ASIAN DEVELOPMENT BANK

Transcription

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2 ASIAN DEVELOPMENT BANK JAPAN FUND FOR POVERTY REDUCTION (JFPR) 2005 ANNUAL REPORT

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4 Poverty, in all its aspects, remains our region s most daunting problem. Thus, the abiding passion, vision, and mission of the Asian Development Bank continues to be the elimination of poverty The face of Asia is changing. Today, hundreds of millions of people enjoy a better quality of life. The middle classes are growing and Asia's place in the world is rising. But open the lens wider, and another face appears. In this region of increasing prosperity, one in five people still cannot access safe drinking water. Half the population is without proper sanitation more than 4 million children will die this year, never reaching their fifth birthday. Haruhiko Kuroda, President, Asian Development Bank. Excerpt from his speech to an audience of more than 2,000 delegates at the Hyderabad International Convention Center during the 39th Annual Meeting in Hyderabad, India.

5 ABBREVIATIONS ADB Asian Development Bank DMC developing member country EA executing agency IA implementing agency ICM implementation completion memorandum JFPR Japan Fund for Poverty Reduction LOA letter of agreement NGO nongovernment organization NWFP North-West Frontier Province OED Operations Evaluation Department OCO Office of Cofinancing Operations NOTE In this report, $ refers to US dollars.

6 CONTENTS Page I. BACKGROUND A. Overview 1 B. Purposes 1 C. Activities 1 D. Types of Grants 2 E. Focus 2 F. Japan s Contribution 2 G. Commitments and Financial Status 3 II. OVERVIEW OF JFPR OPERATIONS IN 2005 A. Tsunami Response Projects 3 B. JFPR Processing and Approvals 4 C. Letters of Agreement 6 D. Disbursements 6 E. Summaries of Grants Approved in F. Ongoing JFPR Projects 11 G. Completed Projects 14 H. NGO Participation 14 I. Monitoring and Evaluation 14 J. Outreach and Visibility 15 III. ACTIVITIES FOR APPENDIXES 1. Members of the Asian Development Bank Audit Report and Financial Statements List of ADB-Approved JFPR Projects JFPR Disbursements, JFPR Grants Approved in 2005 and Implementation Status Progress of Implementation of JFPR Grants, List of NGOs Participating in JFPR Projects JFPR Outreach and Communication Activities, May December 2005

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8 1 I. BACKGROUND A. Overview 1. The 2005 Annual Report of the Japan Fund for Poverty Reduction 1 (JFPR) is the fifth such report and covers the period from 1 January to 31 December The report describes the background and rationale, implementation progress, and achievements of the JFPR. 2. The JFPR was established in May 2000 and provides direct grant assistance to the poorest and most vulnerable groups in developing member countries (DMCs) while fostering long-term social and economic development. The grants target initiatives in poverty reduction and foster the direct participation of nongovernment organizations (NGOs), community groups, and civil society. B. Purposes 3. The main purposes of the JFPR are to: (i) (ii) (iii) (iv) (v) provide direct relief to the poor and most vulnerable groups; use innovative methods in social development; apply community-driven, participatory approaches to achieve rapid results that create ownership by beneficiaries of development activities; support capacity building activities to build a solid foundation for sustainable development; and promote cooperation with NGOs. C. Activities 4. The JFPR grants support a distinct set of priorities to create rapid results and ensure long-term sustainability. The JFPR provides financing for activities that have a strong relation to and enhance the effectiveness of projects financed by the Asian Development Bank (ADB). Typical activities covered include the following. (i) (ii) (iii) Provision of basic economic and social services to the poor, including pilottesting types of activities, such as community-level water supply and sanitation, small clinics, local product market facilities, and skills training centers. Support to social development funds that channel funding to small-scale programs such as child nutrition, reproductive health, skills training, and microfinance, which are targeted to benefit the poor and communities that are otherwise excluded from access to jobs and essential services. Support for NGO activities in poverty reduction and social development, by assisting NGOs with processing projects in a participatory manner, facilitating community involvement in project implementation, building capacity at the grassroots level, and monitoring project progress. 1 The Government of Japan established a similar facility at the World Bank called the Japan Social Development Fund.

9 2 (iv) Capacity building for local governments, community-based organizations (CBOs), and local NGOs for designing, implementing, monitoring, and evaluating projects and pilot testing activities in conjunction with ADB-financed projects. D. Types of Grants 5. There are two types of JFPR grants: (i) (ii) Project grants finance (a) activities directly providing relief measures, supporting the improvement of services and facilities for poorer population groups, or reinforcing/reinvigorating social safety nets; or (b) innovation and testing of new approaches, particularly in the social sectors. Capacity-building grants finance capacity building and improvement measures, for example, to bolster local communities and NGOs through learning by doing, to expand the capabilities or coverage of institutions involved in social funding, or to support local governments working with communities on ADB-funded projects and/or programs. E. Focus 6. The Directional Guidance for 2005, as agreed between the Government of Japan and ADB, stressed that JFPR grants should complement ADB-financed operations and programs compatible with the development objectives of the country support program, poverty reduction strategy paper/national poverty reduction strategy, poverty partnership agreement, or poverty reduction elements of the sector strategies. The grants should focus on activities that: (i) respond directly to the needs of the poorest and most vulnerable groups, through new and innovative methods; (ii) support initiatives that lead to rapid, demonstrable benefits with positive prospects of developing into sustainable activities; and/or (iii) build ownership, capacity, empowerment, and participation of the local communities, NGOs, and other civil society groups to facilitate their involvement in operations financed by ADB. F. Japan s Contribution 7. In May 2000, the Government of Japan made an initial contribution of 10 billion (approximately $92.6 million) to the JFPR. This was followed in March 2002 by an additional contribution of 7.9 billion (about $61.1 million), and $90 million transferred by the Government of Japan from the Asian Currency Crisis Support Facility (ACCSF) to the JFPR. In March 2003, 7.1 billion (about $59.9 million) was transferred to ADB, while in March 2004 and March 2005, additional 2.6 billion (about $23.3 million) and 1.9 billion (about $18.0 million) were transferred. The total Government of Japan contribution as of 31 December 2005 was about $344.9 million.

