Annual Progress Report January–December 2013 · received UFPF-support (and allocated assistance) since its inception up to the coverage of this reporting period. 7. At present,

Annual Progress Report January–December 2013

ABBREVIATIONS

ADB – Asian Development Bank CDIA – Cities Development Initiative for Asia CDTA – Capacity Development Technical Assistance CEFPF – Clean Energy Financing Partnership Facility DC – direct charges DFID – Department for International Development DMC – developing member countries DMF – design monitoring framework GMS – Greater Mekong Subregion OBA – output based aid OCO – Office of Cofinancing Operations OD – operation department PATA – Policy Advisory Technical Assistance PPP – public-private partnership PPTA – Project Preparatory Technical Assistance PRC – People’s Republic of China PSOD – Private Sector Operations Department RF – Rockefeller Foundation RM – resident mission RSDD – Regional and Sustainable Development Department RSID – Regional Sustainable Infrastructure Division SWM – solid waste management SPV – Special Purpose Vehicle TA – technical assistance UCCRP – Urban Climate Change Resilience Partnership UCCRTF – Urban Climate Change Resilience Trust Fund UCoP – Urban Community of Practice UEIF – Urban Environmental Infrastructure Fund UFPF – Urban Financing Partnership Facility UISC – Urban Infrastructure Steering Committee UIWG – Urban Infrastructure Working Group UOP – Urban Operational Plan

USAID – United States Agency for International Development WFPF – Water Financing Partnership Facility

NOTES

(i) In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

(ii) In this report, "$" refers to US dollars.

Governance of the Urban Financing Partnership Facility

Urban Infrastructure Steering Committee (UISC)

W. Um, Officer-in-Charge, Regional and Sustainable Development Department (RSDD) - Chair Klaus Gerhaeusser , Director General, Central and West Asia Department (CWRD) Ayumi Konishi, Director General, East Asia Department (EARD) Xianbin Yao, Director General, Pacific Department (PARD) Todd Freeland, Director General, Private Sector Operations Department (PSOD) Juan Miranda, Director General, South Asia Department (SARD) James Nugent, Director General, Southeast Asia Department (SERD)

Urban Committee Members

Anand Chiplunkar, Director, CWUW – Acting Chair Hun Kim, Deputy Director General, SARD - Co-Chair Srinivas Sampath, Principal Urban Development Specialist, RSID Arnaud Heckmann, Urban Development Specialist, EASS Fei Yue, Director, SAUW Frederic Thomas, Senior Investment Specialist, PSIF2 James Leather, Principal Transport Specialist, SETC Jingmin Huang, Senior Urban Development Specialist, RSID Kathie Julian, Resident Representative, GRM, concurrently Lead Urban Development Specialist (PPP) Priyanka Sood, Financial Sector Specialist, CWPF Stephen Blaik, Senior Urban Development Specialist, PAUS Tatiana Gallego-Lizon, Principal Urban Development Specialist, SAUW Vijay Padmanabhan, Senior Urban Development Specialist, SAUW Alexandra Vogl, Urban Development Specialist, RSID Preety Bhandari, Advisor, RSDD-CC Michael Rattinger, Climate Change Specialist, RSDD-CC Arghya Sinha Roy, Disaster Risk Management (Climate Change Adaptation), RSGP

Facility Manager

Gil-Hong Kim, Director, Sustainable Infrastructure Division, RSDD

Secretariat Srinivas Sampath, Principal Urban Development Specialist, RSID Alexandra Vogl, Urban Development Specialist, RSID Vergel K. Latay, Urban Development Officer, RSID Diana Marie Hernandez, Operations Analyst, RSID Virginia Herrera, Senior Operations Assistant, RSID Vince Michael Docta, Urban Sector Coordinator, RSID

Office of Cofinancing Operations (OCO)

Ma. Carmela D. Locsin, Head, OCO Sujata Gupta, Director, OCO Toshimasa Dojima, Principal Financing Partnerships Specialist, OCO Heeyoung Hong, Senior Financing Partnerships Specialist, OCO Rikard Elfving, Senior Financing Partnerships Specialist, OCO

CONTENTS I. INTRODUCTION 1 II. HIGHLIGHTS AND KEY ACHIEVEMENTS 2

A. Project Approvals 2B. 2013 Work Program Accomplishments 3

III. RESULTS FRAMEWORK FROM JANUARY TO DECEMBER 2013 17

A. Progress Towards Expected Results 17 B. Resource Utilization/Commitment 22 IV. FINANCIAL STATUS 26 A. Financing Partner Contributions and Status of Grant 26

B. Discussion on Disbursements 27C. Projected Demand for 2014 31 V. MANAGEMENT OF THE FACILITY 32 A. Governance and Operating Structure 32 B. Administrative Arrangements/Operations 32 VI. LESSONS LEARNED 34 VII. OVERVIEW OF THE 2014 WORKPLAN 34 APPENDICES 1. UFPF Design and Monitoring Framework2. Guidelines for Application for Assistance and Project Selection 3. UFPF Status of Grant (Contribution) as of 31 December 20134. Emerging Pipeline of Urban Projects Requesting UFPF Assistance 2014 5. 2014 ADB Urban Lending Pipeline6. UFPF Governance Structure7. UFPF Draft Monitoring Framework 8. UFPF Results Monitoring Form

1

I. INTRODUCTION 1. The Urban Financing Partnership Facility (UFPF or the ‘Facility’) was established in November 2009 with the aim of raising and utilizing development partner funds for investment co-financing in urban environmental infrastructure projects and support a wide range of technical assistance to help lay the groundwork for such projects. The UFPF is expected to deliver concrete outcomes:

(i) greater coverage and access to improved infrastructure and services in drinking water, sanitation, transport, solid waste management for about 200 million people, with consequent impacts on improved health, mobility opportunities for employment and hence, economic growth;

(ii) increased investments (including, private sector) in urban environmental infrastructure projects through UFPF upstream technical assistance, viability gap investment financing and / or credit enhancement (guarantee) support for whole projects or components thereof; and

(iii) investment road maps for sustainable development in 50 cities;

(iv) capacity development for national sustainable urban development strategies in 10 countries.

2. The UFPF is composed of:

(i) the Urban Environmental Infrastructure Fund (UEIF) which is a multi-donor trust

fund, where the Government of Sweden (Sida) has made an initial commitment of $14 million (and an additional commitment of $7 million in 2011) for investment co-financing and technical assistance (and a guarantee facility of $ 70 million) for urban environmental infrastructure that benefits the poor. As a multi-donor fund, the UEIF supports grant components of investment projects and technical assistance, and any other activities that may be agreed upon between partners and ADB. Specifically, the UEIF supports climate change mitigation and adaptation, public transport, water supply and sanitation, solid waste management and urban renewal projects. It provides: technical assistance for building DMC/local government/utility capacity for (a) pre-feasibility assessments and project structuring (b) project implementation, (c) structuring mechanisms to support private participation and financing of urban environmental infrastructure; (d) early-stage investment or viability gap financing; and (e) guarantees to help build a pipeline of pro-poor bankable urban environmental projects that are able to borrow cost effectively from domestic markets and stimulate long-term investment interest from mainstream investors.

(ii) the Urban Climate Change Resilience Trust Fund (UCCRTF), is a multi-donor trust fund that provides untied1 grants for components of investment projects, technical assistance, direct charges and other activities that may be agreed upon between the contributors to the UCCRTF and ADB. UCCRTF focuses on a

1 Untied refers to funding the procurement eligibility of which applies to all ADB member countries. In the case of administration

of this type of funding by ADB, as in the case of the UCCRTF, ADB’s Procurement Guidelines and Guidelines on the Use of Consultants apply

2

systems-centered approach that supports climate change integration into city planning as a central element, linking this to the implementation of both ‘hard’ (infrastructure) and ‘soft’ (policy or institutional) interventions, and a strong knowledge, capacity building and networking component. Therefore, the key three components of the UCCRTF program are (a) planning: support for mainstreaming climate change considerations (both impact/adaptation and low carbon objectives) into existing city-wide and sectoral planning processes, (b) project investments: support for investment that will include technical assistance for project preparation, incentive and viability gap funding to climate resilient integrated infrastructure projects, and (c) knowledge: funding and support to establish and strengthen knowledge and learning from selected cities, setup peer learning networks through which cities share experiences and lessons globally and monitoring and evaluation framework and systems for the program. The 6 priority countries have been identified which are: Bangladesh, India, Indonesia, Pakistan, the Philippines, and Viet Nam.

(iii) bilateral grants through urban trust funds; (iv) project-specific loans, grants, or guarantees under framework agreements to be

negotiated with financing partners; (v) knowledge provision and exchange, such as through secondments and network

building; and (vi) other forms of assistance, such as risk-sharing mechanisms.

3. This Annual Report covers the period January to December 2013 and presents the Facility’s performance for the year against the annual work program and the cumulative performance as of 31 December 2013 measured against its Design and Monitoring Framework (DMF) presented in Appendix 1.

II. HIGHLIGHTS AND KEY ACHIEVEMENTS

A. Project Approvals 4. $5.88 million for 10 projects. For 2013, the Facility has identified the fourth group of projects that will receive investment co-financing, technical assistance (TA), and direct charges support which have been selected and prioritized as guided by the impacts, outcomes and targets set under the Facility’s DMF. The total allocations for the year amounted to $5.88 million for 10 projects consisting of: 2 Investment grants2 ($3.8 million), 3 TA grants3 ($1.5 million), and 5 direct charges4 ($585,300).

2 (i) IND: Karnataka Integrated Urban Water Management Investment Program and Bangalore City Cluster

Development; and (ii) PHI: Water District Development Sector Project. 3 (i) IND: Karnataka Integrated Urban Water Management Investment Program and Bangalore City Cluster

Development; (ii) PHI: Water District Development Sector Project; and (iii) REG: Mainstreaming Integrated Solid Waste Management in Asia.

4 (i) VIE: Urban Environmental Improvement and Climate Change Adaptation Project; (ii) REG: Urban Sector Development Indicators - Measuring Green and Inclusive Growth and Competitiveness of Cities in Asia and the Pacific;(iii) MON: Ulaanbaataar Urban Renewal Community Participation - Phase 2; (i) SRI: Trincomalee Integrated Urban Development Project; and (v) ARM: Seismic Risk Mitigation Study

3

5. Following the Guidelines for application for assistance and projects selection (Appendix 2), these projects have merited support as they cover one or more of UFPF project categories which demonstrates UFPF’s ability to influence project design and pilot investment projects that can be replicated in ensuing loan projects and that these resources are directed to project that are able to best contribute to the Facility’s impacts and outcomes.

6. $52.63 million cumulative assistance for 26 projects. To date, UFPF has a cumulative committed/allocated assistance amounting to $52.63 million for 26 projects consisting of 10 TAs ($4.46 million), 8 investment grants ($13.44 million), 7 direct charges ($0.730 million), and 1guarantee support of $34 million. Listed in Table 1 are details on the initiatives that have received UFPF-support (and allocated assistance) since its inception up to the coverage of this reporting period.

7. At present, the Facility has committed to support projects that cover the following UFPF project categories: climate change adaptation and mitigation (4 projects); inclusive basic water and wastewater services (8 projects); solid waste management services (10 projects); and urban renewal (4 project) within which all projects have exhibited an inherent pro-poor inclusive development approach. Furthermore, these projects already have significant poverty and environment components.

8. In terms of geographic spread, UFPF has been able to provide support across all the ADB operational departments through the available funding modalities. Southeast Asia has the highest funding allocation by modality and number of projects supported (with 5 investment projects, 3 TA projects).

