AfDB approves third sovereign lending instrument

AfDB HeadThe AfDB is a financial provider to African governments and private companies investing in the regional member countries (RMC). (Image source: Clara Sanchiz/Flickr)The board of directors of the African Development Bank Group (AfDB) have approved the Bank’s third sovereign lending instrument called the Results-Based Financing (RBF) Policy

RBF will be the Bank’s third financing instrument to complement the two existing instruments such as investment lending and programme-based operations (PBOs).

RBF is an additional, innovative, financing instrument that supports government-owned programmes and links disbursements directly to the achievement of programme results.

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 programmes.

The Policy is expected to enhance the Bank’s responsiveness to such growing demands from its clients. It is also set to 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.

The Bank will embark on the development of a solid pipeline of RBF operations, carefully selecting priority government programmes that are expected to deliver results in regional member countries.

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