Piloting Results-Based Lending for Programs: Proposed Increase in Resource Allocation Ceiling

Abstract

ADB introduced results-based lending (RBL) for programs in June 2013. RBL was conceived and developed in the context of broader efforts by the international development community to expand the use of results-based financing modalities. It aims to strengthen incentive and accountability for results in development assistance operations by linking loan disbursements with results. Multilateral development banks (MDBs) and other agencies have been utilizing elements of results-based financing since the late 1990s through such mechanisms as cash on delivery aid, conditional cash transfers, output-based aid, and performance-based contracts. ADB’s Third Primary Education Development Project in Bangladesh approved in July 2011 used a sector-wide approach with ADB financing linked to clearly defined indicators and relying on the government’s treasury system for financial management. The World Bank introduced the program-for-results (PforR) financing instrument in January 2012. ADB built on these discussions in developing its version of results-based financing, RBL. Based on the policy paper entitled Piloting Results-Based Lending for Programs (RBL policy), ADB introduced this new modality on a pilot basis, from 6 June 2013 to 5 June 2019.