The African Development Bank Role of ADB in

The African Development Bank Role of ADB in Mainstreaming Disaster Risk Reduction into Development Programmes Vasantt Jogoo Principal Environmentalist 02 -03 June 2004 Johannesburg, RSA

The African Development Bank Group The African Development Bank is the premier financial development institutio of Africa, dedicated to combating poverty and improving the lives of people of the continent and engaged in the task of mobilizing resources towards the economic and social progress of its Regional Member Countries

The African Development Bank Group Constituent Institutions: The African Development Bank (ADB) The African Development Fund (ADF) The Nigeria Trust Fund (NTF) Shareholders: 53 African countries 24 non-African countries Authorized Capital at 31 Dec 2001 UA 21. 87 billion Subscribed Capital at 31 Dec 2001 UA 21. 49 billion

The African Development Bank The Development Challenge “poorest continent despite being one of the most richly endowed” • Declining agricultural and industrial productivity • Increasing environmental degradation • High level of debt • Civil unrest and conflicts • Collapsing infrastructure….

The African Development Bank Development Opportunities • • Greater political commitment Commitment to peace, democracy Greater need for cooperation Improved environmental governance • Growing role of private sector • New opportunities for industrial development • Globalization and GPG…

The African Development Bank Bank’s Strategic Focus • at the country level, three broad sectoral themes, namely agriculture and rural development, human resource development and private sector development • one generic theme, governance • at the regional/continental level, economic integration and co-operation ; and two cross-cutting issues: environment and gender

African Development Bank Group Approvals and Disbursements, 1989 -2002 (in US$ millions)

The African Development Bank Group Approved Operations in 2001 • 134 approved operations, total UA 2. 37 billion (UA 1. 17 billion in 2003): UA 1. 38 billion from ADF; UA 986. 7 million from ADB; UA 5. 1 million from NTF • Major Sector Approvals: Agriculture & Rural Development: UA 268. 5 million or 15. 3 % of total Social Sector: UA 198. 2 million or 11. 3 % of total Multisector: UA 410. 8 million or 23. 5 % of total (mostly economic reform programs and good governance promotion) HIPC Debt Relief Approvals 2001 UA 611. 2 million

The African Development Bank ADB’s Response to Environmental Sustainability Challenge • Clear vision of Sustainability • Appropriate Institutional Structure • Effective Integration of ES Objectives in Policies and Programmes • Incorporation of ES Objectives within Projects • Independent In-House Review Mechanism • Areas of Improvement Identified

Vice Presidency Policy, Planning and Research (PRVP)

The African Development Bank Safeguard Policies, Procedures and Guidelines • • • Policy on Environment (new Policy under preparation) Environmental and Social Assessment Procedures (2001) Integrated Strategic Impact Assessment (under preparation) Environmental and Social Auditing Guidelines (2001) Policy on Involuntary Resettlement

The African Development Bank New Environment Policy • Goals: Improve overall quality of Life and Preserve/Enhance ecological capital • Objectives: Promote Long-term view of Development; enhance regenerative capacity of ecological capital; reverse impoverishment process; help RMCs build capacity; strengthen partnership…

Key Principles ü A strong and diversified economy shall be recognized as a just means to enhance the capacity for environmental protection; ü Environmental management tools, like environmental assessments, shall systematically be used to ensure that economic activities are environmentally sustainable, and to systematically monitor their environmental performance. ü Community involvement, specifically including women, in natural resource management decisions that affect the most marginalized and vulnerable groups shall be provided for; ü Transparency, accountability of governance structures and institutions, which are more responsive to the needs and priorities of affected communities in general, and poor people, women, and vulnerable groups in particular, shall be encouraged.

The African Development Bank Policy Interventions “cross-sectoral. Approach” • Reversing land degradation and desertification • Protecting the coastal zone • Protecting GPG while preserving biodiversity and forests • Improving public health • Enhancing disaster management capabilities

The African Development Bank Policy Interventions cont’d • Promoting Sustainable Industry, Mining… • Increasing Awareness, Institution and Capacity Building • Improve Environmental Governance • Urban Development and Population growth • Greater role for CSO

The African Development Bank Purpose and Nature of Environmental & Social Impact Assessment (ESIA ) • To improve decision making and to ensure that the projects under consideration are environmentally and socially sound and sustainable. • Environmental and social consequences should be recognized early in the project cycle • ESA helps to identify ways to improve a project environmentally and socially by preventing, minimizing, mitigating, or compensating for adverse impacts. • ESA also plays an important role in building the environmental and social management capacity of the project sponsor.

The African Development Bank Project Screening • Category 1: A proposed project is likely to have significant adverse • Category 2 : A proposed project is classified as Category 2 if its • Category 3: A proposed project is classified as Category 3 if there are impacts. potential adverse environmental impacts are predictable and manageable. no adverse environmental impacts. Beyond screening, no further EA action is required for a Category 3 project.

The African Development Bank Financial Intermediaries (Category 4) Category 4: • A proposed project is categorized as Category 4 if it involves investment of Bank funds through a financial intermediary • The FIs on-lends to small and medium size enterprises which may include banks, insurance and leasing companies, investment funds, etc. • The Bank needs to ensure the proper implementation of its environmental mandate in its FI operations while respecting the principle of delegated responsibility, which characterises such operations

The African Development Bank ADB’s Environmental Review Procedures for Private Sector Operations • Private sector projects financed by the Bank must comply with applicable Bank’s environmental and social policies. • In sectors where no appropriate policies or guidelines exist, Bank applies relevant internationally recognised standards. • The project sponsor must ensure compliance with host country requirements.

The African Development Bank The Harmonization Process • • Managed by Multilateral Financial Institutions Working Group on Environment (MFI-WGE) Driven by need to: Increase efficiency, reducing transaction costs and allowing more timely interventions; Improving borrower practices and development effectiveness; and Development Committee’s request to harmonize financial, management, procurement, and environmental assessment practices. • 1 st Phase on Common Framework for Environmental Impact Assessment Completed; Two Workshops held in Africa: Addis Ababa in January and Tunis in May 2003. • 2 nd Phase: Will look Beyond EIA and the Need to develop methods and tools that address projects that do not require full EIAs (Sectoral, Regional and Strategic Assessment)