5 15 0.7 91.1 181.08 0.2 98.7
25 Samoa PA A 1966 97.5 99.6 Dec 69 Nov 03 30 2.8 88.0 121.92 0.4 96.9 30 1.5 92.6 121.92 0.1 98.8
26 Bhutan SA A 1982 97.5 99.6 Sep 83 Sep 03 19 1.8 89.7 111.16 0.4 97.3 19 0.9 93.5 111.16 0.1 98.9
27 Hong Kong, China EC Grad 1969 Apr 72 Feb 80 5 0.5 98.1 101.50 0.1 99.7 89.7 97.3 5 0.2 93.7 101.50 0.1 99.0
28 Taipei,China EC Grad 1966 Nov 68 Dec 71 13 1.3 99.4 100.39 0.1 99.8 89.7 97.3 13 0.6 94.4 100.39 0.1 99.1
29 Maldives SA A 1978 99.4 99.8 Jun 81 Dec 03 13 1.2 91.0 83.68 0.3 97.6 13 0.6 95.0 83.68 0.1 99.2
30 Solomon Islands PA A 1973 99.4 99.8 Dec 76 Dec 00 17 1.6 92.6 79.31 0.3 97.9 17 0.8 95.8 79.31 0.1 99.3
31 Marshall Islands PA B1 1990 Jun 01 Jun 01 1 0.1 99.5 4.00 0.0 99.8 Sep 91 Nov 02 11 1.0 93.6 74.13 0.2 98.1 12 0.6 96.4 78.13 0.1 99.3
32 Micronesia, FS PA B1 1990 Nov 04 Nov 04 1 0.1 99.6 4.80 0.0 99.8 Oct 93 Nov 04 7 0.7 94.3 70.34 0.2 98.3 8 0.4 96.8 75.14 0.1 99.4
33 Tonga PA B1 1972 Eligible 0 0.0 99.6 0.00 0.0 99.8 Nov 73 May 02 16 1.5 95.8 57.79 0.2 98.5 16 0.8 97.6 57.79 0.1 99.5
34 Azerbaijan EC B1 1999 Dec 04 Dec 04 1 0.1 99.7 10.00 0.0 99.8 Dec 03 Dec 04 2 0.2 96.0 42.00 0.1 98.7 3 0.1 97.7 52.00 0.0 99.5
35 Vanuatu PA A 1981 99.7 99.8 Dec 82 Apr 99 9 0.8 96.8 51.25 0.2 98.8 9 0.4 98.2 51.25 0.0 99.6
36 Cook Islands PA B1 1976 Eligible 0 0.0 99.7 0.00 0.0 99.8 Aug 80 Jul 01 12 1.1 97.9 26.67 0.1 98.9 12 0.6 98.8 26.67 0.0 99.6
37 Kiribati PA A 1974 99.7 99.8 Nov 76 Dec 98 6 0.6 98.5 15.14 0.1 99.0 6 0.3 99.1 15.14 0.0 99.6
38 Tuvalu PA A 1993 99.7 99.8 Jul 99 Aug 04 3 0.3 98.8 7.82 0.0 99.0 3 0.1 99.2 7.82 0.0 99.6
39 Nauru PA B2 1991 Dec 98 Dec 98 1 0.1 99.8 5.00 0.0 99.8 98.8 99.0 1 0.0 99.3 5.00 0.0 99.6
40 Palau PA U 2003 0 0.0 0.00 0.0
41 Timor-Leste PA A 2002 0 0.0 0.00 0.0
42 Turkmenistan EC C 2000 Eligible 0 0.0 0.00 0.0 0 0.0 0.00 0.0
Subtotal 976 99.8 78,244.31 99.8 1,050 98.8 29,720.59 99.0 2,026 99.3 107,964.90 99.6
Regional EC Oct 00 Dec 02 2 0.2 122.00 0.2 Oct 00 Nov 04 6 0.6 68.20 0.2 8 0.4 190.20 0.2
MK Dec 98 Dec 02 7 0.7 232.00 0.8 7 0.3 232.00 0.2
PA 0 0.00
SA 0 0.00
SE 0 0.00
Subtotal 2 0.2 122.00 0.2 13 1.2 300.20 1.0 15 0.7 422.20 0.4
Total Jan 68 Dec 04 978 100 78,366.31 100 Jun 69 Dec 04 1,063 100 30,020.79 100 2,041 100.0 108,387.10 100.0
Appendix 1
1 U = Unclassified: PAL 24 DMCs have taken OCR loans 33 DMCs have taken ADF loans
16 A = ADF only: AFG, BHU, CAM, KIR, KYR, LAO, MAL, MON, 21 DMCs are in categories eligible for OCR loans [B1, B2, C] 31 DMCs are in categories eligible for ADF loans [A, B1, B2]
MYA, NEP, SAM, SOL, TAJ, TIM, TUV, VAN 15 DMCs have taken an OCR loan since 1 Jan 2000 4 DMCs in A, B, B2 currently ineligible for ADF
9 B1 = ADF with OCR: AZE, BAN, COO, FSM, PAK, RMI, SRI, TON, VIE DMCs have active OCR loans 23 DMCs have taken an ADF loan since 1 Jan 2000
6 B2 = OCR with ADF: PRC, IND, INO, NAU, PNG, UZB 2 Number of Regional OCR loans since 2000 DMCs have active ADF loans
6 C = OCR only: FIJ, KAZ, MAL, PHI, THA, TUR 13 Number of Regional ADF loans since 1998
4 Grad = Graduated: HKG, KOR, SIN, TAI
42 Total
103
104 Appendix 2
LOANS APPROVED
(1 January–31 December 2004)
Amount Date Type of
No.Loan Number Project Name Dept Div ($ million)Approved Lending
A. PUBLIC SECTOR
Afghanistan
1. Agriculture Sector Program
2083 AFG (SF) SARD SAAE 55.0 04 MayProgram
2. Afghanistan Investment Guarantee Facility
2091 AFG (SF) SARD SAOC 5.0 24 SepProject
3. Regional Airports Rehabilitation Phase I
2105 AFG (SF) SARD SATC 30.0 23 NovProject
4. Andkhoy-Qaisar Road
2140 AFG (SF) SARD SATC 80.0 15 DecProject
Azerbaijan
Urban Water Supply and Sanitation
5. 2119 AZE (SF) ECRD ECSS 20.0 07 DecProject
6. 2120 AZE Urban Water Supply and Sanitation ECRD ECSS 10.0 07 DecProject
Bangladesh
7. 2101 BAN (SF)Teaching Quality Improvement in Secondary Education SARD SASS 68.9 09 NovProject
8. 2117 BAN (SF)Secondary Towns Integrated Flood Protection Phase II SARD SASS 80.0 02 DecProject
9. 2147 BAN Chittagong Port Trade Facilitation SARD SATC 30.6 20 DecProject
Small and Medium Enterprise Sector Development Program
10. 2148 BAN (SF) SARD SAGF 15.0 20 DecSDP-Program
Small and Medium Enterprise Sector Development Program
11. 2149 BAN (SF) SARD SAGF 30.0 20 DecSDP-Project
Small and Medium Enterprise Sector Development Program
12. 2150 BAN (SF) SARD SAGF 5.0 20 DecSDP-TA Loan
Cambodia
Second Education Sector Development Program
13. 2121 CAM (SF) MKRDMKSS 20.0 09 DecSDP-Program
Second Education Sector Development Program
14. 2122 CAM (SF) MKRDMKSS 25.0 09 DecSDP-Project
15. 2129 CAM (SF)
Small and Medium Enterprise Development Program MKRDMKGF 20.0 14 DecProgram
China, People's Rep. of
16. 2082 PRC Fujian Soil Conservation and Rural Development II ECRD ECAE 80.0 28 AprProject
17. 2089 PRC Hunan Roads Development II ECRD ECTC 312.5 09 SepProject
18. 2094 PRC Guangxi Roads Development II ECRD ECTC 200.0 21 OctProject
19. 2112 PRC Liaoning Environmental Improvement ECRD ECEN 70.0 25 NovProject
20. 2116 PRC Dali-Lijiang Railway ECRD ECTC 180.0 02 DecProject
21. 2125 PRC Gansu Roads Development ECRD ECTC 300.0 13 DecProject
22. 2146 PRC Coal Mine Methane Development ECRD ECEN 117.4 20 DecProject
India
23. 2141 IND Assam Governance and Public Resource Management Sector Development SARD SAGF 125.0 16 DecProgram
Program (Subprogram I)
24. 2142 IND Assam Governance and Public Resource Management Project SARD SAGF 25.0 16 DecProject
25. 2151 IND SARD
Multisector Project for Infrastructure Rehabilitation in Jammu and Kashmir SATC 250.0 21 DecProject
26. 2152 IND Power Grid Transmission SARD SAEN 400.0 21 DecSector
27. 2154 IND National Highway Sector II SARD SATC 400.0 21 DecSector
Indonesia
28. 2126 INO State Audit Reform Sector Development Program SERD IRM 200.0 13 DecSDP-Program
29. 2127 INO (SF)State Audit Reform Sector Development Program SERD IRM 25.0 13 DecSDP-Project
Kyrgyz Republic
Southern Transport Corridor Road Rehabilitation
30. 2106 KGZ (SF) ECRD ECTC 32.8 23 NovProject
Lao PDR
Roads for Rural Development
31. 2085 LAO (SF) MKRD MKID 17.7 28 JunProject
Northern Community-Managed Irrigation Sector
32. 2086 LAO (SF) MKRDMKAE 10.0 05 Jul Project
Federated States of Micronesia
Omnibus Infrastructure Development
33. 2099 FSM (SF) PARD PAHQ 14.2 05 NovProject
34. 2100 FSM Omnibus Infrastructure Development PARD PAHQ 4.8 05 NovProject
Mongolia
Regional Road Development
35. 2087 MON (SF) ECRD ECTC 37.1 22 Jul Project
Nepal
Decentralized Rural Infrastructure and Livelihood
36. 2092 NEP (SF) SARD SAAE 40.0 24 SepProject
Subregional Transport Facilitation
37. 2097 NEP (SF) SARD SATC 20.0 04 NovProject
Community-Managed Irrigated Agriculture Sector
38. 2102 NEP (SF) SARD SAAE 20.0 17 NovSector
Skills for Employment
39. 2111 NEP (SF) SARD SASS 20.0 25 NovProject
Gender Equality and Empowerment of Women
40. 2143 NEP (SF) SARD SAAE 10.0 16 DecProject
Appendix 2 105
Pakistan
41. 2103 PAK North-West Frontier Province Road Development Sector and Subregional SARD SATC 296.2 18 Nov Sector
Connectivity
42. 2104 PAK (SF) North-West Frontier Province Road Development Sector and Subregional SARD SATC 5.0 18 Nov Sector
Connectivity
43. 2107 PAK Balochistan Resource Management Program SARD SAGF 110.0 25 Nov Program
44. 2108 PAK (SF) Balochistan Resource Management Program SARD SAGF 20.0 25 Nov Program
45. 2109 PAK (SF) Supporting Public Resource Management Reforms in Balochistan SARD SAGF 3.0 25 Nov TA Loan
46. 2133 PAK (SF) Restructuring of the Technical Education and Vocational Training System SARD SASS 16.0 14 Dec Project
(Balochistan Province)
47. 2134 PAK (SF) Sustainable Livelihoods in Barani Areas SARD SAAE 41.0 14 Dec Project
48. 2135 PAK (SF) Restructuring of the Technical Education and Vocational Training System (North-
SARD SASS 11.0 14 Dec Project
West Frontier Province)
49. 2144 PAK Punjab Devolved Social Services Program SARD SASS 75.0 20 Dec Program
50. 2145 PAK (SF) Punjab Devolved Social Services Program SARD SASS 75.0 20 Dec Program
SARD SASS
51. 2153 PAK (SF) Multisector Rehabilitation and Improvement Project for Azad Jammu and Kashmir 57.0 21 Dec Sector
Papua New Guinea
52. 2079 PNG (SF)Community Water Transport PARD PAHQ 19.0 24 Mar Project
Philippines
53. 2136 PHI Health Sector Development Program SERD SESS 200.0 15 Dec SDP-Program
54. 2137 PHI Health Sector Development Program SERD SESS 13.0 15 Dec SDP-Project
Sri Lanka
55. 2080 SRI (SF) Road Project Preparatory Facility SARD SATC 15.0 13 Apr TA Loan
56. 2084 SRI (SF) North East Community Restoration and Development - Extension SARD SLRM 10.0 15 Jun Sector
57. 2096 SRI (SF) Secondary Education Modernization II SARD SASS 35.0 25 Oct Project
58. 2130 SRI Fiscal Management Reform Program SARD SAGF 45.0 14 Dec SDP-Program
59. 2131 SRI (SF) Strengthening of the Fiscal Management Institutions SARD SAGF 10.0 14 Dec SDP-Project
60. 2132 SRI Modernization of the Revenue Administration SARD SAGF 15.0 14 Dec SDP-Project
61. 2138 SRI Financial Markets Program for Private Sector Development SARD SAGF 60.0 15 Dec Program
62. 2139 SRI (SF) Financial Markets Program for Private Sector Development SARD SAGF 5.0 15 Dec TA Loan
Tajikistan
63. 2124 TAJ (SF) Irrigation Rehabilitation ECRD ECAE 22.7 10 Dec Project
Tuvalu
64. 2088 TUV (SF) Maritime Training (Supplementary Loan) PARD PAHQ 2.0 03 Aug Project
Uzbekistan
65. 2090 UZB Woman and Child Health Development ECRD ECSS 40.0 23 Sep Project
66. 2093 UZB Second Textbook Development ECRD ECSS 25.0 29 Sep Project
Viet Nam
67. 2076 VIE (SF) Health Care in the Central Highlands MKRD MKSS 20.0 09 Jan Project
68. 2095 VIE (SF) Small and Medium-Sized Enterprise Development Program (Subprogram I) MKRD MKGF 60.0 21 Oct Program Cluster
69. 2115 VIE (SF) Second Lower Secondary Education Development MKRD MKSS 55.0 26 Nov Project
70. 2118 VIE (SF) Second Financial Sector Program (Subprogram 2) MKRD MKGF 35.0 03 Dec Program Cluster
71. 2123 VIE (SF) Support to Implementation of Poverty Reduction Program MKRD VRM 6.4 09 Dec Program
72. 2128 VIE Northern Power Transmission Sector MKRD MKID 120.0 13 Dec Sector
Regional
73. 2113 REG (SF)Regional Customs Modernization and Infrastructure Development Project (Kyrgyz
ECRD ECGF 7.5 26 Nov Project
Republic)
74. 2114 REG (SF)Regional Customs Modernization and Infrastructure Development Project ECRD ECGF 10.7 26 Nov Project
(Tajikistan)
Ordinary Capital Resources (OCR) 3,704.5
- Project 2,889.5
- Program 815.0
Asian Development Fund (ADF) 1,242.0
- Project 935.6
- Program 306.4
Subtotal OCR & ADF 4,946.5
- Project 3,825.1
- Program 1,121.4
106 Appendix 2
B. PRIVATE SECTOR
Afghanistan
1. 2098 AFG Roshan Cellular Telecommunications PSOD PSIF 35.0 04 Nov PS Loan
Bangladesh
2. 2078 BAN Grameen Phone Telecommunications Expansion PSOD PSIF 20.0 26 Jan PS Loan
India
3. 2110 IND Torrent Combined-Cycle Power PSOD PSIF 54.4 25 Nov PS Loan
Mongolia
4. 2081 MON Trade and Development Bank of Mongolia PSOD PSOP 4.5 20 Apr PS Loan
Philippines
5. 2077 PHI Peso Swap and Financing PSOD OPSD 200.0 13 Jan PS Loan
6. 2155 PHI Purchase and Resolution of National Home Mortgage Finance Corporation's PSOD PSOP 33.0 17 Dec PS Loan
Portfolio of Nonperforming Loans
Ordinary Capital Resources 346.9
Asian Development Fund -
Subtotal OCR & ADF 346.9
C. PUBLIC AND PRIVATE SECTOR
Ordinary Capital Resources 4,051.4
Asian Development Fund 1,242.0
Total OCR & ADF 5,293.4
STATUS OF PROGRAM LOAN TRANCHE RELEASES
(1 January - 31 December 2004, $ million)
Project
Expected Tranche Releases Actual Tranche Releases Ratingsa
Date Date of Loan Net Loan Release Date Tranche Actual Date of Amount Cum. Disburse-
Country/Loan No. Approved Effective-ness Amount Dept Div Tranche No. Original/ Revised Amount Release Disbursed ment IP DO Remarks
A. LOANS WITH TRANCHE RELEASES
Afghanistan
1. 2083-AFG (SF) 04 May 04 05 May 04 56.2 SARD SAAE 1st May 04 30.0 14 May 04 29.9 29.9 S S The first tranche was released on 14 May 2004. Excellent progress is
Agriculture Sector 2nd May 05 25.0 being made towards fulfillment of the conditions for release of the
Program second tranche.
Bangladesh
2. 2038-BAN 10 Dec 03 02 Aug 04 100.0 1st 31 Mar 04 50.0 11 Aug 04 50.0 b 50.0 S S The loan was declared effective on 2 August 2004 and first tranche
SARD SAEN
Power Sector Sep 04 was released on 11 August 2004.
Development Program 2nd Dec 04 50.0
Cambodia
3. 1864-CAM (SF) 04 Dec 01 12 Apr 02 21.4 MKRD MKSS 1st 12 Apr 02 10.0 09 May 02 9.9 9.9 S S ADB received the Government's certification on its compliance with
Education Sector 2nd Mar 03 5.0 10 Nov 03 5.6 15.5 the third tranche conditions. The third tranche was released on 29
Development Program 31 Aug 03 November 2004.
30 Apr 03
30 Sep 03
31 Oct 03
3rd 2004 5.0 29 Nov 04 5.9 21.4
31 Aug 04
31 Oct 04
Nov 04
4. 2022-CAM (SF) 26 Nov 03 02 Dec 04 26.9 MKRD MKAE 1st 31 May 04 15.0 23 Dec 04 15.0 15.0 S S The first tranche was released on 23 December 2004.
Agriculture Sector Aug 04
Development Program Nov 04
2nd 30 Nov 06 10.0
Dec 06
India
5. 2141-IND 16 Dec 04 17 Dec 04 125.0 SARD SAGF 1st 17 Dec 04 45.0 17 Dec 04 45.0 45.0 S S The first tranche was released on 17 December 2004.
Assam Governance incentive Nov 05 45.0
and Public Resource 2nd Dec 06 35.0
Management Sector
Development Program
(Subprogram I)
Indonesia
- 1965-INO 10 Dec 02 19 Dec 02 250.0 1st 19 Dec 02 100.0 23 Dec 02 100.0 102.5 c The incentive tranche was released on 13 January 2004. The final
SERD SEGF
Financial Governance incentive 31 Mar 03 50.0 13 Jan 04 50.0 152.5 tranche was released on 20 December 2004. Loan account was
and Social Security 30 Jun 03 closed on the same day.
(Phase 1) 31 Aug 03
11 Dec 03
2nd 30 Jun 03 100.0 20 Dec 04 97.5 250.0
31 Aug 03
11 Dec 03
30 Jun 04
30 Sep 04
Nov 04
6. 2126-INO 13 Dec 04 17 Dec 04 200.0 SERD IRM 1st 17 Dec 04 100.0 17 Dec 04 100.0 100.0 S S The first tranche was released upon loan effectiveness on 17
State Audit Reform 2nd Jun 06 100.0 December 2004.
Sector Development
P
Kyrgyz Republic
Appendix 3
- 1860-KGZ (SF) 22 Nov 01 07 Dec 01 37.4 ECRD ECGF 1st 10 Dec 01 17.5 10 Dec 01 17.3 17.3 Second tranche of $19,969,854.25 and $81,479.24 was released on
Second Phase of the 2nd Sep 03 17.5 20 Aug 04 20.0 37.3 20 August 2004 and 2 September 2004, respectively. Loan account
Corporate Governance Qtr 2 2004 02 Sep 04 0.1 37.4 was closed on the same day.
and Enterprise Reform 31 May 04
Program Jun 04
Aug 04
- 1926-KGZ (SF) 29 Oct 02 20 Dec 02 15.9 ECRD ECGF 1st 20 Dec 02 7.6 20 Dec 02 7.6 7.6 Tranche release of $8,281,321.02 equivalent was released on 17
Regional Trade 2nd 30 Jun 04 7.6 17 Sep 04 8.3 15.9 September 2004. Loan account was closed on the same day.
Facilitation & Customs Sep 04
107
Coop.
108
Micronesia, Fed. States of
7. 1873-FSM (SF) 12 Dec 01 24 Apr 03 5.8 PARD PAHQ 1st Feb 02 2.5 31 Jul 03 1.9 1.9 S S Balance of the first tranche was released on 30 July 2004 after
Private Sector Apr 02 0.7 30 Jul 04 0.6 2.5 compliance with all conditions. Second tranche will be released in
Development Program Oct 02 September 2005 upon compliance with tranche conditions.
30 Nov 02
Mar 03
Jul 04
2nd Aug 03 2.5
Appendix 3
30 Jun 04
Jul 05
Sep 05
Mongolia
8. 1837-MON (SF) 28 Aug 01 21 Feb 02 9.4 ECRD ECSS 1st Nov 01 2.0 27 Feb 02 2.0 2.0 S S The second tranche was released on 28 December 2004. Third
Social Security Sector 2nd Nov 03 3.0 28 Dec 04 3.7 5.7 tranche release is expected in 1st Qtr of 2006. One of the 3rd tranche
Development Program 28 Feb 04 release conditions is fully complied with.
Qtr 3 2004
Qtr 4 2004
3rd Nov 05 3.0
Qtr 1 2006
9. 2010-MON (SF) 14 Oct 03 27 Jan 04 14.8 ECRD ECGF 1st 11 Dec 03 5.0 03 Feb 04 5.3 5.3 S S The first tranche was released on 3 February 2004. The second
Governance Reform 06 Feb 04 tranche will be released in July 2005, subject to satisfactory fulfillment
Program II 2nd 31 Jul 05 8.5 of second tranche release conditions and other program conditions.
(Subprogram I) Jul 05
Pakistan
10. 1897-PAK 20 Dec 01 24 Dec 01 268.4 SARD SAGF 1st 24 Dec 01 63.2 27 Dec 01 63.4 63.4 S S Status of compliance on the second tranche policy actions has been
Access to Justice incentive 30 Jun 02 25.0 23 Nov 02 25.4 88.8 reviewed with the Government during the annual performance
Program Jul 02 review. Second tranche release of $117.4 million was disbursed on
Sep 02 20 December 2004. Compliance with third tranche conditions is
Nov 02 underway.
2nd 30 Jun 03 75.0 20 Dec 04 87.5 176.3
31 Oct 03
31 Mar 04
Jul 04
Sep 04
Dec 04
3rd 31 Dec 04 80.0
30 Sep 05
11. 1898-PAK (SF) 20 Dec 01 24 Dec 01 92.7 SARD SAGF 1st 24 Dec 01 36.8 27 Dec 01 36.5 36.5 S S
Access to Justice incentive 30 Jun 02 25.0 23 Nov 02 26.2 62.7
Program Jul 02
Sep 02
Nov 02
2nd 30 Jun 03 25.0 20 Dec 04 30.0 92.7
31 Oct 03
Mar 04
Jul 04
Sep 04
Dec 04
12. 1935-PAK 21 Nov 02 24 Sep 03 223.3 SARD SAGF 1st Mar 03 90.0 30 Sep 03 95.2 95.2 S S Conditions for the release of the second tranche have been fulfilled.
Decentralization 30 Jun 03 Second tranche was released on 22 December 2004.
Support Program 30 Sep 03
2nd Mar 04 115.0 22 Dec 04 128.0 223.3
31 Jul 04
30 Sep 04
30 Nov 04
13. 1936-PAK (SF) 21 Nov 02 24 Sep 03 72.2 SARD SAGF 1st Mar 03 30.0 30 Sep 03 30.3 30.3 S S
Decentralization 30 Jun 03
Support Program 30 Sep 03
2nd Mar 04 35.0 22 Dec 04 41.8 72.2
31 Jul 04
30 Sep 04
30 Nov 04
14. 1987-PAK 20 Dec 02 26 Dec 02 225.0 SARD SAGF 1st 26 Dec 02 100.0 26 Dec 02 102.3 102.3 S S All conditions for the release of the second tranche have been met.
Rural Finance Sector 2nd 31 Jul 03 50.0 07 Dec 04 50.0 152.3 The tranche was released on 7 December 2004.
Development Program 18 Dec 03
Jul 04
Sep 04
Nov 04
3rd 31 Jul 04 50.0
Jul 05
4th 31 Dec 05 25.0
Dec 06
15. 2047-PAK 12 Dec 03 29 Apr 04 111.6 SARD SASS 1st 01 Mar 04 100.0 06 May 04 66.7 66.7 S S The first tranche was released on 6 May 2004. Compliance with
Sindh Devolved Social May 04 conditions for the second tranche release is ongoing.
Services Program 2nd 01 Mar 05 70.0
Jul 05
3rd 01 Mar 06 40.0
16. 2048 (SF)-PAK 12 Dec 03 29 Apr 04 105.9 SARD SASS 1st 01 Mar 04 100.0 06 May 04 33.5 33.5 S S
Sindh Devolved Social May 04
Services Program 2nd 01 Mar 05 70.0
Jul 05
3rd 01 Mar 06 40.0
17. 2066-PAK 19 Dec 03 05 Jul 04 158.2 SARD SAGF 1st 31 Mar 04 30.0 23 Jul 04 30.6 30.6 S S Loan became effective on 5 July 2004. First tranche was released on
Small and Medium Apr 04 23 July 2004.
Enterprise Sector Jul 04
Development Program incentive 31 Oct 04 30.0
31 Jan 05
31 May 05
2nd 30 Jun 05 30.0
3rd 31 Dec 06 60.0
18. 2107-PAK 25 Nov 04 23 Dec 04 116.2 SARD SAGF 1st 23 Dec 04 65.0 23 Dec 04 68.2 68.2 S S The first tranche was released on 23 December 2004.
Balochistan Resource 2nd Jun 06 45.0
Mngt Program
Philippines
- 2003-PHI 02 Sep 03 26 Sep 03 150.0 SERD SEGF 1st 19 Sep 03 75.0 29 Sep 03 75.0 75.0 Progress Report for the release of the final tranche was circulated on
Nonbank Financial 2nd 28 Feb 05 75.0 07 Dec 04 75.0 150.0 18 November 2004. The second tranche was released on 7
Governance Program II Sep 04 December 2004 and loan account was closed on the same day.
Nov 04
Sri Lanka
19. 2040-SRI 11 Dec 03 12 May 04 50.0 SARD SAGF 1st 01 Feb 04 15.0 21 May 04 15.3 15.3 S S First tranche was released on 21 May 2004.
Rural Finance Sector Apr 04
Development Program 2nd 01 Feb 05 20.0
30 Jun 05
3rd 01 Aug 06 10.0
31 Dec 06
4th 01 Feb 07 5.0
30 Jun 08
20. 2130-SRI 14 Dec 04 20 Dec 04 45.0 SARD SAGF 1st 20 Dec 04 15.0 22 Dec 04 15.0 15.0 S S The first tranche was released on 22 December 2004.
Fiscal Management 2nd Jun 06 15.0
Reform Program 3rd Dec 07 15.0
Uzbekistan
d
21. 1960-UZB 06 Dec 02 22 Oct 03 70.0 ECRD ECSS 1st 01 Jul 02 30.0 26 Aug 04 30.0 30.7 S S First tranche was released on 26 August 2004. Fulfillment of second
Education Sector 30 Apr 03 tranche conditions will depend on the works to be carried out by
Development Program 30 Sep 03 consultants of Part A component, expected to be fielded by June
Oct 03 2005. The project will need close monitoring to expedite engagement
31 Mar 04 of consultants and also due to a long delay in the release of the first
Apr 04 tranche.
Qtr 4 2004
2nd 03 Jan 04 20.0
31 Mar 04
Appendix 3
Qtr 1 2005
Qtr 1 2006
3rd 03 Jan 05 20.0
31 Mar 05
Qtr 1 2006
Qtr 1 2007
109
110
Viet Nam
22. 1932-VIE (SF) 20 Nov 02 23 May 03 56.0 MKRD MKGF 1st 31 Aug 03 20.0 28 Aug 03 21.1 21.1 S S The second tranche was released on 8 December 2004.
Second Financial 2nd 20 Nov 04 30.0 08 Dec 04 34.9 56.0
Sector Program
Subtotal (A) 2,607.3 1,137.6 1,760.6
Appendix 3
B. LOANS WITHOUT TRANCHE RELEASE
Afghanistan
1. 1954-AFG (SF) 04 Dec 02 05 Dec 02 173.7 SARD SAOC 1st 04 Dec 02 100.0 04 Dec 02 100.2 100.2 S S The second tranche was released on 18 December 2003. Loan is
Postconflict Multisector 2nd 04 Dec 03 50.0 18 Dec 03 55.4 155.7 e fully disbursed.
Program
Bangladesh
2. 2148-BAN (SF) 21 Dec 04 - 15.4 SARD SAGF 1st Apr 05 5.0 - 0.0 0.0 S S The first tranche will be released upon effectiveness of the loan and
SME Sector 2nd Jun 07 10.0 fulfillment of the first tranche release conditions.
Development Program
Cambodia
3. 1951-CAM (SF) 28 Nov 02 21 Feb 03 11.7 MKRD MKGF 1st 31 Dec 03 5.0 - 0.0 0.0 PS S Seven out of 8 conditions for the release of the first tranche have
Financial Sector 31 Mar 04 been fully complied with. One remaining condition, requiring passing
Program (Subprogram Qtr 4 2004 of the law on commercial enterprises by the National Assembly, is
II) 2005 likely to be met in early 2005. Fulfilment of the second tranche
31 May 05 conditions are underway.
2nd 31 Dec 04 5.0
Jun 05
Dec 05
4. 2121-CAM (SF) 09 Dec 04 - 20.7 MKRD MKSS 1st Jun 05 5.0 - 0.0 0.0 S S Awaiting loan effectiveness.
Second Education 2nd Jun 06 7.5
Sector Development 3rd Jun 07 7.5
5. 2129-CAM (SF) 14 Dec 04 - 20.7 MKRD MKGF 1st Jun 05 7.0 - 0.0 0.0 S S Awaiting loan effectiveness.
SME Development 2nd Dec 06 8.0
Program 3rd Jun 08 5.0
India
6. 1958-IND 05 Dec 02 16 Dec 02 30.0 SARD SAID 1st 30 Dec 02 12.0 18 Dec 02 12.0 12.0 S PS Second tranche is due in 2005, but disbursement is likely to be
Madhya Pradesh State 2nd 30 Jun 05 18.0 delayed if the labour rationalization covenant is not resolved before
Roads Sector the scheduled date. INRM will continue to work with the Government
Development to explore options in the labor rationalization process.
7. 1974-IND 16 Dec 02 17 Dec 02 200.0 SARD SAGF 1st 17 Dec 02 100.0 19 Dec 02 100.0 100.0 S S Release of second tranche has been moved to February 2005 due to
Modernizing Govt & 2nd 30 Jun 04 100.0 delay in signing of Amended Loan Agreement on the Government's
Fiscal Reform in Kerala Nov 04 financing of $25 million tranche component, in lieu of Government of
(Subprogram I) Dec 04 Netherlands.
28 Feb 05
8. 2036-IND 10 Dec 03 12 Dec 03 150.0 2036 SAEN 1st Dec 03 90.0 16 Dec 03 90.0 90.0 S S The Government of Assam and Assam Electricity Board are taking
Assam Power Sector 2nd Dec 04 60.0 necessary actions to meet the second tranche release conditions. Of
Development 30 Jun 05 the 32 second tranche policy actions, 22 were fully met, 6 were
substantially met, and 2 were partially met.
Indonesia
9. 1738-INO 16 Mar 00 29 Mar 00 200.0 SERD SEGF 1st 29 Mar 00 100.0 29 Mar 00 100.0 100.0 PS PS There has been substantial delay in compliance with the remaining
Industrial 2nd Dec 00 50.0 19 Feb 02 50.0 150.0 conditions for the release of the final tranche. Of the five release
Competitiveness and incentive Mar 01 conditions, two are yet to be complied with, i.e. the enactment of new
Small and Medium Dec 00 Investment Law and conversion of all import licenses into tariffs.
Enterprise Mar 01 Based on the findings of the special loan administration mission in
Development Program Dec 01 September 2004, the new Investment Law has not been submitted to
Jan 02 the Parliament. The law is not being considered as a priority issue to
2nd final 30 Sep 01 50.0 be addressed. In its letter dated 12 January 2005, the Government
Mar 02 requested ADB to cancel the remaining undisbursed loan amount of
Nov 02 $50 million. Cancellation of $50 million was made effective 31
30 Jun 03 December 2004.
31 Dec 03
30 Sep 04
Dec 04
10. 1866-INO 04 Dec 01 18 Dec 01 400.0 SERD SEGF 1st 18 Dec 01 150.0 21 Dec 01 150.0 150.0 PS S Submission to Management of the progress report for the release of
State-Owned Enterprise 2nd Jul 03 150.0 the second and final tranches is subject to the Government's
Governance and Dec 03 issuance of a new regulation clarifying the procedural matters on the
Privatization Program May 04 sale of public shareholdings in companies. The 2004 privatization
Dec 04 proposal is with the Parliament. In view of the presidential elections
Dec 05 and anticipated changes in the Government, the earliest the
3rd Sep 04 100.0 Parliament can review the proposal will be early 2005.
Dec 04
Dec 05
Lao PDR
11. 1867-LAO (SF) 06 Dec 01 19 Feb 02 23.0 MKRD MKID 1st 19 Feb 02 5.0 11 Mar 02 4.9 4.9 PS S Change in the schedule of the release of the second tranche is due to
Environment & Social 2nd 30 Apr 03 10.0 the delay in compliance of the remaining conditions. Per recent
Program 31 May 03 discussion with Government of Lao in January 2005, fulfillment of the
30 Sep 03 remaining 3 conditions for the second tranche is expected by April
30 Nov 03 2005, and the third tranche by June 2005.
29 Feb 04
Jun 04
Aug 04
Nov 04
Feb 05
3rd 31 Dec 04 5.0
Jun 05
12. 1946-LAO (SF) 28 Nov 02 07 Mar 03 16.9 MKRD MKGF 1st 28 Feb 03 5.0 24 Mar 03 5.2 5.2 S S Five critical conditions are still to be met for release of the second
Banking Sector Reform 2nd 01 Sep 04 5.0 tranche: (i) nonperforming loan resolution & recapitalization of state-
Program Oct 04 owned commercial banks (SOCB), (ii) completion of 2003 external
2005 audit, (iii) approval of amendments to laws, (iv) preparation of SOCB
Q2 2005 capital build up plans, and (v) restructuring the Agriculture Promotion
3rd 01 Nov 05 5.0 Bank.
Mar 06
Nepal
13. 1861-NEP (SF) 27 Nov 01 27 Dec 01 33.7 SARD SAOC 1st 27 Dec 01 12.0 28 Dec 01 11.9 11.9 PS S Compliance with second tranche conditions are ongoing. The
Governance Reform 2nd 30 Jun 03 9.0 Cabinet in principle agreed to promulgate an ordinance to amend the
Program 2004 Civil Service Act on 20 December 2004. Following this, the Ministry of
Sep 04 General Administration submitted the proposed amendment to the
Dec 04 Cabinet. The Cabinet Committee is presently reviewing the proposed
Jun 05 amendment.
3rd 31 Dec 04 9.0
14. 2002-NEP (SF) 08 Jul 03 10 Jul 03 36.1 SARD SAGF 1st 14 Jul 03 20.0 14 Jul 03 19.7 19.7 S PS Implementation progress has been slow due to change in
Public Sector 2nd 14 Oct 04 15.0 Government and political instability. Only 2 of 15 second tranche
Management Program Mar 05 release conditions have been fully met, 6 have been partly met, and
Mar 06 the remaining 7 are not yet met. Release of the second tranche in
2005 seems unlikely, and the loan closing date of June 2005 may
need to be extended.
15. 2058-NEP (SF) 18 Dec 03 07 Dec 04 5.4 SARD SASS 1st 31 Jul 04 2.5 - 0.0 0.0 S S Loan was declared effective on 7 December 2004. Compliance with
Kathmandu Valley Aug 04 first tranche conditions are ongoing. First tranche is expected to be
Water Services Sector Nov 04 released in May 2005. Second tranche is to be released five months
Development Program May 05 after first tranche release.
2nd 31 Jan 05 2.5
Oct 05
Pakistan
16. 1877-PAK (SF) 13 Dec 01 24 Sep 02 140.2 SARD SAAE 1st Apr 02 50.0 27 Sep 02 51.8 51.8 PS S Only 3 of the 14 conditions for second tranche release have been
Agriculture Sector Oct 02 fully met. Work on the most critical and demanding conditions has
Program II 2nd Oct 03 50.0 just started, partly due to delay in recruiting consultants under the TA
Mar 04 loan.
Jun 04
30 Sep 04
31 Mar 05
3rd 30 Sep 07 23.0
17. 1878-PAK 13 Dec 01 24 Sep 02 254.2 SARD SAAE 1st Apr 02 75.0 27 Sep 02 78.7 78.7 PS S
Agriculture Sector Oct 02
Program II 2nd Oct 03 50.0
Appendix 3
Mar 04
Jun 04
30 Sep 04
31 Mar 05
3rd 30 Sep 07 100.0
111
112
18. 1891-PAK 19 Dec 01 27 Jun 02 50.8 SARD SAID 1st 01 Feb 02 35.0 28 Jun 02 34.6 34.6 S S The final tranche was released in November 2003. Loan is fully
Road Sector May 02 disbursed.
Development Program 2nd 01 Jun 02 15.0 14 Nov 03 15.0 49.6
Sep 02 28 Nov 03 1.2 50.8
Feb 03
30 Sep 03
19. 1955-PAK 05 Dec 02 22 Apr 03 260.0 SARD SAGF 1st Jun 03 100.0 02 May 03 102.6 102.6 S S Incentive tranche will be released upon compliance of nine out of 18
Appendix 3
Financial (Nonbank) 2nd Sep 03 80.0 second tranche release conditions. Five conditions are fully complied
Markets and incentive 29 Feb 04 with and 7 substantially complied with. Further follow-up mission will
Governance Program Sep 04 be fielded in February 2005 to enable release of an incentive second
Nov 04 tranche by June 2005. The final release of the second tranche will
Dec 04 take place upon satisfactory compliance with the remaining
2nd final Nov 04 80.0 conditions.
20. 2030-PAK 04 Dec 03 23 Dec 03 206.6 SARD SAGF 1st 23 Dec 03 100.0 24 Dec 03 101.8 101.8 S S The second tranche is expected to be released in March 2005.
Punjab Resource 2nd 31 Dec 04 100.0
Management Program 31 Mar 05
21. 2108-PAK (SF) 25 Nov 04 - 21.0 SARD SAGF 1st Mar 05 10.0 - 0.0 0.0 S S Awaiting compliance of conditions for loan effectiveness.