10 3 G. Commitments and Financial Status 8. By 31 December 2005, the JFPR had committed a total of $174.4 million for 72 projects. Of this amount, $166.4 million for 66 projects was outstanding, i.e., letters of agreement (LOAs) had been signed. By the end of 2005, taking into account the Fund s income from investments as well as interest earned from the bank accounts, about $199 million was available for further commitments. Appendix 2 presents the audit report and financial statement for 2005 and A. Tsunami Response Projects II. OVERVIEW OF JFPR OPERATIONS IN JFPR assistance in 2005 began with the tsunami response projects initiated by ADB. The earthquake off the coast of Sumatra on 26 December 2004 and the tsunami that it generated claimed the lives of over 220,000 people across 12 countries and resulted in over $10 billion in damages. Immediately, then President of ADB Tadao Chino called for concerted efforts to deal with this unprecedented disaster. ADB launched the largest grant program in its history by 31 December 2005, ADB's total approved funding for tsunamiaffected countries had reached $859.9 million, of which $679.6 million (79%) was grant funding. This amount includes $20 million from the JFPR, which finance minister and ADB Governor for Japan Sadakazu Tanigaki announced on 11 January 2005 at ADB headquarters would be made available to DMCs affected by the tsunami disaster. 10. Shortly after taking office on 1 February 2005, President Haruhiko Kuroda traveled to Banda Aceh, Maldives, and Sri Lanka, and then to India to survey the destruction, offer his sympathies, and pledge ADB s support for the reconstruction efforts. In all, five projects worth a total of $10 million were prepared for Banda Aceh; one project worth $1 million was prepared for the Maldives; two projects worth $2 million each were prepared for Sri Lanka; and one project worth $5 million was prepared for India. As of the end of 2005, all 10 projects had been approved by the Government of Japan. Of these, eight had been approved by ADB, of which Supporting Community Health Care Initiatives in Aceh 2 project received ADB approval on 18 January The India proposal on Restoration and Diversification of Livelihoods for Tsunami-Affected Poor and Marginalized People in the States of Tamil Nadu and Kerala 3 would not be circulated to the Board until Asian Development Bank (ADB) Proposed Grant Assistance to the Republic of Indonesia: Supporting Community Health Care Initiatives in Nanggroe Aceh Darussalam. Manila. 3 ADB Proposed Grant Assistance to India: Restoration and Diversification of Livelihoods for Tsunami-Affected Poor and Marginalized People in the States of Tamil Nadu and Kerala. Manila.

11 4 B. JFPR Processing and Approvals 11. Besides the above emergency assistance pledged in 2005, ADB approved $28.4 million for 19 JFPR projects (Appendix 3 lists the approved JFPR projects). These brought to 72 the total number of projects approved from 2000 to 2005, with a total amount of $174.4 million (Figures 1 and 2). The level of 19 projects has been the highest since JFPR was established in If we exclude the large Afghanistan projects from 2002 onwards, the 2005 level is the highest in terms of amount (Figure 2). Figure 1: No. of ADB Approved Projects ( ) Year Other Countries Afghanistan Figure 2: Amount of ADB Approved Projects in $millions ( ) Year Other Countries Afghanistan

12 5 12. Indonesia had the highest number of projects in 2005 at five projects, four of which were tsunami response projects, while Cambodia had three. Sri Lanka s two projects were also in response to the effects of the tsunami. In total, Cambodia has the highest number with nine approved projects, followed by Indonesia with eight, Afghanistan with seven, and Philippines with six. Figure 3 shows the distribution of projects by country, as approved in 2005, as well as the cumulative approvals from 2000 to Figure 3: Distribution of Projects by Country No. of Projects Afghanistan Azerbaijan Bangladesh Bhutan China, People's Republic of Number of Projects by Country (2005) LAO PDR = LAO People's Democratic Republic Cambodia India Indonesia Kyrgyz Lao PDR Maldives Mongolia Nepal Pakistan Philippines Papua New Guinea Regional Sri Lanka Tajikistan Number of Projects by Country (Cumulative) 13. In all, there were six projects for South Asia, five projects each for Southeast Asia and the Greater Mekong Subregion, while Eastern and Central Asia had three projects (Figure 4). In terms of total approvals, South Asia leads with 21 projects, followed by the GMS with 19, Eastern and Central Asia with 17, Southeast Asia with 14, and Pacific region with one project. 25 Figure 4: Distribution of Projects by Region 20 No. of Projects East and Central Asia South Asia Southeast Asia Mekong Pacific No. of Projects by Region (2005) No. of Projects by Region (Cumulative)