9. UFPF supported projects are expected to facilitate leveraging/catalyzing ensuing investments worth $816 million of loans and investment grants. 2013 Work Program Accomplishments 10. ADB Annual Donor Consultation Meeting. From 17-19 March 2013, the Office of Co-Financing Operations (OCO) and the RSDD jointly hosted the Annual Consultation Meeting for Donors participating in the ADB-administered cooperation funds and trust funds under FPFs at the ADB Headquarters, Manila with the aim of strengthening partnerships between ADB and donors for enhanced aid effectiveness. During the event, the UFPF Secretariat presented the performance and results of non-contributing partners, who were invited as observes. Among the issues and concerns that were highlighted during the open forum discussion for UFPF included:

i. the need to address the structure and complementation of trust funds within the Facility UEIF, UCCRTF and other potential single and multi-donor funds;

ii. the need to review the UFPF Results Framework and its DMF as most of the

financing partners observed that it is leaning towards to an output-level oriented type (number of projects, amount of money) rather than performance-based (impacts and outcomes) type of measuring results;

4

iii. the need to strengthen administrative resources in terms of managing the UFPF Secretariat in relation to the new established UCCRTF and other financing partners; and

iv. concerns on the current UFPF disbursement utilization, the use of guarantees, and

output-based aid modalities. 11. Establishment of the Urban Climate Change Resilience Trust Fund (UCCRTF).The Urban Climate Change Resilience Partnership (UCCRP) is an innovative partnership between ADB, the UK Government’s DfID, and the Rockefeller Foundation, which aims to scale up the response to building urban climate change resilience in Asia. It proposes to break new ground by supporting city-level engagement to build resilience to the effects of climate vulnerability and climate change within secondary cities in Asia, in order to positively impact upon the vulnerability of the low-income urban groups. 12. Under the UCCRP, a multi-donor trust fund known as the Urban Climate Change Resilience Trust Fund (UCCRTF) has been established to be managed by ADB under the umbrella of the UFPF to provide assistance in the form of untied5 grants for components of investment projects and technical assistance. Funding from the UCCRTF may be made available to a range of users including, central and local governments, government agencies, nongovernment agencies, and other entities eligible to receive funding from ADB.

13. UCCRTF’s three key components will focus on (a) planning: support for mainstreaming climate change considerations (both impact/adaptation and low carbon objectives) into existing city-wide and sectoral planning processes, (b) project investments: support for investment that will include technical assistance for project preparation, incentive and viability gap funding to climate resilient integrated infrastructure projects, and (c) knowledge: funding and support to establish and strengthen knowledge and learning from selected cities, setup peer learning networks through which cities share experiences and lessons globally and monitoring and evaluation framework and systems for the program. 14. Under the aegis of the UFPF, UCCRTF complements UEIF’s mandate of assistance for environmental infrastructure projects. It allows for a whole range of resilience building measures required at city-level that is specific enough to address the particular issues related to building climate change resilience, which is an emerging concept and field that brings an important new perspective to the implementation of the ADB’s Urban Operational Plan (UOP). The UCCRTF will help to strongly reinforce the Green Cities objectives making not only

5 Untied refers to funding the procurement eligibility of which applies to all ADB member countries. In the case of

administration of this type of funding by ADB, as in the case of the UCCRTF, ADB’s Procurement Guidelines and Guidelines on the Use of Consultants apply

5

investments but also planning activities more purposeful towards building climate change resilience. 15. Training Workshops on output-based aid (OBA) and other Urban Community of practice (UCoP) related events. In pursuit of inclusive urban development agenda under the UOP, the output based aid (OBA), also known as “performance-based aid” or “results-based financing” is an innovative modality to ensure the timely and efficient delivery of expected project outputs to its target beneficiaries. On March 2013, the UCoP invited the World Bank-Global Partnership on Output-Based Aid (WB-GPOBA) to conduct a training workshop on how to design urban projects using OBAs that will further the facilitation of accessing basic services for the low income and poor communities. The training workshop which was attended by 30 participants, comprised most of ADB urban staff, employed interactive sessions such as lectures and open forum discussions in presenting the OBA concepts, designing subsidy mechanisms, institutional frameworks, mitigating risks, and monitoring of results. A case study on a particular successful OBA project implemented by the Manila Water Company in the Philippines was also presented

16. In addition to the OBA training workshop, UCoP organized events served as learning platform for which a number of UFPF-supported projects have been showcased as case studies that also served as the opportunity for the Facility’s marketing and promotion such as:

(i) Internal Brainstorming Workshop for Green City Initiatives – organized on June

2013 collaboration with the Environment CoP, which aimed at exploring innovative and holistic approaches to developing urban projects through incorporating various sector perspectives. Experts from different ADB sectors also shared their own strategies and options for building greener cities that bring considerable economic benefits while at the same time ensuring environmental sustainability. Topics that were presented included: Green Transport; Energy for Green Cities; Water for Green Cities; City Resilience and Disaster Management; and PPP and Climate Change for Green Cities.

(ii) Implementing the Green City Agenda: Workshop on Integrated Solid Waste Management - held in September 2013 which aimed at (a) increasing the knowledge and awareness on the concepts of integrated SWM including: basic elements of SWM; best practices; and innovative financing support; (b) learn the various methods and schemes on how to integrate SWM in designing urban projects; and (c) brainstorm on the entry points and options for mainstreaming SWM into ADB operations. The UFPF project “Solid Waste Management Sector Project (PHI)” was presented during the workshop where UFPF support is being utilized for a project feasibility study and for grant support to a group of pilot initiatives in SWM that demonstrate the 3-R approach on a city-wide scale, integrating poverty groups who have a significant role in the collection.

(iii) Workshop on Enabling Inclusive Cities and the Symposium on Cities and

Slums - back-to-back activities geared towards enabling Inclusive Cities Agenda of ADB's Urban Operational Plan. The events were held on October 2013 which aimed at (a) gaining appreciation and understanding of the tools and methods imbibed in the Inclusive Cities toolkit; (b) familiarize ADB staff on using an “inclusive approach” in designing urban sector projects; and (c) get a first-hand experience of actual outputs and outcomes of an inclusive urban development project. Selected TA and direct charges activities supported by UFPF under the “MON: Ulaanbaatar Urban

6

Services and Ger Areas Development Investment Program” were presented which primarily looked at the consideration of the water supply and environmental improvement needs of the poor and how these communities could become involved in sustainable service provision as well as how to enhance community mobilization, participation and empowerment to produce a high quality and participatory local development plan for Ulaanbaataar City ger areas.

(iv) Workshop on Integrated Urban Planning - held on December 2013 focused on

knowledge exchange among external and internal experts in developing and discussing steps on how to best involve cities from ADB DMCs through the Integrated Urban Planning approach. The workshop included presentations from external experts/resource persons as well as ADB urban staff from the Operational Department wherein practical experiences, challenges and approaches for integrated urban planning have been showcased and discussed. The workshop tackled an overview on ongoing and future urban activities and potential cities for integrated planning exercises including UFPF projects under MON: Ulaanbaatar Urban Services and Ger Areas Development Investment Program and SRI: Trincomalee Integrated Urban Development Project.

17. These learning events where particular UFPF supported projects have been showcased has led to generating awareness and increased interest among ADB urban staff and resident mission (RMs) to explore funding options of the facility that can be included in discussions during country programming and that will lay basis for future UFPF demand. 18. Use of UFPF Guarantee Resources. It must be noted that in the previous reporting periods, three urban transportation services were expected to utilize UFPF guarantee resources. Following a pre-feasibility study carried out, a consultant has been retained to structure the project as a possible public-private partnership (PPP), which could be credit enhanced by use of guarantee product. Based on the consultant’s preliminary conclusions from the assessment of the applicability of Sida guarantees, it may be that guarantees can be provided on a stand-alone basis or in conjunction with the development loans. While development loans are generally given to a government agency or to the government in the country, guarantees can also be given directly to companies and SPVs.

19. A SIDA credit guarantee could potentially be used to enhance the credit rating of the project SPV that is set up to undertake the project and hence improve its bankability. The report further suggests that the guarantees could be effectively utilized for the Musi IV Bridge in Palembang, Indonesia also if the costs of the SIDA guarantee are sufficiently low, the SIDA guarantee could be considered for the Yogyakarta, Indonesia BRT project. The consultant’s report has already been forwarded to SIDA for perusal.

20. Furthermore, it is also worthwhile to mention that the Urban Committee is currently considering a possible candidate project for guarantee for an urban transport (“Integrated Transport System”) project in Metro Manila, Philippines that would contribute to economic growth, improved access to more efficient and convenient public transport facilities, reduce travel times, increase productivity, and improve the quality of life of commuters. Approval of the Government is expected in the 1st quarter of 2014. 21. UFPF Results Monitoring. Currently, the UFPF Secretariat has undertaken a more proactive role in monitoring the performance of UFPF supported projects by tracking the documentation of said projects as it progresses through ADB’s project processing and

7

implementation cycle. Moreover, the UFPF Secretariat has developed a project tracking list which obtained basic project information as well as estimated number of beneficiaries and the scope of the project within its respective country of implementation.

22. It is interesting to note that with the internal mid-term review of ADB Strategy 2020, discussion have been initiated between the UCoP and ADB’s Strategy and Policy Department (SPD) to provide inputs on how ADB can redefine its urban sector operations with the implementation of the UOP, coupled with its “Finance++” (finance+leverage+knowledge) approach to be able to make a lasting impact in addressing the present and future urban growth. Presently, in ADB operations, particularly under the Bank-wide results framework – urban is neither considered to be a sector nor a theme. Almost all of the urban projects are categorized under “multi-sector” or under the ‘Water and other municipal infrastructure services” which has great implications on measuring the effectiveness of ADB’s urban sector operations and interventions.

23. Coinciding with this, a direct charges activity supported by the UFPF is specifically looked at this area of concern, with the overall objective of supporting the project implementation of ADB’s urban sector, the UOP’s 3E agenda and to provide measurement of the impact of ADB activities. This process was primarily done through the:

Development of a set of geographically cross-cutting urban sector development indicators for designing and measuring the impacts of projects supporting urban growth and maximizing the 3E approach;

Development of 2 sets of SMART indicators that will measure urban sector project achievements against the development impact targets of the UOP; and

Provision of a framework for building the knowledge and capacity of UCoP towards improved implementation of the UOP and mainstreaming it into urban sector operations

24. The direct charges activity yielded the development of a Quick Reference Guide on Using Urban Sector Performance Indicators which has been circulated to ADB’s Urban CoP Network as a pilot-testing activity to assess the usefulness of the tool in designing projects and TAs. A year-long period of internal pilot-testing of the guidebook was agreed during the presentation of the draft final output last December 2013 and is intended to gather feedback for further improving the tool from among ADB’s urban sector project officers. 25. Management towards better utilization of UFPF resources. Issues raised during the 2013 Annual Donors Consultation meeting particularly, concerns on the current UFPF disbursement utilization concerns are being addressed by the UFPF Secretariat by undertaking efforts to review the current status of resources and in particular the disbursement performance of the individual projects, respective of the modalities.

26. With this, the Urban Committee has initiated the proactive dialogue with project officers and respective sector directors to discuss individual projects that are in the preliminary stages of

8

project processing, with its commencement and actual disbursements taking place far ahead of the Facility’s given timeframe of expected results to withdraw the requested UFPF fund allocation. This has led to the cancellation of VIE: Coastal Cities Urban Environment and Climate Change and MYA: Urban Environment Improvement Project.

27. These “freed-up” resources can be utilized for other potential urban projects in the pipeline that can ensure to generate immediate tangible results. A discussion on disbursements is also presented under Section IV. Financial Status of this report.