Balochistan Resource 2nd Sep 06 10.0
Mngt Program
22. 2144-PAK 20 Dec 04 - 77.8 SARD SASS 1st Jun 05 40.0 - 0.0 0.0 S S Awaiting declaration of loan effectiveness, which is expected in June
Punjab Devolved Social 2nd Jun 06 20.0 2004.
Services Program 3rd Jun 07 15.0
23. 2145 (SF)-PAK 20 Dec 04 - 77.0 SARD SASS 1st Jun 05 25.0 - 0.0 0.0 S S
Punjab Devolved Social 2nd Jun 06 25.0
Services Program 3rd Jun 07 25.0
Papua New Guinea
24. 1875-PNG 12 Dec 01 13 Dec 01 70.0 1st 13 Dec 01 35.0 14 Dec 01 34.9 f 34.9 PS S Progress Report has been finalized. However, tranche release is still
PARD PAHQ
Public Service Program 2nd Sep 02 35.0 being held in view of the fluid political environment that may restrict
Nov 02 implementation of the policy reforms.
Jun 03
15 Sep 03
Nov 03
Mar 04
Jul 04
Sep 04
Dec 04
Apr 05
Philippines
25. 2136-PHI 15 Dec 04 - 200.0 SERD SESS 1st Jan 05 100.0 - 0.0 0.0 S S Loan was declared effective on 12 January 2005. First tranche was
Health Sector 2nd Jul 06 100.0 released on 13 January 2005.
Development Program
Sri Lanka
26. 1894-SRI (SF) 20 Dec 01 03 May 02 21.1 SARD SAGF 1st Dec 01 10.0 07 May 02 10.0 10.0 S S Loan fully disbursed. All tranches have been released.
Small and Medium May 02
Sector Enterprise 2nd Jun 03 10.0 14 Jul 03 11.1 21.1
Sector Development
27. 1929-SRI 31 Oct 02 28 Nov 02 60.0 SARD SAID 1st 31 Dec 02 30.0 29 Nov 02 30.6 30.6 S S Although progress has been made in most areas for power sector
Power Sector 2nd 31 Dec 03 30.0 restructing, the unbundling of the Ceylon Electricity Board and the
Development Program Sep 04 Lanka Electricity Company was delayed. With the new Government
Mar 05 setting policy in the power sector, the second tranche probably will
be delayed by 9 to 12 months.
28. 2138-SRI 15 Dec 04 - 60.0 SARD SAGF 1st Mar 05 20.0 - 0.0 0.0 S S First tranche will be released upon loan effectiveness. Loan is
Financial Markets 2nd Aug 06 20.0 expected to be declared effective in March 2005.
Program for Private 3rd Mar 08 20.0
Sector Devt
Tajikistan
29. 1927-TAJ (SF) 29 Oct 02 23 Dec 02 10.9 ECRD ECGF 1st 23 Dec 02 5.0 23 Dec 02 5.0 5.0 S S Following substantial implementation progress on the overall
Regional Trade 2nd 31 Dec 04 5.1 program, and meeting the second tranche release conditions, the
Facilitation and 31 Jan 05 second tranche was released on 3 January 2005.
30. 2000-TAJ (SF) 26 Jun 03 21 Jul 04 4.5 ECRD ECGF 1st 31 Oct 03 1.5 - 0.0 0.0 PS S Expected release of 1st tranche has been moved to 2nd quarter of
Microfinance Systems Nov 03 2005. Awaiting receipt of the withdrawal application and supporting
Development Program 09 Feb 04 documents to release the first tranche. The incentive tranche will be
Qtr 2 2004 considered for release before the second tranche if the law on
Qtr 4 2004 microfinance organizations is ratified and regulations for MFIs are
30 Apr 05 approved. The second tranche will be released within two years from
incentive Jun 05 1.0 the date of loan effectiveness.
2nd Oct 05 1.5
Qtr 2 2006
Viet Nam
31. 1972-VIE (SF) 16 Dec 02 27 Oct 03 68.2 MKRD MKAE 1st 01 Apr 03 20.0 18 Dec 03 21.9 21.9 S S The Government is taking actions on the second tranche release
Agriculture Sector 01 Aug 03 conditions with assistance from ADB TA 4105 and 4194. Three of the
Development Program 15 Nov 03 13 conditions have been fulfilled.
2nd 01 Sep 04 20.0
15 May 05
Sep 05
3rd 01 Mar 06 20.0
Jun 06
32. 1992-VIE (SF) 16 Jan 03 19 Aug 03 50.9 MKRD VRM 1st Apr 03 15.0 25 Nov 03 16.2 16.2 S S Out of eleven second tranche release measures and actions, six
Support Implementation 01 Aug 03 were accomplished, two are partially accomplished, three are
of the Public 31 Oct 03 underway. Disbursement is projected in September 2005.
Administration Reform 2nd 30 Sep 04 30.0
Master (Phase 1) Feb 05
31 Mar 05
30 Sep 05
33. 2095-VIE (SF) 21 Oct 04 - 63.6 MKRD MKGF 1st Aug 05 25.0 - 0.0 0.0 S S Awaiting declaration of loan effectiveness.
SME Development 2nd Dec 06 35.0
Program (Subprogram
I)
34. 2118-VIE (SF) 03 Dec 04 - 36.8 MKRD MKGF 1st 30 Sep 05 10.0 - 0.0 0.0 S S
Second Financial 2nd 30 Sep 06 15.0
Sector Program 3rd 31 Mar 07 10.0
35. 2123-VIE (SF) 09 Dec 04 - 6.7 MKRD VRM 1st Mar 05 6.4 - 0.0 0.0 S S
Support to
Implementation of
Poverty Reduction
Program
Subtotal (B) 3,077.5 1,214.7
TOTAL (A + B) 5,684.8 1,137.6 2,975.3
a IP = Implementation Progress Rating, DO = Development Objectives Rating, as shown in PPR.
b Includes front-end fee of $0.5 million.
c Includes $2.5 million capitalization fee.
d Total amount disbursed includes $0.7 million representing 1% capitalization fee.
e Excludes interest during grace period of $17.7 million to be capitalzed and charged to the loan account.
f Total disbursed amount is inclusive of $34.7 million released for the first tranche and recovery of $0.2 million in excess of TA 3280-PNG.
Appendix 3
113
114
Cancellation of Surplus Loan Proceeds
(1 January - 31 December 2004)
Loan Approved Cancelled Date
a b c
Number DMC Fund Sector Project Name Dept. Division Office ($ million) ($ million) % Cancelled Reason
1 1529 KGZ SF Fin Rural Financial Institutions ECRD ECAE ECGF 12.50 0.21 1.7 05-Aug-04 E - unutilized loan proceeds.
Appendix 4
2 1593 KAZ SF ANR Water Resources Management ECRD ECAE ECAE 10.04 2.94 29.3 21-Jun-04 E - Govt to finance project admin
3 1852 TAJ SF WSS Emergency Restoration of Yavan Water Conveyance System ECRD ECAE ECAE 3.65 0.08 2.1 12-Mar-04 C. Loan closing
ECAE 26.19 3.23 12.3
1 1547 KGZ SF LEP Capacity Building in Corporate Governance & Insolvency ECRD ECGF ECGF 3.96 0.52 13.2 16-Apr-04 E - undisbursed loan amount.
2 1336 PRC Mult Beijing Environmental Improvement ECRD ECGF ECGF 157.00 2.70 1.7 13-Sep-04 C. Loan closing
d
1336 PRC Mult Beijing Environmental Improvement ECRD ECGF ECGF 0.27 0.2 21-Sep-04 C. Loan closing
3 1491 PRC ANR Industrial Pollution Abatement ECRD ECGF ECEN 112.00 3.23 2.9 18-Feb-04 C. Loan closing
4 1543 PRC Ener Xi'An-Xianyang-Tongchuan Environment Improvement ECRD ECGF ECEN 156.00 0.02 0.0 05-Jan-04 C. Loan closing
ECGF 428.96 6.74 1.6
1 1548 MON SF Ener Ulaanbaatar Heat Sufficiency ECRD ECID ECEN 42.42 0.60 1.4 21-Oct-04 E - for other ADF commitments.
2 1912 TAJ SF ANR Emergency Baipaza Landslide Stabilization ECRD ECID ECEN 5.86 0.70 11.9 28-Sep-04 E - for other ADF commitments.
e
3 1470 PRC TC Chongqing Expressway ECRD ECID ECTC 150.00 4.51 3.0 09-Jun-03 C. Loan closing
4 1617 PRC TC Hebei Roads Development ECRD ECID ECTC 180.00 12.93 7.2 02-Apr-04 C. Loan closing
5 1644 PRC Ener Yunnan Dachoashan Power Transmission ECRD ECID ECEN 100.00 3.19 3.2 14-Jan-04 C. Loan closing
6 1890 PRC Mult Acid Rain Control & Environmental Improvement ECRD ECID ECEN 147.00 30.00 20.4 13-Sep-04 B. Change in project scope
ECID 625.28 51.93 8.3
1 1542 KAZ SF Edu Basic Education ECRD ECSS ECSS 9.85 0.00 0.0 30-Jan-04 C. Loan closing
2 1555 KGZ SF Edu Education Sector Development ECRD ECSS ECSS 13.97 1.82 13.0 14-Jun-04 C. Loan closing
d
1555 KGZ SF Edu Education Sector Development ECRD ECSS ECSS 0.27 2.0 07-Oct-04 C. Loan closing
e
3 1569 MON SF HNS Health Sector Development ECRD ECSS ECSS 11.50 0.29 2.5 18-Dec-03 C. Loan closing
4 1595 UBZ SF Edu Basic Education Textbook Development ECRD ECSS ECSS 19.44 0.25 1.3 30-Jun-04 C. Loan closing
5 1705 TAJ SF Mult Social Sector Rehabilitation ECRD ECSS ECSS 20.40 0.50 2.5 27-Sep-04 C. Loan closing
e
6 1544 PRC WSS Zhejiang-Shanxi Water Supply (Phase I) ECRD ECSS ECSS 100.00 3.03 3.0 10-Jul-03 C. Loan closing
7 1636 PRC WSS Fuzhou Water Supply and Wastewater Treatment ECRD ECSS PRCM 102.00 10.02 9.8 23-Apr-04 C. Loan closing
ECSS 277.16 16.17 5.8
20 ECRD 1,357.59 78.08 5.8
1 1295 LAO SF ANR Industrial Tree Plantation MKRD MKAE MKAE 10.77 0.71 6.6 29-Sep-04 B. Change in project scope
2 1404 VIE SF ANR Fisheries Infrastructure Improvement MKRD MKAE MKAE 52.04 13.92 26.7 04-Jun-04 C. Loan closing
3 1488 LAO SF ANR Community-Management Irrigation Sector MKRD MKAE MKAE 13.65 0.62 4.6 29-Sep-04 C. Loan closing
d
1488 LAO SF ANR Community-Management Irrigation Sector MKRD MKAE MKAE 0.00 0.0 05-Oct-04 C. Loan closing
4 1515 VIE SF ANR Forestry Sector MKRD MKAE MKAE 33.77 11.00 32.6 29-Sep-04 B. Change in project scope
MKAE 110.22 26.26 23.8
1 1735 THA Fin Restructuring of Specialized Financial Institutions MKRD MKGF MKGF 4.50 0.00 11-Mar-04 C. Loan closing
MKGF 4.50 0.00 0.0
e
1 1503 CAM SF TC SIEM Resp Airport MKRD MKID MKID 13.87 0.18 1.3 17-Apr-03 C. Loan closing
2 1558 LAO SF Ener Power Transmission and Distribution MKRD MKID MKID 29.11 0.38 1.3 01-Jun-04 C. Loan closing
3 1653 VIE SF TC Third Road Improvement MKRD MKID VRM 180.47 7.19 4.0 29-Sep-04 C. Loan closing
4 1659 CAM SF TC Phnom Penh to Ho Chi Minh City Highway MKRD MKID CARM 39.84 0.54 1.4 31-Aug-04 E - unallocated funds
5 1824 CAM SF Mult Emergency Flood Rehabilitation MKRD MKID CARM 58.28 2.37 4.1 16-Sep-04 E - unallocated funds
6 1306 THA TC Regional Roads (Sector) MKRD MKID MKID 170.00 8.42 5.0 20-Feb-04 C. Loan closing
7 1391 THA TC Second Regional Roads Sector MKRD MKID MKID 180.00 8.00 4.4 29-May-04 C. Loan closing
d
1391 THA TC Second Regional Roads Sector MKRD MKID MKID 5.78 3.2 10-Nov-04 C. Loan closing
MKID 671.56 32.87 4.9
1 1273 VIE SF WSS Ho Chi Minh City Water Supply & Sanitation Rehabilitation MKRD MKSS MKSS 61.44 3.57 5.8 17-Feb-04 C. Loan closing
2 1361 VIE SF WSS Provincial Towns Water Supply and Sanitation MKRD MKSS MKSS 56.17 3.00 5.3 30-Jun-04 C. Loan closing
d
1361 VIE SF WSS Provincial Towns Water Supply and Sanitation MKRD MKSS MKSS 0.12 0.2 01-Dec-04 C. Loan closing
e
3 1460 VIE SF HNS Population and Family Health MKRD MKSS MKSS 39.11 0.59 1.5 11-Dec-03 C. Loan closing
4 1525 LAO SF Mult Secondary Towns Urban Development MKRD MKSS MKSS 26.31 0.97 3.7 01-Sep-04 C. Loan closing
5 1655 VIE SF Edu Vocational & Technical Education MKRD MKSS MKSS 57.82 4.50 7.8 04-Feb-04 E - revised implementation plan
e
6 1410 THA WSS Samut Prakarn Wastewater Management MKRD MKSS MKSS 150.00 1.20 0.8 16-Dec-03 C. Loan closing
MKSS 390.84 13.95 3.6
18 MKRD 1,177.12 73.08 6.2
1 1459 FSM SF WSS Water Supply Sanitation PARD PAHQ PAHQ 9.57 0.46 4.8 04-Feb-04 C. Loan closing
2 1518 PNG SF HNS Health Sector Development PARD PAHQ PAHQ 9.80 3.28 33.5 13-Feb-04 C. Loan closing
e
3 1694 RMI SF Mult Ebeye Health and Infrastructure PARD PAHQ PAHQ 8.96 0.01 0.1 09-Dec-03 C. Loan closing
PAHQ 28.33 3.75 13.2
3 PARD 28.33 3.75 13.2
1 1923 VIE Ener Phu My 3 Power PSOD PSIF PSIF 40.00 2.54 6.3 01-Sep-04 C. Loan closing
PSIF 40.00 2.54 6.3
1 PSOD 40.00 2.54 6.3
1 1311 NEP SF ANR Irrigation Management Transfer SARD SAAE NRM 12.08 1.09 9.0 28-Sep-04 C. Loan closing
2 1403 PAK SF ANR Forestry Sector SARD SAAE SAAE 41.54 10.50 25.3 26-Jul-04 E - savings unlikely to be utilized
e
3 1437 NEP SF ANR Second Irrigation Sector SARD SAAE SAAE 22.79 0.13 0.6 13-Nov-03 C. Loan closing
4 1461 NEP SF ANR Third Livestock Development SARD SAAE NRM 16.90 1.12 6.7 20-Sep-04 C. Loan closing
5 1467 PAK SF ANR Bahawalpur Rural Development SARD SAAE SAAE 36.83 3.00 8.1 16-Apr-04 A. Cost underrun
6 1486 BAN SF ANR Forestry Sector SARD SAAE BRM 59.65 12.21 20.5 30-Jun-04 A. Cost underrun
7 1578 PAK SF ANR Second Flood Protection Sector SARD SAAE SAAE 110.27 43.43 39.4 08-Jul-04 B - savings from reduced scope
8 1609 NEP SF ANR Community Groundwater Irrigation Sector SARD SAAE NRM 32.85 10.33 31.4 10-Sep-04 E - low utilization of loan funds
9 1778 NEP SF ANR Crop Diversification SARD SAAE NRM 12.62 2.00 15.9 12-Aug-04 E - unused training and unallocated funds
SAAE 345.53 83.81 24.3
e
1 1681 PAK Ind Mdrnztn of Customs Administration Tech Assistance SARD SAGF SAGF 3.00 0.36 12.1 06-May-03 C. Loan closing
2 1682 PAK Ind Institutional Support for Trade Regime TA Project SARD SAGF SAGF 3.00 0.95 31.7 22-Jan-04 C. Loan closing
3 1796 PAK Ind Foreign Currency Export Finance Facility SARD SAGF SAGF 150.00 147.62 98.4 21-Jan-04 C. Loan closing
SAGF 156.00 148.93 95.5
1 1452 NEP SF Ener KALI GANDAKI "A" Hydroelectric SARD SAID SAEN 148.51 7.74 5.2 26-Apr-04 C. Loan closing
2 1505 BAN SF Ener Ninth Power Project SARD SAID BRM 125.21 5.38 4.3 12-Jul-04 B. Change in project scope
3 1532 MLD SF Ener Third Power System Development SARD SAID SAEN 6.65 0.17 2.6 09-Jan-04 C. Loan closing
e
4 1561 BAN SF TC Jamuna Bridge Railway Link SARD SAID SATC 106.29 0.35 0.3 18-Dec-03 C. Loan closing
5 1708 BAN SF TC Southwest Road Network Development SARD SAID BRM 120.33 5.00 4.2 11-Mar-04 A. Cost underrun
d
1708 BAN SF TC Southwest Road Network Development SARD SAID BRM 3.00 2.5 30-Sep-04 A. Cost underrun
6 1730 BAN SF Ener Dhaka Power System Upgrade SARD SAID BRM 79.40 14.92 18.8 29-Jun-04 A. Cost underrun
7 1789 BAN SF TC Road Maintenance and Improvement SARD SAID BRM 83.73 4.98 6.0 13-May-04 A. Cost underrun
8 1809 PAK SF Ener Capacity Enhancement in the Energy Sector SARD SAID SAEN 5.69 5.69 100.0 30-Jun-04 C. Loan closing
9 1825 BAN SF TC Southwest Flood Damage Rehabilitation SARD SAID BRM 58.35 3.24 5.6 17-May-04 B. Change in project scope
10 1424 PAK Ener Ghazi Barotha Hydropower SARD SAID SAEN 300.00 45.49 15.2 20-Jan-04 C. Loan closing
11 1747 IND TC Surat Manor Tollway SARD SAID INRM 180.00 15.00 8.3 13-Dec-04 E - reallocation of project categories.
12 1804 IND Ener Gujarat Power Sector Development SARD SAID INRM 200.00 77.52 38.8 11-Aug-04 E - components withdrawn from loan funds
13 1807 PAK Ener Energy Sector Restructuring Program SARD SAID SAEN 300.00 147.00 49.0 19-Jan-04 C. Loan closing
SAID 1,714.15 335.48 19.6
Appendix 4
1 1260 PAK SF WSS Urban Water Supply and Sanitation SARD SASS SASS 68.02 6.92 10.2 21-Jun-04 C. Loan closing
2 1451 NEP SF Ind Second Tourism Infrastructure Development SARD SASS SASS 16.03 3.52 22.0 15-Jul-04 C. Loan closing
SASS 84.05 10.44 12.4
115
116
27 SARD 2,299.73 578.66 25.2
e
1 1258 INO SF ANR Sustainable Agriculture Development in Irian Jaya SERD SEAE IRM 26.42 0.76 2.9 22-Dec-03 C. Loan closing
2 1351 INO SF ANR Sulawesi Rainfed Agriculture Development SERD SEAE IRM 28.22 0.86 3.1 07-May-04 C. Loan closing
3 1366 PHI SF ANR Second Irrigation Systems Improvement SERD SEAE SEAE 12.98 0.46 3.6 26-Jul-04 E - local currency depreciation.
4 1422 PHI SF ANR Cordillera Highland Agricultural Resource Management SERD SEAE SEAE 8.58 0.11 1.3 12-Mar-04 E - local currency depreciation.
Appendix 4
d
1422 PHI SF ANR Cordillera Highland Agricultural Resource Management SERD SEAE SEAE 0.94 11.0 23-Jun-04 E - local currency depreciation.
5 1426 INO SF ANR North Java Flood Control Sector SERD SEAE SEAE 40.56 1.44 3.5 07-May-04 C. Loan closing
6 1453 PHI SF Mult Bukidnon Integrated Area Development SERD SEAE SEAE 18.41 1.28 6.9 01-Apr-04 C. Loan closing
7 1476 INO SF ANR Segara Anakan Conservation & Development SERD IRM IRM 22.97 10.73 46.7 10-Aug-04 B. Change in project scope
e
8 1571 INO SF ANR Coastal Commty Dev & Fisheries Resource Mgmnt SERD SEAE SEAE 15.96 0.90 5.6 27-Oct-03 E - local currency depreciation.
d
1571 INO SF ANR Coastal Commty Dev & Fisheries Resource Mgmnt SERD SEAE SEAE 0.80 5.0 10-Aug-04 E - local currency depreciation.
9 1365 PHI ANR Second Irrigation System Improvement SERD SEAE SEAE 15.00 0.70 4.7 26-Jul-04 E - local currency depreciation.
10 1425 INO ANR North Java Flood Control SERD SEAE SEAE 45.00 0.69 1.5 29-Jun-04 C. Loan closing
e
11 1469 INO ANR Integrated Pest Management for Smallholder Estate Crops SERD SEAE SEAE 44.00 1.96 4.5 17-Nov-03 E - local currency depreciation.
12 1475 INO ANR Segara Anakan Conservation & Dev SERD IRM IRM 22.80 3.68 16.1 10-Aug-04 B - change in project scope.
13 1500 MAL ANR Klang River Basin Env'l Improvement & Flood Mitigation SERD SEAE SEAE 26.30 12.00 45.6 24-May-04 D. & E.- change impl arr & local currency depr
14 1526 INO ANR Participatory Development of Agriculture Technology SERD SEAE SEAE 63.80 4.00 6.3 02-Jan-04 E - local currency depreciation.
e
15 1570 INO ANR Coastal Commty Dev & Fisheries Resource Mgmnt SERD SEAE SEAE 26.00 0.80 3.1 27-Oct-03 E - local currency depreciation.
16 1583 INO Mult Rural Income Generation SERD SEAE SEAE 78.60 9.45 12.0 30-Jan-04 E - local currency depreciation.
e
17 1613 INO ANR Coral Reef Rehabilitation & Management SERD SEAE SEAE 7.00 0.15 2.1 22-Dec-03 E - local currency depreciation.
e
18 1667 PHI Mult Agrarian Reform Communities SERD SEAE SEAE 93.16 13.91 14.9 30-Sep-03 E - local currency depreciation.
d
1667 PHI Mult Agrarian Reform Communities SERD SEAE SEAE 6.61 7.1 03-Nov-04 E - local currency depreciation.
19 1740 PHI ANR Grains Sector Development SERD SEAE SEAE 75.00 1.06 1.4 08-Jun-04 C. Loan closing
SEAE 644.34 72.52 11.3
1 1449 INO ANR BAPEDAL Regional Network SERD SEGF IRM 45.00 1.57 3.5 08-Apr-04 C. Loan closing
d
1449 INO ANR BAPEDAL Regional Network SERD SEGF IRM 1.67 3.7 03-Aug-04 C. Loan closing
2 1729 PHI LEP LGU Private Infrastructure Project Development Facility SERD SEGF SEGF 2.85 2.52 88.5 06-Sep-04 C. Loan closing
SEGF 47.85 5.76 12.0
1 1271 INO Ener Power XXIII SERD SEID SEID 275.00 17.72 6.4 15-Jul-04 A. Cost underrun
2 1333 PHI TC Airport Development SERD SEID SEID 41.00 1.25 3.1 23-Feb-04 C. Loan closing
3 1397 INO Ener Power Development and Efficiency Enhancement SERD SEID SEID 337.00 62.20 18.5 10-Sep-04 E - component cancelled & unallocated bal
d
1397 INO Ener Power Development and Efficiency Enhancement SERD SEID SEID 7.11 2.1 25-Oct-04 C. Loan closing
4 1590 PHI Ener Power Transmission Reinforcement SERD SEID SEID 191.40 8.30 4.3 14-Jun-04 E - component cancelled
5 1674 INO Ener Capacity Building for Competitive Electricity Markey SERD SEID SEID 20.00 1.82 9.1 22-Dec-04 C. Loan closing
SEID 864.40 98.40 11.4
1 1396 PHI SF HNS Integrated Community Health Services SERD SESS SESS 23.98 1.50 6.3 07-May-04 E - local currency depreciation.
2 1441 PHI SF WSS Rural Water Supply and Sanitation Sector SERD SESS SESS 17.41 1.76 10.1 23-Jul-04 C. Loan closing
3 1574 INO SF Edu Second Junior Secondary Education SERD SESS SESS 15.30 0.72 4.7 28-Jul-04 C. Loan closing
4 1367 PHI Mult Regional Municipal Development SERD SESS SESS 30.00 2.97 9.9 12-Jan-04 C. Loan closing
5 1383 INO Mult Sumatra Urban Development Sector SERD SESS SESS 130.00 15.98 12.3 10-Sep-04 C. Loan closing
6 1384 INO Mult West Java Urban Development Sector SERD SESS IRM 70.00 8.60 12.3 20-Feb-04 C. Loan closing
7 1440 PHI WSS Rural Water Supply and Sanitation Sector SERD SESS SESS 18.50 0.22 1.2 08-Jul-04 C. Loan closing
e
8 1471 INO HNS Family Health and Nutrition SERD SESS SESS 45.00 2.50 5.6 12-Dec-03 C. Loan closing
d
1471 INO HNS Family Health and Nutrition SERD SESS SESS 5.41 12.0 30-Jun-04 C. Loan closing
9 1472 PHI WSS Small Towns Water Supply Sector SERD SESS SESS 50.00 12.00 24.0 22-Mar-04 E - subprojects cancelled
d
1472 PHI WSS Small Towns Water Supply Sector SERD SESS SESS 8.20 16.4 C. Loan closing
10 1511 INO Mult Metropolitan Bogoi, Tangerang & Bekasi Urban Dev (Sector) SERD SESS SESS 80.00 4.41 5.5 04-Mar-04 C. Loan closing
e
11 1523 INO HNS Intensified Communicable Diseases Control SERD SESS IRM 87.40 5.00 5.7 11-Dec-03 E - unused loan funds
12 1572 INO LEP Cap Building in Urban Infrastructure Management SERD SESS IRM 42.00 9.41 22.4 02-Nov-04 C. Loan closing
13 1573 INO Edu Second Junior Secondary Education SERD SESS SESS 160.00 9.54 6.0 28-Jul-04 C. Loan closing
14 1599 PHI Mult Subic Bay Area Municipal Development SERD SESS SESS 22.00 0.95 4.3 30-Apr-04 C. Loan closing
15 1676 INO HNS Health and Nutrition SERD SESS SESS 200.00 12.79 6.4 28-Jul-04 C. Loan closing
16 1751 PHI Edu Fund for Technical Education and Skills Development SERD SESS SESS 20.04 10.00 49.9 22-Nov-04 E - low utilization of loan funds.
SESS 1,011.62 111.96 11.1
42 SERD 2,568.21 288.65 11.2
111 ADB 7,470.98 1,024.76 13.7
a
Notes: The total value of the 124 OCR and ADF cancellations of loan proceeds was $1,024.8 million, or 13.7% of the $7,471.0 million approved value of the 111 loans involved.
The total value of the 59 OCR cancellations of loan proceeds (47.6%) was $796.2 million, or 15.2% of the $5,221.9 million approved value of the 52 loans involved.
The total value of the 65 OCR cancellations of loan proceeds (52.4%) was $228.6 million, or 10.2% of the $2,249.1 million approved value of the 59 loans involved.
b
ANR = agriculture & natural resources; Edu = education; Ener = energy; Fin = finance; Ind = industry & trade; LEP = law, economic management & public policy; Mult = multisector;
HNS = health, nutrition & social protection; TC = transportation & communication; WSS = water supply, sanitation & waste management
c
Reasons for cancellations of loan proceeds: A - Cost underrun (7); B - Change in project scope (8); C - Loan closing (76); D - Change in financing arrangements (1); E - Other (32); Total = 124.
d
Of the 111 loans with cancellations of loan proceeds, 13 loans had 2 cancellations during 2004, for a total of 124 separate cancellations.
e
Of the 124 cancellations of loan proceeds completed during 2004, 18 (14.5%) were made retroactive to 2003.
Source: Accounting
Source: Accounting
Loan # DMC Fund Sector Project Name RD Div Impl Approved Cancelled % Date Reason
0 ECAE
3 SF ECAE 26.19 3.23 12.33347
Appendix 4
117
118
Loans with Cost Overruns
(1 January - 31 December 2004)
Appendix 5
Date
Approved Identified & Cost
Project Cost Loan Date Overrun
Project ($ million) ($ million) Approved ($ million) Cause and Proposed Action
CAUSE: exchange rate fluctuation. ACTION: the overrun is being funded by
1 1832-COO(SF): Waste Management 4.6 2.2 03 Nov 04 -
the Government.
1820-NEP(SF): Melamchi Water CAUSE: unspecified. ACTION: Following discussion at the Joint Donors
2 4.6 120.0 Apr/05 46.4
Supply Review Mission in April 2004, Government will seek additional funding.
CAUSE: Bids for main civil works were higher than the Appraisal Report
1921-TUV(SF) and 2088-TUV(SF):
3 4300.0 2.1 03 Aug 04 1.97 estimate due mainly to the depreciation of US$ against A$, and additional
Maritime Training
scope of civil works not anticipated at Apraisal. ACTION: unspecified.
Loans with Changes in Project Scope, by Operations Department
(1 January - 31 December 2004)
Loan Approved Change
Approval Amount Type of Approval
No. Loan Country Fund Project Name Sector Dept. Div. Date ($ million) Change Approving Authority Date
East and Central Asia Region
1 1775 KGZ SF Almaty-Bishkek Regional Road Rehabilitation (Kyrgyz Component) Transport & Comm ECRD ECTC 31 Oct 00 5.0 Minor Director, ECTC 16 Mar 04
2 2045 KGZ SF Emergency Rehabilitation Multiple ECRD KYRM 11 Dec 03 5.0 Minor Director, ECTC 08 Jul 04
2 2045 KGZ SF Emergency Rehabilitation Multiple ECRD KYRM 11 Dec 03 5.0 Minor Country Director, KYRM 27 Dec 04
3 1715 PRC Shanxi Environment Improvement Energy ECRD ECEN 07 Dec 99 102.0 Minor Director, ECEN 01 Oct 04
4 1814 PRC West Henan Agricultural Development Agriculture & Natural Res ECRD PRCM 19 Dec 00 64.3 Major Vice President, Op. 2 30 Aug 04
5 1890 PRC Acid Rain Control and Environmental Improvement Industry & Trade ECRD ECEN 19 Dec 01 147.0 Minor Director, ECEN 12 Feb 04
6 1918 PRC Southern Sichuan Roads Development Transport & Comm ECRD ECTC 20 Sep 02 300.0 Major Vice President, Op. 2 26 May 04
7 1912 TAJ SF Emergency Baipaza Landslide Stabilization Agriculture & Natural Res ECRD ECEN 10 Sep 02 5.3 Minor Director, ECEN 20 Jul 04
8 1631 UZB Railway Rehabilitation Transport & Comm ECRD URM 15 Sep 98 70.0 Minor Country Director, URM 02 Apr 04
Mekong Region
1 1969 CAM SF GMS: Mekong Tourism Development (CAMBODIA) Industry & Trade MKRD MKSS 12 Dec 02 15.6 Minor Director, MKSS 08 Sep 04
2 1621 LAO SF Basic Education (Girls) Education MKRD LRM 25 Jun 98 20.0 Minor Country Director, LRM 07 Jan 04
3 1727 LAO SF GMS: East-West Corridor (Lao PDR) Transport & Comm MKRD LRM 20 Dec 99 32.0 Minor Country Director, LRM 15 Nov 04
3 1727 LAO SF GMS: East-West Corridor (Lao PDR) Transport & Comm MKRD LRM 20 Dec 99 32.0 Minor Country Director, LRM 17 Dec 04
3 1727 LAO SF GMS: East-West Corridor (Lao PDR) Transport & Comm MKRD LRM 20 Dec 99 32.0 Minor Country Director, LRM 22 Dec 04
4 1749 LAO SF Primary Health Care Expansion Health, Nutrition & Social MKRD MKSS 24 Aug 00 20.0 Minor Director, MKSS 09 Dec 04
Pacific Region
1 1703 PNG Financial Management Law, Econ & Policy PARD PAHQ 21 Oct 99 25.8 Minor Director, PAHQ A 10 May 04
2 1812 PNG SF Provincial Towns Water Supply Water, Sanitation & Waste PARD PAHQ 14 Dec 00 15.3 Minor OIC, PAHQ A 25 Aug 04
3 1886 SAM SF Power Sector Improvement Energy PARD SPRM 17 Dec 01 6.0 Major Vice President, Op. 2 19 Aug 04
South Asia Region
1 1581 BAN SF Third Rural Infrastructure Development Multiple SARD BRM 20 Nov 97 70.0 Minor Country Director, BRM 16 Mar 04
2 1731 BAN Dhaka Power Systems Upgrade Energy SARD BRM 21 Dec 99 82.0 Minor Country Director, BRM 18 Feb 04
3 1884 BAN SF West Zone Power System Development Energy SARD BRM 17 Dec 01 60.2 Minor Country Director, BRM 29 Jun 04
4 1885 BAN West Zone Power System Development Energy SARD BRM 17 Dec 01 138.7 Minor Country Director, BRM 01 Sep 04
5 1647 IND Rajasthan Urban Infrastructure Development Multiple SARD INRM 03 Dec 98 250.0 Major President 11 Oct 04
6 1704 IND Karnataka Urban Development and Coastal Environmental Mgt Multiple SARD INRM 26 Oct 99 175.0 Minor Country Director, INRM 18 May 04
7 1839 IND SF Western Transport Corridor SARD SATC 20 Sep 01 240.0 Minor Director, SATC 08 Dec 04
8 1869 IND Madhya Pradesh Power Sector Development Program (Project) Energy SARD INRM 06 Dec 01 200.0 Major Vice President, Op. 1 12 Oct 04
9 1871 IND Private Sector Infrastructure Facility at State Level (Infrastructure Leasing and F Multiple SARD INRM 11 Dec 01 100.0 Minor Country Director, INRM 14 May 04
10 1974 IND Modernizing Government and Fiscal Reform in Kerala (Subprogram I) Law, Econ & Policy SARD SAGF 16 Dec 02 200.0 Major Vice President, Op. 1 06 Dec 04
11 2046 IND Urban Water Supply & Environmental Improvement in Madhya Pradesh Water, Sanitation & Waste SARD INRM 12 Dec 03 200.0 Major Vice President, Op. 1 30 Nov 04
12 1882 MLD SF Information Technology Development Transport & Comm SARD SATC 17 Dec 01 9.5 Minor Director, SATC 07 Jan 04
13 1578 PAK SF Second Floor Protection (Sector) Agriculture & Natural Res SARD PRM 13 Nov 97 100.0 Major Management 08 Jul 04
14 1545 SRI SF Upper Watershed Management Agriculture & Natural Res SARD SAAE 24 Sep 97 16.6 Minor Director, SAAE 30 Jun 04
15 1649 SRI SF Road Network Improvement Transport & Comm SARD SLRM 08 Dec 98 80.0 Major Board of Directors 07 Jul 04
16 1744 SRI SF Forest Resources Management Sector Agriculture & Natural Res SARD SAAE 28 Jun 00 27.0 Minor Director, SAAE 12 Mar 04
17 1757 SRI SF Water Resources Management Agriculture & Natural Res SARD SAAE 19 Sep 00 19.7 Minor Director, SAAE 26 Apr 04
18 1849 SRI SF Southern Province Rural Economic Advancement Multiple SARD SAAE 26 Oct 01 25.0 Major Vice President, Op. 1 20 Apr 04
19 1930 SRI SF Power Sector Development Program (Project Loan) Energy SARD SLRM 31 Oct 02 70.0 Major Vice President, Op. 1 17 Feb 04
Southeast Asia Region
1 1357 INO Gas Transmission and Distribution Energy SERD SEID 08 Jun 95 218.0 Minor Director, SEID 13 Apr 04
1 1357 INO Gas Transmission and Distribution Energy SERD SEID 08 Jun 95 218.0 Minor Director, SEID 05 Nov 04
2 1469 INO Integrated Pest Management for Smallholder Estate Crops Agriculture & Natural Res SERD SEAE 26 Sep 96 44.0 Minor Director, SEAE 17 Feb 04
3 1475 INO Segara Anakan Conservation and Development Agriculture & Natural Res SERD IRM 17 Oct 96 22.8 Major Vice President, Op. 2 20 Sep 04
Appendix 5
4 1476 INO SF Segara Anakan Conservation and Development Agriculture & Natural Res SERD IRM 17 Oct 96 22.8 Major Vice President, Op. 2 20 Sep 04
5 1526 INO Participatory Development of Agricultural Technology Agriculture & Natural Res SERD SEAE 01 Jul 97 63.8 Minor Director, SEAE 05 Feb 04
6 1570 INO Coastal Community Development and Fisheries Resource Mgt Agriculture & Natural Res SERD SEAE 04 Nov 97 26.0 Minor Director, SEAE 30 Jan 04
7 1571 INO SF Coastal Community Development and Fisheries Resource Mgt Agriculture & Natural Res SERD SEAE 04 Nov 97 15.0 Minor Director, SEAE 30 Jan 04
8 1798 INO Road Rehabilitation (Sector) Transport & Comm SERD IRM 11 Dec 00 190.0 Minor Country Director, IRM 09 Nov 04
9 1863 INO SF Decentralized Basic Education Education SERD SESS 29 Nov 01 100.0 Major Vice President, Op. 2 15 Jun 04
10 1422 PHI SF Cordillera Highland Agricultural Resource Management Agriculture & Natural Res SERD SEAE 11 Jan 96 9.5 Minor Director, SEAE 26 Apr 04
11 1984 PHI Electricity Market and Transmission Development Energy SERD SEID 19 Dec 02 40.0 Minor Director, SEID 08 Jun 04
119
120
Loans with Changes in Implementation Arrangements, by Operations Department
(1 January - 31 December 2004)
Loan Approved Change
Approval Amount Type of Approval
No. Loan Country Fund Project Name Sector Dept Div. Date ($ million) Change Approving Authority Date
Appendix 5
East and Central Asia Region
1 1592 KAZ Water Resources Management and Land Improvement Agriculture & Natural Res ECRD ECAE 17 Dec 97 30.0 Minor Director, ECAE 07 Dec 04
2 1742 KGZ SF Community-Based Infrastructure Services Sector Multiple ECRD ECSS 08 Jun 00 36.0 Major Vice Pres. Operations 2 10 Feb 04
3 1908 MON SF Second Education Development Education ECRD ECSS 06 Aug 02 14.0 Minor Director, ECSS 22 Jan 04
4 1715 PRC Shanxi Environment Improvement Energy ECRD ECEN 07 Dec 99 102.0 Minor Director, ECEN 01 Oct 04
5 1890 PRC Acid Rain Control and Environmental Improvement Multiple ECRD ECEN 19 Dec 01 147.0 Minor Director, ECEN 12 Feb 04
6 1705 TAJ SF Social Sector Rehabilitation Multiple ECRD ECSS 26 Oct 99 20.0 Major Vice Pres. Operations 2 26 Jan 04
7 2001 TAJ SF Microfinance Systems Development Program Finance ECRD ECGF 26 Jun 03 4.0 Minor Director, ECGF 06 Apr 04
8 1833 UZB Ak Altin Agricultural Development Agriculture & Natural Res ECRD ECAE 23 Aug 01 36.0 Minor Director, ECAE 29 Sep 04
9 1842 UZB Urban Water Supply Water, Sanitation & Waste ECRD URM 27 Sep 01 36.0 Major Vice Pres. Operations 2 16 Nov 04
10 1963 UZB Small and Microfinance Development Finance ECRD ECGF 09 Dec 02 20.0 Minor Director, ECGF 14 Apr 04
Mekong Region
1 1953 CAM SF Commune Council Development Law, Economics & Policy MKRD MKGF 03 Dec 02 10.0 Minor Director, MKGF 03 May 04
Pacific Region
1 1874 FSM SF Private Sector Development Program Law, Economics & Policy PARD PAHQ 12 Dec 01 8.0 Minor Director, PAHQ A 07 Jun 04
2 1703 PNG Financial Management Law, Economics & Policy PARD PAHQ 21 Oct 99 25.8 Minor Director, PAHQ A 10 May 04
3 1706 PNG SF Employment-Oriented Skills Development Education PARD PAHQ 28 Oct 99 20.0 Major Vice Pres. Operations 2 26 Aug 04
4 1754 PNG Rehabilitation of the Maritime Navigation Aids System Transport and Comm PARD PAHQ 12 Sep 00 19.8 Major Vice Pres. Operations 2 22 Nov 04
5 1812 PNG SF Provincial Towns Water Supply and Sanitation Water, Sanitation & Waste PARD PAHQ 14 Dec 00 15.3 Minor Director, PAHQ A 30 Aug 04
5 1812 PNG SF Provincial Towns Water Supply and Sanitation Water, Sanitation & Waste PARD PAHQ 14 Dec 00 15.3 Minor Director, PAHQ A 25 Aug 04
South Asia Region
1 1830 BHU SF Basic Skills Development Education SARD SASS 21 Jun 01 7.0 Minor Director, SASS 21 Jun 04
1 1830 BHU SF Basic Skills Development Education SARD SASS 21 Jun 01 7.0 Minor Director, SASS 16 Sep 04
2 1704 IND Karnataka Urban Development and Coastal Environmental Management Multiple SARD INRM 26 Oct 99 175.0 Minor Country Director, INRM 02 Jan 04
2 1704 IND Karnataka Urban Development and Coastal Environmental Management Multiple SARD INRM 26 Oct 99 175.0 Minor Country Director, INRM 17 Dec 04
3 1747 IND Surat-Manor Tollway Transport and Comm SARD INRM 27 Jul 00 180.0 Minor Country Director, INRM 10 Sep 04
4 1804 IND Gujarat Power Sector Development - Project Loan Energy SARD INRM 13 Dec 00 200.0 Minor Country Director, INRM 06 Jul 04
5 1813 IND Calcutta Environmental Improvement Multiple SARD INRM 19 Dec 00 250.0 Minor Country Director, INRM 31 Mar 04
5 1813 IND Calcutta Environmental Improvement Multiple SARD INRM 19 Dec 00 250.0 Minor Country Director, INRM 17 Nov 04
6 1826 IND Gujarat Earthquake Rehabilitation and Reconstruction Multiple SARD INRM 26 Mar 01 500.0 Minor Country Director, INRM 01 Jun 04
6 1826 IND Gujarat Earthquake Rehabilitation and Reconstruction Multiple SARD INRM 26 Mar 01 500.0 Minor Country Director, INRM 05 Oct 04
7 1869 IND Madhya Pradesh Power Sector Development Program Energy SARD INRM 06 Dec 01 200.0 Minor Country Director, INRM 30 Jun 04
8 1968 IND State Power Sector Reform Energy SARD SAEN 12 Dec 02 150.0 Minor Director, SAEN 10 May 04
9 1461 NEP SF Third Livestock Development Agriculture & Natural Res SARD NRM 19 Sep 96 18.3 Major Vice Pres. Operations 1 12 Apr 04
10 1755 NEP SF Small Towns Water Supply and Sanitation Sector Water, Sanitation & Waste SARD NRM 12 Sep 00 35.0 Minor Country Director, NRM 15 Jul 04
11 1820 NEP SF Melamchi Water Supply Water, Sanitation & Waste SARD SASS 21 Dec 00 120.0 Minor Director General, SARD 27 Apr 04
12 1649 SRI SF Road Network Improvement Transport and Comm SARD SLRM 08 Dec 98 80.0 Major Board of Directors 07 Jul 04
13 1757 SRI SF Water Resources Management Agriculture & Natural Res SARD SAAE 19 Sep 00 19.7 Major Vice Pres. Operations 1 03 Aug 04
14 1767 SRI SF Protected Area Management and Wildlife Conservation Agriculture & Natural Res SARD SLRM 19 Oct 00 12.0 Major Vice Pres. Operations 1 21 Jul 04
14 1767 SRI SF Protected Area Management and Wildlife Conservation Agriculture & Natural Res SARD SLRM 19 Oct 00 12.0 Major Vice Pres. Operations 1 11 Nov 04
15 1896 SRI Small and Medium Enterprise Sector Development Program (Investment Loan fo- Industry and Trade SARD SAGF 20 Dec 01 60.0 Major Board of Directors 22 Jun 04
16 2040 SRI Rural Finance Sector Development Program (Program Loan) Finance SARD SAGF 11 Dec 03 50.0 Major Vice Pres. Operations 1 09 Jul 04
17 2041 SRI Rural Finance Sector Development Program (Credit Line) Finance SARD SAGF 11 Dec 03 10.0 Major Vice Pres. Operations 1 09 Jul 04
18 2042 SRI SF Rural Finance Sector Development Program (Project Loan) Finance SARD SAGF 11 Dec 03 10.0 Major Vice Pres. Operations 1 09 Jul 04
Southeast Asia Region
12 1357 INO Gas Transmission and Distribution Energy SERD SEID 08 Jun 95 218.0 Minor Director, SEID 05 Nov 04
13 1475 INO Segara Anakan Conservation and Development Agriculture & Natural Res SERD IRM 17 Oct 96 22.8 Major Vice President, Op. 2 20 Sep 04
14 1476 INO SF Segara Anakan Conservation and Development Agriculture & Natural Res SERD IRM 17 Oct 96 22.8 Major Vice President, Op. 2 20 Sep 04
15 1523 INO Intensified Communicable Diseases Control Health, Nutrition & Social SERD IRM 19 Jun 97 87.4 Minor Director General, SERD 30 Mar 04
16 1770 INO SF Marine and Coastal Resources Management Agriculture & Natural Res SERD SEAE 26 Oct 00 50.0 Minor Director, SEAE 30 Sep 04
28 1473 PHI Sixth Road Transport and Comm SERD SEID 30 Sep 96 167.0 Minor Director, SEID 26 Nov 04
Appendix 6 121
COUNTRY PORTFOLIO PERFORMANCE BY DMC AND RD
A. Operations 1, Mekong Department
1. Cambodia
1. Cambodia’s real gross domestic product (GDP) growth rate increased from 5.2% in 2003
to 6% in 2004. Its per capita gross national income (GNI) was $310 in 2003. The total
population is estimated at 13.08 million in 2004, and the annual growth rate from 2002–2004
was 2%. The proportion of the population below the national poverty line was 35.9%.1
