ADB financing rises 17% to $31.5 B

MANILA, Philippines - Financial assistance provided by Manila-based Asian Development Bank (ADB) rose 17 percent to set a new record in 2016 as main financial instruments were consolidated and co-financing with other multilateral development institutions was strengthened.

The bank’s fund operations for Asia and the Pacific region reached $31.5 billion in 2016, up from $26.9 billion in 2015, according to preliminary figures released yesterday. This covered approved loans, grants, technical assistance and co-financing.

“The increase in our development financing to Asia and the Pacific is reflective of our strong commitment to reducing poverty and improving people’s lives in the region,” said ADB president Takehiko Nakao in a statement.

He noted amid Asia’s strong economic performance, it faces many challenges such as implementing the Sustainable Development Goals, adapting to the ill effects of climate change, increasing income inequality, rapid urbanization, aging of workforce and poor disaster risk management.

“Asia is growing at a steady pace, but more needs to be done to achieve development that is both sustainable and inclusive,” said Nakao.  “ADB will continue to improve by becoming a stronger, better, and faster bank to help the region achieve its development objectives.”

Approvals of loans and grants for sovereign and non-sovereign  operations by ADB itself reached a record $17.5 billion, up nine percent from $16 billion in 2015.

Non-concessional loans from ADB’s Ordinary Capital Resources (OCR) amounted to $14.4 billion. Concessional loans and grants from the Asian Development Fund (ADF) reached $3.1 billion, with $2.6 billion going to loans and $518 million to grants. 

Technical assistance, meanwhile, increased around 20 percent to $170 million from $141 million in 2015.

ADB last year merged its two financial instruments – the ADF and OCR. ADB said with this reform, its annual approval of loans and grants would increase to $20 million by 2020.

The successful replenishment of the ADF in May last year for the period 2017 to 2020 would also allow ADB to substantially increase support to the region’s poorest countries for disaster risk management and regional health initiatives.

The ADF was established to provide soft loans to ADB’s developing member countries that have low incomes and limited or low creditworthiness.

Co-financing with other multilateral development institutions, meanwhile, expanded 29 percent last year to reach $13.9 billion from $10.7 billion in 2015.

ADB last year strengthened co-financing partnerships with China-led Asian Infrastructure Investment Bank (AIIB), Swedish International Development Cooperation Agency (Sida) for a guarantee agreement, and Japan International Cooperation Agency (JICA) for infrastructure financing.