The Board of Directors of the African Development Bank Group (AfDB) has approved the Bank’s third sovereign lending instrument called the Results-Based Financing (RBF) Policy.
In statement, the lender said the RBF will be its third financing instrument to complement the two existing instruments, namely, investment lending and program-based operations (PBOs).
RBF is an additional, innovative, financing instrument that supports government-owned programs and links disbursements directly to the achievement of program results.
According to the statement: “The approval of the RBF policy comes at a critical juncture where countries are increasingly harnessing resources for structural transformation and seeking financing and expertise from development partners, in flexible ways, to improve the effectiveness and efficiency of their development programs. The Policy will therefore enhance the Bank’s responsiveness to such growing demands from its clients. It will also sharpen the Bank’s results focus and help scale up financing in the High 5 priority areas recently adopted by the institution.
“In so doing, the Bank will increase accountability and incentives for delivering and sustaining results, while promoting institutional development and enhancing development effectiveness concurrently.”