2. The World Bank’s 2004 governance indicators2 for Cambodia are given in Table A6.1.
Table A6.1: Governance indicators for Cambodia
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) -0.89 -0.56 -0.35 -0.87 -0.68
Rank (0–100%) 24.8 29.8 38.2 24.1 27.7
B. Political Stability
Estimate(-2.5 to +2.5) -0.60 -0.25 -0.73 -1.18 -1.15
Rank (0–100%) 30.6 35.1 22.4 12.7 14.0
C. Government Effectiveness
Estimate(-2.5 to +2.5) -0.87 -0.51 -0.44 -1.22 -0.58
Rank (0–100%) 18.8 34.3 37.6 7.7 27.4
D. Regulatory Quality
Estimate(-2.5 to +2.5) -0.25 -0.44 -0.07 -0.22 -0.29
Rank (0–100%) 44.3 37.2 43.9 37.0 33.1
E. Rule of Law
Estimate(-2.5 to +2.5) -0.98 -0.90 -0.77 -0.73 -0.91
Rank (0–100%) 17.4 19.9 23.0 24.9 16.9
F. Control of Corruption
Estimate(-2.5 to +2.5) -0.97 -0.95 -0.72 -1.27 -0.94
Rank (0–100%) 13.3 16.8 26.3 2.7 18.7
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
1
Refers to available data before 2000.
2
Voice and Accountability determines the various aspects of the political process, civil liberties and political rights.
It measures (i) the extent to which citizens of a country are able to participate in the selection of governments; and
(ii) the independence of the media. Political Stability and Absence of Violence measures perceptions of the
likelihood that the government in power will be destabilized or overthrown by possibly unconstitutional and/or
violent means, including domestic violence and terrorism. Government Effectiveness combines the responses on
the quality of public service provision, the quality of the bureaucracy, the competence of civil servants, the
independence of the civil service from political pressures, and the credibility of the government’s commitment to
policies. The main focus of this index is on “inputs” required for the government to be able to produce and
implement good policies and deliver public goods. Regulatory Quality is focused on the policies themselves. It
measures the incidence of market-unfriendly policies such as price controls or inadequate bank supervision, as
well as perceptions of the burdens imposed by excessive regulation in areas such as foreign trade and business
development. Rule of Law measures the extent to which agents have confidence in and abide by the rules of
society. These include perceptions of the incidence of crime, the effectiveness and predictability of the judiciary,
and the enforceability of contracts. Control of Corruption measures perceptions of corruption, conventionally
defined as the exercise of public power for private gain.
122 Appendix 6
3. Cambodia received a score of 50.1 on the 2005 Environmental Sustainability Index
(ESI)3 and a ranking of 67th among the 146 rated countries, as compared to the highest score of
75.1 attained by Finland and the lowest score of 29.2 attained by the Democratic People’s
Republic of Korea. Cambodia’s score is near the high end of the range of scores from 33.1 to
55.2 attained by the 23 DMCs included in the Index.
4. As a category A borrower, Cambodia is qualified to receive only ADF loans. At the end
of 2004 the loan portfolio consisted of 24 public sector ADF loans covering 20 projects with a
net loan amount of $614.2 million. The portfolio included 5 program loans. Three new loans
were approved in 2004 and none were closed. Three loans became effective in less than a
month from loan signing.
5. The TA portfolio included 34 ongoing TAs—27 advisory TAs and 7 project preparatory
TAs—worth a total of $19.9 million. TA approvals during 2004 included 11 advisory TAs for
$4.5 million and 1 project preparatory TA for $113,000.
6. The Cambodia Resident Mission (CARM) was established in 1996, and as of January
2005 its personnel comprised 3 international staff, 6 national officers, and 11 administrative
staff. CARM staff administered 5 of the 24 active loans during 2004, an increase from the
4 loans administered during 2003.
7. By loan amount, 13% of Cambodia’s portfolio was at-risk, higher than the 6% at-risk
loans in 2003 but below the 18% for the region and 17% ADB-wide. Based on the number of
loans, 12.5% of the portfolio (3 loans) was considered at risk, compared with 12% for the region
and 14% ADB-wide. The combined ratings for implementation progress and development
objectives show that out of the 24 loans under implementation, 88% were satisfactory, 4% were
partly satisfactory, and 8% were unsatisfactory. Cambodia’s portfolio rating in 2004 was lower
than both the regional and ADB-wide averages (Tables A6.2 and A6.3).
Table A6.2: Lower rated projects
(by number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans - - - - 2
Implementation Progress - - - - -
Development Objectives
Partly Satisfactory Loans - - 1 2 1
Implementation Progress - - - - -
Development Objectives - - 1 - -
Potential Problem Loans - - 2 2 3
Projects At Risk (number of loans) - - - - 2
Source: Asian Development Bank management information systems.
3
The 2005 environmental sustainability index (ESI), prepared by the Yale Center for Environmental Law and Policy,
measures the ability of nations to protect the environment over the next several decades by integrating 76 data
sets into 21 indicators of environmental sustainability. The higher a country’s ESI score, the better positioned it is to
maintain favorable environmental conditions into the future. So far, Finland achieved the highest ESI score of 75.1
and is first in rank out of 146 countries.
Appendix 6 123
Table A6.3: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Weighted Weighted
Group HS S PS U Average HS S PS U Average Average
Cambodia - 87.5 4.2 8.3 1.79 - 100.0 - - 2.00 3.79
Mekong 1.2 90.1 6.2 2.5 1.90 2.5 97.5 - - 2.03 3.93
ADB-Wide 4.5 83.9 6.1 5.5 1.87 1.8 95.5 2.0 0.6 1.98 3.86
HS = highly satisfactory, PS = partly satisfactory, S = satisfactory, U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the
following criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
8. Data on Cambodia’s financial performance indicators are provided in Table A6.4.
Contract awards for project and program loans did not meet expectations, with actual contract
awards totaling $62 million or 71% of the projected $88 million. Cambodia’s contract award ratio
was 18% for all loans, higher than the ADB-wide average of 15% for ADF loans. Disbursements
reached $77 million or 74% of the $103 million projection. The disbursement ratio was 25%,
higher than the ADB-wide average of 18%. The net resource transfer for the year increased
from $68 million in 2003 to $71 million in 2004.
Table A6.4: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 92.6 114.4 124 41.9 40.7 97 74.6 64.4 86 72.7 61.9 85 88.0 62.4 71
Project 78.6 100.8 128 41.9 40.7 97 55.0 44.5 81 47.7 56.3 118 58.0 40.4 70
Program 14.0 13.6 97 - - 19.6 19.9 102 25.0 5.6 22 30.0 22.0 73
Disbursement 50.8 50.8 100 56.8 48.3 85 74.2 78.9 106 99.1 73.3 74 103.0 76.7 74
Project 36.8 37.3 101 56.8 48.3 85 54.6 59.0 108 74.1 67.7 91 73.0 55.8 76
Program 14.0 13.5 96 - - 19.6 19.9 102 25.0 5.6 22 30.0 20.9 70
Loan Approvals 59.0 109.6 186 92.5 75.2 81 105.0 116.5 111 108.0 98.3 91 58.0 65.0 112
Project 59.0 109.6 186 62.5 45.2 72 95.0 106.5 112 73.0 73.3 100 33.0 25.0 76
Program - - 30.0 30.0 100 10.0 10.0 100 35.0 25.0 71 25.0 40.0 160
Disbursement Ratio 24.1 19.1 79 19.2 18.7 97 27.0 30.3 112 26.4 23.1 88 27.6 25.1 91
Project 18.7 14.8 79 19.2 18.7 97 22.2 25.6 115 24.9 22.8 92 22.2 21.3 96
Program 98.5 95.0 96 - - 66.8 67.8 101 48.0 26.9 56 69.7 48.5 70
Net Resource Transfer 49.3 46.4 76.4 68.4 70.9
Project 36.0 46.7 56.8 63.3 50.5
Program 13.3 (0.3) 19.6 5.1 20.3
Loan Service Payment 1.5 1.9 2.5 4.7 5.8
OCR - - - - -
ADF 1.5 1.9 2.5 4.7 5.8
TA Projects Approved (no.) 14 9 64 7 8 114 11 17 155 11 12 109 9 12 133
Private Sector Loans (no.) 1 - - - - - - - - -
Private Sector Equity - - - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
9. During 2004, 39 project administration missions reviewed 21 projects, for a total of
514 staff-mission-days, higher than the 341 days in 2003. Mission-days spent per project
increased from 20 days in 2003 to 24.5 days in 2004. Thirty TA missions visited 20 TA projects
for a total of 129 staff-mission-days, a drop from the 217 days spent in 2003. Staff-mission-days
per TA decreased from 14.5 days in 2003 to 6.5 days in 2004.
124 Appendix 6
10. Of the 14 loans requiring submission of audited accounts in 2004, 9 fully complied
(64%), 3 complied late (21%), 1 partly complied (7%), and one has not complied (7%).
11. According to the latest Country Portfolio Review (CPR) conducted from 16 March to
2 April 2004, Cambodia’s portfolio performance has been generally satisfactory. Project
implementation issues such as longer project start-up delays, increasing shortfalls with regard to
contract awards and disbursement targets, delayed counterpart fund releases, low imprest
account turnover ratios, delayed submission of audited project accounts and financial
statements, and extensive and unnecessary bureaucracy were discussed during the CPR and
actions were agreed to address them. Specific issues were also addressed, such as
(i) weaknesses in the project performance ratings; (ii) Government’s problems meeting tranche
release conditions for three important program loans; (iii) policy issues; (iv) detrimental effects of
(ii) and (iii) on ADB’s proposed 2004 assistance program; and (v) the Government’s marginal
performance on the 2003 Action Plan and the agreed 2004 Action Plan.
12. Project start-up performance has improved slightly. The establishment of Project
Implementation Units, a requirement for successful project start-up, was seen to take up more
time in the provinces due to delay in finding qualified staff. Delays in consultant recruitment
could be minimized if recruitment commences soon after appraisal. The shortage of counterpart
funds has been compounded by (i) the need to compensate Thailand for the damages incurred
during the riots in January 2003, (ii) lower tourist arrivals due to sudden acute respiratory
syndrome (SARS), and (iii) holding of national elections in 2003. The CPR mission was assured
that high priority would be given to allocating sufficient counterpart funds to all ADB projects
during 2004 and that a mechanism to regularly monitor counterpart disbursement would be
established.
13. The CPR mission agreed provide a TA in May 2004 to support the formulation of a
national resettlement policy Funds would also be provided on an annual basis for both routine
and periodic maintenance for national and rural roads. The CPR mission also stressed the need
for compliance with the tranche release conditions under the three program loans.
2. Lao People’s Democratic Republic
14. Lao PDR’s real GDP growth rate increased from 5.9% in 2003 to 6.5% in 2004. Its per
capita GNI was $320 in 2003. The total population is estimated at 5.84 million in 2004, and the
annual growth rate from 2002–2004 was 2.3%. The proportion of the population below the
national poverty line was 38.6% (footnote 1).
15. The World Bank’s 2004 governance indicators (footnote 2) for Lao PDR are given in
Table A6.5.
Appendix 6 125
Table A6.5: Governance indicators for Lao PDR
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) -1.55 -1.73 -1.43 -1.26 -1.09
Rank (0–100%) 6.8 3.5 8.9 13.1 17.8
B. Political Stability
Estimate(-2.5 to +2.5) -0.76 -0.16 +0.09 +0.60 +1.20
Rank (0–100%) 24.8 40.0 51.5 70.3 90.2
C. Government Effectiveness
Estimate(-2.5 to +2.5) -1.02 -0.50 -0.76 -0.30 -0.04
Rank (0–100%) 14.4 34.8 21.5 42.6 60.9
D. Regulatory Quality
Estimate(-2.5 to +2.5) -1.24 -1.25 -1.24 -1.18 -1.17
Rank (0–100%) 9.9 9.2 10.7 11.4 10.5
E. Rule of Law
Estimate(-2.5 to +2.5) -1.27 -0.96 -1.00 -1.07 -1.36
Rank (0–100%) 8.2 16.3 9.6 9.2 4.8
F. Control of Corruption
Estimate(-2.5 to +2.5) -1.15 -0.97 -0.81 -0.70 -0.94
Rank (0–100%) 6.9 15.3 22.0 24.0 18.7
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
16. Lao received a score of 52.4 on the 2005 ESI (footnote 3) and a ranking of 52nd among
the 146 rated countries, as compared to the highest score of 75.1 attained by Finland and the
lowest score of 29.2 attained by the Democratic People’s Republic of Korea. Lao PDR’s score is
near the high end of the range of scores from 33.1 to 55.2 attained by the 23 DMCs included in
the Index, and the highest among the MKRD DMCs.
17. As a category A borrower, Lao PDR is qualified to receive only ADF loans. At the end of
2004 the active loan portfolio consisted of 23 public sector ADF loans covering 22 projects with
a net loan amount of $492 million. There were 2 program loans. Two loans were approved, and
two loans were closed with an average delay of 13 months. Four loans became effective within
an average of 7 months from loan signing.
18. Eleven TAs were approved for a total of $5.1 million—6 advisory TAs and 5 project
preparatory TAs. As of 31 December 2004, there were 31 TAs in the portfolio—20 advisory TAs
and 11 project preparatory TAs—for a total of $18.6 million.
19. The Lao Resident Mission (LRM) was established in 2000, and as of January 2005 its
personnel comprised 4 international staff, 6 national officers, and 5 administrative staff. LRM
staff administered 2 of the 23 active loans during 2004 compared with only one loan
administered during 2003.
20. By loan amount, 10.5% of the Lao PDR portfolio was at-risk, lower than 18% for the
region and 17% ADB-wide. Based on the number of loans, 9% (two loans) were considered at
risk compared to 12% for the region and 14% ADB-wide. The combined ratings for
implementation progress and development objectives show that out of the 23 loans under
implementation, 91% was satisfactory and 9% was partly satisfactory. Lao PDR’s portfolio rating
in 2004 was better than the regional and ADB-wide averages (Tables A6.6 and A6.7).
126 Appendix 6
Table A6.6: Lower Ratings Projects
(number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans
Implementation Progress 1 - 1 2 -
Development Objectives - - - - -
Partly Satisfactory Loans
Implementation Progress 2 1 - - 2
Development Objectives - 1 - - -
Potential Problem Loans - 1 - - -
Projects At Risk (number of loans) - 2 1 2 2
Source: Asian Development Bank management information systems.
Table A6.7: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Weighted Weighted
Group HS S PS U Average HS S PS U Average Average
Lao PDR - 91.3 8.7 - 1.91 4.3 95.7 - - 2.04 3.96
Mekong 1.2 90.1 6.2 2.5 1.90 2.5 97.5 - - 2.03 3.93
ADB-Wide 4.5 83.9 6.1 5.5 1.87 1.8 95.5 2.0 0.6 1.98 3.86
HS = highly satisfactory, Lao PDR = Lao People’s Democratic Republic, PS = partly satisfactory,
S = satisfactory, U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives,
the following criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
21. Data on Lao PDR’s financial performance indicators are provided in Table A6.8. In
2004, contract awards for project and program loans did not meet expectations, with actual
contract awards totaling $55 million, 70% of the projected $78 million. The contract award ratio
was 20%, higher than the ADB-wide average of 15% for ADF loans. Overall disbursement
performance was $49 million, or 79% of the projected $62 million. The disbursement ratio was
15%, lower than the ADB-wide average of 18%. The net resource transfer for the year
decreased from $41 million in 2003 to $31 million in 2004.
22. Thirty six project administration missions visited 19 projects for a total of 449 staff-
mission-days, lower than 468 days in 2003. Mission-days spent per project decreased from
29 days in 2003 to 24 days in 2004. Twenty-seven TA missions visited 8 TA projects for a total
of 264 staff-days, up from 201 days spent in 2003. Staff-mission-days per TA increased from
11 days in 2003 to 33 days in 2004.
23. Of the 14 loans requiring submission of audited accounts in 2004, 6 fully complied
(43%), 6 complied late (by less than 6 months), 1 partly complied, and one has not complied.
Appendix 6 127
Table A6.8: Financial performance indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 76.3 43.5 57 59.0 51.8 88 30.9 43.2 140 49.8 34.9 70 77.8 54.8 70
Project 63.8 32.3 51 59.0 51.8 88 25.9 38.2 147 34.8 29.7 85 62.8 54.8 87
Program 12.5 11.3 90 - - 5.0 5.0 100 15.0 5.2 35 15.0 - 0
Disbursement 55.1 51.0 93 37.4 44.7 120 52.0 48.6 93 64.6 54.7 85 61.8 48.5 78
Project 42.6 39.8 93 37.4 44.7 120 47.0 43.7 93 49.6 49.5 100 46.8 48.5 104
Program 12.5 11.3 90 - - 5.0 4.9 98 15.0 5.2 35 15.0 - 0
Loan Approvals 50.0 60.5 121 45.0 65.0 144 90.0 86.9 97 56.0 46.0 82 47.7 27.7 58
Project 50.0 60.5 121 45.0 45.0 100 75.0 71.9 96 56.0 46.0 82 37.7 27.7 73
Program - - - 20.0 15.0 15.0 100 - - 10.0 - 0
Disbursement Ratio 21.6 21.3 99 15.8 18.9 120 20.9 19.5 93 21.1 19.9 94 18.4 14.6 79
Project 17.5 17.4 99 15.8 18.9 120 20.5 19.1 93 18.1 20.3 112 15.3 15.9 104
Program 106.1 95.6 90 - - 25.4 24.7 97 48.0 16.6 35 52.3 - 0
Net Resource Transfer 41.7 34.6 37.7 40.5 31.0
Project 31.7 36.2 34.5 37.8 33.6
Program 10.0 (1.6) 3.2 2.7 (2.6)
Loan Service Payment 9.3 10.1 10.9 14.1 17.5
OCR - - - - -
ADF 9.3 10.1 10.9 14.1 17.5
TA Projects Approved (no.) 9 12 133 11 10 91 6 7 117 9 7 78 12 11 92
Private Sector Loans (no.) - - - - - - - - - -
Private Sector Equity - - - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
24. LRM conducted the latest CPR from 31 August to 20 September 2004. The mission
found the overall portfolio performance in Lao PDR to be generally satisfactory. Key issues
included the release of counterpart funds, early consultant recruitment, procurement and
disbursement performance, compliance with loan covenants, the role of LRM, and TA
implementation performance. To address shortage in counterpart funding, the EAs were asked
to submit counterpart funding projections to project stakeholders early in the processing stage
so that by loan effectivity, provincial governments would have budgeted counterpart funding in
advance. The mission advised the government that consultants’ recruitment should start
immediately after appraisal and could be fielded shortly after loan effectivity. It was agreed that
LRM was to continue monitoring the submission of audited financial statements and counterpart
funding disbursements, hold regular meetings for loans approved recently, have potential
problems, or have been identified as being “At Risk.” There has been an improvement in loan
signing and effectiveness and in the establishment of project implementation structures.
3. Thailand
25. Thailand’s real GDP growth rate declined from 6.9% in 2003 to 6.1% in 2004. Its per
capita GNI was $2,190 in 2003. The total population is estimated at 64.2 million in 2004, and the
annual growth rate from 2002-2004 was 0.9%. The proportion of the population below the
national poverty line was 9.8% in 2002.
26. The World Bank’s 2004 governance indicators (footnote 2) for Thailand are given in
Table A6.9.
128 Appendix 6
Table A6.9: Governance indicators for Thailand
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) +0.24 +0.20 +0.25 +0.11 +0.01
Rank (0–100%) 52.4 57.1 57.6 55.0 52.9
B. Political Stability
Estimate(-2.5 to +2.5) -0.15 +0.45 +0.24 +0.28 +0.20
Rank (0–100%) 41.7 61.1 57.6 59.4 53.0
C. Government Effectiveness
Estimate(-2.5 to +2.5) +0.38 +0.29 +0.20 +0.12 +0.47
Rank (0–100%) 65.4 66.7 62.9 62.8 74.3
D. Regulatory Quality
Estimate(-2.5 to +2.5) -0.01 +0.31 +0.70 +0.27 +0.49
Rank (0–100%) 51.2 64.8 77.5 56.0 69.6
E. Rule of Law
Estimate(-2.5 to +2.5) -0.05 +0.23 +0.41 +0.40 +0.49
Rank (0–100%) 51.7 60.2 69.0 69.2 71.1
F. Control of Corruption
Estimate(-2.5 to +2.5) -0.25 -0.28 -0.30 -0.26 -0.32
Rank (0–100%) 49.3 47.4 47.8 54.6 42.0
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
27. Thailand received a score of 49.8 on the 2005 ESI (footnote 3) and a ranking of
73rd among the 146 rated countries, as compared to the highest score of 75.1 attained by
Finland and the lowest score of 29.2 attained by the Democratic People’s Republic of Korea.
Thailand’s score is near the high end of the range of scores from 33.1 to 55.2 attained by the
23 DMCs included in the Index.
28. As a category C borrower, Thailand is qualified to receive only OCR loans. At the end of
2004 the loan portfolio consisted of one public sector OCR loan with a net loan amount of
$59.3 million. Three loans were closed with an average delay of 39 months.
29. While no TA was approved, there were 8 ongoing advisory TAs, for a total of $5 million.
30. The single loan was not classified as at-risk during 2004. The combined ratings for
implementation progress and development objectives show that loan implementation was
satisfactory. Thailand’s portfolio rating in 2004 was above both the regional and ADB-wide
averages (Tables A3.10 and A3.11)
Table A6.10: Lower Ratings Projects
(number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans
Implementation Progress - - - - -
Development Objectives - - - 2 -
Partly Satisfactory Loans
Implementation Progress 4 3 - 2 -
Development Objectives - - - - -
Potential Problem Loans - - - - -
Projects At Risk (number of loans) - 3 - 4 -
Source: Asian Development Bank management information systems.
Appendix 6 129
Table A6.11: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Weighted Weighted
Group HS S PS U Average HS S PS U Average Average
Thailand - 100.0 - - 2.00 - 100.0 - - 2.00 4.00
Mekong 1.2 90.1 6.2 2.5 1.90 2.5 97.5 - - 2.03 3.93
ADB-Wide 4.5 83.9 6.1 5.5 1.87 1.8 95.5 2.0 0.6 1.98 3.86
HS = highly satisfactory, PS = partly satisfactory, S = satisfactory, U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the following
criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
31. Data on Thailand’s financial performance indicators are provided in Table A6.12. In
2004, contract awards for project loans exceeded expectations, with actual contract awards
totaling $7 million, or 121% of the projected $6 million. The contract award ratio was 28%,
higher than the ADB-wide average of 15% for OCR project loans. Overall disbursement
performance was 100%. The disbursement ratio was 49%, above the ADB-wide average of
18% for all loans. The negative net resource transfer decreased from minus $232 million in
2003 to minus $119.6 million in 2004. Audited project accounts were submitted as required for
the one loan under implementation.
Table A6.12: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 106.4 29.2 27 73.4 20.0 27 79.2 57.0 72 21.4 23.7 111 6.0 7.3 122
Project 56.4 29.2 52 23.4 20.0 85 79.2 57.0 72 21.4 23.7 111 6.0 7.3 122
Program 50.0 - 0 50.0 - 0 - - - - - -
Disbursement 205.8 130.5 63 158.4 139.0 88 91.8 75.8 83 34.8 28.7 82 22.0 24.3 110
Project 155.8 130.5 84 108.4 139.0 128 91.8 75.8 83 34.8 28.7 82 22.0 24.3 110
Program 50.0 - 0 50.0 - 0 - - - - - -
Loan Approvals 100.0 - 0 153.4 - 0 - - - - - -
Project 100.0 - 0 153.4 - 0 - - - - - -
Program - - - - - - - - - -
Disbursement Ratio 28.8 18.3 64 27.1 26.5 98 23.8 35.6 150 25.4 25.5 100 30.3 49.4 163
Project 27.6 23.1 84 25.0 37.1 148 39.0 35.6 91 25.4 25.5 100 30.3 49.4 163
Program 33.3 - 0 33.3 - 0 - - - - - -
Net Resource Transfer (577.4) (72.9) (1,463.0) (232.1) (119.6)
Project (521.2) 26.2 (455.7) (232.1) (119.6)
Program (56.2) (99.1) (1,008.0) - -
Loan Service Payment 708.0 211.9 1,539.5 260.9 144.0
OCR 705.3 209.1 1,536.4 257.3 140.4
ADF 2.7 2.7 3.1 3.6 3.6
TA Projects Approved (no.) 5 5 100 9 6 67 3 3 100 1 2 200 - -
Private Sector Loans (no.) - - - - - - 1 1 100 - -
Private Sector Equity 2 2 100 1 1 100 - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
32. In 2004, 5 project administration missions visited 3 projects for a total of 73 staff-
mission-days, a drop from 205 days in 2003. Mission-days spent per project decreased from
26 days in 2003 to 24 days in 2004. Three TA missions visited 3 TA projects for a total of
7 staff- mission-days, down from 47 days in 2003. Staff-mission-days per TA also decreased
from 6 days in 2003 to 2.3 days in 2004.
130 Appendix 6
4. Viet Nam
33. Viet Nam’s real GDP increased from 7.1% in 2003 to 7.5% in 2004. Its per capita GNI
was $480 in 2003. The total population is estimated at 82.1 million in 2004, and the annual
growth rate from 2002–2004 was 1.4%. The proportion of the population below the national
poverty line was 28.9% in 2002.
34. The World Bank’s 2004 governance indicators (footnote 2) for Viet Nam are given in
Table A6.13.
Table A6.13: Governance indicators for Viet Nam
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) -1.54 -1.36 -1.53 -1.64 -1.31
Rank (0–100%) 7.3 10.6 6.8 4.2 11.5
B. Political Stability
Estimate(-2.5 to +2.5) +0.16 +0.48 +0.40 +0.59 +0.40
Rank (0–100%) 51.9 62.2 62.4 69.1 60.4
C. Government Effectiveness
Estimate(-2.5 to +2.5) -0.31 -0.29 -0.30 -0.17 -0.10
Rank (0–100%) 44.2 47.3 43.0 49.2 57.0
D. Regulatory Quality
Estimate(-2.5 to +2.5) -0.57 -0.68 -0.65 -0.58 -0.56
Rank (0–100%) 27.6 24.5 21.9 24.5 25.4
E. Rule of Law
Estimate(-2.5 to +2.5) -0.59 -0.42 -0.74 -0.81 -0.50
Rank (0–100%) 35.7 42.3 25.1 20.5 34.3
F. Control of Corruption
Estimate(-2.5 to +2.5) -0.74 -0.67 -0.71 -0.60 -0.64
Rank (0–100%) 27.1 34.2 27.4 29.5 30.7
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
35. Viet Nam received a score of 42.3 on the 2005 ESI (footnote 3) and a ranking of
127th among the 146 rated countries, as compared to the highest score of 75.1 attained by
Finland and the lowest score of 29.2 attained by the Democratic People’s Republic of Korea.
Viet Nam’s score is slightly below the middle of the range of scores from 33.1 to 55.2 attained
by the 23 DMCs included in the Index.
36. As a category B1 borrower, Viet Nam is qualified to receive primarily ADF lending with
some OCR lending. At the end of 2004 the loan portfolio consisted of 33 public sector loans
covering 31 projects with a net loan amount of $2 billion, and 94% of the net loan amount was
ADF. There were six program loans. Six loans were approved and three were closed with an
average delay of 40 months. Five loans became effective within an average of 4.5 months from
loan signing.
37. Fifteen TAs were approved in 2004, for a total of $7.3 million—9 advisory TAs and
6 project preparatory TAs. There were 45 ongoing TAs—31 advisory TAs and 14 project
preparatory TAs—for a total of $33 million.
Appendix 6 131
38. The Viet Nam Resident Mission (VRM) was established in 1996, and as of January 2005
its personnel comprised 5 international staff, 8 national officers, and 12 administrative staff.
VRM staff administered 12 of the 33 active loans during 2004, an increase from 8 loans
administered during 2003.
39. By loan amount, 22% of the Viet Nam portfolio was at-risk in 2004, higher than the
18% for the region and 17% ADB-wide. By number of loans, 15% (5 loans) were considered at
risk, compared with 12% for the region and 14% ADB-wide. The combined ratings for
implementation progress and development objectives show that out of 33 loans under
implementation, 94% was satisfactory, and 6% was partly satisfactory. Viet Nam’s portfolio
rating in 2004 was better than both the regional and ADB-wide averages (Tables A6.14 and
A6.15).
Table A6.14: Lower Ratings Projects
(number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans
Implementation Progress - - - 2
Development Objectives - - - -
Partly Satisfactory Loans
Implementation Progress 4 3 2 2
Development Objectives 1 3 2 1
Potential Problem Loans - - - -
Projects At Risk (number of loans) - 6 3 5
Source: Asian Development Bank management information systems.
Table A6.15: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Weighted Weighted
Group HS S PS U Average HS S PS U Average Average
Viet Nam 3.0 90.9 6.1 - 1.97 3.0 97.0 - - 2.03 4.00
Mekong 1.2 90.1 6.2 2.5 1.90 2.5 97.5 - - 2.03 3.93
ADB-Wide 4.5 83.9 6.1 5.5 1.87 1.8 95.5 2.0 0.6 1.98 3.86
HS = highly satisfactory, PS = partly satisfactory, S = satisfactory, U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the following
criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
40. Data on Viet Nam’s financial performance indicators are provided in Table A6.16.
Contract awards for project and program loans did not meet expectations, with actual contract
awards totaling $116 million, or 83% of the projected $139 million. The contract award ratio for
all loans was 10%, lower than the ADB-wide average of 17%. Overall disbursement
performance was good at $182 million, or 86% of the expected amount of $212 million. The
disbursement ratio was 16%, slightly lower than the ADB-wide average of 18%. The net
resource transfer for the year decreased from $216 million in 2003 to $157 million in 2004.
132 Appendix 6
Table A6.16: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 179.3 177.1 99 156.1 70.2 45 239.1 228.8 96 141.7 159.4 112 139.0 116.0 83
Project 129.3 127.1 98 156.1 70.2 45 193.9 178.8 92 101.7 100.2 99 94.0 81.1 86
Program 50.0 50.0 100 - - 45.2 50.0 111 40.0 59.2 148 45.0 34.9 78
Disbursement 215.0 218.9 102 207.2 176.2 85 256.0 231.7 91 218.3 233.2 107 212.0 182.4 86
Project 165.0 171.0 104 207.2 176.2 85 210.9 182.6 87 178.3 174.0 98 167.0 147.4 88
Program 50.0 47.9 96 - - 45.2 49.1 109 40.0 59.2 148 45.0 34.9 78
Loan Approvals 300.2 188.5 63 240.0 243.1 101 335.0 233.5 70 200.0 179.0 90 329.0 296.4 90
Project 300.2 188.5 63 240.0 243.1 101 85.0 123.5 145 155.0 134.0 86 304.0 195.0 64
Program - - - - 250.0 110.0 44 45.0 45.0 100 25.0 101.4 406
Disbursement Ratio 18.2 18.7 103 19.1 17.0 89 22.9 20.8 91 18.4 21.3 116 16.9 15.7 93
Project 15.2 15.9 105 20.0 17.9 90 19.7 17.1 87 16.6 18.6 112 15.7 14.0 89
Program 50.2 48.0 96 - - 95.5 104.0 109 35.7 37.7 106 24.1 31.3 130
Net Resource Transfer 213.1 165.2 220.4 215.9 156.8
Project 166.0 169.1 174.4 162.8 128.8
Program 47.1 (3.9) 46.0 53.2 28.1
Loan Service Payment 5.8 11.0 11.3 17.2 25.5
OCR (0.0) 1.3 1.4 3.8 4.0
ADF 5.8 9.7 9.9 13.5 21.5
TA Projects Approved (no.) 13 12 92 11 10 91 13 15 115 9 15 167 13 15 115
Private Sector Loans (no.) 2 1 50 1 3 300 2 2 100 - - 1 - 0
Private Sector Equity - - - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, PS = private sector, TA = technical assistance.