13 6 14. Sector-wise, agriculture and natural resources (ANR) sector projects led in terms of grant amounts approved last year at $9.19 million, representing 32% (Figure 5). Health, nutrition, and social protection (HNSP) followed with $5.25 million (18%) and multisector projects amounted to $3.8 million (13%). Looking at the cumulative total for 2000 to 2005, HNSP constitutes 34% with $59.65 million, followed by transport and communications at 23% with $40 million (due mainly to two projects in Afghanistan worth a total of $35 million), and ANR at 21% with $35.81 million (Figure 6). Figure 5: 2005 Grant Amount by Sector Figure 6: Total Grant Amount by Sector $2.00m (1 project) $2.80m (2 projects) $3.80m (2 projects) $9.19m (7 projects) Agriculture and Natural Resources Education Finance Health, Nutrition and Social Protection Transport and Communications $12.04m (9 projects) $3.50m (2 projects) $40.00m (5 projects) $6.34m (3 projects) $35.81m (20 projects) $14.07m (5 projects) $3.00m (2 projects) Agriculture and Natural Resources Education Energy Health, Nutrition and Social Protection Transport and Communications Finance $5.25m (4 projects) $3.50m (2 projects) $1.87m (1 project) Water Supply, Sanitation and Waste Management Multisector $59.65m (26 projects) Water Supply, Sanitation and Waste Management Multisector m = million C. Letters of Agreement 15. Of the 19 projects that were approved by ADB in 2005, 13 projects became effective in the same year, i.e., their LOAs were signed. Two would have their LOAs signed by the first semester of 2006 and four projects have yet to become effective. D. Disbursements 16. Total project disbursement in 2005 amounted to $22.16 million, 14% higher than the amount registered in This brought total project disbursements to $59.95 million (Figure 7). The projects which registered the highest disbursements in 2005 are JFPR 9006-REG: Community Action for Preventing HIV/AIDS ($7.9 million), and JFPR 9024-AFG: Road Employment Project for Settlement and and Integration of Returning Refugees and Displaced Persons which disbursed over $2 million. In terms of total disbursements, JFPR 9024-AFG and JFPR 9006-REG registered the highest with $10.9 million and $7.9 million, respectively. Percentage-wise, JFPR 9008-TAJ: Tajikistan Rural Poverty Reduction, JFPR 9003-PHI: On-Site Urban Upgrading for Vulnerable Slum Communities of Payatas, and JFPR 9004-PHI: Off-Site and Off-City relocation of Vulnerable Slum Communities of Muntinlupa City disbursed % of the total grant amounts [Attachment (v)].

14 7 Figure 7: JFPR Disbursement Disbursement ($ million) JFPR = Japan Fund for Poverty Reduction Disbursement per Year Cumulative Disbursement E. Summaries of Grants Approved in Following are brief summaries of the 19 grant projects approved in JFPR 9061: Improving Primary School Access in Disadvantaged Communes (Cambodia). This $1.87 million project will rehabilitate school infrastructure in incomplete primary schools under the leadership and management of community organizations. The project will provide additional classrooms; repair leaking roofs; and provide toilets, water supply, and school desks. School-parents committees will receive capacity building inputs, and the project will help strengthen the planning and monitoring capacities of the Ministry of Education and NGOs. 19. JFPR 9062: Sustainable Agro-forestry Systems for Livelihood Enhancement of Rural Poor (Lao People s Democratic Republic [Lao PDR]). The grant will (i) construct onfarm infrastructure for the development of sustainable intensive interlinked agriculture and forestry land use systems, (ii) build up the capacity of nine impoverished ethnic minority communities to manage their land holdings sustainably, and (iii) strengthen the institutional capacity of local government agencies to effectively deliver essential agriculture and forestry extension and regulation services to these communities. The project will cost $1.5 million. 20. JFPR 9063: Maternal Mortality Reduction (Mongolia). This $1 million project seeks to reduce the maternal mortality ratio in Mongolia by promoting universal usage of quality reproductive health services, particularly among traditionally underserved mothers. The project will (i) design reforms in resource allocation, service organization, and service provider performance in responding to reproductive health needs; (ii) expand information channels and health service options; (iii) mobilize social support to promote healthy and proper health-seeking behaviors of mothers; (iv) improve the quality of reproductive health services; and (v) continually assess local actions for improving access to quality medical services for indigents and the socially and culturally displaced. 21. JFPR 9064: Improving the Access of Poor Floating Communities on the Tonle Sap to Social Infrastructure and Livelihood Activities (Cambodia). This $1.0 million grant will

15 8 CARM OIC, Purnima Rajapakse, H.E. Aun Porn Moniroth, Secretary of State, Ministry of Economy and Finance, and H.E. Lim Sokun, Secretary of State, Ministry of Agriculture, Forestry and Fisheries, signed the LOA, witnessed by Mr. Susumu Inoue, Charge d'affaires, Embassy of Japan. demonstrate ways of improving the livelihood of the poorest fishing households living in floating villages on the Tonle Sap. It will (i) demonstrate viable alternative income-generating activities; (ii) support community-based microfinance characterized by sustainable financing arrangements; (iii) develop and test low-cost solutions for the most urgent and basic health, nutrition, water, and sanitation needs; and (iv) promote functional literacy and vocational skills for illiterate adults and out-of-school children, especially girls. 22. JFPR 9065: Enriching Lives of the Urban Poor through Food Fortification (Indonesia). The project will try to reduce iron-related and Vitamin A deficiency (VAD) health problems by improving access to and promoting consumption of fortified food. Using publicprivate-civic partnerships in North Jakarta, the project will promote the in-home use of a multimicronutrient fortificant (MMF) called "sprinkles" which will initially be distributed free. The project will (i) assess the effectiveness of palm oil fortification with Vitamin A and the feasibility of local production of MMFs; (ii) build capacity of the public and private sectors to produce quality fortified food and strengthen monitoring systems; and (iii) raise awareness of consumers on prevention of health problems and the benefits of micronutrient-enriched food. The project will cost $1.75 million. 23. JFPR 9066: Restoration of Livelihoods of the Tsunami- Affected Farmers in the Maldives (Maldives). This was the first tsunami response project approved by ADB. It will enable farmers in the 26 worstaffected agricultural communities to restart their agricultural livelihood activities in order to bring their quality of life above pre-tsunami levels. This $1 million project will try to achieve this while increasing the participation of CBOs in farm activities. Photo shows Mohamed Jaleel, minister for finance and treasury of the Government of the Maldives signing the letter of agreement on 5 May 2005 in Male. Witnessing the event were Hiroshi Karube, minister/deputy head of mission to the Republic of Maldives (center) and Hideyaki Onishi, first secretary and representative of the Embassy of Japan, Colombo (right). 24. JFPR 9067: Enhancing Road Improvement Benefits to Poor Communities in North- West Frontier Province (NWFP) (Pakistan). An ADB loan-funded road development and connectivity project in NWFP is expected to improve access to markets, jobs, and other opportunities in the province. This $1 million JFPR project, in turn, will help ensure that poor people living in poor villages will have improved and marketable skills that will allow them to take on jobs outside their villages. Livelihood assistance will enable them to engage in small businesses and take advantage of opportunities brought about by easier access to markets in

