Modality

Structural and nonstructural interventions require cohesive and integrated program approaches as well as long-term planning. The phased approach taken by this program proved most appropriate, allowing the step-by-step construction of various flood and riverbank erosion management (FRERM) structures while verifying innovative solutions and, in the process, strengthening state and local institutions.

The results-based lending (RBL) modality provides flexibility to adjust targets adversely affected by unforessen adverse events such as COVID-19. During 2020–2022, the COVID-19 pandemic affected the demand for electricity, lowering the State Electricity Company's (PLN) revenues and creating uncertainty in its investment plans. Sourcing equity financing and implementing ongoing projects within PLN became difficult under such conditions and adjustments were needed in scope and time targets of ongoing works.

The sector development program modality proved to be effective in helping the government to reform the education sector. It responded to the sector's major problem of insufficient financing, with the policy-based grant providing the government financial incentives to reform the sector. The project component effectively supported the implementation of policy reforms. Some project initiatives are not yet fully functional and the government needs further support to accomplish these. Supporting technical assistance could address this.

The project's use of leasing, a financing instrument not used in previous ADB FILs in Uzbekistan, was positive as it provided alternative financing depending on the needs of customers.

Collaboration with development partners is essential to build consensus for reforms. Donor consensus and support for critical reforms, backed by a policy-based loan and plan to subsequently complement by project-level funding, contributed to the success of this program. Continued long-term engagement on reforms supported by investments is necessary for sustainability.

Selection of the most suitable modality to support institutional development requires adequate consideration of the various factors intricately linked to it, including the prevailing political dynamics, incentive structures in public administration, and commitment of the relevant development agencies. In the case of this project, frequent changes in the senior management of the Erdenes Mongol jeopardized project ownership and seriously affected implementation.

ADB's COVID-19 Pandemic Response Option (CPRO) modality was effective. The CPRO program established a model for ADB to channel timely support to developing member countries to address major health and economic challenges. The speed of delivery, efficient implementation, and strong development impact achieved validate the success of this model, which can be deployed to further assist countries in their economic recovery.

Shock-responsive social protection mechanisms are effective in responding to the severe socioeconomic impact of global pandemics. Topping up existing benefits (known as vertical expansion) and using existing benefit delivery mechanisms allowed the government to respond quickly, ultimately reaching 80% of the population with cash support. This approach has also been adopted for pandemic response in other ADB developing member countries.

The CPRO modality is deemed relevant, appropriate, and efficient for this program, as it allows DMCs to address spending requirements for health, social, and economic measures in response to the pandemic. Discussions with the government to align the modality with response measures facilitated critically needed fiscal stimulus to better manage the immediate economic and financial shocks created by the rapidly unfolding COVID-19 pandemic and an overwhelmed health care system.

ADB's long standing engagement in the country, especially in the health and public finance sectors and in fiscal and macroeconomic policy developed its readiness to respond effectively and quickly. The One ADB approach and the application of the streamlined business processes under the CPRO policy also worked well for Mongolia, as it clearly demonstrated that cutting several bureaucratic layers in the approval process does not necessarily compromise the quality of the end product.