Source: Asian Development Bank management information systems.
41. In 2004, 56 project administration missions visited 29 projects, for a total of 891 staff-
mission-days, an increase from the 677 days in 2003. Mission-days spent per project increased
from 26 staff-mission days in 2003 to 31 days in 2004. Twenty-eight TA missions visited 12 TA
projects for a total of 228 staff-days, a cut from the 333 days in 2003. Staff-mission-days per TA
increased from 14.5 days in 2003 to 19 days in 2004.
42. Of the 19 loans requiring submission of audited accounts in 2004, 9 fully complied
(47%), 4 complied late (by less than 6 months), 2 partly complied, and 4 loans have not
complied.
43. The latest CPR for Viet Nam was conducted from 12 November to 6 December 2004.
During the CPR, meetings with central and line ministries focused on (i) generic implementation
issues related to recruitment of consultants, local competitive bidding (LCB) procurement,
(ii) and the 2004 contract awards and disbursements. Two workshops were held prior to the
CPR which aimed to discuss the findings of the project procurement related audit undertaken by
OAG in June–July 2004, and to introduce Part 2 of the recently completed Guidelines on ADB-
funded Project Preparation and Implementation to the central and key line ministries.
44. Overall performance of the Viet Nam portfolio measured against ADB-wide performance
indicators has not improved since 2003. According to the CPR, the most critical aspect of the
country’s portfolio performance continues to be the delays encountered during project start-up,
inadvertently caused by delays in the recruitment of consultants and the imperfect arrangement
of the transition from the project preparation phase into the project implementation phase.
Significant delays in the fielding of consultants continue to increase due to the need for EAs to
obtain the government’s approval of the project’s procurement plan and the long time EAs take
to evaluate technical proposals. Weaknesses at the level of project monitoring units (PMUs)
Appendix 6 133
continue to adversely impact the performance of the portfolio. With more delegation of project
implementation responsibilities to the provinces, the implementation capacity at the provincial
level becomes a more critical factor for the design of new projects and that substantial capacity
building support at the provincial level is required to ensure that ADB’s guidelines are
implemented.
45. Sectors issues such as increasing power tariffs, implementation of the Road Act,
identification of state-owned enterprise (SOE) directed lending and the adoption of the decree
on the establishment and operation of microfinance institutions, adoption of the strategy for
participatory irrigation management, and budget for river basin organizations were also
discussed during the CPR. Major developments, on the other hand, included the continued
reduction in elapsed time between TA approval and signing, and the cancellation of
$43.8 million of loan savings under 7 projects.
46. With regards to the 2003-2004 Action Plan, most actions related to project preparatory
TA preparation and processing have been implemented, contrary to that of project processing.
Several agreed actions were not implemented in the area of start-up performance, such as the
timely signing of loan agreements, timely fulfilling loan effectiveness conditions, and early
fielding of consultants while most actions related to procurement and disbursement, counterpart
fund, surplus loan proceeds, and overall portfolio management and monitoring have been
followed through.
47. To improve portfolio performance management, the CPR mission and the Ministry of
Planning and Investment has stressed three critical areas: (i) transition from project preparation
to implementation; (ii) recruitment of consultants; and (iii) capacity of PMUs. Adoption of
(i) a checklist for project preparatory TA design and (ii) a readiness criteria for loan appraisal
and loan negotiations were seen to assist in minimizing start-up delays.
134 Appendix 6
B. Operations 1, South Asia Department
1. Afghanistan
1. Afghanistan’s real GDP growth rate declined from 15.7% in 2003 to 7.5% in 2004. The
total population is estimated at 23.2 million in 2004, and the annual growth rate from 2002–2004
was 1.9%.
2. The World Bank’s 2004 governance indicators (footnote 2) for Afghanistan are given in
Table A6.17.
Table A6.17: Governance Indicators for Afghanistan
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) -1.35 -1.31 -1.76 -1.68 -1.53
Rank (0–100%) 11.2 11.1 2.1 2.6 3.7
B. Political Stability
Estimate(-2.5 to +2.5) -2.03 -2.25 -2.48 -2.06 -1.82
Rank (0–100%) 3.4 1.1 0.6 2.4 4.9
C. Government Effectiveness
Estimate(-2.5 to +2.5) -1.24 -1.43 -1.30 N/A N/A
Rank (0–100%) 9.1 5.0 8.1 N/A N/A
D. Regulatory Quality
Estimate(-2.5 to +2.5) -2.05 -1.80 -3.64 N/A N/A
Rank (0–100%) 2.5 3.1 0.0 N/A N/A
E. Rule of Law
Estimate(-2.5 to +2.5) -1.81 -1.62 -2.31 -1.13 -1.19
Rank (0–100%) 1.0 2.0 0.0 7.6 10.8
F. Control of Corruption
Estimate(-2.5 to +2.5) -1.33 -1.32 -1.56 N/A N/A
Rank (0–100%) 3.9 3.1 1.1 N/A N/A
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
3. The ESI has not been calculated for Afghanistan.
4. As a category A borrower, Afghanistan is qualified to receive only ADF lending. At the
end of 2004 the loan portfolio consisted of six public sector ADF loans covering six projects with
a net loan amount of $518 million, including two program loans. A private sector loan for
$35.0 million and an equity investment for $2.6 million were approved in 2004.
5. Thirteen TAs—10 advisory TAs and 3 project preparatory TAs, and a supplementary
advisory TA were approved in 2004, totaling $13.6 million. The portfolio included 23 ongoing
TAs—17 advisory TAs and 6 project preparatory TAs—for a total of $39.2 million.
6. The Afghanistan resident mission (AFRM) was established in 2003. At the end of 2004,
AFRM personnel included 3 international staff, and 4 national officers, and 3 administrative staff.
As of December 2004, no loan or TA project has been delegated to AFRM.
7. The six loans under implementation were rated satisfactory in both implementation
progress and development objectives (Table A6.18).
Appendix 6 135
Table A6.18: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Weighted Weighted
Group HS S PS U Average HS S PS U Average Average
Afghanistan - 100.0 - - 2.0 - 100.0 - - 2.0 4.0
South Asia 3.8 85.0 5.6 5.6 1.9 1.9 94.8 2.3 0.9 2.0 3.9
ADB-Wide 4.5 83.9 6.1 5.5 1.9 1.8 95.5 2.0 0.6 2.0 3.9
HS = highly satisfactory, PS = partly satisfactory, S = satisfactory, U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the following
criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
8. Data on Afghanistan’s financial performance indicators are provided in Table A6.19.
Contract awards exceeded expectations, with actual contract awards totaling $99.2 million, or
120% of the projected $82.5 million. The contract award ratio was 33.5%, higher than the ADB-
wide average of 15% for all ADF loans. The first tranche release of the new program loan was
released as originally scheduled. Overall disbursement performance was lower than anticipated
at $43.2 million, or 94% of the projected $45.8 million. The disbursement ratio for all loans was
18.4%, above the ADB-wide average of 18%. The net resource transfer for the year decreased
from $54.5 million in 2003 to $40.5 million in 2004.
Table A6.19: Financial performance indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 100.2 49.8 58.4 117 82.5 99.2 120
Project - - 3.0 52.5 69.4 132
Program 100.2 49.8 55.4 111 30.0 29.8 99
Disbursement 100.2 49.8 56.4 113 45.8 43.2 94
Project - - 0.3 15.8 12.0 76
Program 100.2 49.8 56.1 113 30.0 31.2 104
Loan Approvals 167.2 150.0 150.0 100 135.0 170.0 126
Project - 150.0 150.0 100 85.0 115.0 135
Program 167.2 - - 50.0 55.0 110
Disbursement Ratio 66.8 97.2 28.0 29 19.9 18.4 92
Project - - 0.2 9.7 7.3 75
Program 66.8 97.2 109.5 113 45.0 43.5 97
Net Resource Transfer 83.0 54.5 40.5
Project (17.3) (0.9) 10.7
Program 100.2 55.4 29.8
Loan Service Payment 17.3 1.9 2.7
OCR - - -
ADF 17.3 1.9 2.7
TA Projects Approved (no.) 2 12 8 67 14 13 93
Private Sector Loans (no.) - 1 - 0 2 1 50
Private Sector Equity - 2 - 0 2 1 50
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
9. In 2004, three project administration missions to visit two projects were fielded for a total
of 24 staff-mission-days. Mission-days per project averaged 12 days. Three missions visited
four TAs for a total of 17 staff-days, averaging 4.3 days per TA.
136 Appendix 6
10. As the portfolio was in its early stages of implementation, submission of audited
accounts and agency financial statements was not due.
2. Bangladesh
11. Bangladesh’s real GDP growth rate increased from 5.3% in 2003 to 5.5% in 2004. Its per
capita GNI was $400 in 2003. The total population is estimated at 135.2 million in 2004, and the
annual growth rate from 2002–2004 was 1.9%. The proportion of the population below the
national poverty line was 49.8% in 2000.
12. The World Bank’s 2004 governance indicators (footnote 2) for Bangladesh are given in
Table A6.20.
Table A6.20: Governance Indicators for Bangladesh
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) -0.69 -0.57 -0.34 -0.17 -0.33
Rank (0–100%) 28.6 28.8 38.7 44.5 41.9
B. Political Stability
Estimate(-2.5 to +2.5) -1.24 -0.65 -0.55 -0.43 -0.53
Rank (0–100%) 11.7 26.5 28.5 26.7 26.8
C. Government Effectiveness
Estimate(-2.5 to +2.5) -0.72 -0.55 -0.47 -0.38 -0.67
Rank (0–100%) 26.4 31.8 35.5 39.3 22.3
D. Regulatory Quality
Estimate(-2.5 to +2.5) -1.15 -1.05 -0.16 -0.08 -0.54
Rank (0–100%) 13.3 14.8 40.1 41.8 26.5
E. Rule of Law
Estimate(-2.5 to +2.5) -0.86 -0.74 -0.65 -0.72 -0.68
Rank (0–100%) 22.2 27.6 29.9 25.9 27.1
F. Control of Corruption
Estimate(-2.5 to +2.5) -1.09 -0.95 -0.60 -0.40 -0.47
Rank (0–100%) 10.3 16.8 33.9 43.2 35.3
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
13. Bangladesh received a score of 44.1 on the 2005 ESI (footnote 3) and a ranking of
113th among the 146 rated countries, as compared to the highest score of 75.1 attained by
Finland and the lowest score of 29.2 attained by the Democratic People’s Republic of Korea.
Bangladesh’s score is at the middle of the range of scores from 33.1 to 55.2 attained by the
23 DMCs included in the ESI.
14. As a category B1 borrower, Bangladesh is qualified to receive primarily ADF lending with
some OCR lending. At the end of 2004 the loan portfolio consisted of 34 public sector loans
covering 27 projects, with a net loan amount of $2.2 billion. Of the net loan amount, 73.4% was
from ADF and 26.6% from OCR. There were two program loans. Six public and one private
sector loans were approved in 2004 and two were closed, with an average delay of 20 months.
Four loans became effective within an average of five months from loan signing.
Appendix 6 137
15. Eleven TAs were approved in 2004, for a total of $6.3 million—six advisory TAs and five
project preparatory TAs. The portfolio had 36 ongoing TAs—21 advisory TAs and 15 project
preparatory TAs—for a total of $22.4 million.
16. The Bangladesh Resident Mission (BRM) was established in 1982, and as of January
2005 its personnel comprised 15 international staff, 13 national officers, and 26 administrative
staff. During 2004 BRM staff administered 20 of the 34 active loans during 2004, an increase
from 13 loans administered during 2003.
17. By loan amount, 11.8% of the portfolio was in the at-risk category, compared to 6% at-
risk loans in 2003, but well below 19.6% for the region and 17% ADB-wide. Based on the
number of loans, 11.8% (four loans) were considered at risk, compared to 13.1% for the region
and 14.1% ADB-wide. The combined ratings for implementation progress and development
objectives show that while there were no potential problem loans, there were four problem
loans—two partly satisfactory and two unsatisfactory. Bangladesh’s portfolio rating in 2003 was
below than the regional and ADB-wide averages (Tables A6.21 and A6.22).
Table A6.21: Lower Ratings Projects
(number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans
Implementation Progress 1 1 - 1 2
Development Objectives - - - 1 2
Partly Satisfactory Loans -
Implementation Progress 6 3 4 1 2
Development Objectives 5 1 1 - -
Potential Problem Loans - 3 2 - -
Projects At Risk (number of loans) - 7 6 2 4
Source: Asian Development Bank management information systems.
Table A6.22: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Weighted Weighted
Group HS S PS U Average HS S PS U Average Average
Bangladesh 2.9 85.3 5.9 5.9 1.8 2.9 91.2 - 5.9 1.9 3.7
South Asia 3.8 85.0 5.6 5.6 1.9 1.9 94.8 2.3 0.9 2.0 3.9
ADB-Wide 4.5 83.9 6.1 5.5 1.9 1.8 95.5 2.0 0.6 2.0 3.9
HS = highly satisfactory, PS = partly satisfactory, S = satisfactory, U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the following
criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
18. Data on Bangladesh’s financial performance indicators are provided in Table A6.23.
Contract awards did not meet expectations, with actual contract awards for project loans totaling
$156.1 million, or 79% of the projected $197.2 million. The contract award ratio for project loans
was 10.6%, lower than the ADB-wide average of 14.6%. The disbursement performance was
lower than anticipated at $176.8 million, or 91% of the projected $194.9 million. The
disbursement ratio for all loans was 10.7%, below the ADB-wide average of 18%. The annual
net resource transfer decreased from $65.4 million in 2003 to minus $2.2 million in 2004.
138 Appendix 6
19. In 2004, 32 project administration missions visited 21 projects for a total of 627 staff-
mission-days, a decrease from 804 days in 2003. Mission-days per project slightly decreased
from 31 days in 2003 to 29.9 days in 2004. Nine missions visited six TAs for a total of 58 staff-
days, a decline from the 78 days in 2003. Staff-mission-days per TA increased from six days in
2003 to 9.7 days in 2004. Separate missions were fielded for country project implementation
and administration seminar, and loan disbursements.
20. The CPR for Bangladesh took place in March 2004. The CPR noted that the relatively
large and increasing amount of uncommitted loan funds indicates slow and declining project
implementation performance. Loan savings amounting to $60 million was identified. The
declining contract and loan disbursement performance were mainly due to: (i) delays by several
entities; (ii) unrealistic projections for some projects; and (iii) slow response time by ADB.
21. The 2004 CPR action plan aimed for (i) timely loan effectiveness of five loans;
(ii) expeditious Government approvals in the recruitment of consultants; (iii) improved utilization
of loan proceeds; (iv) adoption of new PCP/PP approval process; (v) implementation of new
procurement regulations to improve efficiency and transparency in procurement; (vi) improved
financial management and governance of projects; (vii) enhanced monitoring and evaluation;
(viii) reduction/elimination in the number of “at-risk” projects; (ix) improvement in contract award
and disbursement ratios; and (x) reduction of the TA portfolio.
22. Submission of audited accounts declined in 2004. Of the 22 loans requiring submission
of audited accounts, nine loans (40.9%) fully complied, eight loans complied late (36.4%, all by
less than 6 months), two loans partly complied (9%), and three loans have not complied (14%).
In 2003, 19 loans required submission of audited accounts—14 loans fully complied (74%),
four loans complied late, and one loan has not complied.
Table A6.23: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 288.9 290.6 101 176.3 137.8 78 212.4 202.7 95 209.2 133.3 64 253.4 205.6 81
Project 248.9 252.8 102 176.3 137.8 78 212.4 202.7 95 209.2 133.3 64 197.2 156.1 79
Program 40.0 37.8 95 - - - - - - 56.3 49.5 88
Disbursement 259.3 261.5 101 227.9 191.3 84 167.7 171.1 102 204.2 201.7 99 194.9 176.8 91
Project 219.3 223.8 102 227.9 191.3 84 167.7 171.1 102 204.2 201.7 99 138.7 126.8 91
Program 40.0 37.8 95 - - - - - - 56.3 50.0 89
Loan Approvals 330.0 225.1 68 292.0 297.9 102 440.0 299.8 68 400.0 532.0 133 340.0 229.5 68
Project 280.0 225.1 80 292.0 297.9 102 440.0 299.8 68 310.0 432.0 139 340.0 214.5 63
Program 50.0 - 0 - - - - 90.0 100.0 111 - 15.0
Disbursement Ratio 21.4 21.8 102 19.9 17.3 87 14.3 15.4 108 14.6 15.8 108 10.4 10.7 103
Project 18.8 19.3 103 19.9 17.3 87 14.3 15.4 108 14.6 15.8 108 8.2 8.1 99
Program 99.4 93.9 94 - - - - - - 49.5 50.0 101
Net Resource Transfer 158.4 84.9 56.5 65.4 (2.2)
Project 132.6 99.3 71.5 82.1 (29.7)
Program 25.8 (14.4) (15.1) (16.7) 27.5
Loan Service Payment 103.2 106.4 114.6 136.4 179.0
OCR - 0.4 1.8 1.6 4.1
ADF 103.2 106.0 112.8 134.7 174.9
TA Projects Approved (no.) 10 6 60 13 12 92 10 9 90 13 10 77 10 11 110
Private Sector Loans (no.) 1 1 100 1 - 0 - - - - 1 1 100
Private Sector Equity - - 1 - 0 1 1 100 - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
Appendix 6 139
3. Bhutan
23. Bhutan’s real GDP growth rate increased from 6.5% in 2003 to 7% in 2004. Its per capita
GNI was $660 in 2003. The total population is estimated at 0.8 million in 2004, and the annual
growth rate from 2002–2004 was 2.2%. The proportion of the population below the national
poverty line was 25.3% in 2000.
24. The World Bank’s 2004 governance indicators (footnote 2) for Bhutan are given in Table
A6.24.
Table A6.24: Governance Indicators for Bhutan
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) -1.18 -1.17 -1.63 -1.56 -1.37
Rank (0–100%) 14.6 13.6 4.7 6.8 9.4
B. Political Stability
Estimate(-2.5 to +2.5) +0.84 +0.81 +0.74 +0.74 +1.00
Rank (0–100%) 73.8 73.5 72.1 74.5 82.9
C. Government Effectiveness
Estimate(-2.5 to +2.5) -0.14 +0.43 +1.48 +0.22 +0.33
Rank (0–100%) 53.4 68.2 89.8 67.8 70.4
D. Regulatory Quality
Estimate(-2.5 to +2.5) 0.00 -0.38 +0.25 -0.18 +0.08
Rank (0–100%) 51.7 41.3 56.1 37.5 54.7
E. Rule of Law
Estimate(-2.5 to +2.5) +0.27 +0.22 -0.39 -0.07 -1.19
Rank (0–100%) 59.9 59.2 44.4 57.3 10.8
F. Control of Corruption
Estimate(-2.5 to +2.5) +0.69 +0.88 +0.55 +0.46 N/A
Rank (0–100%) 75.4 79.6 74.7 75.4 N/A
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
25. Bhutan received a score of 53.5 on the 2005 ESI (footnote 3) and a ranking of
43rd among the 146 rated countries, as compared to the highest score of 75.1 attained by
Finland and the lowest score of 29.2 attained by the Democratic People’s Republic of Korea.
Bhutan’s score is near the top end of the range of scores from 33.1 to 55.2 attained by the
23 DMCs included in the Index. Bhutan received the highest ESI ranking among the South Asia
DMCs.
26. As a category A borrower, Bhutan is qualified to receive only ADF lending. At the end of
2004 the loan portfolio consisted of five public sector ADF loans covering five projects, with a
net loan amount of $45 million. No loans were approved or closed during 2004, while one loan
became effective with a 3.5 months delay from loan signing.
27. Five TAs were approved in 2004 for a total of $1.7 million—four advisory TAs and one
project preparatory TA. The portfolio had 11 ongoing TAs—eight advisory TAs and three project
preparatory TAs—for a total of $4.2 million.
28. No loans in the Bhutan portfolio were in the at-risk category. All of the five loans under
administration were rated satisfactory for implementation progress, while one project was rated
140 Appendix 6
highly satisfactory and four were rated satisfactory in development objectives. There was no
potential problem or problem loan in the portfolio. Bhutan’s portfolio rating in 2004 was above
both regional and ADB-wide averages (Table A6.25).
Table A6.25: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Weighted Weighted
Group HS S PS U Average HS S PS U Average Average
Bhutan - 100 - - 2.0 20 80 - - 2.2 4.2
South Asia 3.8 85.0 5.6 5.6 1.9 1.9 94.8 2.3 0.9 2.0 3.9
ADB-Wide 4.5 83.9 6.1 5.5 1.9 1.8 95.5 2.0 0.6 2.0 3.9
HS = highly satisfactory, PS = partly satisfactory, S = satisfactory, U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the following
criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
29. Data on Bhutan’s financial performance indicators are provided in Table A6.26. Contract
awards for project loans were 105% of the projected $9.1 million. The contract award ratio for
project loans in 2004 was 65.1%, above the ADB-wide average of 13.3% for ADF project loans.
Overall disbursement performance for project loans was short of expectations, $7 million of the
projected $8.5 million. The disbursement ratio was 25.7%, above the ADB-wide average of
18%. The net resource transfer for the year increased from $3.3 million in 2003 to $5.3 million in
2004.
Table A6.26: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 2.7 10.1 374 8.8 7.3 83 12.7 14.6 115 8.4 7.5 89 9.1 9.6 105
Project 1.2 5.2 433 7.4 7.3 99 6.4 8.0 125 8.4 7.5 89 9.1 9.6 105
Program 1.5 4.9 327 1.4 - 0 6.3 6.5 103 - - - -
Disbursement 2.0 6.9 345 8.1 6.7 83 12.1 13.9 115 5.8 4.7 81 8.5 7.0 82
Project 0.5 2.0 400 6.7 6.7 100 5.9 7.3 124 5.8 4.7 81 8.5 7.0 82
Program 1.5 4.9 327 1.4 - 0 6.3 6.5 103 - - - -
Loan Approvals 12.5 19.6 157 6.6 7.0 106 - - - 9.4 10.0 - 0
Project 7.5 9.6 128 6.6 7.0 106 - - - 9.4 10.0 - 0
Program 5.0 10.0 200 - - - - - - - -
Disbursement Ratio 8.9 16.3 183 20.1 16.9 84 37.9 43.3 114 28.7 23.3 81 22.9 25.7 112
Project 2.4 6.4 267 19.6 20.1 103 22.7 28.4 125 28.7 23.3 81 22.9 25.7 112
Program 99.1 42.6 43 22.5 - 0 101.9 105.7 104 - - - -
Net Resource Transfer 5.8 5.7 12.8 3.3 5.3
Project 1.0 5.8 6.4 3.5 5.5
Program 4.9 (0.1) 6.4 (0.1) (0.1)
Loan Service Payment 1.0 1.0 1.0 1.4 1.7
OCR - - - - -
ADF 1.0 1.0 1.0 1.4 1.7
TA Projects Approved (no.) 4 5 125 4 5 125 2 5 250 4 4 100 5 5 100
Private Sector Loans (no.) - - - - - - - - - -
Private Sector Equity - - - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
Appendix 6 141
30. In 2004, eight project administration missions visited five projects, for a total of 85 staff-
mission-days, from 68 days in 2003. Mission-days per project increased remained at 17 days as
in 2003. No TA missions were fielded, as compared to six missions totaling 30 staff-days in
2003.
31. The most recent CPR for Bhutan took place in November 2004. One of the suggestions
put forward by the mission is for a government-initiated implementation review of the ADB
portfolio and to have measures that will ensure timely achievement of financial and physical
objectives of the portfolio. The mission produced an action plan to further strengthen portfolio
performance and the 2005 lending and non-lending program. The plan identified overall portfolio
and project-specific issues requiring action. The action plan requires: (i) all project directors and
key decision-makers to be familiar with the stipulations of ADB’s safeguard policies on
environment, involuntary resettlement and indigenous peoples; (ii) project staff of ongoing
projects to have a tenure of at least three years in the project; (iii) submission to ADB of the
budgetary allocation of all ADB-financed projects; (iv) timely submission of audited financial
statements; (v) full authority of EAs and IAs to approve draft bid documents regardless of
contract value without referring to agencies outside of their line ministry; and (vi) authority of
EAs and IAs to approve the award of contracts within ADB’s DS/IS limit without referring to
agencies outside of their line ministry.
32. It was noted that 10 of the 15 actions identified in the 2003 CPR has been fully complied
with, while two were in partial compliance and one was ongoing. Partial compliance referred to
the use of project steering committee mechanism and timely submission of withdrawal
applications/contract awards.
33. The submission of audited accounts showed a decline in 2004. Of the four loans
requiring submission of audited accounts, two loans fully complied (50%) and two loans
complied late (by less than 6 months). In 2003, four loans required audited accounts—
three loans fully complied (75%) and one loan complied late (by less than 6 months).
4. India
34. India’s real GDP growth rate declined from 8.5% in 2003 to 6.5% in 2004. Its per capita
GNI was $530 in 2003. The total population is estimated at 1,091 million in 2004, and the
annual growth rate from 2002–2004 was 1.5%. The proportion of the population below the
national poverty line was 28.6% in 2000.
35. The World Bank’s 2004 governance indicators (footnote 2) for India are given in Table
A6.27.
142 Appendix 6
Table A6.27: Governance Indicators for India
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) +0.27 +0.38 +0.45 +0.26 +0.28
Rank (0–100%) 53.9 60.6 62.8 58.6 60.7
B. Political Stability
Estimate(-2.5 to +2.5) -0.81 -0.93 -0.40 -0.42 -0.77
Rank (0–100%) 24.3 21.6 37.0 27.3 18.9
C. Government Effectiveness
Estimate(-2.5 to +2.5) -0.04 -0.11 -0.07 -0.14 -0.14
Rank (0–100%) 55.8 55.7 52.7 50.8 55.3
D. Regulatory Quality
Estimate(-2.5 to +2.5) -0.59 -0.35 -0.17 -0.08 -0.09
Rank (0–100%) 26.6 43.4 38.5 41.8 44.2
E. Rule of Law
Estimate(-2.5 to +2.5) -0.09 +0.04 +0.22 +0.21 -0.01
Rank (0–100%) 50.7 55.6 62.0 67.0 56.6
F. Control of Corruption
Estimate(-2.5 to +2.5) -0.31 -0.36 -0.25 -0.17 -0.31
Rank (0–100%) 47.3 43.4 49.5 59.6 43.3
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
36. India received a score of 45.2 on the 2005 ESI (footnote 3) and a ranking of 101st among
the 146 rated countries, as compared to the highest score of 75.1 attained by Finland and the
lowest score of 29.2 attained by the Democratic People’s Republic of Korea. India’s score is just
above the midpoint of the range of scores from 33.1 to 55.2 attained by the 23 DMCs included
in the ESI.
37. As a category B2 borrower, India is qualified to receive primarily OCR lending, with
some ADF lending. At the end of 2004 the loan portfolio consisted of 32 public sector OCR
loans covering 28 projects with a net loan amount of $6.3 billion. There were four program
loans. Five public sector and one private sector loans were approved in 2004, with three equity
investments. None was closed. Three loans became effective within an average of 3.5 months
from loan signing.
38. Sixteen TAs were approved in 2004, for a total of $11.2 million—six advisory TAs and
10 project preparatory TAs. The portfolio has 64 ongoing TAs—39 advisory TAs and 25 project
preparatory TAs—for a total of $45.3 million.
39. The India Resident Mission (INRM) was established in 1992 and at the end of 2004 its
personnel comprised 7 international staff, 13 national officers, and 19 administrative staff.
During 2004 INRM staff administered 19 of the 32 active loans during 2004, an increase from
14 loans administered during 2003.
40. By loan amount, 31.3% of the India portfolio was in the at-risk category in 2004, a
decline from the 15% at-risk loans in 2003 and below the 19.8% for the region and the ADB-
wide average of 17%. Based on the number of loans, 25% of the portfolio (eight loans) was
considered at risk, compared with 13.1 for the region and 14.1% ADB-wide. The combined
ratings for implementation progress and development objectives show that while there were no
potential problem loans, there were eight problem loans—two partly satisfactory and
Appendix 6 143
six unsatisfactory—compared with four problem loans in 2003. India’s portfolio performance
rating in 2004 was consistent with both the overall regional and ADB-wide averages
(Table A6.28 and Table A6.29).
Table A6.28: Lower Ratings Projects
(number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans
Implementation Progress 2 3 1 3 6
Development Objectives 1 1 - - -
Partly Satisfactory Loans
Implementation Progress 2 3 2 - 1
Development Objectives 1 - 5 2 2
Potential Problem Loans - 1 - - -
Projects At Risk (number of loans) - 7 8 4 8
Source: Asian Development Bank management information systems.
Table A6.29: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Weighted Weighted
Group HS S PS U Average HS S PS U Average Average
India 3.1 75.0 3.1 18.8 2.0 - 93.8 6.2 - 1.9 3.9
South Asia 3.8 85.0 5.6 5.6 1.9 1.9 94.8 2.3 0.9 2.0 3.9
ADB-Wide 4.5 83.9 6.1 5.5 1.9 1.8 95.5 2.0 0.6 2.0 3.9
HS = highly satisfactory, PS = partly satisfactory, S = satisfactory, U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the
following criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
41. Data on India’s financial performance indicators are provided in Table A6.30. Contract
awards for project and program loans did not meet expectations, with actual contract awards
totaling $550.5 million, or 67% of the projected $823.2 million. Contract awards for project loans
totaled $505.5 million, or 61% of the projected $823.2 million. The contract award ratio for
project loans in 2004 was 12.5%, below the ADB-wide average of 15.3% for OCR project loans.
Overall disbursement performance was 87.7% of the projected $435.0 million. The
disbursement ratio (without program loans) was 11.8%. The disbursement ratio including
program loans was 12.1%, lower than the ADB-wide average of 18%. The negative net
resource transfer decreased marginally from minus $1.19 billion in 2003 to minus $1.05 billion in
2004.
42. In 2004, 59 project administration missions visited 21 projects for a total of 790 staff-
mission-days, an increase from the 540 days in 2003. Mission-days spent per project increased
from 30 days in 2003 to 37.6 days in 2004. Twenty-four TA missions visited 11 TAs for a total of
124 staff-days, below the 192 days in 2003. Staff-mission-days per TA increased from nine days
in 2003 to 11.3 days in 2004. Separate missions were fielded for country project implementation
and administration seminar, and loan disbursement.
144 Appendix 6
Table A.30: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 286.2 455.7 159 418.2 124.3 30 928.8 794.4 86 1,094.7 748.6 68 823.2 550.5 67
Project 211.2 305.7 145 293.2 124.3 42 738.8 502.4 68 877.7 441.6 50 823.2 505.5 61
Program 75.0 150.0 200 125.0 - 0 190.0 292.0 154 217.0 307.0 141 - 45.0
Disbursement 412.6 487.0 118 470.6 269.8 57 588.9 576.5 98 752.4 658.2 87 435.0 381.3 88
Project 337.6 335.5 99 345.6 269.8 78 398.9 283.0 71 535.4 351.2 66 435.0 336.3 77
Program 75.0 151.5 202 125.0 - 0 190.0 293.5 154 217.0 307.0 141 - 45.0
Loan Approvals 1,330.0 1,150.0 86 1,540.0 1,500.0 97 1,125.0 1,163.6 103 1,640.0 1,430.0 87 1,760.0 1,200.0 68
Project 1,230.0 1,000.0 81 1,140.0 1,350.0 118 925.0 933.6 101 1,590.0 1,280.0 81 1,110.0 1,075.0 97
Program 100.0 150.0 150 400.0 150.0 38 200.0 230.0 115 50.0 150.0 300 650.0 125.0 19
Disbursement Ratio 21.8 22.2 102 19.0 11.9 63 17.4 17.9 103 20.7 20.0 97 10.2 12.1 119
Project 20.6 18.7 91 15.5 13.3 86 13.4 10.9 81 16.2 12.5 77 10.6 11.8 111
Program 30.0 37.9 126 50.3 - 0 47.7 46.7 98 64.8 63.3 98 - 14.9
Net Resource Transfer (107.4) (202.8) (119.4) (1,190.7) (1,046.4)
Project (152.3) (89.3) (280.8) (749.9) (1,017.3)
Program 44.9 (113.5) 161.4 (440.8) (29.1)
Loan Service Payment 594.4 472.6 695.9 1,848.9 1,427.7
OCR 594.4 472.6 695.9 1,848.9 1,427.7
ADF - - - - -
TA Projects Approved (no.) 12 16 133 16 12 75 26 26 100 16 22 138 18 16 89
Private Sector Loans (no.) - - - - - 1 2 2 1 1
Private Sector Equity - - 1 - - 2 2 - 2 3
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
43. The INRM conducted the most recent CPR during October–November 2004. The CPR
identified a number of project implementation issues that adversely affected portfolio
performance. At the time of the mission, nine of the ongoing projects in India were at risk. In
most cases, it was found that the quality of projects at entry is poor, leading to start-up and
implementation delays exceeding two years. Based on an analysis of 30 closed projects, the
average time taken for implementation has been 6.1 years instead of 3.7 years as estimated at
appraisal. The CPR identified several crucial issues in portfolio performance as follows:
(i) inadequate quality of project design; (ii) delayed establishment and full staffing of PMUs;
(iii) inadequate delegation of authority to PMUs; (iv) delays in recruitment and fielding of
consultants; (v) delays in land acquisition and shifting of utilities affecting commence of
construction activities; (vi) lack of familiarity with ADB procurement procedures; (vii) frequent
turnover of key PIU staff; and (viii) inadequate attention to compliance with policy covenants.
An action plan was drafted to reduce the number of loans at risk from 9 to 4.
44. The mission also reviewed the status of the 2003 CPR action plan that had identified
three actions for immediate implementation, one for medium term and three project-specific
plans. Of the three for immediate implementation, one has been fully complied (requiring
immediate signing and effectiveness of loan agreements), one was partially complied (timely
submission of audited project accounts and agency financial statements) and one has not
complied (timely credit of ADB disbursements to second general imprest account).
45. Submission of audited accounts improved in 2004. Of the 18 loans requiring submission
of audited accounts, eight loans fully complied (44.4%), three complied late (two by less than six
months), two partly complied, and five have not complied. In 2003, 18 loans required audited
Appendix 6 145
accounts—three loans fully complied (17%), six loans complied late, two partly complied and
seven loans have not complied.
5. The Maldives
46. Maldives’ real GDP growth rate increased from 8.4% in 2003 to 8.8% in 2004. Its per
capita GNI was $2,300 in 2003. The total population is estimated at 0.29 million in 2004, and the
annual growth rate from 2002–2004 was 2.4%. The proportion of the population below the
national poverty line was 43% (footnote 1).
47. The World Bank’s 2004 governance indicators (footnote 2) for the Maldives are given in
Table A6.31.
Table A6.31: Governance Indicators for Maldives
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) -1.07 -0.74 -0.94 -1.05 -0.98
Rank (0–100%) 19.9 24.7 19.4 16.8 21.5
B. Political Stability
Estimate(-2.5 to +2.5) +0.82 +1.32 N/A N/A N/A
Rank (0–100%) 72.3 93.0 N/A N/A N/A
C. Government Effectiveness
Estimate(-2.5 to +2.5) +0.47 +0.52 +0.45 +0.55 -0.06
Rank (0–100%) 66.8 71.1 70.4 77.0 59.2
D. Regulatory Quality
Estimate(-2.5 to +2.5) 0.00 +0.71 +0.07 +0.21 +0.23
Rank (0–100%) 51.7 71.9 50.8 51.6 62.4
E. Rule of Law
Estimate(-2.5 to +2.5) -0.57 +0.28 -0.64 -0.65 N/A
Rank (0–100%) 36.7 61.2 31.6 30.8 N/A
F. Control of Corruption
Estimate(-2.5 to +2.5) +0.12 -0.05 -0.45 -0.55 N/A
Rank (0–100%) 60.6 56.1 39.8 33.9 N/A
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
Source: Daniel Kaufmann, Aart Kraay, and Massimo Mastruzzi. 2005. Governance Matters IV: Governance
Indicators for 1996–2004. May. The World Bank.
48. There is no environmental sustainability index for the Maldives.
49. As a category A borrower, Maldives is qualified to receive only ADF lending. At the end
of 2004 the loan portfolio consisted of six public sector ADF loans covering six projects with a
net loan amount of $48 million. There were no program loans. One loan was closed in 2004,
none was approved, while one became effective within three months from loan signing.
50. Three TAs were approved in 2004—two advisory TAs and one project preparatory TA—
totaling $1.0 million. The portfolio had 11 ongoing TAs—eight advisory TAs and three project
preparatory TAs—for a total of $3.3 million.
51. By loan amount, 12.1% of the Maldives portfolio was in the at-risk category in 2004, a
deterioration from 11% in 2003 but still below 19.8% for the region and 17% ADB-wide. Based
on the number of loans, 16.7% (one loan) was considered at risk compared with 13.1% for the
146 Appendix 6
region and 14.1% ADB-wide. The Maldives’ portfolio rating in 2004 was lower than the regional
and ADB-wide averages (Table A6.32 and Table A6.33).
Table A6.32: Lower Ratings Projects
(number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans
Implementation Progress - - - 1 1
Development Objectives - - - - -
Partly Satisfactory Loans
Implementation Progress - - - - -
Development Objectives - - - - -
Potential Problem Loans - 1 - - -
Projects At Risk (number of loans) - 1 - 1 1
Source: Asian Development Bank management information systems.
Table A6.33: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Weighted Weighted
Group HS S PS U Average HS S PS U Average Average
Maldives - 83.3 - 16.7 1.7 - 100.0 - - 2.0 3.7
South Asia 3.8 85.0 5.6 5.6 1.9 1.9 94.8 2.3 0.9 2.0 3.9
ADB-Wide 4.5 83.9 6.1 5.5 1.9 1.8 95.5 2.0 0.6 2.0 3.9
HS = highly satisfactory, PS = partly satisfactory, S = satisfactory, U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the
following criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
52. Data on Maldives’ financial performance indicators are provided in Table A6.34.
Contract awards did not meet expectations, with actual contract awards totaling $0.8 million, or
6.5% of the projected $11.8 million. The contract award ratio in 2004 was 2.4%, below the ADB-
wide average of 13.3% for ADF project loans. Overall disbursement performance was also
below projections, with actual disbursement at $2.2 million or 70.9% of the projected
$3.1 million. The disbursement ratio was 6.9%, below the ADB-wide average of 18%. The net
resource transfer decreased from $3.9 million in 2003 to $0.94 million in 2004.