9

Table 1. Details of UFPF6 supported Projects

Project Title / Country / Amount by

Modality

UFPF Project Category

Project Description Processing / Implementation

Status as of Dec 2013

Clim

ate

Ch

ang

e M

itig

atio

n &

A

dap

tati

on

Urb

an

Tra

nsp

ort

atio

n

Urb

an W

ater

an

d

Was

tew

ater

So

lid W

aste

M

anag

emen

t

Dis

tric

t H

eati

ng

an

d C

oo

ling

Urb

an R

enew

al

Pro

-po

or

app

roac

h

Piloting Innovative Solid Waste Management (PHI)

Indicative Contribution to UEIF Results Framework Reduced discharges of pollutants to

the environment (e.g. ground water, soil and air)

Reduced discharges of GHG Improved public health and safety Improved quality of service delivery Improved cost recovery

- PPTA ongoing

Capex 2,000,000 TA 200,000 Total 2,200,000 Cities / Urban regions

TBD

Target beneficiaries:

TBD

Leveraged/ Catalyzed Ensuing Investments Investment grant 800,000 Loan 70,000,000

Karnataka Integrated and Sustainable Water Resource

Management Investment Program (IND)

Indicative Contribution to UEIF Results Framework Improved living conditions for the

urban poor Reduced consumption of resources

for operation and investments in plant capacities

Increased cost recovery Reduced operational expenses Improved quality of service delivery

-Inputs nearly completed. Assistance from institutional specialist and project implementation specialist has been extended til end March 2014 to assist project start up - 82% of the of the approved amount has been disbursed and 100% disbursement is expected by 2nd quarter of 2014 - Loan due for approval on 27 March 2014

TA 300,000 Total 300,000

Cities / Urban regions

ULBs of Davangere, Harihar, Ranebennur

and Byadagi Target beneficiaries:

61,000 Households (765,000 people for enhanced access to

drinking water and 400,000 people to improved

sanitation) Leveraged/ Catalyzed Ensuing Investments Investment grant 1,200,000

6 Refers to projects financed under UEIF Resources

10


Modality




Clim

ate

Ch

ang

e M

itig

atio

n &

A

dap

tati

on

Urb

an

Tra

nsp

ort

atio

n

Urb

an W

ater

an

d

Was

tew

ater

So

lid W

aste

M

anag

emen

t

Dis

tric

t H

eati

ng

an

d C

oo

ling

Urb

an R

enew

al

Pro

-po

or

app

roac

h

Loan 300,000,000 Ulaanbaatar Water and Wastewater

Operation Improvement (MON) Indicative Contribution to UEIF Results

Framework

Improved living conditions for the urban poor

Reduced consumption of resources for operation and investments in plant capacities

Increased cost recovery Reduced operational expenses Improved quality of service delivery

-PPTA already completed; -The implementation of the UFPF investment grant will start in 2014 as a component of the Ulaanbaatar Urban Services and Ger Areas Development Investment Program which has been approved in Dec 2013.

Capex 3,700,000 TA 300,000 Total 4,000,000


Ulaanbaataar


1.3 million people

Leveraged/ Catalyzed Ensuing Investments Loan 150,000,000

Pilot Project Action Plan for Application of Renewable Energy

and Reduction, Reuse and Recycling of Resources (3R) (PRC)

Indicative Contribution to UEIF Results Framework

Reduced discharges of pollutants to

the environment, e.g. ground water, soil and air,


-UFPF commitment to this specific project is currently being reviewed

Capex 800,000 TA 200,000 Total 1,000,000 Cities / Urban regions

TBD


TBD

Leveraged/ Catalyzed Ensuing Investments Loan 100,000,000

GMS Corridor Towns: Managing Solid Waste-Mainstreaming the 3R

Approach (REG)


the environment,

- Final MRF feasibility studies submitted - Completed fund disbursement The UFPF funded the preparation of 7 feasibility studies under RETA

TA 300,000 Total 300,000

11


Modality




Clim

ate

Ch

ang

e M

itig

atio

n &

A

dap

tati

on

Urb

an

Tra

nsp

ort

atio

n

Urb

an W

ater

an

d

Was

tew

ater

So

lid W

aste

M

anag

emen

t

Dis

tric

t H

eati

ng

an

d C

oo

ling

Urb

an R

enew

al

Pro

-po

or

app

roac

h


Battambang, Bavet and Poipet(CAM);

KaysonePhomvihane (LAO); Dong Ha and

Moc Bai (VIE)


7644: GMS Corridor Towns Development Project, for the development of materials recovery facilities (MRF) in 7 towns: Battambang, Bavet, and Poipet in Cambodia; KaysonePhomvihane and Phine in Lao PDR; and Dong Ha and Moc Bai in Viet Nam. Of the 7 feasibility studies, only the proposed MRF in Phine came out as not feasible for investment. This is due to the following reasons: (i) the proposed MRF subproject is not financially and economically viable due mainly to the very low volume of solid waste which translates to limited amount of recyclables; and (ii) even if the poverty impact ratio in Phine is comparatively high at 50%, the total economic benefit does not justify the economic costs and the subsidy needed to operate the facility. All the other 6 proposed MRFs can be developed and operated on a sustained basis provided specific conditions on their operation and maintenance are satisfied by the authorities and/or service providers as recommended in each feasibility study.


226,600

Leveraged/ Catalyzed Ensuing Investments

Investment grant 3,500,000

Loan 137,570,000


Indicative Contribution to UEIF Results Framework

- Procurement of Project Management and Capacity

12


Modality




Clim

ate

Ch

ang

e M

itig

atio

n &

A

dap

tati

on

Urb

an

Tra

nsp

ort

atio

n

Urb

an W

ater

an

d

Was

tew

ater

So

lid W

aste

M

anag

emen

t

Dis

tric

t H

eati

ng

an

d C

oo

ling

Urb

an R

enew

al

Pro

-po

or

app

roac

h

Approach (CAM) Reduced discharges of pollutants to

the environment, Reduced discharges of GHG Improved public health and safety Improved quality of service delivery Improved cost recovery

Development Consultants on-going

Capex 1,500,000 Total 1,500,000 Cities / Urban regions

Battambang, Bavet and Poipet


58,600


Approach (LAO)



- Procurement of Project Management and Capacity Development Consultants on-going

Capex 638,000 Total 638,000 Cities / Urban regions

KaysonePhomvihane


60,000


Approach (VIE)



- Procurement of Project Management and Capacity Development Consultants on-going

Capex 1,000,000 Total 1,000,000 Cities / Urban regions

Dong Ha and Moc Bai


108,000

Technical Assistance and Advisory Support for Urban Infrastructure

Development (KAZ)

Indicative Contribution to UEIF Results Framework Improved quality of service delivery; Improved public health and safety; Improved cost recovery; Improved living conditions for the

- PPTA ongoing. $99,684 of 10% of UFPF funds have been disbursed

TA 1,000,000 Total 1,000,000 Cities / Urban regions

Karaganda and Taldykorgan

13


Modality




Clim

ate

Ch

ang

e M

itig

atio

n &

A

dap

tati

on

Urb

an

Tra

nsp

ort

atio

n

Urb

an W

ater

an

d

Was

tew

ater

So

lid W

aste

M

anag

emen

t

Dis

tric

t H

eati

ng

an

d C

oo

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Urb

an R

enew

al

Pro

-po

or

app

roac

h


TBD urban poor

Leveraged/ Catalyzed Ensuing Investments Investment grant 2-4 billion (investment

pipeline) Sustainable Urban Development in

Secondary Cities (ARM) Indicative Contribution to UEIF Results

Framework Improved quality of service delivery; Improved public health and safety; Improved cost recovery; Improved living conditions for the

urban poor

- PPTA ongoing. $ 22,326.52 or 3.4% of UFPF funds have been disbursed TA 660,000

Total 660,000 Cities / Urban regions

Jermuk, Dilijan, Vanadzor and Gyumri


TBD

Water District Development Sector Project (PHI)

Indicative Contribution to UEIF Results Framework Reduced consumption of resources

for operation and investments in plant capacities;

Increased cost recovery; Improved quality of service delivery

-RRP being processed for approval Q2 2014. Processing delayed due to PHI government's delay in Cabinet approval. Capex 2,000,000

TA 500,000 Total 2,500,000 Cities / Urban regions

TBD


1.5 - 2 million people

Mainstreaming Integrated Solid Waste Management in Asia

Management of municipal solid waste (MSW) is a key urban environmental challenge in many of the DMCs in Asia. The TA will help develop sustainable SWM strategies and develop downstream project concepts to management MSW for representative large, medium and small cities in Aisa. The resulting improvement in urban environment will help in achieving livable and sustainable cities for Asia thorough

- Newly approved UFPF-supported project (Dec 2013)

TA 600,000 Total 600,000 Cities / Urban regions

TBD (to be implemented in ARM,

IND, INO, THA and PHI)


TBD

14


Modality




Clim

ate

Ch

ang

e M

itig

atio

n &

A

dap

tati

on

Urb

an

Tra

nsp

ort

atio

n

Urb

an W

ater

an

d

Was

tew

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So

lid W

aste

M

anag

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t

Dis

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Pro

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increased implementation of sustainable strategies for addressing SWM through development of 20-25 year strategies for sustainable SWM practices and preparation of specific action plans for SWM projects in 5 case study cities

Solid Waste Management Strategy and Urban Investment Plan (TIM)


the environment, e.g. ground water, soil and air

Reduced discharges of GHG, Improved public health and safety Improved quality of service delivery Improved cost recovery

- Consultant recruitment ongoing

Direct Charges 75,000 Total 75,000 Cities / Urban regions

13 District Towns (including capital city of

Dili Target beneficiaries:

361,577 people

Ulaanbaataar Urban Services and Ger Areas Development Investment

Program (MON)

Indicative Contribution to UEIF Results Framework Improved quality of service delivery Improved living conditions for the

urban poor

-$44,700 have been disbursed, as the final report has been submitted. Remaining $55,800 as final payment is expected to be disbursed by end of Feb 2014.

Direct Charges 70,000


Ulaanbaataar


16,000 people

Urban Environmental Improvement and Climate Change Adaptation

Project (VIE)


the environment, Reduced consumption of resources

for operation and investments

-Draft final reports submitted. - 35% or $ 26,026.22 of UFPF funds have been disbursed


Total 75,000 Cities / Urban Dong Hoi and Hoi An

15


Modality




Clim

ate

Ch

ang

e M

itig

atio

n &

A

dap

tati

on

Urb

an

Tra

nsp

ort

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n

Urb

an W

ater

an

d

Was

tew

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So

lid W

aste

M

anag

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Dis

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an

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oo

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Urb

an R

enew

al

Pro

-po

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roac

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regions Improved public health and safety Target beneficiaries:

10,000 people

Urban Sector Development Indicators – Measuring Green and

Inclusive Growth and Competitiveness of Cities in Asia

and the Pacfic (REG)

This stand-alone activity supports ADB’s 3E Agenda by developing a set of geographically cross-cutting urban sector development indicators for designing and measuring the impacts of TA and loan projects to achieve development of Asia’s cities and other urban areas that is socially inclusive, environmentally sustainable, and economically competitive. These indicators will be a reference for the planning and preparation of ADB’s urban sector projects

-Final output submitted and accepted by UCoP


Total 100,000

Ulaanbaataar Urban Renewal Community Participation - Phase 2

(MON)

Indicative Contribution to UEIF Results Framework Improved quality of service delivery Improved living conditions for the

urban poor

- Under implementation. First disbursement expected by mid-March 2014



Ulaanbaataar


16,000 people

Trincomalee Integrated Urban Development Project

Specifically, UFPF support will be for: (i) sector preparatory work, define the scope of the ensuing project, and undertake (a) technical feasibility assessment, (b) safeguards due diligence, and (c) financial and economic viability assessment of the ensuing project; (ii) assessment of strategic economic interventions and associated

- Newly approved UFPF-supported project (Oct 2013)



Trincomalee

Target TBD

16


Modality




Clim

ate

Ch

ang

e M

itig

atio

n &

A

dap

tati

on

Urb

an

Tra

nsp

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Urb

an W

ater

an

d

Was

tew

ater

So

lid W

aste

M

anag

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Dis

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eati

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h

beneficiaries: industrial development required to boost economic development in the Trincomalee Metropolitan Urban Development Area (TMUDA); (iii) Assist the Ministry of Defense and Urban Development (MDUD) and Urban Development Authority (UDA) in undertaking advance contracting actions for the project.

