JAKARTA: The Asian Development Bank (ADB) board of governors, taking a groundbreaking initiative to combine its lending operations of the Asian Development Fund (ADF) for poor countries, has increased the bank’s lending and grant resources by 50 percent to $20 billion annually.
ADB President Takehiko Nakao told a news conference on the first day of ADB’s annual meeting that the initiative, deliberated since 2013, would become effective in 2017. “Combined with co-financing, ADB’s annual assistance will reach as high as $40 billion in the coming years from $23 billion in 2014,” Nakao added.
Last year alone, the Manila-based ADB leveraged a record $9.2 billion in co-financing, which combined with $13.7 billion from its own resources, saw total assistance reaching $22.9 billion.
Also in 2014, ADB and the Islamic Development Bank extended their co-financing partnership until 2017, allocating up to $2.5 billion for projects across sectors such as transportation, energy, urban development, social services, agriculture and private sector development.
Nakao said under the initiative, the ADB’s ordinary capital resources (OCR) would almost triple to about $53 billion in 2017 from the current $18 billion. This will benefit middle-income countries such as Indonesia as they are entitled to attain OCR loans, while the ADF provides concessional loans to poor countries.
According to ADB reports, since its founding year of 1966 until now, it has approved $30.19 billion in sovereign and non-sovereign 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 high priority given to natural resource management, education, energy, finance, transport 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, expands capacity for operations in middle-income countries and the private sector. The merger of the two lending resources also will enhance ADB’s risk-bearing capacity and strengthen its readiness to respond to future economic crises and natural disasters.
