Key developments in ADF-16 compared to ADF-15 :
A minimum performance-based allocation of UA 9 million per year (UA 27 million per cycle) will be applied to all countries except countries in transition to ADB-only credit status.
To provide stronger incentives to countries on a good reform trajectory, the incentive-related portion of the Modified-Volume discount is used to reward ADF-only countries, and those eligible to TSF Pillar I, which have improved their macroeconomic policies. During the ADF-15 period, Management used a yearly eligibility assessment for the reallocation of the incentives-related portion at the time of each PBA computation. As of the ADF-16 cycle, Management will use a one-cycle eligibility assessment at the beginning of each period rather than a yearly eligibility assessment. The objective of this adjustment is to ensure that the frequency of conducting CPIA exercises per ADF cycle (a minimum of two assessments) will not negatively affect country allocations and therefore resource predictability. The incentives-related portion will be reallocated using the PBA Performance component method.
The share of grants in a country’s PBA will continue to be determined by the Debt Sustainability Analysis. However, ADF-Only (category A) countries at moderate risk of debt distress (yellow traffic light) will receive their allocation in the form of highly concessional loans instead of a mix of loan and grants.
Eligibility for country allocations has been aligned with the revised World Bank criteria for Fragile and Conflict-affected Situations and adjusted to reflect countries’ credit status.
The unallocated reserve of the TSF will be made available for preventive interventions (Prevention Envelope) and crisis responses (Crisis Response Envelope) in any ADF country regardless of its classification as a Transition State. Preventive interventions will be selected through annual Calls-for-Proposals while crisis responses will be managed on a case-by-case basis in emergencies. The preventive approach will address thematic priorities agreed for each ADF cycle. For ADF-16, three thematic areas were identified in addition to the crisis response: gender equality and women’s empowerment; climate change adaptation and mitigation, and private sector development.
An additional UA 50 million was allocated to the PSF to better reach underserved segments through Non-Sovereign Operations.
© 2025 African Developement Fund , All Rights Reserved.
