The Asian Development Bank’s (ADBs) operations – comprising loan approvals and grants, technical assistance, and cofinancing – reached an all-time high of US$ 27.15 billion in 2015, an increase of about 19 per cent over the $22.89 billion in 2014, according to provisional figures released today.
The ADBs approvals of loans and grants, sovereign (government) and nonsovereign (primarily private sector), reached a record $16.58 billion, a 23 per cent increase from 2014. Technical assistance amounted to $144 million and cofinancing increased by 13 per cent to a record $10.43 billion in 2015.
Out of the $16.58 billion, sovereign loan and grant approvals increased by 21 per cent to $13.95 billion in 2015, while nonsovereign approvals leap from $1.92 billion in 2014 to $2.63 billion in 2015, an increase of 36.98 per cent.
In addition to a volume increase the ADB also increased its allocation to the poorest countries to 40 per cent of nonsovereign approvals. To expedite small nonsovereign transactions ADB introduced a fast-track approval process and is now also 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 per cent over the previous year (see Table 2 in Related links).
ADB president Takehiko Nakao said, “Our record performance last year reflected strong and growing demand from the Asian and Pacific region. Infrastructure and other development needs are huge and poverty remains pervasive despite the region’s robust growth performance.”
To help meet the increased demand for its operations the ADBs 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 path-breaking reform ADB’s financing capacity (annual approvals of loans and grants) will dramatically increase by up to $20 billion by 2020. ADB is well on track to achieve this scaling up.
ADB’s 2015 Operational Highlights
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.
In order to help effectively mobilise financial resources and management skills from the private sector for infrastructure development the 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. The ADB has been providing greater resources and delegating more authority to its 31 field offices to improve its responsiveness on the ground.
Last year the ADB operationalised seven sector groups such as energy and transport, and eight thematic groups such as governance and gender, which work across operations departments. This will strengthen the ADB’s knowledge services and provide innovative solutions to client countries.
“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”, Mr. 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.”
This Article was first published by the Asian Development Bank (ADB) and is used here with its permission.
- ADB to work with China-backed AIIB: Nakao (Manila Bulletin)
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