Appendix 6 147
Table A6.34: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 6.7 7.5 112 2.8 3.3 118 3.3 4.1 124 13.1 1.8 14 11.8 0.8 7
Project 6.7 7.5 112 2.8 3.3 118 3.3 4.1 124 13.1 1.8 14 11.8 0.8 7
Program - - - - - - - - - -
Disbursement 1.7 1.3 76 3.3 2.7 82 3.7 6.3 170 5.6 4.9 88 3.1 2.2 71
Project 1.7 1.3 76 3.3 2.7 82 3.7 6.3 170 5.6 4.9 88 3.1 2.2 71
Program - - - - - - - - - -
Loan Approvals - - 15.0 17.5 117 5.0 5.0 100 6.0 6.0 100 6.0 - 0
Project - - 15.0 17.5 117 5.0 5.0 100 6.0 6.0 100 6.0 - 0
Program - - - - - - - - - -
Disbursement Ratio 8.3 6.3 76 17.8 14.9 84 11.3 19.6 173 16.6 17.5 105 7.1 6.9 97
Project 8.3 6.3 76 17.8 14.9 84 11.3 19.6 173 16.6 17.5 105 7.1 6.9 97
Program - - - - - - - - - -
Net Resource Transfer 0.7 2.2 5.6 3.9 0.9
Project 0.7 2.2 5.6 3.9 0.9
Program - - - - -
Loan Service Payment 0.6 0.6 0.8 1.0 1.2
OCR - - - - -
ADF 0.6 0.6 0.8 1.0 1.2
TA Projects Approved (no.) 3 3 100 2 3 150 3 3 100 3 3 100 3 3 100
Private Sector Loans (no.) - - - - - - - - - -
Private Sector Equity - - - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
53. In 2004, seven project administration missions visited five projects, for a total of
101 staff-mission-days, higher than the 60 days in 2003. Mission-days spent per project
increased from 12 days in 2003 to 20.2 days in 2004. There were no TA missions fielded in
2004 compared to the seven TA missions which visited six TAs in 2003 for a total of 22 staff-
days. Separate mission was fielded for loan disbursement.
54. The most recent CPR for the Maldives was conducted in November 2004. Major issues
in portfolio performance were: (i) insufficient and weak staffing due to lack of qualified and
available personnel, leading to difficulties in fielding of ADB review missions; (ii) delays in
signing of TA letters; (iii) difficulties in coordinating among line ministries; (iv) delayed
processing of draft legal framework/bills for project implementation; and (v) delays in
procurement and recruitment of consultants. The CPR action plan included: (i) holding of
training and seminars for government officials to enhance familiarity with ADB guidelines and
project implementation work, utilization of advance procurement, and stricter rules on the
submission of audited accounts; (ii) simplifying procedures for the signing of TA letters;
(iii) regular monitoring by the EA/MOFT of implementation progress; and (iv) establishing project
coordination committees to coordinate project activities.
55. Submission of audited accounts declined in 2004. Of the five loans requiring submission
of audited accounts, four loans complied late (by less than 6 months), and one loan has not
complied. In 2003, four loans required audited accounts—one loan fully complied (25%),
two loans complied late, and one loan partly complied.
148 Appendix 6
6. Nepal
56. Nepal’s real GDP growth rate increased from 2.9% in 2003 to 3.3% in 2004. Its per
capita GNI was $240 in 2003. The total population is estimated at 24.8 million in 2004, and the
annual growth rate from 2002–2004 was 2.1%. The proportion of the population below the
national poverty line was 42% (footnote 1).
57. The World Bank’s 2004 governance indicators (footnote 2) for Nepal are given in Table
A6.35.
Table A6.35: Governance Indicators for Nepal
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) -1.00 -0.52 -0.12 -0.01 +0.14
Rank (0–100%) 22.3 32.8 46.6 50.3 57.1
B. Political Stability
Estimate(-2.5 to +2.5) -1.74 -1.64 -1.13 -0.63 -0.35
Rank (0–100%) 5.3 6.5 12.7 23.0 34.8
C. Government Effectiveness
Estimate(-2.5 to +2.5) -0.90 -0.45 -0.62 -1.02 -0.38
Rank (0–100%) 17.8 39.3 29.0 10.4 40.8
D. Regulatory Quality
Estimate(-2.5 to +2.5) -0.60 -0.51 -0.39 -0.34 -0.22
Rank (0–100%) 25.1 33.7 29.9 33.2 35.9
E. Rule of Law
Estimate(-2.5 to +2.5) -0.82 -0.42 -0.36 -0.25 -0.36
Rank (0–100%) 24.2 42.3 47.1 49.7 39.2
F. Control of Corruption
Estimate(-2.5 to +2.5) -0.61 -0.37 -0.56 -0.59 -0.28
Rank (0–100%) 33.5 42.3 36.6 30.6 48.0
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
58. Nepal received a score of 47.7 on the 2005 ESI (footnote 3) and a ranking of 85th among
the 146 rated countries, as compared to the highest score of 75.1 attained by Finland and the
lowest score of 29.2 attained by the Democratic People’s Republic of Korea. Nepal’s score is
just above the middle of the range of scores from 33.1 to 55.2 attained by the 23 DMCs included
in the ESI.
59. As a category A borrower, Nepal is qualified to receive only ADF lending. At the end of
2004 the loan portfolio for Nepal consisted of 23 public sector ADF loans covering 22 projects
with a net loan amount of $714 million. There were three program loans. Five loans were
approved in 2004 while four were closed. Two loans became effective, with an average delay of
six months from loan signing.
60. Eight TAs were approved in 2004, for a total of $3.2 million—six advisory TAs and
two project preparatory TAs. The portfolio had 27 ongoing TAs—19 advisory TAs and 8 project
preparatory TAs—for a total of $15.6 million.
Appendix 6 149
61. The Nepal Resident Mission (NRM) was established in 1989 and as of January 2005 its
personnel comprised 4 international staff, 10 national officers, and 11 administrative staff.
During 2004 NRM staff administered 7 of the 23 active loans during 2004, the same as in 2003.
62. By loan amount, 42% of Nepal’s portfolio was in the at-risk category in 2004, a decline
from the 31% at-risk loans in 2003 and well above the 19.8% for the region and 17% ADB-wide.
Based on the number of loans, 26.1% of the portfolio (six loans) was considered at risk,
compared with 13.1% for the region and 14.1% ADB-wide. The combined ratings for
implementation progress and development objectives show one potential problem loan and
five problem loans—four partly satisfactory and one unsatisfactory—a decline from the
three problem and one potential problem loans in 2003. Nepal’s portfolio rating in 2004 was
below the regional and ADB-wide averages (Table A6.36 and Table A6.37).
Table A6.36: Lower Ratings Projects
(number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans
Implementation Progress 1 1 1 1 1
Development Objectives - - - - -
Partly Satisfactory Loans
Implementation Progress 3 1 1 1 3
Development Objectives 2 2 3 1 2
Potential Problem Loans - 2 1 1 1
Projects At Risk (number of loans) - 5 6 4 6
Source: Asian Development Bank management information systems.
Table A6.37: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Weighted Weighted
Group HS S PS U Average HS S PS U Average Average
Nepal 4.3 78.3 13.0 4.3 1.8 - 91.3 8.7 - 1.9 3.7
South Asia 3.8 85.0 5.6 5.6 1.9 1.9 94.8 2.3 0.9 2.0 3.9
ADB-Wide 4.5 83.9 6.1 5.5 1.9 1.8 95.5 2.0 0.6 2.0 3.9
HS = highly satisfactory, PS = partly satisfactory, S = satisfactory, U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the
following criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
63. Data on Nepal’s financial performance indicators are provided in Table A6.38. Contract
awards were below expectations, with actual contract awards totaling $38.2 million, or about
51.7% of the projected $73.8 million for all loans. Contract awards for project loans were
$38.2 million, or 61.3% of the projected $62.3 million. The contract award ratio for project loans
was 7.6%, well below ADB-wide average of 13.3% for ADF project loans. Overall disbursement
performance was 57% of projections. The disbursement ratio (without program loans) was
4.8%. The disbursement ratio including program loans was 4.4%, far below the ADB-wide
average of 18%. The negative net resource transfer increased from minus $0.4 million in 2003
to minus $17.3 million in 2004.
150 Appendix 6
Table A6.38: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 51.8 48.3 93 28.5 36.3 127 32.1 13.2 41 46.9 39.0 83 73.8 38.2 52
Project 27.8 24.8 89 23.5 24.4 104 32.1 13.2 41 37.9 19.0 50 62.3 38.2 61
Program 24.0 23.5 98 5.0 11.9 238 - - 9.0 20.0 222 11.5 - 0
Disbursement 97.7 91.4 94 56.0 57.2 102 28.3 28.2 100 33.7 33.6 100 38.6 22.0 57
Project 72.7 67.0 92 51.0 45.3 89 28.3 28.2 100 24.7 13.9 56 27.1 22.0 81
Program 25.0 24.3 97 5.0 11.9 238 - - 9.0 19.7 219 11.5 - 0
Loan Approvals 80.0 173.3 217 120.0 95.3 79 90.0 60.0 67 115.0 94.0 82 100.0 110.0 110
Project 60.0 173.3 289 100.0 65.3 65 90.0 60.0 67 90.0 54.0 60 100.0 110.0 110
Program 20.0 - 0 20.0 30.0 150 - - 25.0 40.0 160 - -
Disbursement Ratio 31.0 37.0 119 10.8 16.6 154 7.3 8.4 115 7.6 7.1 93 6.8 4.4 65
Project 26.3 30.2 115 10.0 14.4 144 7.7 8.9 116 5.8 3.3 57 5.1 4.8 94
Program 59.9 97.1 162 25.0 39.7 159 - - 47.2 36.5 77 27.5 - 0
Net Resource Transfer 64.5 30.7 (2.6) (0.4) (17.3)
Project 43.4 22.2 1.1 (16.1) (12.3)
Program 21.0 8.5 (3.7) 15.6 (5.0)
Loan Service Payment 26.9 26.5 30.8 34.0 39.3
OCR - 0.0 - - -
ADF 26.9 26.5 30.8 34.0 39.3
TA Projects Approved (no.) 10 7 70 5 5 100 10 9 90 8 8 100 13 8 62
Private Sector Loans (no.) - - - - - - - - - -
Private Sector Equity - - - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
64. In 2004, 33 project administration missions visited 19 projects, for a total of 588 staff-
mission-days, down from the 787 days in 2003. Mission-days spent per project declined from
35 days in 2003 to 30.9 days in 2004. Ten TA missions visited 7 TAs for a total of 80 staff-days,
lower than the 210 days in 2003. Staff-mission-days per TA also decreased from 12 days in
2003 to 11.4 days in 2004.
65. The last CPR was led by NRM in August 2004 and focused on overarching issues rather
than project specific issues. Although several indicators reflected some improvement, the
overall performance remained quite weak, and continued to be plagued by political, economic,
and security uncertainties. Key improvements in portfolio performance were the contract award
ratio, less number of projects at risk, and less social and environmental problems. Disbursement
ratio and a continuing upward trend in start-up delays were the areas of deterioration identified
in the CPR.
66. Compliance was moderate to the 2003 action plan. Out of 12 specific actions, six were
complied with, two are ongoing and four remained pending. For 2004, a time-bound action plan,
with a total of 13 actions, was prepared. The actions include those that were pending from the
2003 CPR, relevant actions in the government’s current immediate action plan, and some new
actions that emerged from the mission workshops. The actions identified came under four
topics: (i) quality-at-entry and quality-of-supervision, (ii) procurement management, (iii) financial
management, and (iv) governance. A midterm review of the action plan will be undertaken in
March 2005.
67. Submission of audited accounts slightly improved in 2004. Of the 11 loans requiring
submission of audited accounts, nine loans fully complied (81.8%), one loan complied late
Appendix 6 151
(by less than six months), and one loan has not complied. In 2003, 12 loans required
submission of audited accounts—eight loans fully complied (75%), three loans complied late,
and one loan partly complied.
7. Pakistan
68. Pakistan’s real GDP growth rate increased from 5.1% in 2003 to 6.4% in 2004. Its per
capita GNI was $470 in 2003. The total population is estimated at 148.7 million in 2004, and the
annual growth rate from 2002–2004 was 2%. The proportion of the population below the
national poverty line was 32.6% (footnote 1).
69. The World Bank’s 2004 governance indicators (footnote 2) for Pakistan are given in
Table A6.39.
Table A6.39: Governance Indicators for Pakistan
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) -1.31 -1.10 -1.53 -0.62 -0.98
Rank (0–100%) 11.7 16.2 6.8 31.9 21.5
B. Political Stability
Estimate(-2.5 to +2.5) -1.59 -1.40 -0.60 -0.88 -1.21
Rank (0–100%) 6.3 13.0 25.5 18.8 10.4
C. Government Effectiveness
Estimate(-2.5 to +2.5) -0.57 -0.53 -0.54 -0.69 -0.40
Rank (0–100%) 32.7 32.8 32.8 22.4 38.5
D. Regulatory Quality
Estimate(-2.5 to +2.5) -1.03 -0.80 -0.58 -0.15 -0.57
Rank (0–100%) 15.8 21.4 24.1 39.7 24.3
E. Rule of Law
Estimate(-2.5 to +2.5) -0.78 -0.71 -0.62 -0.72 -0.44
Rank (0–100%) 26.1 28.6 32.6 25.9 38.0
F. Control of Corruption
Estimate(-2.5 to +2.5) -0.87 -0.81 -0.80 -0.76 -0.98
Rank (0–100%) 20.2 25.5 22.6 19.7 12.7
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
70. Pakistan received a score of 39.9 on the 2005 ESI (footnote 3) and a ranking of
131st among the 146 rated countries, as compared to the highest score of 75.1 attained by
Finland and the lowest score of 29.2 attained by the Democratic People’s Republic of Korea.
Pakistan’s score is well below the midpoint of the range of scores from 33.1 to 55.2 attained by
the 23 DMCs included in the Index.
71. As a category B1 borrower, Pakistan is qualified to receive primarily OCR lending with
some ADF lending. At the end of 2004 the loan portfolio consisted of 61 public sector loans
covering 38 projects with a net loan amount of $5.1 billion. Of the net loan amount, 65.3% was
from OCR and 44.7% was from ADF. There were 17 program loans. Eleven loans were
approved in 2004 and six were closed, with an average delay of 16.4 months. Nine loans
became effective within an average of 6.4 months from loan signing.
152 Appendix 6
72. Twenty-two TAs were approved in 2004, for a total of $28.9 million—16 advisory TAs
and six project preparatory TAs. The portfolio had 61 ongoing TAs—43 advisory TAs and
18 project preparatory TAs—for a total of $52.8 million.
73. The Pakistan Resident Mission (PRM) was established in 1989 and as of January 2005
its personnel comprised 5 international staff, 13 national officers, and 17 administrative staff.
During 2004 PRM staff administered 20 of the 61 active loans during 2004, an increase from the
16 loans administered in 2003.
74. By loan amount, 13.7% of Pakistan’s portfolio was in the at-risk category in 2004, an
improvement from 23% at-risk loans in 2003 and above 19.8% for the region and 17% ADB-
wide. Based on the number of loans, 11.5% of the portfolio (seven loans) was considered at
risk, compared with 13.1% for the region and 14.1% ADB-wide. The combined ratings for
implementation progress and development objectives show that there was one potential
problem loan, and six problem loans—five partly satisfactory and one unsatisfactory—compared
with no potential problem loans and 10 problem loans in 2003. Pakistan’s portfolio rating in 2004
was consistent with both the regional and ADB-wide averages (Table A6.40 and Table A6.41).
Table A6.40: Lower Ratings Projects
(number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans
Implementation Progress 3 2 1 3 1
Development Objectives - - - - -
Partly Satisfactory Loans
Implementation Progress 11 9 7 5 5
Development Objectives 5 6 4 3 -
Potential Problem Loans - 4 - - 1
Projects At Risk (number of loans) - 17 9 10 7
Source: Asian Development Bank management information systems.
Table A6.41: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Weighted Weighted
Group HS S PS U Average HS S PS U Average Average
Pakistan 1.6 88.5 8.2 1.6 1.9 1.6 98.4 - - 2.0 3.9
South Asia 3.8 85.0 5.6 5.6 1.9 1.9 94.8 2.3 0.9 2.0 3.9
ADB-Wide 4.5 83.9 6.1 5.5 1.9 1.8 95.5 2.0 0.6 2.0 3.9
HS = highly satisfactory, PS = partly satisfactory, S = satisfactory, U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the
following criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
75. Data on Pakistan’s financial performance indicators are provided in Table A6.42.
Contract awards did not meet expectations, with actual contract awards totaling $643.4 million,
or 80% of the projected $806.2 million. Contract awards for project loans totaled $108.4 million
against the projected $236.2 million. The contract award ratio was 18.6% for all loans and
6.1% for project loans, lower than the ADB-wide average of 17.4% for all loans and 14.6% for
project loans. Likewise, overall disbursement performance at $638.8 million was only 72.5% of
the projected $880.7 million. Disbursement for project loans at $102.5 million was 63.9% of
projections. The disbursement ratio (without program loans) was 8.4%. The disbursement ratio
Appendix 6 153
with program loans was 21.9%, above the ADB-wide average of 18%. The net resource transfer
decreased from $18.4 million in 2003 to minus $852.9 million in 2004.
76. In 2004, 51 project administration missions visited 31 projects for a total of 1,026 staff-
mission-days, up from 950 days in 2003. Mission-days spent per project increased from 26 days
in 2003 to 33.1 days in 2004. Ten TA missions visited nine TAs for a total of 50 staff-days, down
from 194 days in 2003. Staff-mission-days per TA declined from 10 days in 2003 to 5.6 days in
2004. A Portfolio Management Seminar was conducted by PRM in August 2004, while a
separate mission was fielded for loan disbursement.
Table A6.42: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 319.2 384.8 121 314.8 391.4 124 420.6 424.6 101 394.2 501.2 127 806.2 643.4 80
Project 144.2 109.4 76 124.8 93.7 75 107.1 89.9 84 159.2 160.8 101 236.2 108.5 46
Program 175.0 275.4 157 190.0 297.6 157 313.5 334.7 107 235.0 340.4 145 570.0 534.9 94
Disbursement 435.1 521.3 120 503.8 512.3 102 499.0 501.4 100 350.6 465.8 133 880.7 638.8 73
Project 260.1 242.9 93 313.8 212.3 68 185.5 161.6 87 115.6 119.7 104 160.7 102.5 64
Program 175.0 278.4 159 190.0 300.0 158 313.5 339.7 108 235.0 346.1 147 720.0 536.3 74
Loan Approvals 500.0 707.0 141 446.5 956.8 214 850.0 1,141.0 134 720.0 870.7 121 750.0 709.2 95
Project 500.0 287.0 57 76.5 228.8 299 200.0 386.0 193 400.0 308.7 77 630.0 429.2 68
Program - 420.0 370.0 728.0 197 650.0 755.0 116 320.0 562.0 176 120.0 280.0 233
Disbursement Ratio 28.4 27.5 97 28.7 28.2 98 25.3 23.2 92 12.9 16.5 128 25.9 21.9 85
Project 19.9 18.4 92 25.2 18.8 75 15.3 13.7 90 7.8 8.6 110 8.5 8.4 99
Program 77.8 48.4 62 37.3 44.0 118 41.4 34.6 84 19.1 24.2 127 47.4 36.2 76
Net Resource Transfer 102.7 95.8 80.0 18.4 (852.9)
Project (117.5) (116.9) (162.7) (213.1) (674.3)
Program 220.2 212.7 242.7 231.5 (178.7)
Loan Service Payment 418.6 416.6 421.4 447.4 1,491.7
OCR 312.8 308.3 302.2 300.3 1,318.3
ADF 105.8 108.3 119.2 147.1 173.4
TA Projects Approved (no.) 14 7 50 10 17 170 15 16 107 15 19 127 22 22 100
Private Sector Loans (no.) - - - - - - - - - -
Private Sector Equity - 1 - - - - - - 1 - 0
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
77. PRM conducted the most recent CPR during August–September 2004. The review
focused on strengthening the government’s capacity for results-based monitoring of project
implementation. The results-oriented project implementation is only possible if the EA’s capacity
to implement the projects is significantly strengthened. Past efforts have been undermined by
the frequent and indiscriminate replacement of trained project staff. The lower contract award
and disbursement ratios reflected lower project implementation capacity in Pakistan. Included in
earlier years’ plan of action, the establishment of core PMUs to improve project implementation
ownership and accountability were carried out mostly without its full benefits. The 2004 CPR
proposed immediate and medium/longer term measures in its plan of action. The immediate
actions include: (i) loan closing of several projects; (ii) reduce the number of at-risk projects; and
(iii) improve contract award, disbursement, and imprest account turnover ratios. The
Government has agreed to initially finance the core PMUs to be established at the time of fact-
finding for all new projects, starting in July 2003. This will enable taking advance action on start-
up activities and capacity development of PMUs.
154 Appendix 6
78. Submission of audited project accounts declined slightly in 2004. Of the 22 loans
requiring submission of audited accounts, 12 fully complied (54.5%), five complied late (by less
than 6 months), one partly complied, and four have not complied. In 2003, 27 loans required
submission of audited accounts—15 loans fully complied (56%), six loans complied late, and
six loans have not complied.
8. Sri Lanka
79. Sri Lanka’s real GDP growth rate increased from 5.9% in 2003 to 6.5% in 2004. Its per
capita GNI was $930 in 2003. The total population is estimated at 19.45 million in 2004, and the
annual growth rate from 2002–2004 was 0.9%. The proportion of the population below the
national poverty line was 25% (footnote 1).
80. The World Bank’s 2004 governance indicators (footnote 2) for Sri Lanka are given in
Table A6.43.
Table A6.43: Governance Indicators for Sri Lanka
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) -0.16 -0.06 -0.37 -0.29 -0.21
Rank (0–100%) 41.3 48.0 36.6 40.3 44.5
B. Political Stability
Estimate(-2.5 to +2.5) -1.06 -0.97 -1.83 -1.72 -1.73
Rank (0–100%) 14.1 20.0 4.2 6.1 6.1
C. Government Effectiveness
Estimate(-2.5 to +2.5) -0.27 +0.01 -0.32 -0.42 -0.30
Rank (0–100%) 45.7 61.2 40.9 37.7 45.8
D. Regulatory Quality
Estimate(-2.5 to +2.5) +0.21 +0.16 +0.32 +0.72 +0.34
Rank (0–100%) 59.6 61.7 60.4 73.4 66.3
E. Rule of Law
Estimate(-2.5 to +2.5) -0.03 +0.22 -0.17 -0.11 +0.29
Rank (0–100%) 53.1 59.2 52.9 55.7 66.3
F. Control of Corruption
Estimate(-2.5 to +2.5) -0.16 -0.13 -0.09 -0.24 -0.23
Rank (0–100%) 52.2 53.6 57.0 57.9 50.0
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
81. Sri Lanka received a score of 48.5 on the 2005 ESI (footnote 3) and a ranking of
79th among the 146 rated countries, as compared to the highest score of 75.1 attained by
Finland and the lowest score of 29.2 attained by the Democratic People’s Republic of Korea.
Sri Lanka’s score is above the middle of the range of scores from 33.1 to 55.2 attained by the
23 DMCs included in the ESI.
82. As a category B1 borrower, Sri Lanka is qualified to receive primarily ADF lending with
some OCR lending. At the end of 2004 the portfolio consisted of 46 public sector loans covering
35 projects with a net loan amount of $1.6 billion. Of the net loan amount, 78.7% was from ADF
and 21.3% from OCR. There were five program loans. Eight loans were approved in 2004 and
one was closed with a delay of 22.8 months. Seven loans became effective averaging within
three months from loan signing. Four TAs were approved in 2004 for a total of $4.0 million—
three advisory TAs and one project preparatory TA. The portfolio had 23 ongoing TAs—
14 advisory TAs and nine project preparatory TAs—for a total of $16.7 million.
Appendix 6 155
83. The Sri Lanka Resident Mission (SLRM) was established in 1998 and as of January
2005 its personnel comprised 3 international staff, 6 national officers, and 9 administrative staff.
During 2004 SLRM staff administered 13 of the 46 active loans during 2004, an increase from
the 6 loans administered in 2003.
84. By loan amount, 3.1% of Sri Lanka’s portfolio was in the at-risk category in 2004, a
decline from the no at-risk project in 2003, but above the 19.8% for the region and 17% ADB-
wide. Based on the number of loans, 4.3% of the portfolio (2 loans) was considered at risk,
compared with 13.1% for the region and 14.1% ADB-wide. The combined ratings for
implementation progress and development objectives show that there was no potential problem
loan, and two problem loans—one partly satisfactory and one unsatisfactory—compared with no
potential problem loan and problem loans in 2003. Sri Lanka’s portfolio rating in 2004 was
above the regional and ADB-wide averages (Table A6.44 and Table A6.45).
Table A6.44: Lower Ratings Projects
(number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans
Implementation Progress 1 1 - - 1
Development Objectives - - - - -
Partly Satisfactory Loans
Implementation Progress - - 2 - 1
Development Objectives - - - - 1
Potential Problem Loans - - - - -
Projects At Risk (number of loans) - 1 2 - 2
Source: Asian Development Bank management information systems.
Table A6.45: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Weighted Weighted
Group HS S PS U Average HS S PS U Average Average
Sri Lanka 8.7 87.0 2.2 2.2 2.0 0.1 1.9 0.0 0.0 2.0 4.0
South Asia 3.8 85.0 5.6 5.6 1.9 1.9 94.8 2.3 0.9 2.0 3.9
ADB-Wide 4.5 83.9 6.1 5.5 1.9 1.8 95.5 2.0 0.6 2.0 3.9
HS = highly satisfactory, PS = partly satisfactory, S = satisfactory, U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the
following criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
85. Data on Sri Lanka’s financial performance indicators are provided in Table A6.46.
Contract awards for project and program loans did not meet expectations, with actual contract
awards totaling $183.6 million, or 92.7% of the projected $198 million. Contract awards for
project loans were $153.6 million against the projected $168 million. The contract award ratio for
2003 was 19.7% for all loans and 20.5% for project loans, above the ADB-wide average of
17.4% for all loans and 14.6% for project loans. For disbursements, the projected overall
disbursement of $216.2 million was not met with $185.7 million actual disbursements for 2004
or 85.9%. Disbursement for project loans was $155.4 million, 83.4% of the projected
$186.2 million. The disbursement ratio (without program loans) was 17.5%. The disbursement
ratio including program loans was 18.3%, above the ADB-wide average of 18%. The net
resource transfer declined from $162.2 million in 2003 to $126.1 million in 2004.
156 Appendix 6
86. In 2004, 40 project administration missions visited 28 projects, for a total of 714 staff-
mission-days, up from 587 days in 2003. Mission-days spent per project slightly increased from
24 days in 2003 to 25.5 days in 2004. One TA mission for a total of five days was fielded in
2004, a decline from 13 TA missions in 2003 for a total of 134 staff-days. Separate missions
were fielded for country project implementation and administration seminar, and loan
disbursement.
87. The most recent CPR was conducted in November 2004. Performance indicators used
in the CPR included: (i) implementation progress; (ii) contract awards; (iii) disbursements;
(iv) counterpart funding; (v) compliance with loan covenants; and (vi) timely submission of
audited accounts. An emergency cancellation and reallocation of $12.5 million from six ongoing
projects to the emergency reconstruction of roads was made in June 2004. The mission
identified several generic and crosscutting issues, and came up with a time-bound action plan
with specific targets from project preparation to implementation to monitoring and evaluation.
The action plan emphasized: (i) government ownership of the project; (ii) expediting loan
effectiveness; assurance of adequate budget allocation for counterpart funds; appointment of
PMU staff; improved procurement; timely submission of audited accounts, and improved
procurement and disbursement performance; and (iii) regular review of all projects, and
monthly/quarterly monitoring meetings between the Ministry of Finance, the project director, and
ADB.
Table A6.46: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 66.7 55.3 83 183.0 99.6 54 160.4 159.2 99 269.3 315.4 117 198.0 183.6 93
Project 66.7 55.3 83 133.0 74.3 56 125.4 93.3 74 209.3 250.5 120 168.0 153.6 91
Program - - 50.0 25.3 51 35.0 65.9 188 60.0 64.9 108 30.0 30.0 100
Disbursement 66.0 76.0 115 118.2 91.4 77 123.3 149.0 121 194.3 213.9 110 216.2 185.7 86
Project 66.0 76.0 115 68.2 66.0 97 88.3 82.4 93 134.3 149.0 111 186.2 155.4 83
Program - - 50.0 25.4 51 35.0 66.5 190 60.0 64.9 108 30.0 30.3 101
Loan Approvals 146.0 208.7 143 155.0 146.0 94 210.0 236.5 113 165.3 275.3 167 190.0 195.0 103
Project 96.0 108.7 113 140.0 126.0 90 170.0 176.5 104 135.3 225.3 167 80.0 90.0 113
Program 50.0 100.0 200 15.0 20.0 133 40.0 60.0 150 30.0 50.0 167 110.0 105.0 95
Disbursement Ratio 10.8 13.2 122 17.1 15.1 88 17.2 17.6 102 21.6 22.3 103 20.3 18.3 90
Project 10.8 13.2 122 11.6 13.1 113 14.1 11.9 84 16.6 17.1 103 19.8 17.5 88
Program - - 49.7 25.3 51 37.7 43.5 115 65.5 70.8 108 24.1 24.3 101
Net Resource Transfer 40.4 54.0 107.0 162.2 126.1
Project 44.5 33.7 46.8 104.8 105.5
Program (4.1) 20.3 60.2 57.4 20.6
Loan Service Payment 35.6 37.4 42.0 51.7 59.6
OCR - 0.2 1.3 1.1 2.8
ADF 35.6 37.2 40.6 50.6 56.8
TA Projects Approved (no.) 11 10 91 7 8 114 6 9 150 9 11 122 5 4 80
Private Sector Loans (no.) - 1 - - - - - - - -
Private Sector Equity - - 1 1 100 - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
88. Performance on the submission of audited accounts improved in 2004. Of the 30 loans
requiring submission, 20 fully complied (66.7%), two complied late (by less than six months),
and eight have not complied. In 2003, 20 loans required submission of audited accounts—
10 fully complied (50%), three complied late and two partly complied.
Appendix 6 157
C. Operations 2, East and Central Asia Department
1. Azerbaijan, Republic of
1. Azerbaijan’s real GDP growth rate declined from 11.1% in 2003 to 10.2% in 2004. Its per
capita GNI was $810 in 2003. The total population is estimated at 8.35 million in 2004, and the
annual growth rate from 2002–2004 was 0.6%. The proportion of the population below the
national poverty line was 49.6% in 2001.
2. The World Bank’s 2004 governance indicators (footnote 2) for Azerbaijan are given in
Table A6.47.
Table A6.47: Governance Indicators for Azerbaijan
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) -0.97 -0.87 -0.81 -0.95 -1.08
Rank (0–100%) 23.3 22.2 24.1 19.9 18.3
B. Political Stability
Estimate(-2.5 to +2.5) -1.52 -1.13 -0.63 -0.41 -0.40
Rank (0–100%) 6.8 17.3 24.2 29.1 29.9
C. Government Effectiveness
Estimate(-2.5 to +2.5) -0.81 -0.90 -0.96 -0.76 -1.05
Rank (0–100%) 22.1 14.9 16.1 20.2 10.6
D. Regulatory Quality
Estimate(-2.5 to +2.5) -0.57 -0.87 -0.51 -1.10 -1.21
Rank (0–100%) 27.6 19.9 27.3 13.0 9.4
E. Rule of Law
Estimate(-2.5 to +2.5) -0.85 -0.84 -0.99 -0.81 -0.86
Rank (0–100%) 22.7 21.4 10.2 20.5 18.1
F. Control of Corruption
Estimate(-2.5 to +2.5) -1.04 -1.04 -1.06 -1.01 -0.97
Rank (0–100%) 10.8 11.2 6.5 5.5 16.7
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
3. Azerbaijan received a score of 45.4 on the 2005 ESI (footnote 3) and a ranking of
98th among the 146 rated countries, as compared to the highest score of 75.1 attained by
Finland and the lowest score of 29.2 attained by the Democratic People’s Republic of Korea.
Azerbaijan’s score is slightly above the midpoint of the range of scores from 33.1 to
55.2 attained by the 23 DMCs included in the ESI
4. As a category B1 borrower, Azerbaijan is qualified to receive primarily ADF lending with
some OCR lending. At the end of 2004 the portfolio consisted of three public sector loans
covering two projects with a total net loan amount of $55 million. Two blend loans were
approved, but are yet to be signed and declared effective. The ongoing project was rated
satisfactory in both implementation progress and development objectives.
5. Three advisory TAs and two project preparatory TAs totaling $2.6 million were approved
during 2004. At the end of 2004 the portfolio included nine advisory TAs and five project
preparatory TAs for a total of 14 ongoing TAs and $7.3 million.
158 Appendix 6
6. The resident mission in Azerbaijan (AZRM) was established in 2002, and as of January
2005, its personnel comprised 1 international staff, 3 national officers, and 3 administrative staff.
As yet no loans or TAs have been delegated to AZRM for administration.
7. Azerbaijan’s portfolio rating during 2004 was at par with the regional average and better
than the ADB-wide average (Table A6.48).
Table A6.48: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Weighted Weighted
Group HS S PS U Average HS S PS U Average Average
Azerbaijan - 100.0 - - 2.0 - 100.0 - - 2.0 4.0
East and Central Asia 10.2 80.6 5.1 4.1 2.0 2.0 98.0 - - 2.0 4.0
ADB-Wide 4.5 83.9 6.1 5.5 1.9 1.8 95.5 2.0 0.6 2.0 3.9
HS = highly satisfactory, PS = partly satisfactory, S = satisfactory, U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the following
criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
8. Data on Azerbaijan’s financial performance indicators are provided in Table A6.49.
Projections for both contract awards and disbursements were not realized. No contract has so
far been awarded, and there has been no disbursement from the loans.
Table A6.49: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards - - - - - - - - 0.9 - 0
Project - - - - - - - - 0.9 - 0
Program - - - - - - - - - -
Disbursement - - - - - - - - 0.9 - 0
Project - - - - - - - - 0.9 - 0
Program - - - - - - - - - -
Loan Approvals - - - - 23.0 - 0 23.0 22.0 96 22.0 30.0 136
Project - - - - 23.0 - 0 23.0 22.0 96 22.0 30.0 136
Program - - - - - - - - - -
Disbursement Ratio - - - - - - - - 3.7 - 0
Project - - - - - - - - 3.7 - 0
Program - - - - - - - - - -
Net Resource Transfer - - - - -
Project - - - - -
Program - - - - -
Loan Service Payment - - - - -
OCR - - - - -
ADF - - - - -
TA Projects Approved (no.) - - 5 5 100 5 1 20 7 5 71 4 5 125
Private Sector Loans (no.) - - - - - - - - - -
Private Sector Equity - - - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
9. In 2004, a project administration mission visited one project for inception, for a total of
24 staff-days. Five TA missions for a total of 29 days visited three TAs in 2004, a decline from
Appendix 6 159
seven TA missions in 2003 for a total of 70 staff-days. Submission of audited financial accounts
is not yet due.
2. China, People’s Republic of
10. PRC’s real GDP growth rate increased from 9.3% in 2003 to 9.5% in 2004. Its per capita
GNI was $1,100 in 2003. The total population is estimated at 1,300 million in 2004, and the
annual growth rate from 2002–2004 was 0.6%. The proportion of the population below the
national poverty line was 4.6% (footnote 1).
11. The World Bank’s 2004 governance indicators (footnote 2) for PRC are given in
Table A6.50.
Table A6.50: Governance Indicators for PRC
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) -1.54 -1.38 -1.37 -1.51 -1.29
Rank (0–100%) 7.3 10.1 10.5 7.9 12.0
B. Political Stability
Estimate(-2.5 to +2.5) -0.07 +0.06 +0.13 +0.06 +0.12
Rank (0–100%) 46.6 45.9 54.5 49.7 50.6
C. Government Effectiveness
Estimate(-2.5 to +2.5) +0.11 +0.20 +0.22 +0.17 +0.18
Rank (0–100%) 60.1 65.2 64.0 64.5 66.5
D. Regulatory Quality
Estimate(-2.5 to +2.5) -0.45 -0.43 -0.21 -0.07 -0.06
Rank (0–100%) 35.0 37.8 36.9 42.9 47.0
E. Rule of Law
Estimate(-2.5 to +2.5) -0.47 -0.26 -0.33 -0.22 -0.45
Rank (0–100%) 40.6 48.5 48.7 52.4 37.3
F. Control of Corruption
Estimate(-2.5 to +2.5) -0.51 -0.35 -0.34 -0.14 -0.01
Rank (0–100%) 39.9 44.4 44.6 60.7 58.7
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
12. PRC received a score of 38.6 on the 2005 ESI (footnote 3) and a ranking of 133rd among
the 146 rated countries, as compared to the highest score of 75.1 attained by Finland and the
lowest score of 29.2 attained by the Democratic People’s Republic of Korea. PRC’s score is well
below the midpoint of the range of scores from 33.1 to 55.2 attained by the 23 DMCs included in
the ESI.
13. As a category B2 borrower, PRC is qualified to receive primarily OCR lending with some
ADF lending; however to date PRC has not had an ADF loan approved. At the end of 2004 the
loan portfolio consisted of 35 public sector OCR loans covering the same number of projects
with a net loan amount of $6.1 billion. There were no program loans. Seven new loans and
three equity investments were approved in 2004, while nine loans were closed, with an average
delay of 14 months. Ten loans became effective within an average of four months from loan
signing.
160 Appendix 6
14. Thirty-one TAs were approved in 2004 totaling $16.7 million—26 advisory TAs and
5 project preparatory TAs. The portfolio had 78 ongoing TAs—61 advisory TAs and 17 project
preparatory TAs—for a total of $47 million.
15. The PRC Resident Mission (PRCM) was established in 2000 and, at the end of 2004 its
personnel comprised 8 international staff, 12 national officers, and 12 administrative staff.
PRCM staff administered 9 of the 35 active loans during 2004, an increase from the 2 loans
administered during 2003.
16. For amount and number of loans, there were no projects in the at-risk category nor in the
potential problem category in 2004, compared with 7% at-risk loans in 2003, 4.2% for the
region, and 17% ADB-wide. PRC’s portfolio rating in 2004 was better than the regional and
ADB-wide averages (Table A6.51 and Table A6.52).
Table A6.51: Lower Ratings Projects
(number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans
Implementation Progress 1 1 3 4 -
Development Objectives 1 - 1 - -
Partly Satisfactory Loans
Implementation Progress 2 1 1 - -
Development Objectives 2 - - 1 -
Potential Problem Loans - 1 - - -
Projects At Risk (number of loans) - 3 4 4 -
Source: Asian Development Bank management information systems.
