ADB deals reach $27B for Asian infra buildup

The Asian Develop­ment Bank’s (ADB) operations that in­cluded approvals of loans and grants, techni­cal assistance, and cofinanc­ing reached an all-time high of $27.15 billion in 2015, a 19 percent increase over the $22.89 billion in 2014, accord­ing to ADB figures.

ADB’s approvals of loans and grants, sovereign (gov­ernments) and non-sover­eign (primarily private sec­tor), reached a record $16.58 billion, a 23 percent increase from 2014.

Technical assistance amounted to $144 million and cofinancing increased by 13 percent to a record $10.43 bil­lion in 2015.

Out of the $16.58 billion, sovereign loan and grant ap­provals increased by 21 per­cent to $13.95 billion in 2015.

Non-sovereign approvals made a big leap from $1.92 billion in 2014 to $2.63 billion in 2015.

In addition to a volume in­crease, ADB increased its allo­cation to the poorest countries to 40 percent of non-sovereign approvals.

To expedite small non-sovereign transactions, ADB introduced a fast-track approval process. ADB is now making active use of local cur­rency lending to the private sector and increased bond is­suances in local currencies to support the lending.

Unless loans and grants are disbursed, they will have no impact on development. In 2015, total disbursements of loans and grants reached a record $12.34 billion, an in­crease of 21 percent over the previous year.

“Our record performance last year reflected strong and growing demand from the Asian and Pacific region,” ADB President Takehiko Nakao said.

“Infrastructure and other development needs are huge and poverty remains perva­sive despite the region’s robust growth performance,” he add­ed.

To help meet the increased demand for its operations, ADB Board of Governors last year unanimously endorsed the merger of ADB’s conces­sional Asian Development Fund and its market-based or­dinary capital resource balance sheet.

With this reform, ADB’s financing capacity (annual ap­provals of loans and grants) will dramatically increase up to $20 billion by 2020.

Among ADB’s operation­al highlights last year were the quick response to natural disasters, especially the Nepal earthquake in April and the Vanuatu cyclone in March; and support for necessary fis­cal measures of countries suf­fering from lower commodity prices and volatility in financial markets, such as Kazakhstan and Mongolia.

In 2015, ADB was among the first multilateral develop­ment banks to commit a siz­able climate finance target.

In late September, ADB announced it would double its annual climate financing to $6 billion by 2020, up from the current $3 billion.

To support its climate work, ADB issued its first green bond. ADB approved its first policy-based loan in the People’s Republic of China to improve air quality in the Bei­jing-Tianjin-Hebei area.

To help effectively mo­bilize financial resources and management skills from the private sector for infrastruc­ture development, ADB estab­lished an Office of Public-Pri­vate Partnership (PPP).

This office offered active transaction advisory services for PPP projects in the region such as the North-South Railway project in the Philip­pines.

ADB made further prog­ress in streamlining proce­dures for country program­ing, project processing, and procurement.

One example was the introduction of tailor-made procurement procedures specifically for small Pacific Island countries. ADB has been providing greater re­sources and delegating more authority to its 31 field offices to improve its responsiveness on the ground.

“As we approach our 50th anniversary this year, we are committed to scaling up our operations, and achiev­ing poverty reduction and sustainable development in the region,” Nakao said. “We will be a stronger, better, and faster bank by deepening our partnerships with member countries, other international financial institutions, and civ­il society,” he added.