Agreement on the Establishment of the ASEAN Development Fund (ADF) [*]
Done at: Vientiane
Date enacted: 2005-07-26
In force: 2005-07-26
The Governments of Brunei Darussalam, the Kingdom of Cambodia, the Republic of Indonesia, the Lao People's Democratic Republic, Malaysia, the Union of Myanmar, the Republic of the Philippines, the Republic of Singapore, the Kingdom of Thailand, and the Socialist Republic of Viet Nam;
Committing to realise the ASEAN Vision 2020 and build an ASEAN Community as articulated in the Declaration of ASEAN Concord II;
Desiring to implement expeditiously the Vientiane Action Programme (VAP) and related ASEAN action plans towards the realisation of an ASEAN Community that is open, dynamic and resilient;
Recognising the necessity of providing financial resources to support the implementation of the VAP and its successor Plans;
Do hereby agree as follows:
Establishment of the ASEAN Development Fund
The ASEAN Development Fund (ADF) shall be established and implemented in accordance with the annexed Terms of Reference, which forms an integral part of this Agreement.
The initial contribution of each ASEAN Member Country to the ADF shall be one million US dollars (US$1,000,000). This initial contribution shall comprise the existing contributions of each ASEAN Member Country to the ASEAN Fund. These existing contributions of each ASEAN Member Country to the ASEAN Fund shall be transferred to the ADF upon the entry into force of this Agreement.
All other monies of the ASEAN Fund representing its accumulated unprogrammed earnings and its records shall also be transferred to the ADF.
Entry into force and termination
This Agreement shall enter into force on the date of signature of all the ASEAN Member Countries and shall remain in force until it is terminated by the decision of the ASEAN Foreign Ministers.
The entry into force of this Agreement shall automatically constitute the termination of the Agreement for the Establishment of a Fund for ASEAN, signed by the ASEAN Foreign Ministers on 23 July 1994 in Bangkok, and the transfer of all monies and records of the ASEAN Fund to the ASEAN Development Fund.
This Agreement shall be deposited with the Secretary-General of ASEAN who shall promptly furnish a certified copy thereof to each ASEAN Member Country.
In witness whereof, the undersigned, being duly authorised by their respective Governments, have signed this Agreement.
Done at Vientiane, Lao PDR, this Twenty-Sixth Day of July in the Year Two Thousand and Five, in a single original copy in the English language.
Terms of reference of the ASEAN Development Fund
The ASEAN Development Fund shall serve as ASEAN's common
pool of financial resources to support the implementation of the
Vientiane Action Programme (VAP) and its successor documents.
In particular, the ADF shall be used for the following purposes:
To leverage funding of regional cooperation programmes and
projects from Dialogue Partners and other external donors.
When used for counterpart funding, the amount shall not exceed
20% of the total funding raised regardless of whether the cofunding
source is an ASEAN Member Country or an external
To provide seed funding for initial activities of large-scale
projects, requiring major financial support from a Dialogue
Partner or donor institution; and
To provide full funding support to small and short-term projects of
a confidential or strategic nature.
The ADF shall be established and managed according to the
following guiding principles:
The basic element of the ADF shall be equal contributions by
ASEAN Member Countries. The initial contribution of each
ASEAN Member Country to the ADF shall be one million US
dollars (US$1,000,000). This initial contribution shall comprise
the existing contributions of each ASEAN Member Country to
the ASEAN Fund. These existing contributions of each ASEAN
Member Country to the ASEAN Fund shall be transferred to the
ADF upon the Agreement’s entry into force;
ASEAN Member Countries, at any time, are encouraged to
make additional voluntary contribution(s) in any amount in
addition to their initial contributions;
The ADF shall be open to contributions from other public and
private sources. No restrictions or conditions shall be imposed
by other public and private sources with regard to the use of
their contributions; and
Contributions by the ASEAN Member Countries to the ADF shall
be distinct and separate from their contributions to the operating
budget of the ASEAN Secretariat, and to other ASEAN funds of
a sectoral nature.
Arrangements for managing and utilising the ADF
Custody and management of the Fund
The ADF shall be held in trust at the ASEAN Secretariat, subject to
the same rules and conditions that are applied to other existing
trust funds in regard to investment, disbursement, accounting and
The ADF will be increased by equal contributions of the ASEAN
Member Countries in the amount US$100,000 by the end of the
Programming and appraisal of proposed projects
Use of the ADF shall be programmed on a regular basis every two
years to realise each of the three pillars of the ASEAN Community
and to narrow the development gap among ASEAN Member
Countries. Selection of regional cooperation measures to be
included in the ADF programme shall take explicit account of the
need for: (a) priority measures in realising each of the three pillars
of the Community; (b) striking a parallel and balanced development
and implementation of the three pillars of the Community; and (c)
narrowing the development gap among ASEAN Member Countries
so that they could move forward in a unified manner.