Table A6.52: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Weighted Weighted
Group HS S PS U Average HS S PS U Average Average
PRC 22.9 77.1 - - 2.2 - 100.0 - - 2.0 4.2
East and Central Asia 10.2 80.6 5.1 4.1 2.0 2.0 98.0 - - 2.0 4.0
ADB-Wide 4.5 83.9 6.1 5.5 1.9 1.8 95.5 2.0 0.6 2.0 3.9
HS = highly satisfactory, PS = partly satisfactory, S = satisfactory, U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the following
criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
17. Data on PRC’s financial performance indicators are provided in Table A6.53. Contract
awards exceeded expectations, with actual contract awards totaling $685.8 million, or 105% of
the projected $652.0 million. The contract award ratio in 2004 was 19.1%, above the ADB-wide
average of 18.6% for OCR loans. Overall disbursement performance was good at
$635.7 million, or 123.8% of the projected $513.5 million. The disbursement ratio for project
loans was 17%, below the ADB-wide average of 18%. The net resource transfer increased from
minus $2.0 million in 2003 to $ 57.5 million in 2004.
18. During 2004, 44 project administration missions visited 38 projects for a total of
1,075 staff-days, up from 843 days in 2003. Mission-days per project increased from 24 days in
2003 to 28.3 days in 2004. Forty-four TA missions visited 35 TAs for a total of 193 staff-days,
compared to 423 days in 2003. Staff-mission-days per TA decreased as well, from 12 days in
Appendix 6 161
2003 to 5.5 days in 2004. Country project implementation and administration, and loan
disbursement missions were also fielded separately during the year.
19. PRCM conducted the most recent CPR during June–July 2004. Key portfolio issues
discussed were: (i) start up delay due to extensions in loan effectiveness; (ii) financial
management, including delayed submission of audited project accounts and financial
statements; (iii) loan extension and cancellation; and (iv) delay in procurement. The CPR noted
that the joint action plan developed in 2002 has been progressively implemented. Among the
key actions was the delegation of additional projects for administration by PRCM. It is expected
that by 2006 about 50% of the ongoing portfolio will be administered by PRCM. The mission
developed a time-bound action plan to improve portfolio performance. These include:
(i) provision of training to EAs on ADB procedures; (ii) speeding up procurement process;
(iii) better communication among the government, EAs and ADB; (iv) conduct of special portfolio
performance studies; and (v) an increased role for PRCM in project administration.
Table A6.53: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 727.8 754.9 104 737.8 587.8 80 804.5 672.6 84 604.8 454.8 75 652.0 685.8 105
Project 727.8 754.9 104 737.8 587.8 80 804.5 672.6 84 604.8 454.8 75 652.0 685.8 105
Program - - - - - - - - - -
Disbursement 769.5 831.6 108 815.0 1,042.3 128 562.1 781.6 139 588.1 705.1 120 513.5 635.7 124
Project 769.5 831.6 108 815.0 1,042.3 128 562.1 781.6 139 588.1 705.1 120 513.5 635.7 124
Program - - - - - - - - - -
Loan Approvals 1,170.0 872.3 75 1,225.0 997.0 81 1,278.1 833.5 65 1,220.0 1,488.0 122 1,048.0 1,259.9 120
Project 1,170.0 872.3 75 1,225.0 997.0 81 1,278.1 833.5 65 1,220.0 1,488.0 122 1,048.0 1,259.9 120
Program - - - - - - - - - -
Disbursement Ratio 17.5 22.8 130 22.4 29.8 133 16.0 25.9 162 17.0 25.8 152 13.3 17.0 128
Project 17.5 22.8 130 22.4 29.8 133 16.0 25.9 162 17.0 25.8 152 13.3 17.0 128
Program - - - - - - - - - -
Net Resource Transfer 396.5 554.7 (235.2) (1,967.0) 57.5
Project 396.5 554.7 (235.2) (1,967.0) 57.5
Program - - - - -
Loan Service Payment 435.1 487.6 1,016.7 2,672.1 578.2
OCR 435.1 487.6 1,016.7 2,672.1 578.2
ADF - - - - -
TA Projects Approved (no.) 26 25 96 20 16 80 32 24 75 26 24 92 34 32 91
Private Sector Loans (no.) - - 1 - 0 2 - 0 1 - 0 2 - 0
Private Sector Equity 1 1 100 1 - 0 - 1 - - 3 3 100
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
20. Submission of audited accounts improved in 2004. Of the 19 loans requiring submission
of audited accounts, 18 fully complied (89.5%), and one complied late (by less than 6 months).
In 2003, 22 loans required submission of audited accounts—six fully complied (27%),
13 complied late, and 3 partly complied.
3. Kazakhstan
21. Kazakhstan’s real GDP growth rate increased from 9.2% in 2003 to 9.4% in 2004. Its per
capita GNI was $1,780 in 2003. The total population is estimated at 15 million in 2004, and the
annual growth rate from 2002–2004 was minus 0.2%. The proportion of the population below
the national poverty line was 27.9% in 2002.
162 Appendix 6
22. The World Bank’s 2004 governance indicators (footnote 2) for Kazakhstan are given in
Table A6.54.
Table A6.54: Governance Indicators for Kazakhstan
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) -1.21 -1.14 -0.91 -0.73 -1.00
Rank (0–100%) 13.6 14.6 20.9 27.7 20.9
B. Political Stability
Estimate(-2.5 to +2.5) -0.11 +0.38 +0.26 +0.18 -0.05
Rank (0–100%) 45.6 58.4 58.8 54.5 45.1
C. Government Effectiveness
Estimate(-2.5 to +2.5) -0.63 -0.82 -0.54 -0.72 -0.83
Rank (0–100%) 29.8 18.9 32.8 21.9 17.3
D. Regulatory Quality
Estimate(-2.5 to +2.5) -0.89 -0.71 -0.47 -0.35 -0.27
Rank (0–100%) 18.2 24.0 27.8 32.1 34.8
E. Rule of Law
Estimate(-2.5 to +2.5) -0.98 -0.92 -0.77 -0.80 -0.73
Rank (0–100%) 17.4 19.4 23.0 21.6 24.7
F. Control of Corruption
Estimate(-2.5 to +2.5) -1.10 -1.06 -0.85 -0.86 -0.85
Rank (0–100%) 9.9 9.7 18.3 13.1 22.7
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
23. Kazakhstan received a score of 48.6 on the 2005 ESI (footnote 3) and a ranking of
78th among the 146 rated countries, as compared to the highest score of 75.1 attained by
Finland and the lowest score of 29.2 attained by the Democratic People’s Republic of Korea.
Kazakhstan’s score is well above the median of the range of scores from 33.1 to 55.2 attained
by the 23 DMCs included in the ESI.
24. As a category C borrower, Kazakhstan is qualified to receive only OCR lending. At the
end of 2004 the loan portfolio consisted of four public sector loans covering three projects with a
net loan amount of $119.0 million. There were no program loans. No new loans were approved
or became effective during 2004, while one loan was closed with a delay of seven months.
25. Four advisory TAs were approved during 2004 totaling $1.7 million. At the end of 2004
the portfolio included 12 advisory TAs and two project preparatory TAs for a total of 14 ongoing
TAs and a total of $5.4 million.
26. The Kazakhstan resident mission (KARM) was established in 1998 and at the end of
2004 its personnel comprised 1 international staff, 2 national officers, and 3 administrative staff.
KARM staff administered 1 of the 4 active loans during 2004, while none had been delegated
during 2003.
27. By loan amount, 29.1% of the Kazakhstan portfolio was in the at-risk category,
compared to 33% at-risk loans in 2003 and above 4.2% for the region and 17% ADB-wide.
Based on number of loans, 25% of the portfolio (one loan) was considered at risk, compared
with 10.2% for the region and 14.1% ADB-wide. The combined ratings for implementation
progress and development objectives show that there was no potential problem loan and one
Appendix 6 163
problem loan in 2004 compared to one potential problem loan and no problem loans in 2003.
Kazakhstan’s portfolio rating in 2004 was below the regional and ADB-wide averages
(Table A6.55 and Table A6.56).
Table A6.55: Lower Rating Projects
(number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans
Implementation Progress - 3 - - 1
Development Objectives - - - - -
Partly Satisfactory Loans
Implementation Progress 3 3 2 - -
Development Objectives - - - - -
Potential Problem Loans - - - 1 -
Projects At Risk (number of loans) - 6 2 1 1
Source: Asian Development Bank management information systems.
Table A6.56: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Weighted Weighted
Group HS S PS U Average HS S PS U Average Average
Kazakhstan - 75 - 25.0 1.5 25.0 75.0 - - 2.2 3.8
East and Central Asia 10.2 80.6 5.1 4.1 2.0 2.0 98.0 - - 2.0 4.0
ADB-Wide 4.5 83.9 6.1 5.5 1.9 1.8 95.5 2.0 0.6 2.0 3.9
HS = highly satisfactory, PS = partly satisfactory, S = satisfactory, U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the following
criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
28. Data on Kazakhstan’s financial performance indicators are provided in Table A6.57.
Contract awards did not meet expectations, with actual contract awards totaling $6.9 million, or
91.6% of the projected $7.5 million. The contract award ratio was 15.6%, above the ADB-wide
average of 14.6% for project loans. Overall disbursement performance was above expectations,
with actual disbursements at $30.0 million or 107.2% of the projected $28.0 million. The
disbursement ratio for project loans was 47.9%, above the ADB-wide average of 18%. The net
resource transfer decreased from minus $19.6 million in 2003 to minus $85.5 million in 2004.
164 Appendix 6
Table A6.57: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 14.8 13.6 92 37.7 8.3 22 22.5 24.8 110 39.0 48.8 125 7.5 6.9 92
Project 14.8 13.6 92 25.2 8.3 33 22.5 24.8 110 39.0 48.8 125 7.5 6.9 92
Program - - 12.5 - 0 - - - - - -
Disbursement 16.9 28.1 166 31.4 15.3 49 11.8 7.5 64 14.1 13.5 96 28.0 30.0 107
Project 16.9 28.1 166 18.9 15.3 81 11.8 7.5 64 14.1 13.5 96 28.0 30.0 107
Program - - 12.5 - 0 - - - - - -
Loan Approvals 250.0 52.0 21 65.0 - 0 60.0 - 0 35.0 34.6 99 - -
Project 170.0 52.0 31 65.0 - 0 60.0 - 0 35.0 34.6 99 - -
Program 80.0 - 0 - - - - - - - -
Disbursement Ratio 9.7 28.2 291 17.4 25.3 145 6.6 8.1 123 12.2 17.1 140 18.1 47.9 265
Project 9.7 28.2 291 12.1 25.3 209 7.7 8.1 105 12.2 17.1 140 18.1 47.9 265
Program - - 50.0 - 0 - - - - - -
Net Resource Transfer 4.7 (15.1) (26.5) (19.6) (85.5)
Project 22.1 7.5 (3.4) 3.3 18.8
Program (17.4) (22.6) (23.1) (22.9) (104.2)
Loan Service Payment 23.4 30.4 34.0 33.1 115.5
OCR 23.0 30.0 33.5 32.5 114.9
ADF 0.4 0.4 0.5 0.5 0.6
TA Projects Approved (no.) 4 5 125 8 3 38 7 8 114 6 6 100 4 4 100
Private Sector Loans (no.) - - 2 - 0 - - 2 - 0 - -
Private Sector Equity - - 2 - 0 - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
29. During 2004, three project administration missions visited two projects for a total of 89
staff- days, an increase from the 82 days in 2003. Mission-days per project also substantially
increased, from 21 days in 2003 to 44.5 days in 2004. Seven TA missions visited four TAs for a
total of 44 staff-days, a decline from 62 days in 2003. Staff-mission-days per TA increased from
8 days in 2003 to 11 days in 2004.
30. There was no CPR conducted in 2004. In the 2003 CPR, it was agreed that better
management information system within the Government would be needed to enhance project
implementation and administration activities. A technical assistance on the management
information system is being considered and would be implemented in 2005. Being the
substance for the CPR discussions, the next CPR will be scheduled after approval of the TA.
31. Submission of audited accounts improved in 2004. All three loans requiring submission
of audited accounts fully complied. In 2003, five loans required submission of audited
accounts—two fully complied (40%), one complied late (by less than 6 months) and two have
not complied.
4. Kyrgyz Republic
32. Kyrgyz Republic’s real GDP growth rate increased from 7% in 2003 to 7.1% in 2004. Its
per capita GNI was $330 in 2003. The total population is estimated at 5.12 million in 2004, and
the annual growth rate from 2002–2004 was 1.2%. The proportion of the population below the
national poverty line was 52% in 2000.
33. The World Bank’s 2004 governance indicators (footnote 2) for Kyrgyz Republic are given
in Table A6.58.
Appendix 6 165
Table A6.58: Governance Indicators for Kyrgyz
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) -1.06 -0.90 -0.68 -0.46 -0.48
Rank (0–100%) 20.4 20.7 27.2 35.6 34.6
B. Political Stability
Estimate(-2.5 to +2.5) -0.91 -1.10 -0.09 +0.70 +0.76
Rank (0–100%) 19.9 17.8 44.2 73.3 72.6
C. Government Effectiveness
Estimate(-2.5 to +2.5) -0.83 -0.72 -0.63 -0.28 -0.43
Rank (0–100%) 21.6 24.9 28.5 44.3 35.2
D. Regulatory Quality
Estimate(-2.5 to +2.5) -0.06 -0.42 -0.36 -0.72 -0.16
Rank (0–100%) 49.8 38.8 33.2 20.1 38.7
E. Rule of Law
Estimate(-2.5 to +2.5) -1.04 -0.77 -0.90 -0.67 -0.69
Rank (0–100%) 15.0 26.0 16.6 29.2 25.9
F. Control of Corruption
Estimate(-2.5 to +2.5) -0.92 -0.83 -0.85 -0.69 -0.79
Rank (0–100%) 15.3 23.5 18.3 25.7 24.7
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
34. Kyrgyz Republic achieved a score of 48.4 on the 2005 ESI (footnote 3) and a ranking of
th
80 among the 146 rated countries, as compared to the highest score of 75.1 attained by
Finland and the lowest score of 29.2 attained by the Democratic People’s Republic of Korea.
Kyrgyz Republic’s score is well above the median value of the range of scores from 33.1 to
55.2 attained by the 23 DMCs included in the ESI.
35. As a category A borrower, Kyrgyz Republic is qualified to receive only ADF lending. At
the end of 2004 the loan portfolio consisted of 12 public sector ADF loans covering 12 projects
with a net loan amount of $267 million. There were no program loans. One loan was approved
in 2004, while three loans were closed with a delay of 2.6 months. Two loans became effective,
with average delay of three months.
36. Six advisory TAs and one project preparatory TA were approved during 2004 totaling
$3.9 million. The portfolio had 18 ongoing TAs—15 advisory TAs and three project preparatory
TAs—for a total of $10.7 million.
37. The Kyrgyz Resident Mission (KYRM) was established in 2000, and as of January 2005
its personnel comprised 2 international staff, 4 national officers, and 3 administrative staff.
KYRM staff administered 1 of the 12 active loans during 2004, while none had been delegated
during 2003.
38. Performance declined in 2004 when two loans (16.7%) were rated at risk. Unlike in 2003
when no loans were at risk, 17.2 % based on loan amount of the portfolio was in the at-risk
category. The rating was above 4.2% for the region and 17% ADB-wide. Based on number of
loans, 16.7% of the portfolio (two loans) was considered at risk, compared with 10.2% for the
region and 14.1% ADB-wide. The combined ratings for implementation progress and
development objectives show that there was no potential problem loan and two problem loans in
2004 compared to no potential problem loan and no problem loans in 2004. For development
166 Appendix 6
objectives, all loans were rated satisfactory. Kyrgyz Republic’s performance in 2003 was below
the regional and ADB-wide averages (Table A6.59 and Table A6.60).
Table A6.59: Lower Rating Projects
(number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans
Implementation Progress - 2 - - -
Development Objectives - - - - -
Partly Satisfactory Loans
Implementation Progress 1 2 - - 2
Development Objectives - - - - -
Potential Problem Loans - 2 - - -
Projects At Risk (number of loans) - 6 - - 2
Source: Asian Development Bank management information systems.
Table A6.60: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Weighted Weighted
Group HS S PS U Average HS S PS U Average Average
Kyrgyz Republic - 83.3 16.7 - 1.8 - 100 - - 2.0 3.8
East and Central Asia 10.2 80.6 5.1 4.1 2.0 2.0 98.0 - - 2.0 4.0
ADB-Wide 4.5 83.9 6.1 5.5 1.9 1.8 95.5 2.0 0.6 2.0 3.9
HS = highly satisfactory, PS = partly satisfactory, S = satisfactory, U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the following
criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
39. Data on Kyrgyz Republic’s financial performance indicators are provided in Table A6.61.
Contract awards for project and program loans exceeded expectations, with actual contract
awards totaling $48.2 million, or 105.8% of the projected $45.6 million. The contract award ratio
was 32.3% for all loans and 16.5% for project loans, higher than the ADB-wide average of
15% for all ADF loans and 13.3% for ADF project loans. Overall disbursement performance was
below expectations, with actual disbursements at $54.4 million or 90.4% of the projected
$60.2 million. The disbursement ratio (without program loans) was 19%. The disbursement ratio
with program loans was 32.8%, above the ADB-wide average of 18%. The net resource transfer
increased from $22.2 million in 2003 to $50.4 million during 2004.
Appendix 6 167
Table A6.61: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 9.5 9.2 97 23.8 41.1 173 21.7 21.0 97 41.9 51.0 122 45.6 48.2 106
Project 9.5 9.2 97 7.4 7.7 104 14.2 13.4 94 24.4 51.0 209 16.7 19.9 119
Program - - 16.4 33.4 204 7.5 7.6 101 17.5 - 0 28.9 28.3 98
Disbursement 22.6 21.4 95 36.6 58.3 159 27.7 27.2 98 34.7 25.7 74 60.2 54.4 90
Project 22.6 21.4 95 20.2 24.9 123 20.2 19.6 97 17.2 25.7 149 31.3 26.1 83
Program - - 16.4 33.4 204 7.5 7.6 101 17.5 - 0 28.9 28.3 98
Loan Approvals 66.0 41.0 62 65.0 75.0 115 16.0 15.0 94 10.0 15.5 155 37.5 40.3 107
Project 66.0 41.0 62 40.0 40.0 100 - - 10.0 15.5 155 37.5 40.3 107
Program - - 25.0 35.0 140 16.0 15.0 94 - - - -
Disbursement Ratio 15.2 11.9 78 20.2 30.3 150 13.4 15.2 113 21.2 15.7 74 36.4 32.8 90
Project 17.2 13.1 76 12.3 18.5 151 11.6 13.4 116 12.5 18.7 150 22.9 19.0 83
Program - - 99.9 61.3 61 23.3 23.5 101 66.8 - 0 100.5 98.5 98
Net Resource Transfer 19.0 55.8 24.2 22.2 50.4
Project 20.2 23.5 18.0 23.7 23.7
Program (1.2) 32.3 6.1 (1.6) 26.6
Loan Service Payment 2.3 2.5 3.0 3.5 4.1
OCR - - - - -
ADF 2.3 2.5 3.0 3.5 4.1
TA Projects Approved (no.) 9 7 78 6 4 67 7 5 71 4 2 50 5 7 140
Private Sector Loans (no.) - - - - - - - - - -
Private Sector Equity - - - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
40. During 2004, 22 project administration missions visited 13 projects for a total of
321 staff-mission-days, up from 231 days in 2003. Mission-days spent per project increased
from 18 days in 2003 to 24.7 days in 2004. Twenty TA missions visited nine TAs for a total of
69 staff-days, lower than 90 days in 2003. Staff-mission-days per TA decreased from 8 days in
2003 to 7.7 days in 2004. A country project implementation and administration seminar was also
fielded during the year.
41. KYRM conducted the latest CPR in November 2004. Key generic problems that affect
portfolio performance were identified as (i) scarcity of resources for and lack of transparency in
prioritization of public investment program, (ii) weak institutional capacities and deficiencies in
administrative structures; (iii) lack of understanding of policies and procedures of external aid
agencies; and (iv) considerable delays in disbursements. The mission noted that the progress
in implementing the action plan agreed in the CPR of 2003 has been mixed. Of the 35 actions to
address problems in the portfolios, the government complied with 14; partly complied with 3,
on-going with 4, did not comply with 10, while the remaining four are not known. The not-
complied actions were mainly in the areas of: (i) provision of timely information by PIUs to the
Ministry of Finance on their financing plans; (ii) taxation; (iii) provision of timely information and
donor coordination; (iv) rationalizing the intrusive and frequent PIU inspections by the Chamber
of Accounts. The CPR prepared an action plan for 2004 to address the key issues such as the
allocation of counterpart funds, compliance with procurement procedures and audited accounts,
low disbursements, fiduciary requirements, project monitoring and evaluation, need for
harmonization of donor procedures, and taxation.
42. Submission of audited accounts declined in 2004. Of the eight loans requiring
submission of audited accounts, four fully complied (50%), three complied late (by less than
168 Appendix 6
6 months) and one has not complied. In 2003, seven loans required submission of audited
accounts—five fully complied (71%) and two complied late.
5. Mongolia
43. Mongolia’s real GDP growth rate increased from 5.6% in 2003 to 10.6% in 2004. Its per
capita GNI was $480 in 2003. The total population is estimated at 2.53 million in 2004, and the
growth rate from 2002–2004 was 1.2%. The proportion of the population below the national
poverty line was 35.6% (footnote 1).
44. The World Bank’s 2004 governance indicators (footnote 2) for Mongolia are given in
Table A6.62.
Table A6.62: Governance Indicators for Mongolia
-
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) +0.45 +0.44 +0.73 +0.62 +0.38
Rank (0–100%) 59.7 63.1 68.1 66.0 62.8
B. Political Stability
Estimate(-2.5 to +2.5) +0.48 +0.95 +0.99 +0.52 +0.80
Rank (0–100%) 61.2 80.0 80.0 66.7 74.4
C. Government Effectiveness
Estimate(-2.5 to +2.5) -0.46 -0.19 +0.15 +0.02 -0.27
Rank (0–100%) 36.5 54.2 60.2 60.7 48.0
D. Regulatory Quality
Estimate(-2.5 to +2.5) +0.18 -0.10 +0.37 +0.27 -0.57
Rank (0–100%) 57.6 50.0 64.7 56.0 24.3
E. Rule of Law
Estimate(-2.5 to +2.5) +0.18 +0.34 +0.22 +0.02 +0.48
Rank (0–100%) 56.5 63.8 62.0 61.6 70.5
F. Control of Corruption
Estimate(-2.5 to +2.5) -0.51 +0.11 -0.21 -0.28 +0.37
Rank (0–100%) 39.9 59.7 50.5 53.0 66.0
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
45. Mongolia received a score of 50 on the 2005 ESI (footnote 3) and a ranking of
72nd among the 146 rated countries, as compared to the highest score of 75.1 attained by
Finland and the lowest score of 29.2 attained by the Democratic People’s Republic of Korea.
Mongolia’s score is in the upper quartile of the range of scores from 33.1 to 55.2 attained by the
23 DMCs included in the ESI. Mongolia achieved the highest ESI among the East Asia DMCs.
46. As a category A borrower, Mongolia is qualified to receive only ADF lending. At the end
of 2004 the loan portfolio consisted of 14 public sector ADF loans covering 12 projects with a
net loan amount of $245 million. There were two program loans. Two loans, including one for
private sector, and an equity investment were approved in 2004, while one was closed which
had a delay of 20.8 months. One loan became effective within 3 months from loan signing.
47. Six advisory TAs and one project preparatory TA were approved during 2004, for a total
amount of $2.7 million. The portfolio had 23 ongoing TAs—19 advisory TAs and four project
preparatory TAs—for a total of $11.1 million.
Appendix 6 169
48. The Mongolia Resident Mission (MNRM) was established in 2001, and as of January
2005, its personnel comprised 1 international staff, 4 national officers, and 2 administrative staff.
As yet no project has been delegated to MNRM for administration.
49. By loan amount, 17.1% of the Mongolia portfolio was at risk in 2004, a decline from
7% at-risk loans in 2003 and higher than the regional and ADB-wide averages. Based on
number of loans, 7.1% (one loan) was considered at risk, compared with 10.2% for the region
and 14.1% ADB-wide. The combined ratings for implementation progress and development
objectives show that while there were no potential problem loans, there was one problem loan
with a partly satisfactory rating. Mongolia’s portfolio rating in 2004 was better than the regional
and ADB-wide averages (Table A6.63 Table A6.64).
Table A6.63: Lower Rating Projects
(number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans
Implementation Progress 1 - - - -
Development Objectives 1 - - - -
Partly Satisfactory Loans
Implementation Progress 2 2 2 1 1
Development Objectives - 1 - 1 -
Potential Problem Loans - - - - -
Projects At Risk (number of loans) - 2 2 1 1
Source: Asian Development Bank management information systems.
Table A6.64: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Weighted Weighted
Group HS S PS U Average HS S PS U Average Average
Mongolia 14.3 78.6 7.1 - 2.1 7.1 92.9 - - 2.1 4.1
East and Central Asia 10.2 80.6 5.1 4.1 2.0 2.0 98.0 - - 2.0 4.0
ADB-Wide 4.5 83.9 6.1 5.5 1.9 1.8 95.5 2.0 0.6 2.0 3.9
HS = highly satisfactory, PS = partly satisfactory, S = satisfactory, U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the following
criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
50. Data on Mongolia’s financial performance indicators are provided in Table A6.65.
Contract awards for project and program loans went above expectations, with actual contract
awards totaling $31.7 million, or 115.9% of the projected $27.4 million. Contract awards for
project loans were $22.7 million against the projected $19.9 million. The contract award ratio
was 21.5% for all loans and 18.1% for project loans, above the ADB-wide average of 15% for
ADF loans and 13.3% for ADF project loans. Overall disbursement performance also exceeded
projections at 103.2%. Disbursement for project loans reached $30.4 million, 99% of
projections. The disbursement ratio (without program loans) was 23%. The disbursement ratio
with program loans was 23.2%, above the ADB-wide average of 18%. The net resource transfer
decreased from $34.5 million in 2003 to $32.5 million in 2004.
51. During 2004, 16 project administration missions visited 10 projects for a total of
279 staff-mission-days, higher than the 245 staff-days in 2003. Mission-days spent per project
increased from 19 days in 2003 to 27.9 days in 2004. Separate missions for country project
170 Appendix 6
implementation and administration, and loan disbursement were likewise fielded during the
year. Nine TA missions visited eight TAs for a total of 68 staff-days, lower than the 113 days in
2003. Staff-mission-days per TA decreased from nine days in 2003 to 8.5 days in 2004.
Missions for disbursements, project administration and implementation seminars were fielded
during the year.
Table A6.65: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 25.2 36.4 144 38.2 31.1 81 43.6 25.3 58 47.1 44.2 94 27.4 31.7 116
Project 23.2 24.1 104 27.7 21.0 76 20.6 7.2 35 33.6 29.3 87 19.9 22.7 114
Program 2.0 12.2 610 10.5 10.1 96 23.0 18.2 79 13.5 14.9 110 7.5 9.0 120
Disbursement 33.1 32.9 99 38.9 30.4 78 39.0 26.6 68 40.9 39.8 97 38.2 39.4 103
Project 18.6 20.7 111 15.9 20.3 128 16.0 12.5 78 27.4 24.9 91 30.7 30.4 99
Program 14.5 12.2 84 23.0 10.1 44 23.0 14.1 61 13.5 14.9 110 7.5 9.0 120
Loan Approvals 49.9 41.9 84 47.0 35.7 76 34.0 34.1 100 46.0 29.5 64 35.8 37.1 104
Project 9.9 19.9 201 39.0 27.7 71 34.0 34.1 100 28.0 16.0 57 35.8 37.1 104
Program 40.0 22.0 55 8.0 8.0 100 - - 18.0 13.5 75 - -
Disbursement Ratio 25.3 25.2 100 26.9 23.2 86 26.8 16.0 60 24.9 24.0 96 24.7 23.2 94
Project 17.9 20.0 112 15.8 21.3 135 14.1 9.1 65 19.1 17.0 89 23.1 23.0 100
Program 53.6 45.1 84 52.5 28.1 54 71.0 49.5 70 65.8 72.7 110 34.9 24.7 71
Net Resource Transfer 29.9 27.5 22.7 34.5 32.5
Project 18.8 18.5 9.8 21.3 25.8
Program 11.1 9.0 12.9 13.2 6.7
Loan Service Payment 2.9 2.9 3.9 4.8 6.9
OCR - - - - -
ADF 2.9 2.9 3.9 4.8 6.9
TA Projects Approved (no.) 7 5 71 7 7 100 6 9 150 7 3 43 8 7 88
Private Sector Loans (no.) - - - - - - - - 1 1 100
Private Sector Equity - - - - - - - - 1 1 100
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
52. MNRM conducted the most recent CPR during March 2005. It was noted that actual
contract awards and disbursements achievements have been continuously increasing, while
provision of counterpart funds was sufficient for the project activities. Several implementation
issues identified referred to disbursement administration, and procurement and consultants’
recruitment. An action plan has been drafted that will address issues on: (i) recruitment of
consultants; (ii) financial management; and (iii) project performance management.
53. Submission of audited accounts further improved in 2004. All of the nine loans requiring
submission of audited accounts fully complied without delay. In 2003, eight loans required
submission of audited accounts—seven fully complied (88%) and one has not complied.
6. Tajikistan
54. Tajikistan’s real GDP growth rate increased from 10.2% in 2003 to 10.6% in 2004. Its
per capita GNI was $190 in 2003. The total population is estimated at 6.7 million in 2004, and
the growth rate from 2002–2004 was 1.1%. The proportion of the population below the national
poverty line was 56.6% in 2003.
55. The World Bank’s 2004 governance indicators (footnote 2) for Tajikistan are given in
Table A6.66.
Appendix 6 171
Table A6.66: Governance Indicators for Tajikistan
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) -1.12 -1.07 -0.93 -1.37 -1.42
Rank (0–100%) 16.5 18.2 20.4 11.0 6.3
B. Political Stability
Estimate(-2.5 to +2.5) -1.19 -1.17 -1.43 -1.56 -2.67
Rank (0–100%) 13.1 16.2 9.1 7.9 1.8
C. Government Effectiveness
Estimate(-2.5 to +2.5) -1.05 -1.13 -1.39 -1.37 -1.47
Rank (0–100%) 12.5 9.5 5.9 5.5 2.8
D. Regulatory Quality
Estimate(-2.5 to +2.5) -1.16 -1.26 -1.33 -1.71 -1.88
Rank (0–100%) 12.3 8.7 9.1 6.0 4.4
E. Rule of Law
Estimate(-2.5 to +2.5) -1.18 -1.29 -1.28 -1.42 -1.41
Rank (0–100%) 9.2 6.6 4.8 3.2 4.2
F. Control of Corruption
Estimate(-2.5 to +2.5) -1.11 -1.07 -1.05 -1.12 -1.64
Rank (0–100%) 8.9 9.2 7.5 3.8 2.7
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
56. Tajikistan received a score of 38.6 on the 2005 ESI (footnote 3) and a ranking of
134th among the 146 rated countries, as compared to the highest score of 75.1 attained by
Finland and the lowest score of 29.2 attained by the Democratic People’s Republic of Korea.
Tajikistan’s score is well below the median of the range of scores from 33.1 to 55.2 attained by
the 23 DMCs included in the ESI.
57. As a category A borrower, Tajikistan is qualified to receive only ADF lending. At the end
of 2004 the loan portfolio consisted of 14 public sector ADF loans covering 13 projects, with a
net loan amount of $241 million. There were two program loans. One loan was approved in
2004 and one loan was closed, with a delay of 4.4 months. Four loans became effective within
an average of 3.9 months from loan signing.
58. Four advisory TAs and one project preparatory TA were approved during 2004 for a total
of $2.8 million. The portfolio had 21 ongoing TAs—17 advisory TAs and four project preparatory
TAs—for a total of $11.6 million.
59. The Tajikistan Resident Mission (TJRM) was established in 2003, and as of January
2005, its personnel comprised 2 international staff, 3 national officers, and 1 administrative staff.
As yet no project has been delegated to TJRM for administration.
60. By loan amount, 13.5% of Tajikistan’s portfolio was in the at-risk category, a decline from
11% at-risk loans in 2003, above the region’s 4.2% but lower than ADB-wide rating of 17%.
Based on number of loans, 21.4% (three loans) of the portfolio was considered at risk,
compared with 10.2% for the region and 14.1% ADB-wide. Compared to one problem loan in
2003, the combined ratings for implementation progress and development objectives show that
there was one potential problem loan and three problem loans—one partly satisfactory and two
unsatisfactory. Tajikistan’s portfolio rating for 2004 was below the regional and ADB-wide
averages (Table A6.67 and Table A6.68).
172 Appendix 6
Table A6.67: Lower Rating Projects
(number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans
Implementation Progress - - - 1 1
Development Objectives - - - - -
Partly Satisfactory Loans
Implementation Progress 1 - - - 1
Development Objectives - - - - -
Potential Problem Loans - - 1 - 1
Projects At Risk (number of loans) - - 1 1 3
Source: Asian Development Bank management information systems.
Table A6.68: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Weighted Weighted
Group HS S PS U Average HS S PS U Average Average
Tajikistan - 85.7 7.1 7.1 1.8 - 100.0 - - 2.0 3.8
East and Central Asia 10.2 80.6 5.1 4.1 2.0 2.0 98.0 - - 2.0 4.0
ADB-Wide 4.5 83.9 6.1 5.5 1.9 1.8 95.5 2.0 0.6 2.0 3.9
HS = highly satisfactory, PS = partly satisfactory, S = satisfactory, U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the following
criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
61. Data on Tajikistan’s financial performance indicators are provided in Table A6.69.
Contract awards for project and program loans were below expectations, with actual contract
awards totaling $30.9 million, or 86% of the projected $35.9 million. Contract awards for project
loans were $25.1 million against a projected $28.8 million. The contract award ratio for 2003
was 17.9% for all loans and 15.4% for project loans, above the ADB-wide average of 15% for
ADF loans and 13.3% for ADF project loans. Overall disbursement performance did not meet
expectations, with actual disbursements totaling $19.6 million or 71.8% of the projected
$27.3 million. The disbursement ratio for all loans was 13%, below the ADB-wide average of
18%. The net resource transfer increased from $14.2 million in 2003 to $ 19.0 million in 2004.
62. During 2003, 20 project administration missions visited 11 projects for a total of
188 staff-mission-days, lower than the 197 staff-days in 2003. Mission-days per project
decreased from 20 days in 2003 to 17.1 days in 2004. Eighteen TA missions visited 11 TAs for
a total of 129 staff-days, an increase from the 48 days in 2003. Staff-mission-days per TA
increased from five days in 2003 to 11.7 days in 2004. A country project implementation and
administration mission was also fielded in 2004.
63. The most recent CPR for Tajikistan was conducted in March 2004. As noted then, there
has been no shortage or delay in the provision of counterpart funds by the Government. Also,
the average time elapsed from loan approval to effectiveness has declined from 6 months in
2003 to 3.9 months in 2004 (para. 36). As identified in the first CPR, other causes of
implementation delays were related to (i) the delayed staffing of PMUs; and (ii) the prolonged
procurement process, particularly for contract evaluation. An action plan prepared under the first
CPR dealt with (i) the executing agencies lack of experience with ADB operations policies and
procedures, (ii) start-up delays, and (iii) project monitoring. The next CPR for Tajikistan is
tentatively scheduled in June 2005.
Appendix 6 173
Table A6.69: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 13.0 13.7 105 8.0 3.6 45 29.0 32.6 112 35.7 15.5 43 35.9 30.9 86
Project 3.0 4.6 153 8.0 3.6 45 24.0 27.5 115 35.7 10.4 29 28.8 25.1 87
Program 10.0 9.2 92 - - 5.0 5.0 100 - 5.0 7.1 5.8 82
Disbursement 13.0 12.3 95 4.5 2.9 64 13.1 14.1 108 27.4 14.7 54 27.3 19.6 72
Project 3.0 3.2 107 4.5 2.9 64 8.1 9.1 112 27.4 14.7 54 20.2 19.6 97
Program 10.0 9.2 92 - - 5.0 5.0 100 - - 7.1 - 0
Loan Approvals 40.0 54.0 135 40.0 3.6 9 84.8 70.3 83 38.0 38.0 100 35.7 33.4 94
Project 40.0 54.0 135 40.0 3.6 9 74.8 60.3 81 34.0 34.0 100 35.7 33.4 94
Program - - - - 10.0 10.0 100 4.0 4.0 100 - -
Disbursement Ratio 37.4 35.5 95 5.9 3.7 63 15.6 15.9 102 18.9 12.6 67 15.7 13.0 83
Project 12.0 12.7 106 5.9 3.7 63 11.0 11.5 105 20.2 13.2 65 12.3 14.0 114
Program 102.5 93.9 92 - - 50.0 50.8 102 - - 71.4 - 0
Net Resource Transfer 12.2 2.8 13.8 14.2 19.0
Project 3.2 2.9 9.0 14.5 19.2
Program 9.1 (0.1) 4.8 (0.2) (0.2)
Loan Service Payment 0.1 0.2 0.3 0.4 0.6
OCR - - - - -
ADF 0.1 0.2 0.3 0.4 0.6
TA Projects Approved (no.) 7 10 143 7 5 71 6 5 83 6 9 150 5 5 100
Private Sector Loans (no.) - - - - - - - - - -
Private Sector Equity - - - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
64. Submission of audited accounts improved in 2004. All four loans requiring submission of
audited accounts complied without delay. In 2003, four loans required submission of audited
accounts—three loans fully complied (75%), and one complied late.
7. Republic of Turkmenistan
65. Turkmenistan’s real GDP growth rate declined from 23% in 2003 to 21% in 2004. Its per
capita GNI was $1,120 in 2003. The total population is estimated at 6.47 million in 2004, and the
growth rate from 2002–2004 was 1.5%. The proportion of the population below the national
poverty line was 29.9% (footnote 1).
66. The World Bank’s 2004 governance indicators (footnote 2) for Turkmenistan are given in
Table A6.70.
174 Appendix 6
Table A6.70: Governance Indicators for Turkmenistan
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) -1.90 -1.85 -1.59 -1.59 -1.69
Rank (0–100%) 1.5 2.5 5.8 4.7 2.1
B. Political Stability
Estimate(-2.5 to +2.5) -0.92 -0.19 +0.10 +0.19 +0.36
Rank (0–100%) 18.9 37.8 52.1 55.2 59.1
C. Government Effectiveness
Estimate(-2.5 to +2.5) -1.37 -1.50 -1.38 -1.41 -1.36
Rank (0–100%) 5.3 3.5 7.0 4.9 4.5
D. Regulatory Quality
Estimate(-2.5 to +2.5) -2.22 -1.89 -2.18 -2.45 -2.68
Rank (0–100%) 1.0 1.0 2.7 2.2 1.1
E. Rule of Law
Estimate(-2.5 to +2.5) -1.43 -1.15 -1.13 -1.19 -1.20
Rank (0–100%) 5.8 11.7 7.5 7.0 9.0
F. Control of Corruption
Estimate(-2.5 to +2.5) -1.34 -1.21 -1.12 -1.13 -1.43
Rank (0–100%) 3.4 5.1 5.4 3.3 3.3
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
67. Turkmenistan received a score of 33.1 on the 2005 ESI (footnote 3) and a ranking of
144th among the 146 rated countries, as compared to the highest score of 75.1 attained by
Finland and the lowest score of 29.2 attained by the Democratic People’s Republic of Korea.