16 9 adjacent areas. The grant will also finance community infrastructure that will be identified, constructed, and maintained by self-help community groups. At the same time, the project will integrate community consultation and participation into road development processes at the Works and Services Department and the NWFP provincial government. 25. JFPR 9069: Improving the Well-Being of Road Workers (Bhutan). This $0.5 million project will try to reduce poverty among road workers and their children by (i) implementing health education programs, including training-of-trainers as road health workers and strengthening first aid services; (ii) improving their shelter and water and sanitation facilities; and (iii) providing access to school and training opportunities. The project will provide road workers children with boarding facilities near the primary schools to ensure their safety and convenience. 26. JFPR 9071: Community-Based Agricultural Extension and Training in Mountainous Districts (Viet Nam). This is a $0.9 million project that seeks to improve the income and living conditions of ethnic minorities in the northern central region. It will (i) increase the capacity of local agricultural extension workers and commune-based extension agents in appropriate cultivation techniques; (ii) establish participatory and pro-poor extension services; (iii) establish a network of farmer-to-farmer exchanges for learning at the grassroots level; and (iv) ensure food security among poor and remote communities through improved cultivation practices, focusing on food crops and hybrid rice, as well as through the propagation of small livestock. 27. JFPR 9072: Sustainable Livelihood Development for Coastal Communities in the Special Province of Nanggroe Aceh Darussalam (Indonesia). This project will provide technical and financial assistance to tsunami-affected small-scale fishers, fish farmers, and other members of fishing communities, especially women, in Aceh Besar and Aceh Utara Districts of Nanggroe Aceh Darussalam (NAD) province. It has three main components: (i) community organizing and mobilization, which will enable clients to actively participate in livelihood restoration activities; (ii) livelihood restoration and development, which will provide technical and financial support to fishers and fish farmers; and (iii) project management support. NGOs will help organize and manage local production assistance funds. The project cost is $2.5 million. 28. JFPR 9073: Rehabilitation of Coral Reef and Mangrove Resources in the Special Province of Nanggroe Aceh Darussalam (Indonesia). This $1.5 million project will raise the incomes of poor coastal communities in Aceh Besar district and Banda Aceh in Nanggroe Aceh Darussalam (Aceh) by rehabilitating and sustainably managing coral reef and mangrove resources damaged by the tsunami. It has three components: (i) community organizing, which will provide the necessary foundation for rehabilitation works; (ii) community-based coastal resources rehabilitation and management, which will focus on the replanting and enrichment of mangroves and coral transplantation; and (iii) project management, monitoring, and audit. 29. JFPR 9074: Seismically Upgraded Housing in Nanggroe Aceh Darussalam (Indonesia) 4. One of five tsunami projects approved for Indonesia, this $2 million project will demonstrate an appropriate technology for replacement of destroyed housing stock with affordable and seismically enhanced structures, and lay the groundwork for a sustainable system of promotion of such housing through banks and microfinance institutions. It is expected that the selected banks and other microfinance institutions will develop a housing credit line that 4 ADB Proposed Grant Assistance to the Republic of Indonesia: Seismically Upgraded Housing in Nanggroe Aceh Darussalam. Manila