Seisimic Risk Mitigation Study (ARM) The study will amplify the impacts of the urban infrastructure investments and contribute to the inclusive growth of the selected cities and to the achievement of livable and sustainable cities as set out in ADB’s Urban Operational Plan under Strategy 2020 and will be categorized under Urban Renewal Projects which aims to rehabilitate urban public facilities to increase resilience to disasters. This activity could also demonstrate inclusive city development planning by incorporating seismic safety which can serve as a model not only for other cities of Armenia but also for earthquake prone cities in other countries.

- Newly approved UFPF-supported project (Oct 2013) Direct Charges 85,300


Jermuk, Dilijan, Vanadzor and Gyumri


230,300

Foundation Wind Energy (FWE) Land II projects (PAK)

ADB has issued 2 partial credit guarantees (PCGs) of $33 million each, in support of Islamic Development Bank (IsDB), to partially guarantee lease payments under an Islamic Lease between IsDB and two project companies located in Pakistan. The project companies will own and operate two wind farms that will sell power to the grid. ADB is in discussion with Sida to

Currently, final documentations are still being negotiated with Sida

Guarantees 34,000,000

Total 34,000,000

17


Modality




Clim

ate

Ch

ang

e M

itig

atio

n &

A

dap

tati

on

Urb

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Tra

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an

d

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M

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Pro

-po

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assume up to 50% of the risks of the PCGs that ADB has issued ie., for a total Sida participation of up to $33 million.

18

III. RESULTS FRAMEWORK FROM JANUARY TO DECEMBER 2013 A. Progress Towards Expected Results 28. UFPF Impacts and Outcomes. Table 2 presents the status of the Facility’s performance in achieving the intended impacts and outcomes vis a vis the DMF. It must be noted, however, that ultimately, UFPF’s performance will be measured against target impacts and outcome at the completion of all projects in its portfolio, noting that a project’s outcome is determined at project completion while the impact is often only achieved long after project implementation. Currently, ADB tracks projects’ contributions and reports on progress by monitoring the implementation of all financed projects in its portfolio.

Table 2. UFPF Status of Impact and Outcome-level Performance vis-a-vis DMF

Design Summary

Performance Targets/Indicators

Status / Achievements as of

December 2013 Impact Improved livability in cities of all sizes in developing member countries (DMCs)

Improved environmental infrastructure/service delivery. Improved environmental parameters in cities Achievements of Millennium Development Goals (MDGs) in cities

TBD

TBD Outcome Improved coverage, quality and continuity of environmental service delivery and sustainability.

200 million in cities benefiting from improved investments or systems. Improved urban environmental management as demonstrated by pilot project achievements influence on policy and reform measures From the periods of 2010-2015: a. At least 20% of ADB lending projects will

be urban-related, b. over $10 billion in ADB funds invested in

urban Asia, c. and $5 billion additional investments

leveraged from other donors, government and private sector

-investment road maps for sustainable development in 50 cities; -capacity development for national sustainable urban development strategies in 10 countries.

5.0 million (estimated)

26 projects covering climate change adaptation and mitigation; urban solid waste management services; urban water and wastewater services; urban renewal

TBD

TBD

TBD

9 cities: Ulaanbaataar (MON); Bangalore (IND); Gyumri, Vanazdor, Jermuk and Dilijian (ARM); Karaganda and Taldykorgan (KAZ); and Trincomalee (SRI);

5 countries: MON, ARM, KAZ, IND, SRI

19

29. As the UFPF Secretariat has been able to implement concrete steps to develop a robust system of monitoring results and outcomes by tracking the documentation of the projects receiving UFPF funds, some initial information have already established, particularly on the outcomes for the following:

(i) estimated number of beneficiaries - 5.0 million (estimated); (ii) investment road maps for sustainable development - 9 cities - Ulaanbaataar (MON);

Bangalore (IND); Gyumri, Vanazdor, Jermuk and Dilijian (ARM); Karaganda and Taldykorgan (KAZ); and Trincomalee (SRI);

(iii) capacity development for national sustainable urban development strategies. – 5 countries – MON, ARM, KAZ, IND and SRI

30. This information has enabled the Secretariat to indicatively summarize the Facility’s performance in terms of achieving its impact and outcomes (Figure 1) and will be considered in laying basis for effective planning and decision making tool in targeting annual outcomes of the Facility’s operation.

Figure 1. UFPF Performance vis a vis Actual and Targeted Impacts and Outcomes

20

31. UFPF Outputs. The UFPF output-level performances of December 2013 vis a vis the Facility’s DMF is presented in Table 3. It must be noted that since most of these supported projects are in the initial stages of their implementation, information is still indicative and will be subject to validation and modification, if deemed necessary in the near future.

Table 3.UFPF Status of Output-level Performance vis a vis DMF

Design Summary

Performance

Targets/Indicators


December 2013

Output Component 1: Increased levels of investment

Fundable investment projects

70% of grant resources or $70 million of UFPF resources spent on project investment support for either goods, works or systems At least 207 investments either funded in full or cofinanced with ADB or other sources

$13.438million (or 65% of UEIF grant resources) are committed to8investment projects

Component 2 Technical Assistance Project development

support Project implementation

support Non-lending assistance

addressing reforms in the areas of: policy legislation regulation institutional

30% of grant resources or $30 million of UFPF resources allocated to this component At least 208 applications for support to project development through improved design & implementation, better communication with stakeholders, etc. At least 209 applications for support to project implementation through improved supervision, better communication with stakeholders, etc. At least 100 TAs from direct charge applications10 designed to advance reform measures in each of the areas of policy, legislation, regulation or institutional arrangements or to improve monitoring and evaluation of

$4.46million (or 22% of UEIF grant resources) are committed to 10TA projects Eight(8) TAs supporting project feasibility studies, preparatory activities for PPTA, CDTAs, PATAs and exploring opportunities with public-private partnerships Two (2) regional TAs supporting mainstreaming initiatives in urban solid waste management in GMS countries as well as 5 counties (ARM, IND, PHI, INO and THAI) Seven (7) direct charges activities supporting (i) enhanced community mobilization, participation and empowerment in the local development planning process (MON) and (ii) preparation of a SWM strategy and an Urban SWM Investment Plan

7 20 grants for investments based on average cost of $3.5 million per intervention during 2010-2015. 8 20 grants for TA based on average cost of $500K per project or a total of $10 million during 2010-2015. 9 20 grants for TA based on average cost of $500K per project or a total of $ 10 million during 2010-2015. 10 100 applications for direct charges is based on average cost of $100K each or a total of $10 million during 2010-

015.

21

Design Summary

Performance

Targets/Indicators


December 2013

arrangements

results

(TIM); (iii) measuring sector effectiveness (REG); (iv) introducing sustainable urban development strategies (SRI); and (v) mitigating seismic risks in urban areas (ARM)

Component 3 Guarantees

At least $150 million of guarantee resources allocated to this component Guarantees applied to at least 10 projects either standalone or in conjunction with UFPF grant, UFPF resources spent on project investment support for either goods, works or systems

$34 million (or 49% of UEIF guarantees pool) have been allocated to a wind farms project (PAK).

Added value provided by UFPF in terms of:

Greater assurance of outcomes by increasing country commitment & capacity

Investment Dialogues Use of knowledge

products

Dialogues conducted in each of five priority countries that produce updated urban priorities

DMC consultations will be undertaken as part of the work program in connection with the implementation of the recently Urban Operational Plan.

Greater reach to poor and underserved by

Pro-poor orientation At least 10 pilot projects

demonstrating involvement of poor communities as integral to project implementation

Four TA projects and 3 investment are expected to demonstrate pro-poor community involvement in solid waste management as well as water and wastewater services One DC targeted at enhancing community mobilization, participation and empowerment in the local development planning process (MON)

Funding proper

sanitation/recycling At least 10 pilot projects demonstrating increased investment in sanitation

Three TA pilot projects (PHI, PRC and GMS) demonstrate increased investments in solid waste management systems, sanitation and the 3R approach

Funding gender At least 5 pilot projects Effective gender mainstreaming efforts

22

Design Summary

Performance

Targets/Indicators


December 2013

initiatives demonstrating gender mainstreaming

are in-built with the required development of Gender Action Plans. Pro-poor solid waste management projects (PHI, PRC, GMS) aimed at promoting inclusive development, including women, in the regularization and formalization of the existing informal waste picking and recycling industries

Funding initiatives that

help strengthen partnership with or empower civil society

At least 10 pilot projects demonstrating greater involvement of civil society both at policy and project levels

The solid waste management project (PHI) will be the first attempt to forge a coalition of local governments as well as community groups for the purpose of investing in appropriate and inclusive solid waste collection and disposal.

Fostering Innovation Pilot financing Knowledge products Knowledge events Take up of new products

Post evaluation confirms new ideas, methods, technology and approaches taken up and applied from UFPF finance initiatives

N/A

Being more strategic by Funding climate change Linking to more partners

Better dissemination of

knowledge products

At least 15 projects demonstrating climate change adaptation measures At least 10 projects implemented with cofinancing At least 50 million population in cities where knowledge activities have been targeted

Two projects (VIE and PRC) demonstrate climate change adaptation measures focused on coastal cities and wastewater treatment systems.

Three projects (PHI, VIE and PRC) leverage co-financing from sources such as Government of Spain, WFPF, JFPR-TA, among others. One proposed project in Indonesia is in active discussions for co-financing from ADB’s private sector department. Information and awareness campaign programs are a considered to be a built in feature in UFPF-supported projects on solid waste management which will largely deal in organizing and formalizing informal waste picker groups.

23

32. With the implementation of the UOP, the launch of the urban sector development indicators being pilot tested by RSDD and ODs and the new UCCRTF it is highly recommended to review and revise the UFPF DMF. This should be done in close consultation with the financing partners to enable the Facility to be more responsive to the challenges of urban development in Asia and the Pacific. In particular, this will provide the opportunity for the Facility to be in line with the goals of the UOP implementation of promoting ADB’s 3Es approach towards competitive, inclusive and green cities in Asia and the Pacific. B. Resource Utilization and Commitment 33. As the approval, launching and arrival of funds from the UCCRTF came in during the last quarter of 2013, the preceding discussion on the status of resource utilization shall only be limited to the UEIF funds. However, it is also worth noting that UCCRTF has committed a total of $5 million to a regional technical assistance, RETA 8556: Supporting the Cities Development Initiative for Asia (CDIA), to work towards (i) project preparatory interventions in the form of prefeasibility studies with a view to attracting downstream financing in 50 cities; (ii) international good practices involving innovative financing approaches for sustainable urban development adopted in ADB urban operations; and (iii) strengthening of CDIA networking activities, in particular with national partner organizations. 34. Figure 2 below provides an overview of the total UEIF resource commitment as a percentage of the total available for investments co-financing, TA and guarantees under the SIDA commitment – comprising $20.58 million11 grant resources for investment grants and technical assistance projects and $70 million in guarantees. As a percentage of the combined investment co-financing, TAs, direct charges and guarantee pool, 21% of the funds ($18.628 million) have been allocated for investment, TA projects and direct charges as grants while 37% ($34 million) are allocated for guarantee support. This leaves about 2% ($1.946 million) as the remaining grant resources while 40% ($36 million) for the remaining guarantee resources.

11 This amount is net (i) ADB administration costs (utilized and reserve); (ii) audit fees; (iii) bank charges and (iv)

loss arising from change in value of currency, and includes (i) interest income; (ii) income from investments; and (iii) gain from foreign exchange transactions. Please refer to Secretariat’s estimates/computation in Section IV. Financial Status.

24

35. As illustrated in Figure 3, of the available $20.58 million for investment grants, TAs and direct charges, $13.438 million or 65% of these grant resources have already been committed for 8 investment projects, and $4.46 million or 22% have been committed for 10 technical assistance grants and a total of $0.730 million or around 4% of grant resources have been committed for 7 direct charges activities12. As a result, this leaves only about 9% or $1.95 million of UFPF grant resources which may be tapped for 2014.