Turkmenistan’s score is the lowest among the range of scores from 33.1 to 55.2 attained by the
23 DMCs included in the ESI.
68. As a category C borrower, Turkmenistan is qualified to receive only OCR lending. At the
end of 2004 the portfolio consisted of only two ongoing ADTAs carried over from 2003, for a
total amount of $400,000. No TA mission was conducted in 2004. Selected financial
performance indicators are shown in Table A6.71.
Appendix 6 175
Table A6.71: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards - - - - - - - - - -
Project - - - - - - - - - -
Program - - - - - - - - - -
Disbursement - - - - - - - - - -
Project - - - - - - - - - -
Program - - - - - - - - - -
Loan Approvals - - - - - - 15.0 - 0 - -
Project - - - - - - 15.0 - 0 - -
Program - - - - - - - - - -
Disbursement Ratio - - - - - - - - - -
Project - - - - - - - - - -
Program - - - - - - - - - -
Net Resource Transfer - - - - -
Project - - - - -
Program - - - - -
Loan Service Payment - - - - -
OCR - - - - -
ADF - - - - -
TA Projects Approved (no.) - - 3 1 33 2 2 100 1 - 0 - -
Private Sector Loans (no.) - - - - - - - - - -
Private Sector Equity - - - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
8. Uzbekistan
69. Uzbekistan’s real GDP growth rate increased from 4.1% in 2003 to 7.7% in 2004. Its per
capita GNI was $420 in 2003. Its population is estimated at 25.8 million in 2004, and the growth
rate from 2002–2004 was 1.5%. The proportion of the population below the national poverty line
was 27.5% in 2000.
70. The World Bank’s 2004 governance indicators (footnote 2) for Uzbekistan are given in
Table A6.72.
176 Appendix 6
Table A6.72: Governance Indicators for Uzbekistan
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) -1.75 -1.58 -1.39 -1.50 -1.39
Rank (0–100%) 3.4 5.1 9.9 8.4 7.9
B. Political Stability
Estimate(-2.5 to +2.5) -1.37 -1.02 -1.04 -0.27 +0.07
Rank (0–100%) 9.7 18.9 14.5 36.4 48.8
C. Government Effectiveness
Estimate(-2.5 to +2.5) -1.04 -1.04 -0.96 -1.33 -0.89
Rank (0–100%) 13.9 11.4 16.1 6.6 14.5
D. Regulatory Quality
Estimate(-2.5 to +2.5) -2.10 -1.44 -1.40 -1.82 -1.44
Rank (0–100%) 2.0 6.1 7.0 4.9 6.6
E. Rule of Law
Estimate(-2.5 to +2.5) -1.30 -1.23 -0.95 -1.04 -1.02
Rank (0–100%) 7.7 7.7 12.8 10.3 14.5
F. Control of Corruption
Estimate(-2.5 to +2.5) -1.21 -1.03 -0.80 -0.98 -0.99
Rank (0–100%) 5.9 12.2 22.6 7.1 10.7
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
71. Uzbekistan received a score of 34.4 on the 2005 ESI (footnote 3) and a ranking of
nd
142 among the 146 rated countries, as compared to the highest score of 75.1 attained by
Finland and the lowest score of 29.2 attained by the Democratic People’s Republic of Korea.
Uzbekistan’s score is very close to the bottom of the range of scores from 33.1 to 55.2 attained
by the 23 DMCs
72. As a category B2 borrower, Uzbekistan is qualified to receive primarily OCR lending with
some ADF lending. At the end of 2004 the loan portfolio consisted of 16 public sector loans
covering 15 projects with a net loan amount of $739 million. Of the net loan amount, 97.4% was
OCR and 2.6% was ADF. There was one program loan. Two loans were approved during 2004,
and four loans became effective, average 3.1 months from loan signing.
73. Three advisory TAs and three project preparatory TAs were approved during 2004 for a
total of $2.5 million. At the end of 2004 the portfolio included 15 advisory TAs and six project
preparatory TAs for a total of 21 ongoing TAs and $9.5 million.
74. The Uzbekistan Resident Mission (URM) was established in 1998, and as of January
2005 its personnel comprised 2 international staff, 4 national officers, and 7 administrative staff.
URM staff administered 4 of the 16 active loans during 2004, an increase from the one loan
administered in 2003.
75. By loan amount, 23.8% of Uzbekistan’s portfolio was in the at-risk category in 2004, a
slight improvement from 24% at-risk loans in 2003 but still above the 4.2% for the region and
17% ADB-wide. Based on the number of loans, 18.8% (three loans) of the portfolio was
considered at risk, compared with 10.2% for the region and 14.1% ADB-wide. Similar to 2003,
the combined ratings for implementation progress and development objectives show that while
there were no potential problem loans, there were three problem loans—one partly satisfactory
Appendix 6 177
and two unsatisfactory. Uzbekistan’s portfolio rating in 2004 was below the regional and ADB-
wide averages (Table A6.73 and Table A6.74).
Table A6.73: Lower Rating Projects
(number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans
Implementation Progress - - 2 2 2
Development Objectives 1 1 - - -
Partly Satisfactory Loans
Implementation Progress 3 1 - - 1
Development Objectives 1 - - 1 -
Potential Problem Loans - - 2 - -
Projects At Risk (number of loans) - 1 4 3 3
Source: ADB management information systems.
Table A6.74: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Weighted Weighted
Group HS S PS U Average HS S PS U Average Average
Uzbekistan - 81.3 6.3 12.5 1.7 - 100.0 - - 2.0 3.7
East and Central Asia 10.2 80.6 5.1 4.1 2.0 2.0 98.0 - - 2.0 4.0
ADB-Wide 4.5 83.9 6.1 5.5 1.9 1.8 95.5 2.0 0.6 2.0 3.9
HS = highly satisfactory, PS = partly satisfactory, S = satisfactory, U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the following
criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
76. Data on Uzbekistan’s financial performance indicators are provided in Table A6.75.
Contract awards for project loans did not meet expectations, with actual contract awards totaling
$75.9 million or 98.1% of the projected $77.3 million. Actual contract awards for program loans
amounted to $30.0 million as projected. The contract award ratio for project loans was 20.3%,
higher than the ADB-wide average of 17.4% for all loans. Overall disbursement performance
was below expectation at $89.3 million, or 87% of the projected $102.7 million. The
disbursement ratio (without program loans) was 13.7%. Disbursement ratio with program loans
was 17.8%, slightly below the ADB-wide average of 18%. The net resource transfer increased
from $32.2 million in 2003 to $70.8 million in 2004.
77. During 2004, 16 project administration missions visited 11 projects for a total of
244 staff- mission-days, down from 257 days in 2003. Mission-days per project also decreased,
from 29 days in 2003 to 22.2 days in 2004. Eight TA missions visited six TAs for a total of
61 staff-days, down from 148 days in 2003. Staff-mission-days per TA also decreased, from
25 days in 2003 to 10.2 days in 2004.
78. URM led the latest CPR during October 2004. The CPR noted that the overall status of
portfolio performance remained the same as in 2003. Problems relating to start-up performance
continue to delay project implementation. By end of 2004, two loans are yet to be declared
effective. The CPR also noted that delays were experienced in price verification and contract
registration. Recent initiatives based on a generic approach to price verification taken by the
Government will hopefully resolve discrepancies after contract approval. Workshops were being
planned to orient PIUs of ADB and World Bank projects on agency requirements.
178 Appendix 6
79. Although a new action plan for 2005 was developed, the CPR acknowledged that the
action plan for 2004 were still relevant and should be maintained. The updated action plan
focused on (i) improving start-up performance; (ii) streamlining price verification and contract
registration through improved consultation and information exchange sessions; and
(iii) improving implementation capacity.
Table A6.75: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 27.7 40.6 147 68.3 15.9 23 107.9 45.2 42 91.4 61.2 67 107.3 105.9 99
Project 27.7 40.6 147 68.3 15.9 23 77.9 45.2 58 61.4 61.2 100 77.3 75.9 98
Program - - - - 30.0 - 0 30.0 - 0 30.0 30.0 100
Disbursement 47.0 60.9 130 65.5 40.1 61 73.2 28.0 38 81.2 46.3 57 102.7 89.3 87
Project 47.0 60.9 130 65.5 40.1 61 43.2 28.0 65 51.2 45.6 89 72.7 59.3 82
Program - - - - 30.0 - 0 30.0 0.7 2 30.0 30.0 100
Loan Approvals 163.0 177.0 109 170.0 72.0 42 233.5 236.5 101 72.0 99.2 138 60.0 65.0 108
Project 163.0 177.0 109 110.0 72.0 65 163.5 166.5 102 72.0 99.2 138 60.0 65.0 108
Program - - 60.0 - 0 70.0 70.0 100 - - - -
Disbursement Ratio 16.5 31.7 192 21.3 13.1 62 16.4 9.9 60 16.4 11.5 70 17.5 17.8 102
Project 16.5 31.7 192 21.3 13.1 62 11.5 9.9 86 12.1 13.7 113 14.1 13.7 97
Program - - - - 42.9 - 0 42.9 1.0 2 43.3 43.3 100
Net Resource Transfer 56.6 30.5 16.3 32.2 70.8
Project 56.6 30.5 16.3 32.2 41.8
Program - - - - 29.1
Loan Service Payment 4.3 9.7 11.7 14.1 18.5
OCR 4.3 9.6 11.6 13.9 18.3
ADF 0.0 0.0 0.1 0.1 0.2
TA Projects Approved (no.) 8 5 63 4 5 125 7 7 100 8 9 113 5 6 120
Private Sector Loans (no.) - - 1 - 0 - - - - - -
Private Sector Equity - - 1 - 0 1 - 0 - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, PS = private sector, TA = technical assistance.
Source: Asian Development Bank management information systems.
80. Submission of audited accounts declined in 2004. Of the nine loans requiring submission
of audited accounts, four fully complied (44.4%), two complied late (by less than 6 months), one
partly complied, and two have not complied. In 2003, six loans required submission of audited
accounts—three fully complied (50%), two complied late, and one has not complied.
Appendix 6 179
D. Operations 2, Pacific Department
1. The following sections present data by DMC for PARD. Given the small number of loans
and TAs per DMC, it is not surprising that there is considerable variation in the figures from year
to year for contract awards, disbursements, and mission numbers and duration, and that these
do not compare favorably with ADB-wide statistics. It is noted that missions often review more
than one loan or TA project, but that the TPRs sometimes may not be updated for smaller TAs
or those piggy-backed to a loan, and that this should be monitored more closely in the future to
ensure that the correct allocation of mission days is made. PARD notes that in order to
implement the Reform Agenda of September 2004, the frequency of reviews may need to be
increased to twice per year for the more complex and ‘at risk’ projects.
1. The Cook Islands
2. The Cook Islands’ real GDP growth rate increased from 3.1% in 2003 to 3.4% in 2004.
The total population is estimated at 0.01 million in 2004, and the annual growth rate from
2002–2004 was 0.5%.
3. As a category B1 borrower, the Cook Islands is qualified to receive primarily ADF
lending with some OCR lending. At the end of 2004 the portfolio consisted of 1 public sector
ADF loan with a net loan amount of $2.5 million. No loans were approved, closed or became
effective. Similarly, no TAs were approved. Three TAs were financially closed and 2 advisory
TAs were ongoing for a total of $700,000.
4. The one loan in the portfolio was rated satisfactory in both implementation progress and
development objectives (Table A6.76).
Table A6.76: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Group HS S PS U Weighted HS S PS U Weighted Average
Average Average
Cook Islands - 100.0 - - 2.00 - 100.0 - - 2.00 4.00
PDMCs - 83.9 6.5 9.7 1.74 - 96.8 - 3.2 1.94 3.68
ADB-Wide 4.5 83.9 6.1 5.5 1.87 1.8 95.5 2.0 0.6 1.98 3.86
HS = highly satisfactory, PDMC = Pacific developing member country, PS = partly satisfactory, S = satisfactory,
U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the following
criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
5. Data on Cook Islands’ financial performance indicators are provided in Table A6.77.
There were no contract awards in 2004. Disbursement performance was almost 100% and the
disbursement ratio was 92%. The net resource transfer changed from minus $20,000 in 2003 to
$1.14 million in 2004.
6. During 2004, two project administration missions visited the one project for a total of
37 staff-days, down from the 39 staff-days during 2003. Mission-days per project increased from
20 days in 2003 to 37 days in 2004. There were no missions during 2004 for the 2 advisory TAs
(it is unclear whether the TAs were also reviewed during the project administration missions.)
There was full compliance with the loan required to submit audited accounts.
180 Appendix 6
Table A6.77: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 0.5 0.8 160 0.3 0.4 133 0.2 0.4 200 1.0 1.2 120 - -
Project 0.5 0.8 160 0.3 0.4 133 0.2 0.4 200 1.0 1.2 120 - -
Program - - - - - - - - - -
Disbursement 0.6 0.4 67 0.4 0.6 150 0.1 0.1 100 0.4 0.5 125 1.7 1.7 100
Project 0.6 0.4 67 0.4 0.6 150 0.1 0.1 100 0.4 0.5 125 1.7 1.7 100
Program - - - - - - - - - -
Loan Approvals 2.0 - 0 2.0 2.2 110 - - - - - -
Project 2.0 - 0 2.0 2.2 110 - - - - - -
Program - - - - - - - - - -
Disbursement Ratio 32.4 28.4 88 11.4 18.3 161 2.6 4.1 158 16.6 22.0 133 92.8 91.9 99
Project 32.4 28.4 88 11.4 18.3 161 2.6 4.1 158 16.6 22.0 133 92.8 91.9 99
Program - - - - - - - - - -
Net Resource Transfer 0.1 0.2 (0.3) (0.0) 1.1
Project 0.2 0.3 (0.3) 0.0 1.2
Program (0.1) (0.1) (0.1) (0.1) (0.1)
Loan Service Payment 0.3 0.4 0.4 0.5 0.5
OCR - - - - -
ADF 0.3 0.4 0.4 0.5 0.5
TA Projects Approved (no.) 3 2 67 2 2 100 2 - 0 2 2 100 1 - 0
Private Sector Loans (no.) - - - - - - - - - -
Private Sector Equity - - - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
2. The Fiji Islands
7. The Fiji Islands’ real GDP growth rate increased from 3% in 2003 to 3.8% in 2004. Its
per capita GNI was $2,360 in 2003. The total population is estimated at 0.84 million in 2004,
and the annual growth rate from 2002–2004 was 0.9%. The proportion of the population below
the national poverty line was 25.5% (footnote 1).
8. The World Bank’s 2004 governance indicators (footnote 2) for the Fiji Islands are given
in Table A6.78.
Appendix 6 181
Table A6.78: Governance Indicators for the Fiji Islands
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) +0.15 -0.06 +0.11 +0.10 -0.09
Rank (0–100%) 51.0 48.0 55.5 54.5 49.7
B. Political Stability
Estimate(-2.5 to +2.5) +0.10 +0.23 -0.02 +0.76 +0.93
Rank (0–100%) 51.0 50.8 47.9 75.8 80.5
C. Government Effectiveness
Estimate(-2.5 to +2.5) -0.57 +0.13 -0.34 -0.02 -0.04
Rank (0–100%) 32.7 64.2 40.3 58.5 60.9
D. Regulatory Quality
Estimate(-2.5 to +2.5) -0.36 -0.09 -0.81 -0.61 -0.51
Rank (0–100%) 37.9 50.5 17.1 23.9 27.6
E. Rule of Law
Estimate(-2.5 to +2.5) -0.19 -0.38 -0.69 -0.40 +0.09
Rank (0–100%) 47.8 44.4 27.3 39.5 60.2
F. Control of Corruption
Estimate(-2.5 to +2.5) -0.14 +0.15 +0.53 +0.20 N/A
Rank (0–100%) 54.2 60.7 74.2 70.5 N/A
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
9. As a category C borrower, the Fiji Islands is qualified to receive only OCR lending. At the
end of 2004 the loan portfolio consisted of three public sector OCR loans covering three
projects with a net loan amount of $104 million. No loans were approved or closed during the
year, but one loan became effective.
10. Two advisory TAs and one project preparatory TA were approved for a total of $895,000;
and three TAs were financially closed. At the end of 2004 the TA portfolio included 12 advisory
TAs and 3 project preparatory TAs, for a total of 15 ongoing TAs and a total of $7.7 million.
11. All loans under implementation were rated satisfactory in both implementation progress
and development objectives in 2004. Fiji’s portfolio rating was higher than both the regional and
ADB-wide averages (Tables A6.79).
Table A6.79: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Group HS S PS U Weighted HS S PS U Weighted Average
Average Average
Fiji - 100.0 - - 2.00 - 100.0 - - 2.00 4.00
PDMCs - 83.9 6.5 9.7 1.74 - 96.8 - 3.2 1.94 3.68
ADB-Wide 4.5 83.9 6.1 5.5 1.87 1.8 95.5 2.0 0.6 1.98 3.86
HS = highly satisfactory, PDMC = Pacific developing member country, PS = partly satisfactory, S = satisfactory,
U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the following
criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
12. Data on Fiji Islands’ financial performance indicators are provided in Table A6.80.
Contract awards did not meet expectations, with actual contract awards totaling $9.1 million, or
87% of the projected $10.4 million. One reason for the shortfall was the delayed effectiveness
until 8 December 2004 of L2055-FIJ: Suva–Nausori Water Supply and Sewerage. The contract
182 Appendix 6
award ratio was 20%, almost the same as the ADB-wide average of 19% for OCR loans. Overall
disbursements reached 93% of the projection, and the disbursement ratio was 12%, below the
ADB-wide average of 18%. The net resource transfer increased from $0.9 million in 2003 to
$4.1 million in 2004.
Table A6.80: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 1.8 1.2 67 15.7 13.1 83 11.8 7.6 64 10.9 7.4 68 10.4 9.1 88
Project 1.8 1.2 67 15.7 13.1 83 11.8 7.6 64 10.9 7.4 68 10.4 9.1 88
Program - - - - - - - - - -
Disbursement 3.5 4.7 134 6.5 4.4 68 9.9 4.5 45 7.5 8.8 117 10.2 9.5 93
Project 3.5 4.7 134 6.5 4.4 68 9.9 4.5 45 7.5 8.8 117 10.2 9.5 93
Program - - - - - - - - - -
Loan Approvals 35.0 - 0 15.0 - 0 59.2 16.8 28 64.0 47.0 73 35.0 - 0
Project 35.0 - 0 15.0 - 0 59.2 16.8 28 64.0 47.0 73 35.0 - 0
Program - - - - - - - - - -
Disbursement Ratio 9.0 12.0 133 13.2 12.9 98 11.2 9.6 86 17.7 20.9 118 9.6 11.9 124
Project 9.0 12.0 133 13.2 12.9 98 11.2 9.6 86 17.7 20.9 118 9.6 11.9 124
Program - - - - - - - - - -
Net Resource Transfer (2.9) (2.7) (3.0) 0.9 4.1
Project 0.1 (0.0) (0.2) 3.9 4.1
Program (3.1) (2.7) (2.7) (3.0) -
Loan Service Payment 7.6 7.2 7.5 7.9 5.4
OCR 7.6 7.2 7.5 7.9 5.4
ADF - - - - -
TA Projects Approved (no.) 9 4 44 2 - 0 3 4 133 6 4 67 5 3 60
Private Sector Loans (no.) - - - - - - - - - -
Private Sector Equity - - - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, PS = private sector, TA = technical assistance.
Source: Asian Development Bank management information systems.
13. During 2004, two project administration missions visited 2 of the 3 loan projects for a
total of 26 staff-days, down from 33 staff-days during 2003. Mission-days per project decreased
from 17 days in 2003 to 13 days in 2004, which is due to the projects being handled locally by
SPSO in Suva. Thirteen TA mission visited 11 of 15 TAs for a total of 89 staff-days, up from
46 staff-days during 2003. Staff-days per TA increased from 7 days in 2003 to 8 days in 2004.
Of the two loans that were required to submit audited project accounts during 2004, 1 loan
complied and the other complied late.
3. Kiribati
14. Kiribati’s real GDP growth rate declined from 2.5% in 2003 to 1.8% in 2004. Its per
capita GNI was $880 in 2003. The total population is estimated at 0.09 million in 2004, and the
annual growth rate from 2002–2004 was 1.6%.
15. The World Bank’s 2004 governance indicators (footnote 2) for Kiribati are given in
Table A6.81.
Appendix 6 183
Table A6.81: Governance Indicators for Kiribati
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) +0.87 +1.09 +1.15 +1.26 +1.17
Rank (0–100%) 72.8 82.8 84.8 85.9 85.3
B. Political Stability
Estimate(-2.5 to +2.5) +0.77 N/A N/A N/A N/A
Rank (0–100%) 71.4 N/A N/A N/A N/A
C. Government Effectiveness
Estimate(-2.5 to +2.5) -0.61 -0.25 +0.05 -0.50 -0.38
Rank (0–100%) 30.8 51.2 57.0 31.1 40.8
D. Regulatory Quality
Estimate(-2.5 to +2.5) -0.49 -1.10 -0.78 -0.96 -0.36
Rank (0–100%) 31.0 13.3 18.2 15.8 32.0
E. Rule of Law
Estimate(-2.5 to +2.5) +0.25 +0.62 +0.02 -0.65 N/A
Rank (0–100%) 58.5 69.9 59.4 30.8 N/A
F. Control of Corruption
Estimate(-2.5 to +2.5) -0.02 +0.20 -0.21 -0.55 N/A
Rank (0–100%) 56.7 62.2 50.5 33.9 N/A
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
16. As a category A borrower, Kiribati is qualified to receive only ADF lending. At the end of
2004 the loan portfolio consisted of one public sector ADF loan with a net loan amount of
$10 million. No loans were approved nor closed. One project preparatory TA was approved
during 2004 for a total of $800,000, and two were financially closed; and at the end of 2004 the
TA portfolio included 4 ongoing TAs for a total of $2 million.
17. The one loan in Kiribati’s portfolio was at-risk and rated unsatisfactory in implementation
progress during 2004. Kiribati’s portfolio rating in 2004 was lower than both the regional and
ADB-wide averages (Tables A6.82 and A6.83).
Table A6.82: Lower Ratings Projects
(number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans
Implementation Progress - - - - 1
Development Objectives - - - - -
Partly Satisfactory Loans
Implementation Progress 1 - - - -
Development Objectives - 1 1 - -
Potential Problem Loans - - - - -
Projects At Risk (number of loans) - 1 1 - 1
Source: Asian Development Bank management information systems.
184 Appendix 6
Table A6.83: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Group HS S PS U Weighted HS S PS U Weighted Average
Average Average
Kiribati - - - 100.0 0.00 - 100.0 - - 2.00 2.00
PDMCs - 83.9 6.5 9.7 1.74 - 96.8 - 3.2 1.94 3.68
ADB-Wide 4.5 83.9 6.1 5.5 1.87 1.8 95.5 2.0 0.6 1.98 3.86
HS = highly satisfactory, PDMC = Pacific developing member country, PS = partly satisfactory, S = satisfactory,
U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the following
criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
18. Data on Kiribati’s financial performance indicators are provided in Table A6.84. There
were no contract awards in 2004 compared to the projection of $1.0 million. Overall
disbursement performance was 68% of the projected $3.7 million, and the disbursement ratio
was 56%, far above with ADB-wide average of 18%. There was no change in the net resource
transfer from 2003 to 2004 as it remained at $2.3 million.
Table A6.84: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 1.6 2.0 125 1.3 0.3 23 6.0 3.6 60 0.4 0.6 150 1.0 - 0
Project 1.6 2.0 125 1.3 0.3 23 6.0 3.6 60 0.4 0.6 150 1.0 - 0
Program - - - - - - - - - -
Disbursement 0.6 1.1 183 1.5 1.4 93 1.5 0.8 53 1.3 2.4 185 3.7 2.5 68
Project 0.6 1.1 183 1.5 1.4 93 1.5 0.8 53 1.3 2.4 185 3.7 2.5 68
Program - - - - - - - - - -
Loan Approvals - - - - - - 10.5 - 0 - -
Project - - - - - - - - - -
Program - - - - - - 10.5 - - -
Disbursement Ratio 6.0 10.7 178 17.8 16.9 95 22.4 12.1 54 7.7 37.9 492 82.3 55.5 67
Project 6.0 10.7 178 17.8 16.9 95 22.4 12.1 54 20.3 37.9 187 82.3 55.5 67
Program - - - - - - - - - -
Net Resource Transfer 1.0 1.3 0.7 2.3 2.3
Project 1.0 1.3 0.7 2.3 2.3
Program - - - - -
Loan Service Payment 0.1 0.1 0.1 0.2 0.2
OCR - - - - -
ADF 0.1 0.1 0.1 0.2 0.2
TA Projects Approved (no.) 4 2 50 2 1 50 2 2 100 2 1 50 1 1 100
Private Sector Loans (no.) - - - - - - - - - -
Private Sector Equity - - - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
19. During 2004, one project administration mission visited the one loan project for a total of
11 staff-days, down from 35 staff-days during 2003. Mission-days per project decreased from
35 days in 2003 to 11 days in 2004. No missions were conducted for the 4 ongoing TAs during
2004. The one loan due for compliance in the submission of audited accounts has not yet
complied.
Appendix 6 185
4. Marshall Islands
20. Marshall Islands’ real GDP growth rate declined from 2% in 2003 to minus 1.5% in 2004.
Its per capita GNI was $2,710 in 2003. The total population is estimated at 0.06 million in 2004,
and the annual growth rate from 2002–2004 was 3.8%.
21. The World Bank’s 2004 governance indicators (footnote 2) for Marshall Islands are given
in Table A6.85.
Table A6.85: Governance Indicators for Marshall Islands
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) +1.14 +1.23 +1.30 +1.35 +1.23
Rank (0–100%) 86.4 87.4 89.5 89.5 86.4
B. Political Stability
Estimate(-2.5 to +2.5) +0.66 N/A N/A N/A N/A
Rank (0–100%) 66.5 N/A N/A N/A N/A
C. Government Effectiveness
Estimate(-2.5 to +2.5) -0.46 -0.22 -0.79 -0.56 N/A
Rank (0–100%) 36.5 52.2 20.4 25.7 N/A
D. Regulatory Quality
Estimate(-2.5 to +2.5) -0.55 -0.76 -0.66 -0.83 N/A
Rank (0–100%) 29.1 23.0 20.9 18.5 N/A
E. Rule of Law
Estimate(-2.5 to +2.5) -0.11 -0.05 -0.58 -0.33 N/A
Rank (0–100%) 49.8 53.1 33.7 42.7 N/A
F. Control of Corruption
Estimate(-2.5 to +2.5) -0.84 -1.06 -0.73 -0.55 N/A
Rank (0–100%) 22.7 9.7 25.8 33.9 N/A
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
22. As a category B1 borrower, Marshall Islands is qualified to receive primarily ADF lending
with some OCR lending. At the end of 2004 the loan portfolio consisted of two public sector ADF
loans covering two projects with a net loan amount of $16 million. No loans were approved or
closed during the year.
23. Two advisory TAs were approved during 2004, for a total of $910,000 and one was
financially closed. The TA portfolio included 4 advisory TAs and 1 project preparatory TA for a
total of 5 ongoing TAs and a total of $2 million.
24. The two loans under implementation were rated satisfactory in terms of implementation
progress and development objectives. Marshall Island’s portfolio rating in 2004 was better than
both the regional and ADB-wide averages (Tables A6.86 and A6.87).
186 Appendix 6
Table A6.88: Lower Rating Projects
(number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans
Implementation Progress - - - - -
Development Objectives - - - - -
Partly Satisfactory Loans
Implementation Progress - 1 - - -
Development Objectives - 2 - - -
Potential Problem Loans - - - - -
Projects At Risk (number of loans) - 2 - - -
Source: Asian Development Bank management information systems.
Table A6.87: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Group HS S PS U Weighted HS S PS U Weighted Average
Average Average
Marshall Islands - 100.0 - - 2.00 - 100.0 - - 2.00 4.00
PDMCs - 83.9 6.5 9.7 1.74 - 96.8 - 3.2 1.94 3.68
ADB-Wide 4.5 83.9 6.1 5.5 1.87 1.8 95.5 2.0 0.6 1.98 3.86
HS = highly satisfactory, PDMC = Pacific developing member country, PS = partly satisfactory, S = satisfactory,
U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the following
criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
25. Data on Marshall Islands’ financial performance indicators are provided in Table A6.88.
Contract awards reached $1.0 million during 2004, or 29% of the projected $3.4 million. The
contract award ratio was 10%, lower than the ADB-wide average of 15% for ADF. Overall
disbursements reached $1.6 million or 55% of the projected $2.9 million, and the disbursement
ratio was 13%. The net resource transfer decreased from $4.2 million in 2003 to $0.4 million in
2004.
Table A6.88: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 8.8 9.7 110 9.1 6.6 73 10.8 8.4 78 5.6 5.9 105 3.4 1.0 29
Project 6.0 7.0 117 3.1 2.3 74 5.4 3.0 56 3.3 3.2 97 3.4 1.0 29
Program 2.8 2.7 96 6.0 4.3 72 5.4 5.4 100 2.3 2.7 117 - -
Disbursement 9.2 9.8 107 10.5 8.3 79 10.7 8.3 78 3.1 5.0 161 2.9 1.6 55
Project 6.4 7.0 109 4.5 4.0 89 5.3 2.9 55 0.8 2.4 300 2.9 1.6 55
Program 2.8 2.7 96 6.0 4.3 72 5.4 5.4 100 2.3 2.7 117 - -
Loan Approvals 3.0 6.8 227 12.0 12.0 100 - 7.0 - - - -
Project 3.0 6.8 227 - - - 7.0 - - - -
Program - - 12.0 12.0 100 - - - - - -
Disbursement Ratio 55.1 56.5 103 41.1 32.6 79 63.6 50.0 79 18.8 30.8 164 22.7 13.0 57
Project 46.1 48.5 105 33.2 29.7 89 57.5 32.5 57 5.5 17.1 311 22.7 13.0 57
Program 99.0 97.1 98 50.0 35.9 72 70.9 70.9 100 90.0 104.6 116 - -
Net Resource Transfer 9.5 7.9 7.6 4.2 0.4
Project 6.8 3.8 2.5 2.0 0.9
Program 2.7 4.1 5.1 2.2 (0.6)
Loan Service Payment 0.2 0.5 0.8 0.8 1.2
OCR - 0.0 0.2 0.2 0.3
ADF 0.2 0.4 0.5 0.6 0.9
TA Projects Approved (no.) 2 4 200 1 1 100 1 2 200 2 2 100 1 2 200
Private Sector Loans (no.) - - - - - - - - - -
Private Sector Equity - - - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
Appendix 6 187
26. During 2004, five project administration missions visited four projects for a total of
92 staff- mission-days, up from 73 days in 2003. Mission-days per project increased from
18 days in 2003 to 23 days in 2004. There were no TA missions conducted during 2004. The
two loans requiring submission of audited accounts fully complied in 2004.
27. The most recent CPR for the Marshall Islands was conducted in February 2004. Current,
common concerns with the portfolio presented by the Mission to the government included:
(i) counterpart funding to be requested at the time of budget preparation; (ii) follow-up on the
submission of project accounts for the Loan No. 1971-RMI(SF): Skills Training and Vocational
Education; and (iii) delay in recruitment of key counterpart and full time management staff.
28. The Mission was also concerned over the lack of central government direction,
information, and decision-making. In terms of public service delivery, the Mission encouraged
NGOs to gain experience in working on ADB projects. One constraint to improving the delivery
of social and other public services is the in-grained Marshallese attitude to keep the peace
among and between families in their small society which hinders effective personnel
management, the development of a meritocracy, greater democracy, and leaves both society
and economy open to undue influences. For private sector expansion in the Marshall Islands,
ADB portfolio for 2004 has included an advisory TA at $650,000 to help develop the
environment for private sector development. Initial stakeholder consultations and other
preparations were undertaken for the drafting of the CSPU.
29. Another area of concern by the Mission was that key decisions concerning the future of
The Economic Planning Policy and Statistics Office (EPPSO) have remained undetermined,
hence, placing ADB’s future program on hold. Without the resolution of the roles of the Compact
Negotiations Office (CNO) and EPPSO, with no recruitment of Marshallese to EPPSO, ADB
cannot commence the TA. Without commencement of the ADB TA, it would be difficult for ADB
to undertake the planned CSP update.
5. Micronesia, Federated States of
30. Federated States of Micronesia’s (FSM) real GDP growth rate declined from 3.2% in
2003 to minus 3.3% in 2004. Its per capita GNI was $2,090 in 2003. The total population is
estimated at 0.11 million in 2004, and the annual growth rate from 2002–2004 was 0.9%. The
proportion of the population below the national poverty line was 27.9% (footnote 1).
31. The World Bank’s 2004 governance indicators (footnote 2) for FSM are given in Table
A6.89.
188 Appendix 6
Table A6.89: Governance Indicators for FSM
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) +1.01 +0.93 +0.97 +0.98 +1.18
Rank (0–100%) 80.1 76.8 75.4 74.9 85.9
B. Political Stability
Estimate(-2.5 to +2.5) +0.83 N/A N/A N/A N/A
Rank (0–100%) 72.8 N/A N/A N/A N/A
C. Government Effectiveness
Estimate(-2.5 to +2.5) -0.33 -0.29 -0.55 -0.50 N/A
Rank (0–100%) 42.3 47.3 31.7 31.1 N/A
D. Regulatory Quality
Estimate(-2.5 to +2.5) +0.04 -0.65 -0.56 -0.70 N/A
Rank (0–100%) 52.7 26.0 24.6 20.7 N/A
E. Rule of Law
Estimate(-2.5 to +2.5) +0.40 -0.22 -0.54 -0.33 N/A
Rank (0–100%) 61.4 50.5 37.4 42.7 N/A
F. Control of Corruption
Estimate(-2.5 to +2.5) -0.30 -0.26 -0.35 -0.29 N/A
Rank (0–100%) 47.8 49.0 44.1 47.5 N/A
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
32. As a category B1 borrower, FSM is qualified to receive primarily ADF lending with some
OCR lending. At the end of 2004 the loan portfolio consisted of five public sector loans covering
three projects, with a net loan amount of $45 million. Two loans were approved and one loan
was closed.
33. Three advisory TAs were approved for a total of $850,000 and one was financially
closed. At the end of 2004, the TA portfolio included 9 advisory TAs and 1 project preparatory
TA for a total of 10 ongoing TAs at $4.3 million.
34. By loan amount, 21% of the FSM portfolio was at-risk, an improvement from the 27% at-
risk in 2003. Based on number of loans, 20% of the portfolio (one loan) was considered at risk.
The combined ratings for implementation progress and development objectives show the
5 loans under implementation were satisfactory. FSM’s portfolio rating in 2004 was better than
both the regional and ADB-wide averages (Tables A6.90 and A6.91).
Table A6.90: Lower Rating Projects
(number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans
Implementation Progress - 2 3 - -
Development Objectives - - - - -
Partly Satisfactory Loans
Implementation Progress 1 - - - -
Development Objectives - - - - -
Potential Problem Loans - 1 - 1 1
Projects At Risk (number of loans) - 3 3 1 1
Source: Asian Development Bank management information systems.
Appendix 6 189
Table A6.91: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Group HS S PS U Weighted HS S PS U Weighted Average
Average Average
FSM - 100.0 - - 2.00 - 100.0 - - 2.00 4.00
PDMCs - 83.9 6.5 9.7 1.74 - 96.8 - 3.2 1.94 3.68
ADB-Wide 4.5 83.9 6.1 5.5 1.87 1.8 95.5 2.0 0.6 1.98 3.86
FSM = Federated States of Micronesia, HS = highly satisfactory, PDMC = Pacific developing member country,
PS = partly satisfactory, S = satisfactory, U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the following
criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
35. Data on FSM’s financial performance indicators are provided in Table A6.92. Contract
awards in 2004 reached only $1.1 million, or 19% of the projected $5.9 million; and the contract
award ratio was 3%, lower than the ADB-wide average of 17%. Overall disbursements reached
$1.1 million or 48% of the projection of $2.3 million; and the disbursement ratio was 5%, lower
than the ADB average of 18%. The net resource transfer decreased from $2.4 million in 2003 to
$0.6 million in 2004.
Table A6.92: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 6.0 5.5 92 8.5 0.9 11 7.8 1.1 14 5.2 2.3 44 5.9 1.1 19
Project 6.0 5.5 92 2.5 0.9 36 5.3 1.1 21 2.7 0.5 19 5.2 0.4 8
Program - - 6.0 - 0 2.5 - 0 2.5 1.9 76 0.7 0.7 100
Disbursement 4.5 4.4 98 10.1 2.5 25 5.6 1.4 25 4.2 2.7 64 2.3 1.1 48
Project 4.5 4.4 98 4.1 2.5 61 3.1 1.4 45 1.7 0.9 53 1.6 0.5 31
Program - - 6.0 - 0 2.5 - 0 2.5 1.9 76 0.7 0.7 100
Loan Approvals 12.0 8.0 67 12.0 13.0 108 - - - - 8.0 19.0 238
Project - 8.0 - 8.0 - - - - 8.0 19.0 238
Program 12.0 - 12.0 5.0 42 - - - - - -
Disbursement Ratio 40.6 39.9 98 39.5 46.6 118 24.1 56.7 235 17.9 11.7 65 10.2 5.0 49
Project 40.6 39.9 98 30.3 46.6 154 17.0 56.7 334 9.3 4.9 53 8.8 2.6 30
Program - - 50.0 - 0 50.9 - 0 47.2 34.9 74 16.9 16.9 100
Net Resource Transfer 4.1 2.2 1.1 2.4 0.6
Project 4.3 2.4 1.2 0.7 0.2
Program (0.2) (0.2) (0.2) 1.7 0.4
Loan Service Payment 0.3 0.3 0.3 0.3 0.5
OCR - - - - -
ADF 0.3 0.3 0.3 0.3 0.5
TA Projects Approved (no.) 4 2 50 3 2 67 2 2 100 2 3 150 1 3 300
Private Sector Loans (no.) - - - - - - - - - -
Private Sector Equity - - - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, PS = private sector, TA = technical assistance.
Source: Asian Development Bank management information systems.