17 10 promotes earthquake resistant housing to a wider clientele. The project has four components: (i) development and construction of prototypes, (ii) dissemination and training, (iii) grant funding for house construction, and (iv) project management. 30. JFPR 9075: Mahalla Business Development Project (Azerbaijan). This is a $1.5 million project which will establish business support service centers (BSSCs) in 10 rayons (districts) to train poor households on income-generating activities, foster a savings and credit culture through the creation of community savings groups (CSGs), and provide financial assistance for the extreme poor through income-generating activities. 31. JFPR 9076: Public Works Restoration and Rehabilitation of Drainage Systems of Tsunami-Affected Local Government Roads (Sri Lanka). The objective of the project is to improve the quality of life of the tsunami-affected poor through a cash-for-work program which will restore and rehabilitate linedrainage systems of the tsunami affected roads. It is expected that residents will be able to restart their livelihood activities in the tsunami-affected areas, with the clearing of the roads and the Dr. P.B. Jayasundera, finance secretary, shakes hands with Alessandro Pio, country director, Sri Lanka Resident Mission after signing the agreements. Sujatha Cooray, director general, External Resources Department, Ministry of Finance, Katsunori Ashida, second secretary, Embassy of Japan, and K. M. Tilakaratne, project implementation officer, Sri Lanka Resident Mission look on. income from the drainage rehabilitation works. The project costs $2 million. 32. JFPR 9077: Post-Tsunami Utility Connections for the Poor (Sri Lanka). This $2 million project will help victims of the tsunami regain access to power and water connections when their houses are rebuilt. Selection criteria will be prepared by ADB with NGOs to ensure proper targeting. Lessons from JFPR 9045-SRI: Power Fund for the Poor, which has a component that is similar to the proposed project, will be used to guide project implementation. 33. JFPR 9078: Community - Based Rural Road Maintenance (Tajikistan). The project will establish a cost-effective and sustainable community-based road maintenance system in the project area. The maintenance system will focus on the improvement of 350 kilometers (km) of rural roads while generating employment and income for the rural poor through minor repair and maintenance contracts. It will also ensure poor villagers access to education and health services, markets, and regional economic centers. It will Neeraj Jain, country director, Tajikistan Resident Mission, and A. Ashurov, minister of transport, signed the Letter of Agreement, witnessed by Director General H. Satish Rao; Hiroshi Takahashi, Chargé d'affaires, Embassy of Japan; President H. Kuroda; M. Alimardonov, chairman, National Bank of Tajikistan; F. Kholboboev, ADB governor and state adviser to the President on economic policy; G. Babaev, minister of state revenue and duties of Tajikistan; and I. Lalbekov, Chairman, TajikSodirotBank (Tajik Private Commercial Bank).

18 11 build the capacity of government and NGOs, as well as small and very small contractors and communities, to manage and execute the maintenance and minor repair of rural roads. The project cost is $1.8 million. 34. JFPR 9079: Assistance for the Restoration of Microenterprise and Microfinance in Aceh (ARMMA) (Indonesia). ARMMA is a $2 million project that will expand the outreach of microfinance in Aceh by developing microcredit pilot programs that reach households and microenterprises affected by the tsunami, and that have traditionally found access to formal financial institutions difficult. It will disburse seed capital to at least 1,500 borrowers under four microfinance projects. At least two of these pilot projects will follow Syariah 5 principles of banking. The objective is to develop confidence quickly among small entrepreneurs, thereby jumpstarting the local economy and raising family incomes. 35. JFPR 9080: Social Development for Erosion-Affected Persons in the Jamuna- Meghna Floodplains (Bangladesh). This $0.79 million project seeks to reduce poverty among the most vulnerable poor who were displaced by river erosion, became landless, and settled in riverine fringe areas covered by the Meghna-Dhonagoda Irrigation Project (MDIP) and the Pabna Irrigation and Rural Development Project (PIRDP). It will (i) create permanent employment opportunities, such as nursery development and social forestry, fish culture, and livestock development, along with the effective use of existing water management facilities; and (ii) develop the organizational, institutional, and leadership capacities of the poor through community mobilization and organization, through networking, and by establishing selfmanaged information and resources centers (IRCs) in the subproject areas. 36. JFPR 9081: Women s Development Centers (Cambodia). The project will (i) facilitate human development for poor women through life skills training and advocacy support; (ii) promote micro and small entrepreneurship development and support through adequate information, facilitation of access to credit, and enabling links to various organizations and resources; and (iii) build the capacity of institutions that promote women-friendly entrepreneurial environments. The goal is to reduce poverty through increased access to services that support women's social and economic empowerment. The project cost is $1.8 million. F. Ongoing JFPR Projects 37. This section describes a sampling of JFPR projects at various stages of implementation, underscoring the breadth and depth of the interventions in DMCs across the region. 38. JFPR 9058-VIE: Expanding Benefits to the Poor through Urban Environmental Improvements builds on the experience of a similar JFPR project in Cambodia, JFPR 9023 CAM: Income for the Poor through Community Based Environmental Improvements in Phnom Penh. The project will (i) improve drainage systems, laterite roads, and alleyways; (ii) provide water connections and sanitation facilities; and (iii) establish a solid waste management system in selected poor communities in Viet Nam. At 5 Islamic banking in which money extended by the financial institution is repaid based upon a projection of the firm s profit

19 12 the same time, residents will be trained on construction and maintenance skills to provide additional sources of income while ensuring proper maintenance of the improved physical facilities. The LOA was signed for ADB on 12 May 2005 by Bradford Philips, country director, Viet Nam Resident Mission; Phung Khac Ke, deputy governor of the State Bank of Viet Nam; and Nguyen Tan Van, vice minister of construction. Also present at the signing ceremony was Yasukata Fukahori, first secretary and head of economic section of the Embassy of Japan. 39. On 21 November 2005, JFPR 9022-PHI: Strategic Private Sector Partnerships for Urban Poverty Reduction in Metro Manila (STEP-UP) held a 3rd Anniversary and Recognition Program at ADB Headquarters. The event was attended by Philippine Vice President Noli de Castro, concurrently head of the Housing and Urban Development Coordinating Council; ADB officers and staff; and key private sector representatives. The photo shows Vice President de Castro with Philippines Country Office (PHCO) Country Director Tom Crouch, Southeast Asia Social Sector Division Urban Development Specialist and STEP-UP project officer Michael Lindfield, Vice President Joseph Eichenberger, Southeast Asia Regional Department Director General Shamshad Akhtar, Alternate Executive Director Marita Magpile-Jimenez, Deputy Secretary Amarjit Wasan, and JFPR Coordinator Megumi Araki. STEP-UP is a $3.6 million project that brings together the public and private sectors in addressing needs for housing improvement, livelihood, community infrastructure, and risk reduction and management in Metro Manila s poor communities. 40. JFPR 9015-MON: Improving the Living Environment of the Poor in Ger Areas of Mongolia s Cities is a $2.2 million project that provides financing for small construction and repair works, and builds public bath houses and demonstration greenhouses in ger (informal settlement in an urban area) areas. These before and after photos demonstrate the varied uses of the housing micro-loans by poor recipients in Ulaanbaatar. A house owner borrowed money to repair the roof and windows and to resurface and repaint the interior of his house.

