The Asian Development Bank (ADB) is to increase its lending and grant resources by 50 percent to as much as US$20 billion annually after the board of governors approved a groundbreaking initiative to combine its lending operations: the Asian Development Fund (ADF) for poor countries and ordinary capital resources for middle-income members.
ADB President Takehiko Nakao told a news conference on the first day of the 48th ADB annual meeting in Baku on Saturday that the initiative, deliberated since 2013, would become effective in 2017.
“Combined with cofinancing, ADB’s annual assistance will reach as much as $40 billion in coming years from $23 billion in 2014,” Nakao added.
Last year alone, the Manila-based ADB leveraged a record $9.2 billion in cofinancing, which, combined with $13.7 billion from its own resources, saw total assistance reach $22.9 billion.
Also in 2014, ADB and the Islamic Development Bank extended their cofinancing partnership until 2017, allocating up to $2.5 billion for projects across sectors including transportation, energy, urban development, social services, agriculture and private sector development.
Nakao said that under the initiative, the ADB’s ordinary capital resources (OCR) would almost triple to about $53 billion in 2017 from $18 billion now. This will benefit middle-income coutries such as Indonesia, as they are currently entitled only to get loans from the OCR granted at maket-based rates, while the Asian Development Fund provides concessional loans and grants to poor countries.
Acording to ADB reports, since its establishment in 1966, ADB has approved $30.19 billion in sovereign and nonsovereign loans, $432.06 million in technical assistance and $429.98 million in grants for Indonesia.
The ADB current country partnership strategy (CPS) for Indonesia focuses on inclusive growth and environmental sustainability, with priority given to natural resource management, education, energy, finance, transportation and water supply.
According to Nakao, the latest decision by the board of governors is a win-win situation because it will increase financial support for poorer members and expand capacity for operations in middle-income countries and the private sector. The merger of the two lending resources, he said, would also enhance ADB’s risk-bearing capacity and strengthen its readiness to respond to future economic crises and natural disasters.
Nakao dismissed fears that the launch of the China-led Asian Infrastructure Investment Bank (AIIB) would lead to a battle over staff and projects, insisting that additional sources of finance such as the AIIB were welcome in view of the huge infrastructure gap in the region, which, he claimed, required at least US$8 trillion over the next 10 years.
“We will collaborate, cofinance and complement each other,” added Nakao after a meeting on Friday with Liqun Jin, secretary-general of the Multilateral Interim Secretariat of the Asian Infrastructure Investment Bank (AIIB).
More than 67 coutries in Asia — including Indonesia — Europe and Latin America have joined AIIB as founding shareholders, but Japan, perceived to be the dominant shareholder in the ADB, has not yet made up its mind.
The ADB, Nakao said, had answered questions from the AIIB at the staff level about procurement systems and safeguard policies, as well as legal issues.
He acknowledged, however, that the bank needed to embark on initiatives to improve its work in the region. “We must make efforts to reform ourselves by increasing our lending capacity and strengthening knowledge and streamlining procedures,” Nakao added.
Subscribe to:
Post Comments (Atom)
0 comments:
Post a Comment