36. Figure 4 illustrates the utilization of the $70 million guarantees where, 49% or $34 million have been provisionally allocated to one project on developing a wind farm in Pakistan and is currently under discussions with SIDA. The remaining $36 million or 51% is available for utilization for future projects. The PAK: Foundation Wind Energy Land II project is at the final stages of negotiations. The remaining guarantee pool is available for utilization for future projects and the Urban Committee is in discussions with the Guarantees and Syndication Unit of PSOD to identify possible candidates.

12 In line with the innovative nature of the Facility, UFPF has made a conscious effort to use direct charges for undertaking non-standard, non-routine and exceptional initiatives that fit with an on-going larger program

25

37. The Facility has achieved a good geographic spread, and has already been accessed by all of the ODs. Table 2 and Figure 5 illustrate the UFPF support provided to ADB operational departments with Southeast Asia receiving the highest cumulative allocation (44% of the UEIF grant resources). In the same manner, Southeast Asia has the highest concentration of funding allocation by modality and number of projects (5 investments, 3 TAs and 1 DCs), followed by East Asia (2 investments, 2 TAs, 2 DC), South Asia (1 investment, 2 TAs and 1 DC), Central and West Asia (2 TA projects, 1 DC and 1 guarantee), Regional Department (1 TA and 1 DC) and Pacific Department (1 DC).

Table 2: UFPF Assistance by Regional Department in 2013

Operations Department Support Provided by UEIF

Capex TA Direct

Charges Guarantee

Total (US$’000)

Central and West Asia Department (CWRD) - 1,660,000 85,300 34,000,000 1,745,300 East Asia Department (EARD) 4,500,000 500,000 170,000 - 5,170,000 Pacific Department (PARD) - - 75,000 - 75,000 South Asia Department (SARD) 1,800,000 700,000 225,000 - 2,725,000 Southeast Asia Department (SERD) 7,138,000 1,000,000 75,000 - 8,213,000 Regional (REG) - 600,000 100,000 700,000

13,438,000 4,460,000 730,300 - 18,628,300

26

Figure 5: UFPF Assistance by Regional Department in 2013

IV. FINANCIAL STATUS

A. Financing Partner Contributions and Status of Grant

38. The Government of Sweden committed an initial Skr 100 million (around $14 million equivalent) and a guarantee facility of Skr 500 million (around $70 million equivalent) to the UEIF. In 2011, Sida provided an additional Skr50 m (around $7.2 million equivalent) for the UEIF grants. The UFPF status of grant (contribution), as of this writing is provided in Appendix 3. 39. Table 3 details the Secretariat’s estimates pertaining to the status of UEIF grant resources. The current amount of the UEIF grant resources is net of the ADB administration costs (utilized and reserve); (ii) audit fees; (iii) bank charges and (iv) loss arising from change in value of currency, and is inclusive of (i) interest income; (ii) income from investments; and (iii) gain from foreign exchange transactions.

27

Table 3. UFPF Secretariat’s Estimates / Computation of UEIF Grant Resources

Particulars Amount

Total amount from SIDA (with interest earnings) 21,142,509.94

ADB Administration Fee (48,298.39)

Audit Fee (12,505.00)

Financial Expense - Bank Charges (222.99)

Reserve for Administration Costs (506,601.61)

Total Grant Resources 20,574,881.95 40. As the UFPF team has been proactive in canvassing resources, a contribution of $135 million from DfID and $5 million from the Rockefeller Foundation has been set-up focusing on climate change resilient investments, reflecting the need for larger grant components for larger projects. Under the aegis of the UCCRTF, ADB, DfID and RF aim to build resilience to manage the negative impact of climate variability and in secondary cities in Asia through an integrated urban systems approach that also impacts positively on the vulnerability of the poor. Tapping other financing partners such as United States Agency for International Development (USAID) is currently being explored to contribute further to the UCCRTF.

41. As such, UFPF has its current aggregate resources totaling to around $236 million. Figure 6 illustrates the percentage share of current financing partner contributions to UFPF. Initially, $14 million of Sida’s commitment has been utilized for UEIF grants while $70 million as guarantee pool. With the additional SKr 50 million (approx. $7 million), Sida’s contribution has totaled to $91.2 million. On the other hand, the $135 million contribution from DfID and $5 million from RF through the UCCRTF constitutes 61% share of the Facility’s current resources.

B. Discussion on Disbursements 42. Following the launching and implementation of the UOP in 2012, it has been observed that there was an increased number of applications from ODs to access the UFPF. This high demand is reflective of the high interest by ODs to formulate innovative projects as opposed to standard/business-as-usual types of urban development interventions. However, due to the limited resources of the Facility, the UFPF Secretariat has undertaken efforts to review the current status of resources and in particular the disbursement performance of the individual projects, respective of the modalities. Tables 3-6 provide the current disbursements as of 31Dec 2013 and projected disbursements by end of 2014. 43. Assumptions for the projected disbursements (particularly for 2014) were made using loan processing schedules provided by project officers as well as actual vs. projected

28

disbursements of the typical ADB projects undergoing early stages of project cycle implementation.

Table 4: UFPF CURRENT AND PROJECTED DISBURSEMENTS – Investment Grants

Project Name Country Approval

Date of UFPF Application

Expected Completion

Date

Amount (in $ US)

Disbursed as of 31 Dec 2013

Projected Disbursements by end of 2014

INVESTMENT GRANT

Piloting Innovative Solid Waste Management

PHI Aug-11 - 2,000,000 - 200,000

Ulaanbaataar Water and Wastewater Operation Improvement

MON Aug-11 - 3,700,000 - 900,000

Piloting Renewable Energy and 3R Principles

PRC Aug-11 - 800,000 - 80,000

GMS Corridor Town Development

CAM Jul-12 Jun-19 1,500,000 - 150,000


LAO Jul-12 Jun-19 638,000 - 63,800


VIE Jul-12 Jun-19 1,000,000 - 100,000

Karnataka Integrated Urban Water Management Investment Program and Bangalore City Cluster Development

IND Apr-13 - 1,800,000 - 100,000

Water District Development Sector Project

PHI Apr-13 - 2,000,000 - 200,000

TOTAL 13,438,000 - 1,793,800

DISBURSEMENT RATE (%) 0 13

44. Table 4 illustrates that there have been no disbursements taken place in 2013 as most of these investment grants are “tied” with UFPF TA grants which are currently in project processing or advance stages of implementation. By the end of 2014, it is expected that around 13% of the Investment grant resources have already been disbursed. 45. Particular disbursement cases are the UFPF-supported projects under MON: Ulaanbaatar Urban Services and Ger Areas Development Investment Program. The Multi-Tranche Facility (MFF) has been approved in Dec 2013 and will take effect on 2014. As such, the UFPF Secretariat has requested the project officer to provide annual projected disbursement for the project cycle implementation (Table 5). Similar types of information will also be gathered for other projects receiving UFPF investment and TA grant to be able to track the progress of disbursements.

29

Table 5: Annual Projected Disbursements for UFPF investment grants MON: Ulaanbaatar Urban Services and Ger Areas Development Investment Program

2014

Q1 2014 Q3

2014 Q4

2015 Q1

2015 Q2

2015 Q3

2015 Q4

2016 Q1

2016 Q2

2016 Q3

2016 Q4

Cumulative ($ million)

0.3 0.6 1.2 2 3.2 4

Percentage 7.5 15 30 50 80 100

46. In terms of UFPF TA grants, there has been considerable progress in the disbursement of UFPF resources as illustrated in Table 6. As of Dec 2013, around 20% of $4.460 million have been disbursed. It is projected that by end of 2014, almost 58% of these UFPF TA resources have been utilized as most of the TA projects are already on the advance stages of project cycle implementation around that time period. 47. Finally, UFPF direct charges (Table 7) can be considered to have the fastest pace of disbursement considering that these are stand-alone activities that are implemented in the short-to-medium term timeframe. As of Dec 2013, 21% of UFPF committed resources for direct charges have been disbursed and it is projected to have a disbursement rate of 79% end of 2014.

48. In spite of the progress, it has been observed that there is generally a slow pace in the disbursement and utilization of the UFPF resources, particularly in the investment grants. This is primarily due to the fact that most of the approved projects in the earlier years of the Facility were TA projects that are tied up with loan investment projects. Delays in implementation and processing (due to negotiations, change in DMC government functions and related issues) of TA projects and has ultimately impact the processing of their respective loan investments projects. Towards this end, the UFPF Secretariat is in active discussions with the respective ADB operations departments to resolve this issue and develop solutions that would allow for faster disbursement of resources and generate tangible results that will contribute to the goals of the Facility.

30

Table 6: UFPF CURRENT AND PROJECTED DISBURSEMENTS – TA Grants



Expected Completion

Date

Amount (in $ US)

Disbursed as of 31Dec

2013

Projected Disbursements

by end of 2014

TECHNICAL ASSISTANCE

Piloting Innovative Solid Waste Management

PHI Aug-11 Nov-14 200,000 121,818 -

Ulaanbaataar Water and Wastewater Operation Improvement

MON Aug-11 Nov-14 300,000 31,423 -

Piloting Renewable Energy and 3R Principles

PRC Aug-11 Nov-14 200,000

- 200,000

Karnataka Integrated & Sustainable Water Resource Management Investment Program

IND Aug-11 Nov-14 300,000 246,000 54,000


REG Oct-11 Jun-14 300,000 299,646 353

Urban Infrastructure Development

KAZ Aug-12 May-15 1,000,000

99,864 762,750

Sustainable Urban Development in Secondary Cities

ARM Aug-12 Sept-15 660,000 22,236 660,000

Water District Development Sector Project

PHI Apr-13 - 500,000

- 500,000

Karnataka Integrated Urban Water Management Investment Program and Bangalore City Cluster Development

IND Apr-13 - 400,000 12,000 388,000

Mainstreaming Integrated Solid Waste Management in Asia

REG Apr-13 - 600,000

- 60,000

TOTAL 4,460,000 832,987 2,625,103


31

Table 7: UFPF CURRENT AND PROJECTED DISBURSEMENTS – Direct Charges



Expected Completion

Date

Amount (in $ US)

Disbursed as of 31Dec

2013

Projected Disbursements

by end of 2014

Solid Waste Management Strategy and Urban Investment Plan

TIM Mar-12 75,000

- 75,000

Ulaanbaataar Urban Services and Ger Areas Development Investment Program (Ulaanbaataar Urban Renewal Community Participation)

MON Jun-12 70,000

41,660.00 28,340

Urban Environmental Improvement and Climate Change Adaptation Project

VIE Apr-13 75,000

26,026 48,974

Urban Sector Development Indicators - Measuring Green and Inclusive Growth and Competitiveness of Cities in Asia and the Pacific

REG June-13 100,000

33,840 66,160

Ulaanbaataar Urban Renewal Community Participation - Phase 2

MON June-13 100,000

13,006 86,994

Trincomalee Integrated Urban Development Project

SRI Oct-13 150,000

23,15.00 126,850

Seismic Risk Mitigation Study ARM Oct-13 85,300 85,300

TOTAL 655,300 137,682 200,000


Foundation Wind Energy (FWE) land II projects

PAK Oct-12 34,000,000 - -

49. Given the current level of disbursement of investment grant components, the Urban Committee has undertaken a thorough review of the existing approvals made by the Facility for investment grant components. Based on the discussions and on-going review, the Urban Committee recommends that approvals pertaining to investment grants components that are unlikely to lead to a disbursement within the foreseeable future be reprioritized. At the same time, the urban teams in operating departments are also making new financing demands on the Facility, particularly for TA grants. Since the Facility has significantly low level of uncommitted/ un approved funds, the Urban Committee is currently unable to approve any new application, while facing the unique challenge of low level disbursement of approved applications.

