ADB increases loans in 2008

ADB increases loans in 2008
# 23 April 2009 09:35 (UTC +04:00)
Baku. Nijat Mustafayev – APA-Economics. The Asian Development Bank (ADB) approved $10.5 billion in loans, a 5.3% increase over the previous year, according to ADB’s 2008 Annual Report, released ahead of the 42nd Annual Meeting to be held 2–5 May in Bali, Indonesia.
The 2008 amount is the highest in ADB’s 42-year history. It reflects the region’s ever-increasing development finance demand, and the assistance provided by ADB to help developing member countries deal with the impact of the global financial crisis.
"ADB responded quickly [to the global financial crisis], allocating over $4 billion of additional resources to support the efforts of its developing member countries," ADB President Haruhiko Kuroda said in the report.
In 2008, India was the largest borrower with $2.9 billion, or 27.4% of the total loans ADB extended last year.
Loans with government guarantees last year totaled $8.7 billion for 72 projects. Of this amount, $6.9 billion came from the ordinary capital resources of ADB, while the balance was sourced from the concessional Asian Development Fund (ADF).
ADB approved a further $811.4 million of assistance in grants in 2008, up 20.6% from the previous year. Of the total, $707.4 million came from ADF and $104 million from external sources.
A total of 299 technical assistance projects were approved worth $274.5 million, all of which were also provided as grants.
Recognizing the important role of the private sector in generating jobs and economic growth, ADB significantly increased nonsovereign lending in 2008. It approved $1.5 billion for 13 loans to the private sector, an increase of 106.9% on the previous year, and $300 million for nonsovereign loans to the public sector.
The Annual Report notes that in May 2008 ADB secured $11.3 billion for the next 4-year phase of its concessional ADF to fight poverty in the Asia and Pacific region—a significant jump of over 60% from the previous period.
The ADF provides grants and low-interest loans to Asia and the Pacific’s poorest countries. The new ADF will cover the period 2009–2012.
"The replenishment will enable ADB to make a contribution to poverty reduction in its lower-income developing member countries, particularly during this difficult period," Mr. Kuroda said.
Mr. Kuroda also said in the report that ADB is seeking a substantial general capital increase to respond to the vast investment and development needs of the region. Negotiations with shareholders began in late 2008, and an agreement is hoped to be reached by May 2009.