36. During 2004, five project administration missions visited two projects for a total of
59 staff-mission-days, down from 84 days in 2003. Mission-days per project increased from
28 days in 2003 to 30 days in 2004. One TA mission visited one TA project for a total of 2 staff-
days, a drop from 20 days in 2003. Staff-mission-days per TA decreased from 10 days in 2003
to 2 days in 2004. One loan due for compliance in the submission of audited accounts has not
yet complied.
37. The CPM for FSM was conducted from 28 April to 11 May 2004. According to the
mission, one critical development in FSM was the passage into US law of the Compact of Free
Association Amendments Act 2003 which will provide FSM a $76 million grant to cover
190 Appendix 6
six sectors and a $16 million contribution to the trust fund during the first year. With regards to
FSM’s CSP update, the mission and the government have agreed that ADB’s current FSM
country strategy with the three pillars (good governance, social development, and economic
growth) should still remain relevant and valid.
6. Nauru
38. Nauru’s total population is estimated at 0.01 million in 2004, and the annual growth rate
from 2002–2004 was 2.1%. Table A6.93 shows the World Bank’s 2004 governance indicators
for Nauru.
Table A6.93: Governance Indicators for Nauru
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) +1.08 +0.85 +0.88 +1.02 +0.90
Rank (0–100%) 82.5 72.7 71.7 78.0 73.3
B. Political Stability
Estimate(-2.5 to +2.5) +0.66 N/A N/A N/A N/A
Rank (0–100%) 66.5 N/A N/A N/A N/A
C. Government Effectiveness
Estimate(-2.5 to +2.5) -1.36 -1.17 N/A N/A N/A
Rank (0–100%) 5.8 8.5 N/A N/A N/A
D. Regulatory Quality
Estimate(-2.5 to +2.5) N/A N/A N/A N/A N/A
Rank (0–100%) N/A N/A N/A N/A N/A
E. Rule of Law
Estimate(-2.5 to +2.5) +0.77 N/A N/A N/A N/A
Rank (0–100%) 74.4 N/A N/A N/A N/A
F. Control of Corruption
Estimate(-2.5 to +2.5) N/A N/A N/A N/A N/A
Rank (0–100%) N/A N/A N/A N/A N/A
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
39. There were no ongoing loans in Nauru’s portfolio in 2004. One TA was financially closed
and two ADTAs were ongoing for a total of $700,000.
7. Papua New Guinea
40. Papua New Guinea’s (PNG) real GDP growth rate declined from 2.8% in 2003 to
2.6% in 2004. Its per capita GNI was $510 in 2003. The total population is estimated at
5.8 million in 2004, and the annual growth rate from 2002–2004 was 2.1%. The proportion of the
population below the national poverty line was 37.5% (footnote 1).
41. The World Bank’s 2004 governance indicators (footnote 2) for PNG are given in Table
A6.94.
Appendix 6 191
Table A6.94: Governance Indicators for PNG
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) -0.03 -0.15 +0.03 +0.20 +0.17
Rank (0-100%) 45.6 46.0 53.9 57.6 57.6
B. Political Stability
Estimate(-2.5 to +2.5) -0.94 -0.71 -0.46 -0.42 -1.18
Rank (0-100%) 18.4 23.2 32.1 27.3 13.4
C. Government Effectiveness
Estimate(-2.5 to +2.5) -1.01 -0.77 -0.68 -0.62 -0.41
Rank (0-100%) 15.4 21.4 25.8 23.5 36.9
D. Regulatory Quality
Estimate(-2.5 to +2.5) -0.64 -0.46 -0.61 -0.48 -0.78
Rank (0-100%) 23.6 36.2 23.5 27.2 18.2
E. Rule of Law
Estimate(-2.5 to +2.5) -0.82 -0.93 -0.43 -0.32 -0.33
Rank (0-100%) 24.2 18.9 43.9 47.6 41.6
F. Control of Corruption
Estimate(-2.5 to +2.5) -0.90 -0.75 -0.85 -0.70 -0.27
Rank (0-100%) 17.7 28.6 18.3 24.0 48.7
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
42. PNG received a score of 55.2 on the 2005 ESI (footnote 3) and a ranking of 36th among
the 146 rated countries, as compared to the highest score of 75.1 attained by Finland and the
lowest score of 29.2 attained by the Democratic People’s Republic of Korea. PNG’s score is the
highest among the range of scores from 33.1 to 55.2 attained by the 23 DMCs included in the
ESI.
43. As a category B2 borrower, PNG is qualified to receive primarily OCR lending with some
ADF lending. At the end of 2004 the loan portfolio consisted of 11 public sector loans covering
11 projects, with a net amount of $271 million. Of the net loan amount, 69% was OCR and
31% was ADF. One loan was approved and closed in 2004 with a delay of 25 months. One loan
became effective 6 months from loan signing.
44. One advisory TA was approved during 2004 for a total of $500,000 and eight TAs were
financially closed. At the end of 2004 the TA portfolio included 5 advisory TAs and 6 project
preparatory TAs for a total of 11 ongoing TAs and $7.7 million.
45. By loan amount, 29% of the PNG portfolio was at-risk, higher than the regional (21%)
and ADB-wide (17%) averages. By number of loans, 18% (2 loans) was considered at-risk. The
combined ratings for implementation progress and development objectives show that out of
eleven loans under implementation, 9 loans were satisfactory, 1 was partly satisfactory, and
1 was unsatisfactory. PNG’s portfolio rating for 2004 was above the regional average but below
ADB-wide average (Table A6.95 and Table A6.96).
192 Appendix 6
Table A6.95: Lower Rating Projects
(number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans
Implementation Progress 1 1 - 1 1
Development Objectives - 1 - - -
Partly Satisfactory Loans
Implementation Progress 3 2 1 1 1
Development Objectives 3 - 1 - -
Potential Problem Loans - 2 - - -
Projects At Risk (number of loans) - 5 1 2 2
Source: Asian Development Bank management information systems.
Table A6.96: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Group HS S PS U Weighted HS S PS U Weighted Average
Average Average
Papua New Guinea - 81.8 9.1 9.1 1.73 - 100.0 - - 2.00 3.73
PDMCs - 83.9 6.5 9.7 1.74 - 96.8 - 3.2 1.94 3.68
ADB-Wide 4.5 83.9 6.1 5.5 1.87 1.8 95.5 2.0 0.6 1.98 3.86
HS = highly satisfactory, PDMC = Pacific developing member country, PNG = Papua New Guinea, PS = partly
satisfactory, S = satisfactory, U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the following
criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
46. Data on PNG’s financial performance indicators are provided in Table A6.97. Contract
awards in 2004 reached $22.6 million, or 39% of the projected $58.4 million; and the contract
award ratio was 15%, lower than the ADB-wide average of 17%. Overall disbursements reached
$19.2 million or 35% of the projected $55.1 million; and the disbursement ratio was 9%. The
negative net resource transfer was minus $14.7 million in 2004 as compared to minus
$17.7 million in 2003.
Table A6.97: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 30.2 23.0 76 60.0 43.6 73 54.3 10.9 20 56.8 15.1 27 58.4 22.6 39
Project 30.2 23.0 76 30.0 9.7 32 19.3 10.9 56 21.8 15.1 69 23.4 22.6 97
Program - - 30.0 34.0 113 35.0 - 0 35.0 - 0 35.0 - 0
Disbursement 16.3 13.0 80 46.0 44.7 97 53.1 14.0 26 53.5 13.8 26 55.1 19.2 35
Project 16.3 13.0 80 16.0 10.1 63 18.1 13.8 76 18.5 13.8 75 20.1 19.2 96
Program - - 30.0 34.7 116 35.0 0.2 1 35.0 0.0 0 35.0 - 0
Loan Approvals 75.0 44.7 60 75.0 75.9 101 12.0 5.7 48 68.3 - 0 18.6 19.0 102
Project 35.0 44.7 128 15.0 5.9 39 12.0 5.7 48 33.3 - 0 18.6 19.0 102
Program 40.0 - 0 60.0 70.0 117 - - 35.0 - 0 - -
Disbursement Ratio 11.0 8.8 80 19.6 19.6 100 25.8 7.0 27 24.9 7.0 28 27.3 9.4 34
Project 11.0 8.8 80 9.1 6.3 69 10.6 8.3 78 10.3 8.5 83 12.0 11.4 95
Program - - 50.0 49.5 99 99.0 0.7 1 99.7 0.1 0 99.7 - 0
Net Resource Transfer (17.6) 13.3 (16.9) (17.7) (14.7)
Project (9.5) (13.0) (7.9) (7.8) (4.2)
Program (8.1) 26.3 (9.1) (9.9) (10.5)
Loan Service Payment 30.6 31.4 31.0 31.5 33.9
OCR 23.1 23.9 22.5 21.3 22.5
ADF 7.5 7.5 8.4 10.2 11.4
TA Projects Approved (no.) 10 6 60 7 8 114 4 3 75 3 2 67 4 1 25
Private Sector Loans (no.) - - - - - - - - - -
Private Sector Equity - - - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, PS = private sector, TA = technical assistance.
Source: Asian Development Bank management information systems.
Appendix 6 193
47. During 2004, 16 project administration missions visited 9 of 11 loan projects for a total of
262 staff-days, down from 307 staff-days visiting 12 projects during 2003. Mission-days per
project increased from 26 days in 2003 to 29 days in 2004. Two TA missions visited 2 of 11 TA
projects for a total of 34 staff-days, up from the 31 staff-days during 2003. Staff-mission-days
per TA reviewed also increased, from 5 days in 2003 to 17 days in 2004.
48. Of the nine loans requiring submission of audited accounts in 2004, four loans complied,
one complied late (by less than 6 months), and four have not yet complied.
49. The most recent CPR for PNG was conducted in September 2004. According to the
Mission, overall performance for 2004 continues to be weak, wherein ongoing projects face
varying degrees of implementation problems. Problem areas included (i) start-up delays in loan
signing and effectivity and in establishing PMUs; (ii) procurement delays and weak financial
management; (iii) shortfalls in counterpart funding; (iv) poor project fund utilization; (v) poor
compliance with ADB’s requirements for audit submission; and (vi) poor project monitoring by
EAs.
50. Two broad areas of weaknesses identified by the CPR mission were weak project
management and weak interagency coordination. One major problem was the poor selection of
PMU staff including project manager and accountant which resulted in (i) poor project planning,
implementation, and monitoring; (ii) weak financial management including imprest fund
management, delayed audit of project accounts; (iii) delayed preparation of bid documents and
submission to ADB; and (iv) substantial delays in preparation of withdrawal applications
resulting in slow disbursements. To achieve effective interagency coordination, the Mission
requested to have a focal point in the Department of Planning and Rural Development and in
each EAs. The Secretary of each concerned Department should play an active role and must
demonstrate project ownership. As a result of poor interagency coordination, most projects were
observed to frequently face inadequate budget allocations and counterpart funds. Hence,
interagency meetings should be held at least every quarter and that budgetary allocations
should be regularly discussed to resolve the issues.
51. To improve future project performance and reduce implementation problems, the
government and ADB agreed to work closely to ensure project quality-at-entry and project
readiness, and proactive project performance monitoring. Ensuring project “readiness” was
seen to be important for immediate implementation even before loan effectiveness to eliminate
the usual project start-up delays. The mission also emphasized the importance of having a
proper monitoring mechanism from the start of each project and requested all EAs to submit
regular project progress reports. Cancellation of surplus loan amounts was deemed important
by the mission to generate savings for some projects.
8. Samoa
52. Samoa’s real GDP growth rate declined from 3.5% in 2003 to 2.3% in 2004. Its per
capita GNI was $1,600 in 2003. The total population is estimated at 0.18 million in 2004, and the
annual growth rate from 2002–2004 was 0.8%. The proportion of the population below the
national poverty line was 20.3% in 2002.
53. The World Bank’s 2004 governance indicators (footnote 2) for Samoa are given in
Table A6.98.
194 Appendix 6
Table A6.98: Governance Indicators for Samoa
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) +0.69 +0.67 +0.62 +0.60 +0.77
Rank (0–100%) 68.4 69.7 66.0 64.9 70.2
B. Political Stability
Estimate(-2.5 to +2.5) +0.89 +0.82 N/A N/A N/A
Rank (0–100%) 76.7 74.1 N/A N/A N/A
C. Government Effectiveness
Estimate(-2.5 to +2.5) +0.09 +0.08 +0.58 -0.06 -0.27
Rank (0–100%) 59.1 62.7 72.0 56.8 48.0
D. Regulatory Quality
Estimate(-2.5 to +2.5) +0.39 -0.06 -0.03 -0.70 -0.21
Rank (0–100%) 63.5 52.6 47.6 20.7 36.5
E. Rule of Law
Estimate(-2.5 to +2.5) +0.62 +1.04 -0.01 -0.97 N/A
Rank (0–100%) 67.1 82.1 58.8 14.1 N/A
F. Control of Corruption
Estimate(-2.5 to +2.5) +0.05 +0.22 -0.12 -0.29 N/A
Rank (0–100%) 59.1 63.3 55.9 47.5 N/A
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
54. As a category A borrower, Samoa is qualified to receive only ADF lending. At the end of
2004 the loan portfolio consisted of four public sector ADF loans with a net loan amount of
$28 million. No loan was approved nor closed. One loan became effective within 3 months of
loan signing.
55. Three advisory TAs were approved, for a total of $700,000 and one was financially
closed. At the end of 2004 the TA portfolio consisted of 12 advisory TAs and 2 project
preparatory TAs for a total of 14 ongoing TAs and $5.4 million.
56. By loan amount, 26% of Samoa’s portfolio was at-risk. By number of loans, 25%
(one loan) of the portfolio was considered at-risk. The combined ratings for implementation
progress and development objectives show that out of four loans under implementation, three
were satisfactory and one was partly satisfactory. Samoa’s portfolio rating for 2004 was above
the regional average but below ADB-wide average (Table A6.99 and Table A6.100).
Table A6.99: Lower Rating Projects
(number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans
Implementation Progress - - - - -
Development Objectives - - - - -
Partly Satisfactory Loans
Implementation Progress - - - - 1
Development Objectives - - - - -
Potential Problem Loans - - - - -
Projects At Risk (number of loans) - - - - 1
Source: Asian Development Bank management information systems.
Appendix 6 195
Table A6.100: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Group HS S PS U Weighted HS S PS U Weighted Average
Average Average
Samoa - 75.0 25.0 - 1.75 - 100.0 - - 2.00 3.75
PDMCs - 83.9 6.5 9.7 1.74 - 96.8 - 3.2 1.94 3.68
ADB-Wide 4.5 83.9 6.1 5.5 1.87 1.8 95.5 2.0 0.6 1.98 3.86
HS = highly satisfactory, PDMC = Pacific developing member country, PS = partly satisfactory, S = satisfactory,
U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the following
criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
57. Data on Samoa financial performance indicators are provided in Table A6.101. Contract
awards in 2004 were only $3.8 million or 63% of the projected $6 million; and the contract award
ratio was 20%, above the ADB-wide average of 15% for ADF loans. Overall disbursements
reached $2.8 million or 93% of the projection of $3.0 million; and the disbursement ratio was
12%, lower than the ADB-average of 18%. The negative net resource transfer was minus
$0.2 million in 2004 as compared to minus $0.8 million in 2003.
Table A6.101: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 3.6 0.1 3 4.6 3.7 80 4.6 1.0 22 1.9 3.3 174 6.0 3.8 63
Project - 0.1 1.2 0.4 33 4.6 1.0 22 1.9 3.3 174 6.0 3.8 63
Program 3.6 - 0 3.4 3.3 97 - - - - - -
Disbursement 3.6 0.3 8 4.5 3.6 80 2.6 0.8 31 1.6 1.9 119 3.0 2.8 93
Project - 0.3 1.1 0.3 27 2.6 0.8 31 1.6 1.9 119 3.0 2.8 93
Program 3.6 - 0 3.4 3.3 97 - - - - - -
Loan Approvals 9.0 10.5 117 6.0 6.0 100 - - 7.0 8.0 114 - -
Project 9.0 10.5 117 6.0 6.0 100 - - 7.0 8.0 114 - -
Program - - - - - - - - - -
Disbursement Ratio 100.3 2.5 2 33.2 26.7 80 16.8 5.3 32 9.9 11.8 119 12.7 11.9 94
Project - 3.7 10.7 2.9 27 16.8 5.3 32 9.9 11.8 119 12.7 11.9 94
Program 100.3 - 0 99.8 97.1 97 - - - - - -
Net Resource Transfer (2.1) 1.6 (1.2) (0.8) (0.2)
Project (1.6) (1.3) (0.7) (0.2) 0.4
Program (0.5) 2.9 (0.5) (0.6) (0.6)
Loan Service Payment 2.4 2.0 2.0 2.7 3.0
OCR - - - - -
ADF 2.4 2.0 2.0 2.7 3.0
TA Projects Approved (no.) 3 3 100 5 3 60 3 3 100 3 4 133 1 3 300
Private Sector Loans (no.) - - - - - - - - - -
Private Sector Equity - 1 - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, PS = private sector, TA = technical assistance.
Source: Asian Development Bank management information systems.
58. During 2004, five project administration missions visited the four loan projects for a total
of 47 staff-days, down from 54 staff-days during 2003. Mission-days spent per project
decreased from 18 days in 2003 to 12 days in 2004. Two TA missions visited 2 of the 14 TA
projects for a total of 7 staff-days, a decline from 51 staff-days during 2003. Staff-mission-days
per TA reviewed also decreased from 6 days in 2003 to 4 days in 2004.
196 Appendix 6
59. Of the 3 loans requiring submission of audited accounts, one loan complied, one
complied late (by less than 6 months), and one has not yet complied.
9. Solomon Islands
60. Solomon Islands’ real GDP growth rate declined from 5.3% in 2003 to 4.6% in 2004. Its
per capita GNI was $600 in 2003. The total population is estimated at 0.52 million in 2004, and
the annual growth rate from 2002–2004 was 2.7%.
61. The World Bank’s 2004 governance indicators (footnote 2) for Solomon Islands are
given in Table A6.102.
Table A6.102: Governance Indicators for Solomon Islands
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) +0.10 +0.37 +0.06 +1.11 +1.07
Rank (0–100%) 49.5 60.1 54.5 82.2 80.1
B. Political Stability
Estimate(-2.5 to +2.5) -0.70 N/A N/A N/A N/A
Rank (0–100%) 26.2 N/A N/A N/A N/A
C. Government Effectiveness
Estimate(-2.5 to +2.5) -1.76 -0.92 -1.04 -0.82 -1.06
Rank (0–100%) 1.4 14.4 13.4 17.5 10.1
D. Regulatory Quality
Estimate(-2.5 to +2.5) -1.47 -1.89 -1.55 -1.09 -1.24
Rank (0–100%) 6.4 1.0 5.9 13.6 8.3
E. Rule of Law
Estimate(-2.5 to +2.5) -1.15 -1.53 -1.34 -0.65 N/A
Rank (0–100%) 10.1 3.6 4.3 30.8 N/A
F. Control of Corruption
Estimate(-2.5 to +2.5) -1.23 -1.58 -0.95 -0.55 N/A
Rank (0–100%) 5.4 1.0 15.1 33.9 N/A
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
62. As a category A borrower, Solomon Islands is qualified to receive only ADF lending. At
the end of 2004 the loan portfolio consisted of two public sector ADF loans covering two
projects, with a net loan amount of $13 million. No loans were approved nor closed.
63. Three advisory TAs amounting to $1.85 million were approved during 2004, and
four were ongoing in the portfolio, for $2 million.
64. By loan amount, 8% (one loan) of the Solomon Island’s portfolio was at-risk in 2004. The
combined ratings for implementation progress and development objectives show that out of the
two loans under implementation, one loan was satisfactory and one was unsatisfactory.
Solomon Island’s portfolio rating for 2004 was below the regional and ADB-wide averages
(Table A6.103 and Table A6.104).
Appendix 6 197
Table A6.103: Lower Rating Projects
(number)
Item 2000 2001 2002 2003 2004
Unsatisfactory Loans
Implementation Progress - - - 2 1
Development Objectives - 1 1 2 1
Partly Satisfactory Loans
Implementation Progress 1 1 1 - -
Development Objectives 1 - - - -
Potential Problem Loans - 1 1 - -
Projects At Risk (number of loans) - 2 2 2 1
Source: Asian Development Bank management information systems.
Table A6.104: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Group HS S PS U Weighted HS S PS U Weighted Average
Average Average
Solomon Islands - 50.0 - 50.0 1.00 - 50.0 - 50.0 1.00 2.00
PDMCs - 83.9 6.5 9.7 1.74 - 96.8 - 3.2 1.94 3.68
ADB-Wide 4.5 83.9 6.1 5.5 1.87 1.8 95.5 2.0 0.6 1.98 3.86
HS = highly satisfactory, PDMC = Pacific developing member country, PS = partly satisfactory, S = satisfactory,
U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the following
criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
65. Data on Solomon Islands’ financial performance indicators are provided in Table
A6.105. Contract awards in 2004 reached only $0.2 million, or 5% of the projected $4.0 million;
and the contract award ratio was 1.7%, well below the ADB average of 15% for ADF loans.
Disbursements reached $0.9 million, or 75% of the projected $1.2 million; and the disbursement
ratio was 7%. The negative net resource transfer decreased from minus $3.0 million in 2003 to
minus $0.7 in 2004.
198 Appendix 6
Table A6.105: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 10.0 - 0 0.8 1.0 125 0.6 - 0 - - 4.0 0.2 5
Project 0.0 - 0 0.8 1.0 125 0.6 - 0 - - 4.0 0.2 5
Program 10.0 - 0 - - - - - - - -
Disbursement 10.7 0.5 5 1.6 0.0 1 0.6 - 0 - 0.2 1.2 0.9 75
Project 0.7 0.5 71 1.6 0.0 1 0.6 - 0 - 0.2 1.2 0.9 75
Program 10.0 - 0 - - - - - - - -
Loan Approvals 7.0 10.0 143 - - 15.0 - - - - -
Project 7.0 10.0 143 - - - - - - - -
Program - - - - 15.0 - - - - -
Disbursement Ratio 97.0 34.7 36 15.7 0.1 1 6.0 - 0 - 2.1 9.9 7.4 75
Project 101.1 64.2 64 15.7 0.1 1 6.0 - 0 - 2.1 9.9 7.4 75
Program 96.8 - 0 - - - - - - - -
Net Resource Transfer (0.5) (0.8) - (3.0) (0.7)
Project (0.4) (0.6) - (2.6) (0.6)
Program (0.1) (0.2) - (0.4) (0.1)
Loan Service Payment 0.9 0.8 - 3.2 1.6
OCR - - - - -
ADF 0.9 0.8 - 3.2 1.6
TA Projects Approved (no.) 3 2 67 2 - 0 2 - 0 - - 2 3 150
Private Sector Loans (no.) - - - - - - - - - -
Private Sector Equity - - - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
66. One project administration mission visited 1 of the 2 loan projects for a total of 8 staff-
days, down from 10 staff-days during 2003. There were no TA missions to the Solomon Islands
from 2002 to 2004. The one loan requiring submission of audited accounts has not yet complied
in 2004.
10. Timor-Leste, Democratic Republic of
67. Timor-Leste’s real GDP growth rate increased from minus 4.4% in 2003 to 1.5% in 2004.
Its per capita GNI was $430 in 2003. The total population is estimated at 0.8 million in 2004, and
the annual growth rate from 2002–2004 was 7%. The proportion of the population below the
national poverty line was 41% in 2001.
68. The World Bank’s 2004 governance indicators (footnote 2) for East Timor are given in
Table A6.106.
69. As a category A borrower, Timor-Leste is qualified to receive only ADF lending. At the
end of 2004 no loan had yet been approved.
Appendix 6 199
Table A6.106: Governance Indicators for East Timor
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) +0.25 +0.19 N/A N/A N/A
Rank (0–100%) 52.9 55.6 N/A N/A N/A
B. Political Stability
Estimate(-2.5 to +2.5) -0.62 -0.94 N/A N/A N/A
Rank (0–100%) 29.1 20.5 N/A N/A N/A
C. Government Effectiveness
Estimate(-2.5 to +2.5) -1.21 -0.93 N/A N/A N/A
Rank (0–100%) 10.1 13.9 N/A N/A N/A
D. Regulatory Quality
Estimate(-2.5 to +2.5) -0.43 -1.25 N/A N/A N/A
Rank (0–100%) 35.5 9.2 N/A N/A N/A
E. Rule of Law
Estimate(-2.5 to +2.5) -0.60 -1.12 N/A N/A N/A
Rank (0–100%) 34.8 12.8 N/A N/A N/A
F. Control of Corruption
Estimate(-2.5 to +2.5) -0.29 -0.52 N/A N/A N/A
Rank (0–100%) 48.3 36.2 N/A N/A N/A
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
70. The TA portfolio consisted of twelve ongoing ADTAs for a total of $6 million.
Three advisory TAs were approved and three were financially closed. One TA mission visited 1
of the 12 TA projects for a total of 5 staff-days, down from 14 staff-days during 2003. Selected
indicators for Timor-Leste are shown in Table A6.107.
Table A6.107: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards - - - - - - - - - -
Project - - - - - - - - - -
Program - - - - - - - - - -
Disbursement - - - - - - - - - -
Project - - - - - - - - - -
Program - - - - - - - - - -
Loan Approvals - - - - - - - - - -
Project - - - - - - - - - -
Program - - - - - - - - - -
Disbursement Ratio - - - - - - - - - -
Project - - - - - - - - - -
Program - - - - - - - - - -
Net Resource Transfer - - - - -
Project - - - - -
Program - - - - -
Loan Service Payment - - - - -
OCR - - - - -
ADF - - - - -
TA Projects Approved (no.) - 12 - 6 3 2 67 2 1 3 3 100
Private Sector Loans (no.) - - - - - - - - - -
Private Sector Equity - - - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, PS = private sector, TA = technical assistance.
Source: Asian Development Bank management information systems.
200 Appendix 6
11. Tonga
71. Tonga’s real GDP growth rate decreased from 3.1% in 2003 to 1.6% in 2004. Its per
capita GNI was $1,490 in 2003. The total population is estimated at 0.10 million in 2004, and the
annual growth rate was 0.5%. The proportion of the population below the national poverty line
was 22.7% in 2001.
72. The World Bank’s 2004 governance indicators (footnote 2) for Tonga are given in
Table A6.108.
Table A6.108: Governance Indicators for Tonga
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) -0.35 -0.12 -0.09 -0.05 0.00
Rank (0–100%) 38.3 47.0 47.6 48.2 52.4
B. Political Stability
Estimate(-2.5 to +2.5) +0.72 N/A N/A N/A N/A
Rank (0–100%) 69.9 N/A N/A N/A N/A
C. Government Effectiveness
Estimate(-2.5 to +2.5) -0.73 -0.46 -0.47 -0.43 -0.19
Rank (0–100%) 25.0 37.3 35.5 36.1 52.0
D. Regulatory Quality
Estimate(-2.5 to +2.5) -0.43 -1.22 -0.18 -1.09 -0.14
Rank (0–100%) 35.5 10.7 38.0 13.6 40.3
E. Rule of Law
Estimate(-2.5 to +2.5) -0.11 +0.04 -0.39 -0.65 N/A
Rank (0–100%) 49.8 55.6 44.4 30.8 N/A
F. Control of Corruption
Estimate(-2.5 to +2.5) -0.68 -0.73 -0.59 -0.29 N/A
Rank (0–100%) 31.5 30.1 34.9 47.5 N/A
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
73. As a category B1 borrower, Tonga is qualified to receive primarily ADF lending with
some OCR lending. At the end of 2004 there were no ongoing loans in the portfolio. One loan
was closed retroactively in 2004.
74. Tonga currently has no loan. During 2004, three advisory TAs were approved for a total
of $700,000, and one was financially closed. At the end of 2004 the portfolio consisted of
8 advisory TAs and 1 project preparatory TA for a total of 9 ongoing TAs and a total of
$3 million.
75. Two missions visited 2 of 9 TA projects for a total of 10 staff-days, a decline from
11 staff-days in 2003. Staff-days per TA increased from 3.7 days in 2003 to 5 days in 2004.
76. The net resource transfer changed from $5 million in 2003 to minus $1.3 million in 2004.
Selected indicators for Tonga are shown in Table A6.109.
Appendix 6 201
Table A6.109: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards - 0.7 - 0.0 5.0 5.0 100 5.0 6.1 122 - -
Project - 0.7 - 0.0 - - - - - -
Program - - - - 5.0 5.0 100 5.0 6.1 122 - -
Disbursement 3.1 2.9 94 0.2 0.2 100 5.0 5.0 100 5.0 6.1 122 - -
Project 3.1 2.9 94 0.2 0.2 100 - - - - - -
Program - - - - 5.0 5.0 100 5.0 6.1 122 - -
Loan Approvals - - - - 10.0 10.0 100 - - 5.0 - 0
Project - - - - - - - - 5.0 - 0
Program - - - - 10.0 10.0 100 - - - -
Disbursement Ratio 87.3 81.7 94 98.7 96.0 97 50.0 50.0 100 88.7 108.2 122 - -
Project 87.3 81.7 94 98.7 96.0 97 - - - - - -
Program - - - - 50.0 50.0 100 88.7 108.2 122 - -
Net Resource Transfer 2.2 (0.6) 4.1 5.0 (1.3)
Project 2.2 (0.6) (0.8) (1.0) (1.2)
Program - - 5.0 6.0 (0.1)
Loan Service Payment 0.7 0.8 0.9 1.1 1.3
OCR - - - - -
ADF 0.7 0.8 0.9 1.1 1.3
TA Projects Approved (no.) 1 2 200 1 1 100 1 1 100 2 3 150 2 3 150
Private Sector Loans (no.) - - - - - - - - - -
Private Sector Equity - - - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
12. Tuvalu
77. Tuvalu’s real GDP growth rate declined from 3% in 2003 to minus 4% in 2004. The total
population is estimated at 0.01 million in 2004, and the annual growth rate was 1.6%.
The proportion of the population below the national poverty line was 29.3% (footnote 1).
78. The World Bank’s 2004 governance indicators (footnote 2) for Tuvalu are given in
Table A6.110.
202 Appendix 6
Table A6.110: Governance Indicators for Tuvalu
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) +0.94 +1.17 +1.39 +1.44 +1.29
Rank (0–100%) 74.8 85.4 92.1 94.2 88.0
B. Political Stability
Estimate(-2.5 to +2.5) +0.86 N/A N/A N/A N/A
Rank (0–100%) 76.2 N/A N/A N/A N/A
C. Government Effectiveness
Estimate(-2.5 to +2.5) -0.79 -0.26 +1.29 N/A N/A
Rank (0–100%) 24.0 50.2 87.6 N/A N/A
D. Regulatory Quality
Estimate(-2.5 to +2.5) +0.76 +0.35 +0.43 N/A N/A
Rank (0–100%) 74.4 65.3 67.4 N/A N/A
E. Rule of Law
Estimate(-2.5 to +2.5) +0.76 +1.79 +1.49 N/A N/A
Rank (0–100%) 73.4 94.4 89.3 N/A N/A
F. Control of Corruption
Estimate(-2.5 to +2.5) -0.78 +0.47 -0.07 N/A N/A
Rank (0–100%) 25.1 71.4 57.5 N/A N/A
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
79. As a category A borrower, Tuvalu is qualified to receive only ADF lending. At the end of
2004 the loan portfolio consisted of two public sector ADF loans with a net loan amount of
$4 million. One loan was approved.
80. One TA was approved and one was financially closed. At the end of 2004 the portfolio
consisted of 6 ongoing TAs and a total of $1.5 million.
81. The combined ratings for both implementation progress and development objectives
show that the two loans under implementation were satisfactory. Tuvalu’s portfolio rating was
higher than both the regional and ADB-wide averages (Table A6.111).
Table A6.111: Project Performance Ratings as of 31 December 2004
(percent of loans)
Implementation Progress Development Objectives
Group HS S PS U Weighted HS S PS U Weighted Average
Average Average
Tuvalu - 100.0 - - 2.00 - 100.0 - - 2.00 4.00
PDMCs - 83.9 6.5 9.7 1.74 - 96.8 - 3.2 1.94 3.68
ADB-Wide 4.5 83.9 6.1 5.5 1.87 1.8 95.5 2.0 0.6 1.98 3.86
HS = highly satisfactory, PDMC = Pacific developing member country, PS = partly satisfactory, S = satisfactory,
U = unsatisfactory.
Note: To calculate the weighted average for implementation progress and development objectives, the
following criteria were used: HS = 3, S = 2, PS = 1, U = 0.
Source: Asian Development Bank management information systems.
82. Data on Tuvalu’s financial performance indicators are provided in Table A6.112.There
were no contract awards in 2004, against the projection of $1.8 million. Disbursements reached
only $0.1 million, or 13% of the projected $0.8 million; and the disbursement ratio was 2.7%,
lower than the ADB average of 18%. There was no net resource transfer during 2004, as
compared to the $0.1 million in 2003.
Appendix 6 203
Table A6.112: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 1.3 - 0 1.2 1.2 100 - - 2.0 0.2 10 1.8 - 0
Project - - - - - - 2.0 0.2 10 1.8 - 0
Program 1.3 - 0 1.2 1.2 100 - - - - - -
Disbursement 1.3 - 0 1.2 1.2 100 - - 0.6 0.1 17 0.8 0.1 13
Project - - - - - - 0.6 0.1 17 0.8 0.1 13
Program 1.3 - 0 1.2 1.2 100 - - - - - -
Loan Approvals - - - - 2.0 1.8 90 - - - 2.0
Project - - - - 2.0 1.8 90 - - - 2.0
Program - - - - - - - - - -
Disbursement Ratio 99.3 - 0 99.8 95.8 96 - - 29.7 6.7 23 43.4 2.7 6
Project - - - - - - 29.7 6.7 23 43.4 2.7 6
Program 99.3 - 0 99.8 95.8 96 - - - - - -
Net Resource Transfer (0.0) 1.1 (0.0) 0.1 -
Project - - - 0.1 0.1
Program (0.0) 1.1 (0.0) (0.0) (0.0)
Loan Service Payment 0.0 0.0 0.0 0.0 -
OCR - - - - -
ADF 0.0 0.0 0.0 0.0 -
TA Projects Approved (no.) 2 1 50 1 1 100 1 1 100 1 3 300 1 1 100
Private Sector Loans (no.) - - - - - - - - - -
Private Sector Equity - - - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assistance.
Source: Asian Development Bank management information systems.
83. One project administration mission visited 1 of the 2 loan projects during 2004 for a total
of 5 staff-days. Three TA missions visited 2 of the 6 TA projects for a total of 17 staff-days.
Staff-mission days per TA were 8.5 days. The two loans due for compliance of audited accounts
in 2004 have not yet complied.
13. Vanuatu
84. Vanuatu’s real GDP growth rate increased from 1.6% in 2003 to 2.2% in 2004. Its per
capita GNI was $1,180 in 2003. The total population is estimated at 0.21 million in 2004, and the
annual growth rate from 2002–2004 was 2%.
85. The World Bank’s 2004 governance indicators (footnote 2) for Vanuatu are given in
Table A6.113.
204 Appendix 6
Table A6.113: Governance Indicators for Vanuatu
Indicators 2004 2002 2000 1998 1996
A. Voice and Accountability
Estimate(-2.5 to +2.5) +0.68 +0.89 +0.62 +0.63 +0.47
Rank (0–100%) 67.5 73.2 66.0 66.5 63.9
B. Political Stability
Estimate(-2.5 to +2.5) +0.53 N/A N/A N/A N/A
Rank (0–100%) 63.1 N/A N/A N/A N/A
C. Government Effectiveness
Estimate(-2.5 to +2.5) -0.60 -0.28 -0.47 -0.43 -0.23
Rank (0–100%) 31.3 48.8 35.5 36.1 51.4
D. Regulatory Quality
Estimate(-2.5 to +2.5) -0.33 -1.20 -0.74 -0.31 -0.06
Rank (0–100%) 39.4 11.2 19.8 34.2 47.0
E. Rule of Law
Estimate(-2.5 to +2.5) -0.07 -0.21 -0.28 -0.65 N/A
Rank (0–100%) 51.2 51.0 50.8 30.8 N/A
F. Control of Corruption
Estimate(-2.5 to +2.5) -0.53 -0.83 -0.83 -0.29 N/A
Rank (0–100%) 37.4 23.5 21.0 47.5 N/A
Note: Estimates range from -2.5 to 2.5, with higher values corresponding to better governance outcomes. The
percentile rank indicates the percentage of countries worldwide that rank below the selected country
(subject to the margin of error).
86. As a category A borrower, Vanuatu is qualified to receive only ADF lending. At the end
of 2004 there were no active loans in the portfolio.
87. Two advisory TAs were approved during 2004 for a total of $1.3 million, and two were
financially closed. At the end of 2004 the portfolio consisted of 8 ongoing advisory TAs for a
total of$3 million.
88. Data on Vanuatu’s financial performance indicators are provided in Table A6.114.
There were no contract awards or disbursements for Vanuatu in 2004, and none were
projected. The negative net resource transfer increased from minus $0.8 million in 2003 to
minus $0.9 million in 2004.
89. There were no loan administration missions to Vanuatu. Three TA missions visited 3 of
8 TA projects for a total of 19 staff-days, a slight drop from the 20 staff-days during 2003. Staff
days per TA project increased from 5 days in 2003 to 6 days in 2004.
Appendix 6 205
Table A6.114: Financial Performance Indicators
($ million)
Year 2000 2001 2002 2003 2004
Item Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual % Proj. Actual %
Contract Awards 11.1 9.5 86 0.8 0.8 100 0.3 0.2 67 - - - -
Project 6.1 4.7 77 0.8 0.8 100 0.3 0.2 67 - - - -
Program 5.0 4.8 96 - - - - - - - -
Disbursement 9.8 10.6 108 3.2 2.8 88 0.2 0.5 250 - 0.0 - -
Project 4.8 5.8 121 3.2 2.8 88 0.2 0.5 250 - 0.0 - -
Program 5.0 4.8 96 - - - - - - - -
Loan Approvals 8.0 - 0 - - 6.0 - 0 5.5 - 0 - -
Project 8.0 - 0 - - 6.0 - 0 5.5 - 0 - -
Program - - - - - - - - - -
Disbursement Ratio 66.3 63.0 95 92.9 82.5 89 34.4 100.6 292 - 100.0 - -
Project 49.8 49.6 100 92.9 82.5 89 34.4 100.6 292 - 100.0 - -
Program 97.2 93.4 96 - - - - - - - -
Net Resource Transfer 9.9 2.1 (0.2) (0.8) (0.9)
Project 5.3 2.3 (0.0) (0.6) (0.7)
Program 4.6 (0.2) (0.2) (0.2) (0.2)
Loan Service Payment 0.6 0.7 0.7 0.9 0.9
OCR - - - - -
ADF 0.6 0.7 0.7 0.9 0.9
TA Projects Approved (no.) 5 4 80 3 3 100 3 2 67 2 2 100 3 2 67
Private Sector Loans (no.) - - - - - - - - - -
Private Sector Equity - - - - - - - - - -
- = not available, ADF = Asian Development Fund, No. = number, OCR = ordinary capital resources,
Proj. = projected, TA = technical assi