32

C. Projected Demand for 2014 50. While around $18.628 million (from the available $20.58 million UEIF grant resources) have been committed the four group of projects (with an additional $34millionfor guarantee support), the remaining $1.946 million is still available to be tapped for the remainder of the year 2014. 51. Meanwhile, the available $140 million contribution from the UCCRTF may be tapped for implementing urban climate change resilience initiatives. Based from initial discussions held between the UFPF team with ODs and resident mission, the total identified grant financing for 2014 amounts to $7.7 million while the total potential loan identified for 2014 for UCCRTF consideration is around $100 million. Details of this pipeline of projects for UFPF, along with their TA and investment support requirements, are provided in Appendix 4.

52. The emerging pipeline for the Facility is expected to grow further for the year 2014 and beyond. As summarized in Table 8 below and further detailed in Appendix 5, it can be gauged from ADB’s programmed urban lending for 2014 is currently valued at $1.8 billion, respectively13.

Table 8.ADB Programmed Urban Lending by Region, 2014

Region 2014

No. of Investment Projects

Amount (US$ Million)

Central and West Asia 3 258.0 East Asia 4 420.0 South Asia 12 1,069.0 Southeast Asia 7 87.2 Pacific - -

TOTAL 26 1,843.2

IV. MANAGEMENT OF THE FACILITY A. Governance and Operating Structure 53. The UFPF governance and operating structure includes an Urban Infrastructure Steering Committee (UISC) and an Urban Infrastructure Working Group (UIWG). The UIWG is made up of representatives from the operational departments and chaired by the director general of RSDD (or designate). It reviews and makes recommendations on projects submitted for consideration by the operations departments for assistance under the UFPF. The UISC, comprising the directors general of the operational departments and chaired by the director general of RSDD, provides strategic direction to the UFPF. The Director, Regional and Sustainable Infrastructure Division (RSID), serves as the Facility Manager, overseeing the day to day operations, monitoring and evaluation, and reporting of the UFPF with assistance from UFPF Secretariat. The Facility Manager approves the use of the Facility for direct charges within the framework of annual work program. The UFPF works in close co-ordination with the Office of Co-financing Operations (OCO) where the guarantee support line is to be utilized.

13 Source: ADB’s Operations Dashboard as of 7 February 2013 and staff estimates.

33

Figure 7 presents the process flow of the UFPF approvals while the detailed Governance Structure of the UFPF is provided in Appendix 6.

B. Administrative Arrangements/Operations 54. The establishment of the UCCRTF under the aegis of the UFPF, presents a unique opportunity to enhance the present administrative arrangements of the UFPF Secretariat. Figure 8 presents the current mechanisms as to how the UFPF is administered and the options for institutionalizing both the UCCRTF and UEIF. 55. The existing UEIF has the mandate to support urban environmental, pro-poor projects and provide investment co-financing, technical assistance and guarantee support for urban infrastructure development. Under the UEIF, a regional technical assistance (TA) - TA 7918-REG for Support to Urban Infrastructure Development and Financing was developed for the purpose of streamlining access to the resources of the UFPF and enable operational departments’ (ODs) to respond better and expeditiously to DMCs’ issues in the development and financing of urban infrastructure. The said TA also serves to support the works of the UFPF Secretariat consultant/s.

56. Under the proposed structure (right side), the UCCRTF may: (1) commonly support TA 7918 to further its objectives of streamlined access to the resources of the UFPF; and (2) UCCRTF will also support the CDIA by adding resources to an existing TA 8556-REG: Managing the Cities in Asia; and(3) seek the processing of new separate TA projects.

Figure 7. Process Flow for Approving UPFP Project Proposals

34

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VI. LESSONS LEARNED 59. 2013 has been a remarkable year for the management of the Facility, particularly in addressing the issue of disbursement and more importantly the establishment of the UCCRTF in contributing more resources towards attaining the Facility’s over-all goals. In the light of the aforementioned challenges on disbursement and towards better utilization of UFPF resources, the following are suggested as the way forward:

(a) In case of already approved applications for investment grant, which are unlikely to lead to a disbursement within the foreseeable future, these applications, where feasible, should be reprioritized so as to free up commitments. This could be used towards new applications for investment grants;

(b) Since there is a significant demand for TA resources, some or part of the funds as a

result of the reprioritization process outlined above could be used towards new application for TA; and

(c) For all new application from July 2013 onwards, the Urban Committee’s approval

should be stage wise. In order to streamline the business process, operating departments can still submit a composite application for both TA and investment grant (if both are justified). However, in deciding the application, the Urban Committee could approve in the first instance funding for the TA; while the investment grant is put on a priority waiting list. The waiting list itself would follow the timeline of applications submitted to the Urban Committee. These applications would be cleared for financing as the PPTA is completed and approved for the project.

VII. OVERVIEW OF THE 2014 ANNUAL WORKPLAN 60. Uptake, evaluation and approval of fifth pipeline of emerging urban projects under the UEIF. UFPF Secretariat will commence in the evaluation of projects for the 2014 pipeline of emerging of urban projects requesting UFPF assistance in consideration of the remaining UEIF resources of about $1.946 million. As many project proposals for UFPF funding are received, consultations with UFPF Secretariat are being undertaken, parallel to the development and preparation of official applications. Project details are then expected to be refined through discussions among the project officers and the UCoP. 61. To commence implementation of the UCCRTF, immediate activities include finalizing the Implementation Guidelines to enable Project applications to be received and assessed; and setting up the Secretariat to both manage the applications process and continue engagement with User Departments (UD’s). The development of the draft Implementation Guidelines was undertaken in consultation with the User Departments (including PSOD) creating an opportunity for initial feedback on the eligibility criteria and structure of the UCCRTF, and also taking the first stage of raising awareness among the teams responsible for developing project applications, 62. The core role of the Secretariat moving forward will be to: (a) market the UCCRTF internally through workshops, the urban community of practice, and the development of a short handbook or quick reference guide to support User Departments; (b) raise the profile of the UCCRTF externally and create pathways for engaging with external partners who to support the planning and knowledge components, and (c) initiate a baseline study for the indicative

36

logframe in order to both refine the indicators and outputs, and establish a baseline against which the performance of the UCCRTF can be measured. In parallel the Secretariat will also determine the strategy for city selection, partnering with external actors on planning and knowledge, and develop its approach to knowledge generation and influence more widely. 63. The UCCRTF proposes to work in 25 cities across the 6 priority countries. Rather than starting from a blank slate, the Secretariat engaged with User Departments across the ADB (including transport, urban, water, and private sector departments across the 3 geographies – South East Asia, South Asia, and Central West Asia) and the Cities Development Initiative for Asia (CDIA) to map existing programs related to building urban climate change resilience, and understand the possible pipeline of grants and loans that might emerge from these programs in the near future (2014-2016). This ‘pipeline’ is indicative only, and each application would need to be considered on its merits following the process set out under the UFPF, however it is evident that there is a strong platform of urban programs and projects emerging which seek to build resilience to climate change through a range of approaches. 64. To augment this mapping of ADB activities, the Secretariat also undertook an initial mapping of cities that were active in developing strategies for urban climate change resilience, including the Rockefeller Foundation funded ACCCRN and 100 Resilient Cities Initiative, as well as the UN Habitat Cities and Climate Change Initiative. By understanding the number of cities that are, or are about to, initiate participatory and integrated planning processes, we have an initial picture of those cities that may generate both knowledge and investment opportunities in the near term, and to which planning support can build on existing capacity and/or interest. 65. Facility Marketing and Promotion. Efforts are underway to assist with next steps on funds commitment by engaging potential donor partners as well as private sector partners. Marketing interventions for UFPF have been made mostly through the UCoP. Exploratory discussions and briefings will be undertaken among ADB Resident Missions (RMs) for awareness and promotions, thus, funding options of the facility can be included in discussions during country programming.

66. Monitoring. UFPF Secretariat will continuously monitor the performance indicators for the outcome and outputs by tracking the documentation of projects receiving UFPF funds allocation as it progresses through ADB’s project processing and implementation cycle. This is also to ascertain whether individual projects are on-track toward keeping their implementation targets, and reports on any adjustments. Specifically, UFPF Secretariat will review the following:

(i) Approved concept clearance paper, for allocations made by the Urban Committee; (ii) Report and recommendation of the President or TA report, for projects receiving

UFPF fund allocations, approved by ADB (i.e., Board or President) for implementation;

(iii) Project performance report or TA performance report for ADB-approved projects in advance stages of implementation;

(iv) Project completion report or TA completion report; and (v) Progress updates or final reports for DCs

67. In response to the ongoing activities, the UFPF is also planning to commence fielding of consultants (potentially financed through direct charges) to undertake monitoring activities. The activities will be based on the agreed monitoring framework (Appendix 6) and using a results monitoring form (Appendix 7) to obtain baseline information on UFPF components and outputs categorized under agreed targeted outcomes. Monitoring mechanisms will be further expanded

37

and developed as part of the concrete steps towards a robust UFPF integrated project monitoring database. 68. Through discussions with other FPFs in an effort to strengthen the methodology on collecting results to highlight the successes of the Facility, a project tracking sheet (Appendix 8) has been initially developed which contains basic details on the UFPF-supported projects as well as information on which UFPF components and outputs are these projects categorized and most importantly, the targeted outcomes of the individual projects wherein the Facility has made its contribution. These will be further expanded and developed are part of the concrete steps towards a robust UFPF integrated project monitoring database. 69. Review and revision of the current DMF. Recognizing the emerging challenges and opportunities in urban development in the region, following the UOP implementation as well as the UFPF Secretariat highly recommends will the possibility for the review and revision of the current DMF to be in line with the UOP’s thrusts of Competitive, Inclusive and Green cities.

70. This process will be undertaken in consultation with different stakeholders, wherein an agreed set of parameters (particularly using the Urban Sector Performance Indicators which was an output of a UFPF-supported direct charges study) shall be modified to the DMF to reflect UFPF’s contribution to aspects relating to the 3Es of the UOP. It is envisaged that this will enable the Facility’s impacts and results to be measured in terms of its support/resource allocation to initiatives towards promoting inclusive development, creating resilient environments and building economic competitiveness of cities in the Asia-Pacific region. 71. In the same manner, as the UCCRTF also operates within the framework of the UFPF, (but will be measured using another set of results framework), there is an impetus that to an extent, some review and rationalization of the current DMF may be required.

38 Appendix 1

UFPF Design and Monitoring Framework

Introduction 1. The Urban Financing Partnership Facility (UFPF) was established to provide additional financial and knowledge resources for the implementation of urban environmental infrastructure, a core focus of ADB's Strategy 2020. The design and monitoring framework (DMF) sets out the objectives of the UFPF. 2. The key points to note are:

a. The DMF provides more detail on specific outputs that fall within its three major output components defined under UFPF; and

b. The "outputs" section of the DMF is defined using as basis the $100 million expected

total grant contributions and $150 million in guarantees from the financing partners and using 2010-2015 period as a base.