20 13 A loan was used to buy felt for the inner and outer covers of this ger. Here, loan funds were used to replace a ger structure with a modern concrete house. 41. Another urban project, this time in Vientiane, Lao PDR, is putting in place infrastructure improvements in support of a community-based solid waste management system. JFPR LAO: Solid Waste Management and Income Generation for Vientiane s Poor is a $1 million project which combines urban environmental improvements with income generation and entrepreneurship development within selected urban poor communities. This photo shows residents responding to a baseline survey. The other one shows participants at a training workshop on income generation. The photo shows school children being taught on how they can participate in the community s solid waste management program. Community members gather on the riverbank to take part in a boat racing festival The project used the boat racing festival as an opportunity to talk about and promote solid waste management. Project staff launched a JFPR boat, from which volunteers unfurled posters and spoke to the crowd.

21 14 Community members go to the streets to help during the public clean-up day. The project used events such as this to drum up public interest and participation in the solid waste management campaign G. Completed Projects 42. As of 31 December 2005, of the 72 ADB-approved projects, all but six projects had become effective (i.e., LOAs had been signed). Of the 66 effective projects, four were completed in Sixteen projects were scheduled to close in 2005, but of these, 10 projects sought and were granted extensions by the Office of Cofinancing Operations (OCO). The four projects that closed in 2004 and the six projects that closed in 2005 are currently in the process of financial closing and the project officers are preparing the implementation completion memoranda (ICM). H. NGO Participation 43. NGO participation has been deeply ingrained in JFPR operations so much so that JFPR is widely recognized as one of the primary grant facilities available to NGOs. Community groups and NGOs are routinely involved in the different stages of the project cycle, from factfinding to preparation, appraisal, and then to the implementation, monitoring, and evaluation stages. They take part either as executing agency (EA); implementing agency (IA); as a resource NGO providing information, community organizing, or some other specialized services to the project; or even as consultant to ADB in the course of the project s supervision. 44. There are instances when the proposal comes to ADB as an initiative of the NGO, and is taken up by an ADB officer who packages it and obtains the necessary project approvals. In such cases, the NGO becomes either an EA or an IA, with the partnership arrangements spelled out in a memorandum of agreement. The JFPR inbox receives offers for collaboration from various NGOs around the region, which JFPR staff then routinely transmit to the resident missions or divisions concerned. Appendix 7 lists the NGOs participating in JFPR projects. I. Monitoring and Evaluation 45. As part of OCO s role as JFPR administrator, missions were conducted in 2005 to Tokyo for discussions with Japanese authorities at the Ministry of Finance; and to Viet Nam and Lao PDR to monitor JFPR implementation, address portfolio issues, and promote visibility. The Executive Director (ED) for Japan Masaki Omura participated in the latter two missions. Alternate ED Atsushi Mizuno and Mr. Keiji Takechi, an official of the Development Institutions Division, International Bureau, Ministry of Finance, Japan, took part in separate missions to Vietnam to observe the implementation of JFPR, and Japan Special Fund (JSF) Technical Assistance projects, and to meet with alumni and scholars of the Japan Scholarship Program.

22 A special evaluation study on Civil Society Organizations (CSO) Involvement in ADB Operations 6 was conducted by the Operations Evaluation Department (OED) in late The study included an analysis of the experience under JFPR in the five operational regions. The report is now being finalized and will be available toward the end of the first semester of OCO is also coordinating with OED for the evaluation of JFPR projects. OED is scheduled to undertake the Evaluation of Selected Special Funds for Poverty Reduction and Lessons for Scaling-Up/Replicability for ADB Lending in 2007 and this will include JFPR. In response to OCO s request, OED will review JFPR projects which are linked to ADB loans that are scheduled for review in 2006 and In 2005, draft project completion/evaluation/impact assessment reports were prepared for JFPR , , and These, as well as the ICMs that will be submitted to OCO, will be shared with OED as input for the evaluation studies. On top of these individual project evaluations, a larger evaluation of the Fund itself is being planned for late 2006 up to the second quarter of J. Outreach and Visibility 48. ADB continues to promote the visibility of the JFPR in Japan, as well as within the DMCs. LOA signing and project launch ceremonies are normally attended by representatives from the Embassy of Japan, national and local leaders, and representatives from ADB headquarters and/or ADB resident missions. These events are featured in daily national newspapers. The JFPR s main link to the public is through the JFPR website ( which is consistently one of the most regularly visited pages on the ADB.org website. The JFPR website includes program details, basic information on grants approved, JFPR annual reports, news, and feature articles on JFPR-funded projects. 49. Within ADB, JFPR events and announcements are routinely featured in ADB Today, ADB s daily in-house electronic newsletter. The following are three examples of such events as they appeared in ADB Today. 6 ADB Involvement of Civil Society Organizations in Asian Development Bank Operations. Manila. 7 ADB Proposed Grant Assistance to the Republic of Tajikistan: Tajikistan Rural Poverty Reduction. Manila. 8 ADB Grant Assistance to the Lao People s Democratic Republic : Community-Managed Livelihood Improvement. Manila. 9 ADB Proposed Grant Assistance to the Republic of Azerbaijan: Integration of Internally Displaced Persons in Mingechevir Rayon. Manila.