The two-yearly ADF programme shall be approved by the ASEAN
Standing Committee (ASC) as basis for preparation of specific
project proposals for ADF funding support.
Projects seeking ADF support shall be appraised based on criteria
including regionality, appropriateness and relevance in the context
of the VAP and its successor documents, quality of design, costeffectiveness,
and sustainability. Appraisal of projects shall be
made by the ASEAN Secretariat Project Appraisal Committee
(PAC) based on those criteria. The standard format for ASEAN
project proposals shall be used.
Utilisation of the fund is mainly for implementation of programmes,
projects and activities identified in the VAP and its successor
The ADF shall support projects and activities with clearly defined set
of objectives and targets within a set timeframe for implementation.
The items of expenditure in a project budget shall be classified into
three (3) general categories as follows:
Administrative costs: rent, utilities, office space, salaries of
locally engaged personnel, insurance and taxes;
Operational costs: project overhead costs, recruitment costs,
compensation of professional staff engaged in the project, its
related expenditure (e.g. travel, accommodation, per diem)
equipment and supplies; and
Capital costs: land and building, and equipment costing more
Only the operational costs of the project shall be eligible for
support under the ADF.
The capital and administrative costs shall be borne by the Host
Government of the project.
Travelling, accommodation and other expenses of delegations
attending regular meetings of duly established ASEAN bodies are
not eligible expenditures under the ADF.
Approval authority for use of the fund by a project shall be obtained
from the ASC taking into account the recommendations of the PAC
of the ASEAN Secretariat submitted through the Secretary General
of ASEAN, in consideration of the nature of activities eligible for
support under the ADF.
Ownership of property
The ownership of property acquired as a result of expenditures for
financing capital costs as provided for in Paragraphs 10.iii and 12
shall be vested in the Host Government or the ASEAN Secretariat
for projects which are hosted by the ASEAN Secretariat.
The ownership of office equipment such as computers, audio-video
appliances; laboratory instruments; and the like, acquired as a
result of expenditures for financing operational costs of projects
shall be vested in the Host Government, or the ASEAN Secretariat
for projects which are hosted by the ASEAN Secretariat to help
ensure the sustainability of benefits after project completion. The
Host Government or the ASEAN Secretariat, as applicable may
redeploy property acquired under a project to other projects
supported by the ADF under cost- effective arrangements, or it
may sell such property when circumstances warrant. Any such
redeployment or sale shall be reported by the Host Government or
the ASEAN Secretariat, as applicable to the ASC. Any proceeds
from the sale of property shall accrue to the ADF.
The Host Government or the ASEAN Secretariat, as applicable
may not exercise their right to dispose of any property, the
ownership of which has been vested to it under Paragraphs 15 and
16, until after the completion of the project.
The ownership of intellectual property acquired as a result of the
project shall be vested in the ASEAN Member Countries. The
disposition and use of intellectual property rights shall be governed
by guidelines to be determined by the ASC.
All project implementing agencies receiving ADF support for
projects of duration longer than six months are required to submit
six-monthly financial reports to the ASEAN Secretariat, for
consolidation into a regular six-monthly financial statement for
review by the ASC.
At the end of a project, a project completion report including a full
accounting of all funds received from the ADF shall be submitted
by the project implementing agency within 60 days of project
completion. Any excess funds unutilised by the project shall be
returned by the project implementing agency to the ASEAN
Secretariat within 90 days of project completion.
The ASEAN Secretariat shall provide a six-monthly financial
statement to the ASC to update ASEAN Member Countries on the
status of the ADF.
ASEAN Member Countries or the ASEAN Secretariat may propose
amendments at any time to these Guidelines and submit them for
consideration by the ASC.
Utilisation of remaining funds
At the end of the period of the implementation of the VAP, any
funds remaining in the ADF shall be carried over for the
implementation of the successor ASEAN action programmes or for
any other related purposes approved by the ASC.
Entry into effect
This TOR shall enter into effect upon the entry into force of the
Agreement for the Establishment of an ASEAN Development
Fund and shall remain in force until the Agreement is
Upon the entry into effect of this TOR, the Agreement for the
Establishment of a Fund for ASEAN signed in Bangkok on 23
July 1994 and the ASEAN Fund established by the said
Agreement shall be terminated and all remaining monies and
records of the ASEAN Fund shall form part of the ADF.
This Agreement terminates the Agreement for the Establishment of a Fund for ASEAN signed 1994-07-23.