3. ADB's urban community of practice and operations departments are implementing new approaches to investment in environmental infrastructure and other priority areas under Strategy 2020 to achieve more livable cities in Asia, but additional resources are needed for these approaches to be made operational. Concrete outcomes will be an improved environment, safe drinking water, improved sanitation, better access to employment and improved health for about 200 million people, investment road maps for sustainable development in 50 cities, and capacity development for national sustainable urban development strategies in 10 countries. With these as targeted outcomes, the activities to be supported by the resources from UFPF are those directly contributing to the achievements of such outcomes as described below: How UFPF Resources will help achieve Targeted Outcomes: Rationale for Choice of Indicators 4. The specific output indicators used in the proposed DMF for UFPF are those that directly reflect the activities to be financed from UFPF resources. They are:

a. Component 1: Increased levels of urban environmental infrastructure investment – to be supported by UFPF in terms of additional resources to:

(i) prepare projects (through PPTAs) resulting in fundable investment proposals;

(ii) finance grant components of investments that support either works, goods

and services designed to enhance project design and implementation; and

(iii) finance specific activities that directly support a programmatic approach to the above outputs.

b. Component 2: Technical Assistance – UFPF funds may also be used for technical

assistance to support business and/or financial advisory and engineering services to:

(i) undertake economic and sector work, linking urban investments to sustained, inclusive growth and other Strategy 2020 objectives including selective

Appendix 1 39

support for other non-lending measures—such as policies, regulations, standards, and institutional capacity building;

(ii) prepare projects, transactions, and programs for investment and structure the

financing of urban projects appropriate for local governments and capital market conditions;

(iii) share costs of implementing TA components of urban investment programs in

combination with other government, donor, and commercial funding;

(iv) support knowledge development and sharing through transfer of technology and experience by developing networks of practice, and through participation at learning events; and

(v) build the capacity of capital markets to finance urban investments and

programs.

c. Component 3: Guarantees – support will be provided by UFPF to reduce financing costs and enhance the credit quality of projects, for pilot and demonstrations projects and for investments that produce new and innovative financing approaches to urban environmental infrastructure implementation targeted at local governments and utilities, community associations and apex bodies, local financial institutions, and other organizations involved in the financing of such projects either on the supply or demand side of the market.

5. Furthermore, it is envisaged that the UFPF will not only provide additional resources to produce the outputs described above but also provide added value such as:

(i) greater assurance of outcomes by providing support to counterpart agencies in respect of improving implementation and through improved dialogues with government.

(ii) greater reach to underserved, particularly the poor, by facilitating preparation of

additional projects and leveraging more resources from partners. (iii) fostering innovation by supporting activities like pilot and demonstration,

development of knowledge products and organization of knowledge events in areas of emerging priority such as climate change.

(iv) being more strategic by addressing policy and institutional issues of replication

specific and priority issues such as gender, climate change, environment and sanitation.

40 Appendix 1

Design Summary Performance Targets/Indicators

Data Sources/Reporting Mechanisms

Assumptions and Risks

Impact Improved livability in cities of all sizes in developing member countries (DMCs)

Improved environmental infrastructure/service delivery. Improved environmental parameters in cities Achievements of Millennium Development Goals (MDGs) in cities

Urban sector and sector and/or thematic reports of DMC governments and international organizations Asian Development Bank (ADB) and international progress reports on the MDGs

Assumptions There is greater

commitment by stakeholders and policymakers in DMCs to improve environmental quality

Sustained emphasis on environmental infrastructure investment to keep pace with increased demand – population and economic growth

Financial mechanisms for sustainable maintenance programs in place

Outcome Improved coverage, quality and continuity of environmental service delivery and sustainability.

200 million in cities benefiting from improved investments or systems. Improved urban environmental management as demonstrated by pilot project achievements influence on policy and reform measures Funding commitments. Between 2010-2015, at least 20% of ADB lending projects will be urban-related, over $10 billion in ADB funds invested in urban Asia, and $5 billion additional investments leveraged from other donors, government and private sector

Country sector reports and analysis prepared by ADB Reports of UN and other agencies Government reports on sector matters in targeted countries. CPS, CAPEs and DMC feedback received through various formal and informal channels Reports of research bodies Project Processing Information System (PPIS) Project documents

Assumptions Leadership of key local

governments, agencies and utilities

Implementation of governance reforms for service delivery and sustainable management

Community involvement Risks Intensified opposition to

private sector involvement in service delivery

Budgetary constraints

Appendix 1 41

Output Component 1 Increased levels of investment Fundable investment

projects Component 2 Technical Assistance Project development

support Project implementation

support Non-lending assistance

addressing reforms in the areas of: policy legislation regulation institutional

arrangements

Component 3 Guarantees

70% of grant resources or $70 million of UFPF resources spent on project investment support for either goods, works or systems At least 2015 investments either funded in full or cofinanced with ADB or other sources 30% of grant resources or $30 million of UFPF resources allocated to this component At least 2016 applications for support to project development through improved design and implementation, better communication with stakeholders, etc. At least 2017 applications for support to project implementation through improved supervision, better communication with stakeholders, etc. At least 100 TAs from direct charge applications18 designed to advance reform measures in each of the areas of policy, legislation, regulation or institutional arrangements or to improve monitoring and evaluation of results At least $150 million of guarantee resources

Published ADB data on past and future public and private sector investments and technical assistance Government evaluation studies/ research reports ADB databases TA documents, reports on sector work dealing with policies and legislation Government evaluation studies/ research reports Knowledge products developed on schedule and achieve targeted distribution levels Published ADB data on past and future public and

Assumptions ADB investment

products are attractive to DMCs

Replenishment of OCR/ADF to support increased urban investment

Internal resources allocated to deliver increased urban program

UFPF contributions are received based on the committed date of contributions

Risks Low DMC demand for

increased investment in the sector

15 20 grants for investments based on average cost of $3.5 million per intervention during 2010-2015. 16 20 grants for TA based on average cost of $500K per project or a total of $10 million during 2010-2015. 17 20 grants for TA based on average cost of $500K per project or a total of $ 10 million during 2010-2015. 18 100 applications for direct charges is based on average cost of $100K each or a total of $10 million during 2010-2015.

42 Appendix 1

allocated to this component Guarantees applied to at least 10 projects either standalone or in conjunction with UFPF grant, UFPF resources spent on project investment support for either goods, works or systems

Published ADB data on past and future public and private sector investments with guarantee involvement Government evaluation studies/ research reports

Added value provided by UFPF in terms of:

Greater assurance of outcomes by increasing country commitment and capacity

Investment Dialogues Use of knowledge

products

Dialogues conducted in each of five priority countries that produce updated urban priorities

BTOR on dialogues ADB UCoP database

Greater reach to poor and underserved by

Pro-poor orientation At least 10 pilot projects demonstrating involvement of poor communities as integral to project implementation

Post evaluation study of PPTAs and subsequent loan project design, UFPF reports

Funding proper

sanitation/recycling At least 10 pilot projects demonstrating increased investment in sanitation

Project documents/UFPF reports

Funding gender

initiatives At least 5 pilot projects demonstrating gender mainstreaming

As above

Funding initiatives that

help strengthen partnership with or empower civil society

At least 10 pilot projects demonstrating greater involvement of civil society both at policy and project levels

As above

Fostering Innovation Pilot financing Knowledge products Knowledge events Take up of new

products

Post evaluation confirms new ideas, methods, technology and approaches taken up and applied from UFPF finance initiatives

Post evaluation of approved technical assistance projects, UFPF reports Government evaluation studies/ research reports

Appendix 1 43

Being more strategic by Funding climate change Linking to more

partners Better dissemination of

knowledge products

At least 15 projects demonstrating climate change adaptation measures At least 10 projects implemented with cofinancing At least 50 million population in cities where knowledge activities have been targeted

ADB project documents (loans and TAs); UFPF application documents and reports Government evaluation studies/ research reports As above As above

Activities Investment

Demonstrate expansion of urban environmental investment in at least 5 countries

Mobilize private finance Build momentum for urban environment infrastructure investments

Reforms Intensify support for national infrastructure sector reforms Support development of regulatory frameworks

Capacity Development Develop new and innovative approaches, methodologies Strengthen institutional capacity Enhance the knowledge base and knowledge products Strengthen regional partnerships

Inputs: Urban Financing Partnership Facility approx. $250 million Project Support Window TA Window Guarantee Window ADB TA grant resources ADB Lending ADB staff resources Government resources Private sector resources NGO resources

44 Appendix 2

Guidelines for Application for Assistance and Project Selection under UFPF

1. The applications for assistance will be proposed by the Operations Departments and the Urban Infrastructure Working Group (UIWG), made up of representatives from the operational departments and chaired by the director general of RSDD (or designate), will review, assess and make recommendations on projects that are suitable candidates for assistance under UFPF. 2. Operations Departments and the UIWG will use the following criteria as guidelines for project selection and approval to ensure that resources are directed to projects and activities that are best able to demonstrate bankability, capacity enhancement, pilot scalability and leveraging of both public and private sector finance with UFPF assistance.

Eligible Urban Infrastructure Sectors

Water, Sanitation, Wastewater, Transport, Energy, Roads (city)

Eligible Countries ADB Developing Member Countries (DMCs)

Eligible Activities TA, Investment, Guarantee Government Commitment DMC government discussion and

corresponding Operations Department endorsement

Consistent With ADB Urban Initiatives under Strategy 2020

Funding Not be more readily available from other sources

Value for Money Activities aimed at ensuring value for money, including adopting the lowest cost strategies consistent with appropriate standards of quality

Additionality a) Environmental sustainability, pro-poor innovative finance and pilot demonstration

pilot projects demonstrating, pro-poor benefits, environmental sustainability, innovative financing and pilot scalability

b) Technical project proposing operations department demonstrate that without technical advisory support, for example in the form of pre-feasibility assessments, PPTAs and / or project structuring including identification of scope and nature of private sector involvement’ the proposed project would not be formulated/structured well enough to be ‘marketed’ to potential financiers

c) Financial project proposing operations department demonstrate that without viability gap investment funding assistance and /or guarantee support, the project would not be viable and/or commercially attractive

Appendix 2 45

3. To ensure alignment of bank wide sector operations and close co-ordination with operations departments, proposals for UFPF assistance must originate in the operations departments of the ADB. 4. Consistent with the approval criteria, proposals relating to country-specific activities will require evidence of commitment from the government towards the project. 5. To ensure a rapid response capability, applications will be considered on a rolling basis as requests arise, without the need for a relative assessment of proposals through the periodic batching of proposals. 6. The Urban Infrastructure Working Group (UIWG) will undertake an initial screening of all proposals to ensure that the application is complete and consistent with the eligibility criteria with respect to eligible countries, DMC country commitment, sectors and additionality and nature of intervention/activities. 7. Proposals that meet the eligibility requirements will then be subject to more intensive scrutiny /technical assessment. The UIWG may undertake this assessment using RSID staff. The findings of the technical assessments shall be more in the nature of recommendations and not binding on the UIWG.

46 Appendix 3

UFPF Financial Statement as of 31 December 2013

Appendix 3 47

48 Appendix 3

Appendix 3 49

50 Appendix 3

Appendix 4 51

Emerging Pipeline of Urban Projects Requesting UFPF Assistance for 2014 and Beyond

Country City Title Source Grant $ Loan $ Timing Details

Bangladesh

Barisal CDIA 300,000 2014 TBD

TBA Coastal Towns Environ Infrastructure Program

S Asia 2014 Investments in drainage, sanitation, cyclone shelter, early warning systems

TBA Urban Governance and Infrastructure Improvement Project

S Asia 2014 PPTA Stage (loan approval June) – Would benefit from Climate Risk additions to investments

India

Bhubeneshwar TBD CDIA 300,000 2014 City Infrastructure Prioritization Planning scheduled for Feb

Surat Flood Management (TBC)

CDIA 300,000 2014 City Infrastructure Prioritization Planning scheduled for end Feb.