23 16 Monday, 9 May 2005 ADB, Maldives sign letter of agreement for JFPR grant to help tsunamiaffected farmers The first JFPR-financed tsunami assistance project was signed at a ceremony held on Thursday in Male. The $1 million grant, approved 29 April by ADB, will help restore the livelihoods of farmers. Friday, 10 June 2005 IRM: Evaluation of the first JFPR project CD David Green attended a final evaluation of the JFPR project Assisting Girl Street Children at Risk of Sexual Abuse. NGOs implementing the project, government officials and other stakeholders participated in the event, which also marked the project's official completion. Friday, 21 October 2005 Visit: Director's Advisors to urban development project Director's Advisors and SESS's Michael Lindfield this week visited Malabon/Caloocan slums that have been upgraded and provided with livelihood assistance under the JFPR-funded Strategic Private Sector Partnerships for Urban Poverty Reduction project. 50. At ADB headquarters, on 23 November 2005, OCO kicked off the JFPR Series with the session on Lessons in Income Generation through Community-Based Environmental Improvements in Phnom Penh with no less than two of the municipality s vice governors presenting the project results and lessons learned. It was a high-profile event that was attended by the executive director for Japan, the alternate executive director, and the advisor to the executive director. Also in attendance were OCO Principal Director Werner Liepach, Deputy Director General Arjun Thapan, officers and staff from the different operations departments of ADB, and guests from the World Bank and NGOs. The meeting received favorable reviews from JFPR officers and staff, as well as visitors from multilateral development agencies and NGOs, and generated a high level of awareness of JFPR. This is the banner that was put up at the ADB Headquarters entrances before the event.

24 The article below was published in ADB Today, JRO E-newsletter, and may be viewed on the JFPR website. JFPR Series: Lessons on Income Generation through Community-Based Environmental Improvements in Phnom Penh 24 November 2005 Their Excellencies, Messrs. Trac Thai Sieng and Mann Chhoeurn, Vice Governors of the Municipality of Phnom Penh, presented to ADB staff and representatives from the donor community the experience from JFPR 9023-CAM: Income Generation through Community-based Environmental Improvements which is scheduled to close by the end of this year. A joint initiative by the Office of Cofinancing Operations and the Mekong Regional Department, the presentation kicked off the JFPR Series which seeks to disseminate among ADB staff and the development community lessons learned from implementing JFPR projects. ADB Executive Director for Japan, Mr. Masaki Omura (right) welcomes His Excellency Trac Thai Sieng, Vice Governor of the Municipality of Phnom Penh (second from right), at the start of the presentation. Looking on are Mr. Megumi Araki, Sr. Cofinancing Specialist and JFPR Coordinator (left), and Mr. Januar Hakim, Urban Development Specialist, MKSS (second from left) Typical of many cities in the Mekong Region, Phnom Penh faces public health issues due to flooding, poor drainage, and inadequate solid waste disposal. The limited capacity of the municipal government to provide basic infrastructure services and the lack of civic awareness on the importance of environmental hygiene prompted the Municipality of Phnom Penh to seek ways to resolve these concerns using participatory processes. Through JFPR assistance, a pilot project was developed to target poor communities in seven sangkats (villages), which aimed to simultaneously improve the environmental conditions of the poor while generating income. The activities revolved around the establishment of solid waste management systems run by and located within poor communities. Reaction by the communities was initially lukewarm and skeptical. However, through persistence, dynamic leadership, and building up of community trust, the incremental efforts eventually led to spin-off activities and triggered involvement of a wider group of stakeholders that included the private sector and NGOs, and, eventually, the development of social capital. His Excellency Trac Thai Sieng, Vice Governor of the Municipality of Phnom Penh (left) shares lessons learned from JFPR 9023 with the audience led by ADB Executive Director for Japan, Mr. Masaki Omura (front row, center), OCO Principal Director Werner Liepach, and Deputy Director General Arjun Thapan of MKRD. The initiative was also attended by the ADB Executive Director for Japan, Mr. Masaki Omura, Alternate Executive Director Mizuno, OCO Principal Director Mr. Werner Liepach, MKRD DDG Arjun Thapan and the Director's Advisor (Japan) Mr. Takeshi Murazawa. In recognition of the pioneering effort for the poor and the environment, the Phnom Penh officials presented Mr. Januar Hakim, the project officer, a medal of honor and plaque signed by the Prime Minister of Cambodia. The JFPR was set up in 2000 with an initial contribution of Y10 billion (about $90 million). The Fund now stands at over $344 million.