TBA Clustered Technical Assistance

Pilot civil works across efficient water supply, energy efficient buildings, green transport

Indonesia

Palu Climate resilient bay area rehabilitation

CDIA 300,000 2014

Karachi Bus Rapid Transit West Asia

2016

Punjab Province

Punjab Cities Investment Improvement Program

West Asia

2015

Sindh Province

Sindh Cities Investment Improvement Program

West Asia

2015

52 Appendix 4

Country City Title Source Grant $ Loan $ Timing Details

Cebu Fostering credit for livelihood recovery PSOD Early idea from PSOD following

Yolanda Microfinance meeting

San Fernando climate resilient sanitation with drainage component

CDIA 300,000

Valenzuela flood mitigation and drainage improvement CDIA 300,000 2014 Application approved, ToRs being

drafted

Vietnam

Ca Mao and KienGiang cluster

Cluster economic development

SE Asia/ CDIA

300,000` Part of Competitive and Green Cities in the Mekong Delta PPTA

Dong Hoi/ Hoi An

Urban Environment and Climate Change Adaptation Project

SE Asia $5M $100m 2014/15 PPTA completed Jan 2014 (next step is loan application)

RạchGiá Water supply and waste water management

CDIA/ SE Asia

300,000 2014 VRM will initiate city application in march/April

QuyNhon Flood mitigation and drainage improvement

CDIA 290,000 2014 Endorsement pending for application, ToRs being drafted

Appendix 5 53

2014 ADB Urban Lending Pipeline

Financing Plan (US$ million)

ADF ADB No. Country Proj Name OCR (A) Loan (B) Grant

(C) (A+B+C)

CWUW 1. GEO Urban Services Improvement Investment Program – Tranche 4 151.0 32.0 183.0

2. PAK Punjab Wholesale Market Project (Rawalpindi) 70.0 70.0

3. PAK Karachi Mass Transit Project Design Advance 5.0 5.0 Total 258.0

EASS 1. MON Urban Sector Development (Additional Financing) 20.0 20.0

2. PRC Yunnan Chuxiong Urban Environment Improvement Project 150.0 150.0

4. PRC Jilin Urban Development Project 150.0 150.0

5. PRC Hubei Huanggang Urban Environment Improvement Project 100.00 100.0 Total 420.0

SAUW 1. BAN 3rd Urban Governance and Infrastructure Improvement (Sector) 125.0 125.0

2. BAN Dhaka Water Supply Sector Development Program (Additional Financing) 20.0 20.0

3. BAN Coastal Towns Infrastructure Improvement Project 52.0 52.0

4. IND MFF-Jammu and Kashmir Urban Sector Development Investment Project 60.0 60.0

5. IND National Capital Region Urban Infrastructure Financing Facility 90.0 90.0

6. IND MFF-Rajasthan Urban Development Program (Facility Concept) 250.0 250.0

7. IND MFF-Rajasthan Urban Development Program (Project 1) 150.0 150.0

8. IND Karnataka Integrated Urban Water Management Investment Program 150.00 150.0

9. IND Karnataka Integrated Urban Water Management Investment Program 75.0 75.0

10. NEP Melamchi Water Supply Project (Additional Financing) 25.0 25.0

11. NEP 3rd Small Towns Water Supply and Sanitation Sector Project 42.0 42.0

12. SRI PDA for Integrated Urban Development 30.0 30.0 Total 1,069.0

SEUW 1. INO Metropolitan Sanitation Management Investment Program 80.0 80.0

2. INO Capacity Development Metropolitan Sanitation Management Investment (CDTA) 2.0

3. INO Connecting Urban Poor in Jakarta (CDTA) 0.5

4. LAO Urban Environmental Improvement (PPTA) 1.0

5. LAO Capacity Development for Urban Planning and Management (CDTA) 1.9

6. MYA GMS Third Corridor Towns Development Project (PPTA) 1.0

7. VIE 2nd Secondary Cities Development Project (Green Cities) (PPTA) 0.8 Total 87.2

GRAND TOTAL 1,843.2

54 Appendix 6

Governance Structure of UFPF

Party Responsibilities Financing Partners

Members: UFPF contributors (i) Provide strategic direction to UFPF (ii) Meet with ADB for Annual Consultation (iii) Review progress and administration and

Annual Work Program

Urban Infrastructure Steering Committee (UISC)Chair: DG, RSDD Secretariat: RSID Members: DGs of UDs

(i) Provide strategic direction to UFPF (ii) DG, RSDD approves UFPF policy and

procedures (iii) Approves allocation of funds to

applications for TAs and grant components of investments

Urban Infrastructure Working Group (UIWG)

Chair: DG, RSDD (or Designate) Secretariat: RSID Members: Urban Development Specialists nominated by Urban Division Directors as members

(i) Review and endorse proposals for UFPF support

(ii) Recommend policy & procedures of UFPF to UISC

Facility Manager (RSID)

Manager: Director, RSID

(i) Serve as Secretariat and oversee UFPF day-to-day operations

(ii) Oversee review process for applications (iii) Review applications for compliance with

Implementation Guidelines for use of funds

(iv) Prepare Annual Work Program and progress reports

(v) Serve as focal point for UFPF partners for technical matters

OCO

Contact: Designated by Head, OCO (i) Facilitate partner contributions to UFPF (ii) Communicate on financial issues among

the partners (iii) Lead negotiations with partners on

financial and procedural agreements for UFPF contributions and framework agreement

Appendix 7 55

UEIF DRAFT RESULTS MONITORING FRAMEWORK

GENERAL ELIGIBILITY CRITERIA

Consistence with ADB Country Strategy Innovative solutions Participatory Catalytic Demonstration value Potential for replication Potential for positive environmental benefits Potential benefits for the poorest Mitigation of potential negative social impacts Potential for partner cooperation

CRITERIA FOR SECTOR SPECIFIC INDICATORS

1 - CLIMATE CHANGE MITIGATION AND ADAPTATION PROJECTS Conversion to use of renewable resources for production of energy

- Reduced consumption of finite fuels - Increased use of renewable resources - Reduced discharges of GHG

Introduction of air pollution control- Reduced discharges of GHG - Improved public health and safety

Coastal protection and flood control- Reduced risks for flooding - Reduced hazards exposures to vulnerable groups

Energy efficiency 2- URBAN ENVIRONMENTAL TRANSPORTATION SERVICES PROJECTS Introduction of public transportation by displacing cars

- Reduced total and specific energy demand - Increased urban transportation efficiency - Reduced discharges of GHG - Improved public health and safety - Increased mobility for urban poor groups

Introduction of air pollution control- Reduced discharges of GHG - Improved public health and safety

Use of cleaner fuels - Reduced discharges of GHG

Use of renewable resources - Reduction of use of finite resources such as oil, coal and natural gas - Reduced discharges of GHG

3 - URBAN ENVIRONMENTAL WATER AND WASTEWATER SERVICES PROJECTS Introduction of metering, demand management and institutional reforms for sustainable service delivery

- Reduced consumption of resources for operation and investments in plant capacities - Increased cost recovery - Improved quality of service delivery - Improved operational sustainability - Extension of services to urban poor in unserviced areas

Introduction of modern and efficient methods for treatment of discharges - Reduced discharges of pollutants to the environment

56 Appendix 7

- Reduced consumption of resources for operation and investments - Improved public health and safety

Introduction of recovery and utilization of renewable resources such as e.g. biogas - Reduction of use of finite resources such as oil, coal and natural gas - Reduced discharges of GHG

Introduction of modern equipment for control and operation of pumping of water and sludge- Reduction of use of electric energy - Reduced operational expenses - Improved quality of service delivery

3- URBAN ENVIRONMENTAL SOLID WASTE MANAGEMENT SERVICES PROJECTS Closure of inadequate landfills and uncontrolled disposals and construction of new modern disposal facilities with e.g. biogas recovery

- Reduced discharges of pollutants to the environment, e.g. ground water, soil, air - Reduced discharges of GHG - Improved public health and safety

Introduction of institutional reforms and modern solid waste collection system - Reduced discharges of GHG - Improved quality of service delivery - Improved public health and safety - Improved cost recovery

4 - DISTRICT HEATING AND COOLING SERVICES PROJECTS Introduction of metering, demand management and institutional reforms for sustainable service delivery

- Reduced consumption of resources for operation and investments in capacities - Increased cost recovery - Improved quality of service delivery - Improved operational sustainability - Extension of services to urban poor in unserviced areas

Modernization of heat production and extension of services to areas with alternative heating- Reduced discharges of GHG - Improved quality of service delivery - Improved public health and safety - Improved cost recovery - Reduction of use of finite resources such as oil, coal and natural gas

Rehabilitation of distribution networks and substations- Reduced discharges of GHG - Improved quality of service delivery - Improved public health and safety - Improved cost recovery - Reduction of use of finite resources such as oil, coal and natural gas

5 - URBAN RENEWAL PROJECTS Rehabilitation of housing and urban public facilities

- Reduction of use of finite resources such as oil, coal and natural gas - Reduced discharges of GHG - Improved quality of service delivery - Improved public health and safety - Improved cost recovery - Improved living conditions for the urban poor

Appendix 8 57

UFPF RESULTS MONITORING FORM 1. Project Name:

2. Country:

3. Specific target cities and urban centers:

4. Estimated number of beneficiaries:

5. RESULTS MONITORING

A ‐ CLIMATE CHANGE ADAPTATION

1. Conversion to use of renewable resources for production of energy

Reduced consumption of finite fuels

Increased use of renewable resources

Reduced discharges of GHG

2. Introduction of air pollution control


Improved public health and safety

3. Coastal protection and flood control

Reduced risks for flooding

Reduced hazards exposures to vulnerable groups

4. Energy efficiency

SPECIFIC DMF PERFORMANCE TARGETS AND INDICATORS TO BE MONITORED:

B ‐ URBAN ENVIRONMENTAL TRANSPORTATION SERVICES

1. Introduction of public transportation by displacing cars

Reduced total and specific energy demand

Increased urban transportation efficiency



Increased mobility for urban poor groups

2. Introduction of air pollution control



3. Use of cleaner fuels


4. Use of renewable resources

Reduction of use of finite resources such as oil, coal and natural gas



58 Appendix 8

C ‐ URBAN ENVIRONMENTAL WATER AND WASTEWATER SERVICES

1. Introduction of metering, demand management and institutional reforms for sustainable service delivery

Reduced consumption of resources for operation and investments in plant capacities

Increased cost recovery

Improved quality of service delivery

Improved operational sustainability

Extension of services to urban poor in unserviced areas

2. Introduction of modern and efficient methods for treatment of discharges

Reduced discharges of pollutants to the environment

Reduced consumption of resources for operation and investments


3. Introduction of recovery and utilization of renewable resources such as e.g. biogas



4. Introduction of modern equipment for control and operation of pumping of water and sludge

Reduction of use of electric energy

Reduced operational expenses



D ‐ URBAN ENVIRONMENTAL SOLID WASTE MANAGEMENT SERVICES

1. Closure of inadequate landfills and uncontrolled disposals and construction of new modern disposal facilities with e.g. biogas recovery

Reduced discharges of pollutants to the environment, e.g. ground water, soil and air



2. Introduction of institutional reforms and modern solid waste collection system




Improved cost recovery


E ‐ DISTRICT HEATING AND COOLING SERVICES PROJECTS

1. Introduction of metering, demand management and institutional reforms for sustainable service delivery

Reduced consumption of resources for operation and investments in capacities

Increased cost recovery


Improved operational sustainability

Extension of services to urban poor in unserviced areas

2. Modernization of heat production and extension of services to areas with alternative heating

Appendix 8 59






3. Rehabilitation of distribution networks and substations







F ‐ URBAN RENEWAL PROJECTS

1. Rehabilitation of housing and urban public facilities






Improved living conditions for the urban poor


UFPF VALUE ADDITION

6. Does the project have high demonstration value and scalability / replicability?

If YES, kindly elaborate

7. Are gender mainstreaming activities present in the project?

If YES, how is this done?

8. Does the project fostering partnerships with communities / working with civil society?

If YES, how is this done?

9. Expected knowledge outputs to be generated from the project

60 Appendix 8

TIMETABLE OF PROJECT IMPLEMENTATION:

Please fill –up the estimated / actual timetable (year and quarter) for which the UFPF funded project components and activities are being/will be implemented

UFPF Component

Year 1 (201_) Year 2 (201_) Year 3 (201_) Year 4 (201_) Year 5 (201_)

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

TA Grant / Direct Charges

Investment Grant

Guarantee

Documents

Annual Progress Report January–December 2013 · received UFPF-support (and allocated assistance) since its inception up to the coverage of this reporting period. 7. At present,