25 To inform Japanese audiences on developments on JFPR, OCO provides news items for inclusion in the bimonthly JRO E-Newsletter. The Japan Representative Office (JRO), under the leadership of Director General Woo Chull Chung, has been supportive in this regard. 53. The JFPR website, meanwhile, continues to be a popular site within the ADB website, consistently ranking among its most-viewed top-level directories. OCO regularly uploads data on projects as well as JFPR to make sure the information is always up-to-date. The JFPR 2004 Annual Report 10 was also produced in 2005, and distributed to DMC governments and NGOs. Copies were sent to the representative offices in Japan (JRO), North America (NARO), and Europe (ERO) as well as the Public Information Center at ADB headquarters for dissemination to project partners, beneficiaries, and the public. Appendix 8 lists the JFPR communication and outreach activities. The 2004 JFPR Annual Report III. ACTIVITIES FOR For 2006, OCO will focus on the following: (i) (ii) (iii) Increasing grant utilization through (a) acceptance of grant proposals linked to Asian Development Fund grants; (b) dialogues with regional departments to encourage preparation of JFPR grants; and (c) maintaining high visibility for JFPR within ADB. Improving portfolio performance and disbursement through (a) working with the regional departments operations coordination divisions, and the resident missions project administration units to address portfolio level issues and concerns; and (b) continuing the initiative begun in 2005 to undertake special missions, as necessary, to monitor projects and help address operational issues. Strengthening JFPR linkage to Country Support Programs/Updates through enhancement of the Directional Guidance Paper and the JFPR Guidelines, in 10 ADB Japan Fund for Poverty Reduction 2004 Annual Report. Manila.

26 19 consultation with the Government of Japan, to encourage upstream consideration of JFPR project possibilities during CSP preparation and reviews. (iv) (v) Promotion of knowledge management and dissemination of lessons and enhancement of JFPR visibility through (a) continuation of the JFPR dissemination series; (b) ensuring completion and dissemination of project completion reports (PCRs) and ICM; (c) inclusion of photo-essays and project write-ups on the JFPR website; and (d) continued utilization of the ADB Today, JRO E-newsletter, and other ADB media to announce developments in JFPR. Evaluation of completed projects in coordination with OED and dissemination of evaluation reports.

27 20 Appendix 1 MEMBERS OF THE ASIAN DEVELOPMENT BANK Regional Year of Nonregional Year of Membership Membership Afghanistan a 1966 Austria 1966 Armenia 2005 Belgium 1966 Australia 1966 Canada 1966 Azerbaijan a 1999 Denmark 1966 Bangladesh a 1973 Finland 1966 Bhutan a 1982 France 1970 Cambodia a 1966 Germany 1966 China, People's Republic of a 1986 Italy 1966 Cook Islands a 1976 Luxembourg 2003 Fiji Islands a 1970 The Netherlands 1966 Hong Kong, China a 1969 Norway 1966 India a 1966 Portugal 2002 Indonesia a 1966 Spain 1986 Japan 1966 Sweden 1966 Kazakhstan a 1994 Switzerland 1967 Kiribati a 1974 Turkey 1991 Korea, Republic of a 1966 United Kingdom 1966 Kyrgyz Republic a 1994 United States 1966 Lao People's Democratic Republic a 1966 Malaysia a 1966 Maldives a 1978 Marshall Islands a 1990 Micronesia, Federated 1990 States of a Mongolia a 1991 Myanmar a 1973 Nauru a 1991 Nepal a 1966 New Zealand 1966 Pakistan a 1966 Palau a 2003 Papua New Guinea a 1971 Philippines a 1966 Samoa a 1966 Singapore a 1966 Solomon Islands a 1973 Sri Lanka a 1966 Taipei, China a 1966 Tajikistan a 1998 Thailand a 1966 Timor-Leste 2002 Tonga a 1972 Turkmenistan a 2000 Tuvalu a 1993 Uzbekistan a 1995 Vanuatu a 1981 Viet Nam a 1966 a Developing member country

28 2005 AUDIT REPORT AND FINANCIAL STATEMENTS Appendix 2 21

29 22 Appendix 2

30 Appendix 2 23

31 24 Appendix 2

32 Appendix 2 25

33 26 Appendix 2

34 Appendix 2 27

35 28 Appendix 2

36 Appendix 2 29

37 30 Appendix 2

38 Appendix 3 31 LIST OF ADB-APPROVED JFPR PROJECTS DMC Project Title Amount ($ million) 1. Afghanistan Community-Based Gender Sensitive Basic Education for the Poor Afghanistan Road Employment Project for Settlement and Integration of Returning Refugees and Displaced Persons Afghanistan Primary Health Care Partnerships for the Poor Afghanistan Emergency Road Rehabilitation Afghanistan Integrated Community Development in Northern Afghanistan Afghanistan Rural Recovery through Community-Based Irrigation Rehabilitation Afghanistan Balkh River Basin Integrated Water Resources Management Azerbaijan Integration of Internally Displaced Persons in Mingechevir Rayon Azerbaijan Mahalla Business Development Bangladesh Supporting Livelihood Improvement for the Poor through Water Management Cooperation Associations 11. Bangladesh Social Development for Erosion-Affected Poor in the Jamuna Meghna Floodplains Bhutan Improving the Well-Being of Road Workers Cambodia Community-Based Livelihood Enhancement of the Rural Poor in Northwestern Cambodia 14. Cambodia Income for the Poor Through Community-Based Environmental Improvements in Phnom Penh Cambodia Improving the Livelihood of Poor Farmers in Southern Cambodia Cambodia Targeted Assistance for Education of Poor Girls and Indigenous Children Cambodia Mainstreaming Labor-Based Road Maintenance to the National Roads Network Cambodia Health Care Financing for the Poor Cambodia Improving Primary School Access in Disadvantaged Communes Cambodia Improving the Access of Poor Floating Communities on the Tonle Sap to Social Infrastructure and Livelihood Activities Cambodia Women s Development Centers Central Asian Republics Asian Countries in Transition for Improving Nutrition for Poor Mothers and Children Central Asian Republics Sustainable Food Fortification in Central Asia and Mongolia China, People's Republic of Innovations for the Participatory Flood Control by the Poor Along the Yellow River Greater Mekong Community Action for Preventing HIV/AIDS 8.00 Region a