ADB governors approve corporate financial matters in first virtual annual meeting

The Board of Governors of the Asian Development Bank (ADB) today approved ADB’s financial statements and the allocation of its 2019 net income in its first-ever virtual annual meeting held amid the novel coronavirus disease (Covid-19) pandemic.
The approval came at the first stage of the 53rd annual meeting of the Board of Governors, a Business Session among the Governors or their designated representatives from 68 members of ADB.
The second stage of the annual meeting, including seminars with Governors and other senior government officials, members of the private sector, representatives of international organisations and civil society organisations, youth, academia, and the media, is currently scheduled for September 18–21 in Incheon of Republic of Korea.
“Our immediate priority is to provide vital support to developing member countries as they confront the Covid-19 pandemic and return their economies to a path of sustainable growth,” said ADB president Masatsugu Asakawa, in his remarks to the meeting. “Your approval today of the financial statements and allocation of net income ensure that we have the tools and financial stability to address the enormous challenges that now affect the lives and economies of millions of people across our region,” he said
“Our choices and efforts today will determine whether it can overcome the current health care and economic crises,” said the chair of the Board of Governors, and deputy prime minister and minister of Economy and Finance of the Republic of Korea Hong Nam-Ki. “The ADB should turn this crisis into an opportunity, while enhancing knowledge sharing on Covid-19 policy responses and expanding support for low-income countries and vulnerable groups.”
The Board of Governors adopted a resolution to allocate $1.069 billion of net income, the highest in the bank’s history, from ADB's 2019 ordinary capital resources. The 2019 net allocable income is higher than the $841.4 million recorded in 2018, due largely to an increase in income from lending operations and liquidity investments, as well as a drop in nonsovereign loan loss provisions.
The allocable net income will be distributed as follows: $615.7 million to the ordinary reserve to support ADB’s capital adequacy and provide an earnings base to generate net income; $259.5 million to the Asian Development Fund (ADF), which provides grants to ADB’s low-income member countries; $130 million to the Technical Assistance Special Fund, which provides a stable and predictable funding source for ADB’s technical assistance, as well as increased support to respond to the Covid-19 pandemic; $30 million to the Regional Cooperation and Integration Fund; $24 million to the Climate Change Fund; and $10 million to the Asia Pacific Disaster Response Fund.
Governors also approved the bank’s annual financial statements, according to a press note issued by the multilateral development partner. ADB’s ordinary capital resources’ operating income totaled $1.1 billion in 2019, up from $889 million in 2018. The 2019 net income was $1.554 billion, up from $750 million in 2018.
ADB is actively supporting its members as they address the effects of Covid-19 through its $20 billion response package announced on April 13. ADB has approved a series of measures to streamline its operations for quicker and more flexible delivery of assistance. Visit ADB’s website to learn more about our ongoing response.
ADB said in its press note that it is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members, 49 from the region.

ADB operations reach $28.9 billion

Asian Development Bank (ADB) operations—comprising approvals of loans and grants, technical assistance (TA), and cofinancing—reached $28.9 billion in 2017 in its continued efforts to help meet Asia and the Pacific’s development needs, according to preliminary figures released today.
Approvals of loans and grants from ADB’s own resources reached a record $19.1 billion, representing a 9 per cent increase from the $17.5 billion seen in 2016. This puts ADB well on its way to meet its $20 billion target by 2020. Of the total, non-sovereign (primarily private sector) operations accounted for $3.2 billion, a 26 per cent increase from $2.5 billion in 2016. TA, meanwhile, increased by about 22 per cent to $205 million from $169 million in the previous year.
Commitments (the amount of loans and grants signed)—ADB’s new performance measure—reached $20.1 billion. This is a significant increase from $13.3 billion in 2016, reflecting the signing of large projects approved in 2016 and 2017.
“The strong figures for ADB operations in the past year were supported by the successful merger of ADB’s concessional Asian Development Fund (ADF) lending operations with the Ordinary Capital Resources balance sheet—which took effect at the start of 2017,” ADB President Takehiko Nakao said. “This will allow us to deliver a much higher level of assistance to our developing member countries for years to come without seeking a capital increase.”
A highlight of ADB’s operational figures for 2017 is climate financing, which reached a record $4.5 billion (comprising mitigation $3.6 billion and adaptation $0.9 billion), a 21% increase from 2016. This puts ADB in a good position to achieve its $6 billion climate financing target by 2020.
Cofinancing approvals declined to $9.5 billion in 2017 from the $13.9 billion recorded in 2016, partly due to the delay of large expected cofinanced projects. Disbursements were $11.7 billion in 2017, compared to $12.7 billion in 2016. This is because of lower approvals, and hence disbursements, of policy-based lending and counter-cyclical support facility, among other factors.
“Disbursements are essential to make a difference on the ground. Cofinancing and catalyzation is a much-discussed strategy in the international community to realize the Sustainable Development Goals,” said Mr. Nakao. “ADB will come up with additional concrete measures to increase disbursements and cofinancing, building on the new procurement policy approved in April 2017 and ongoing efforts to leverage resources.”
Among ADB’s other operational highlights were projects that combine finance with innovative approaches to development, including satellite data and remote sensing to improve irrigation in Indonesia and Pakistan, pilot testing of climate-smart agriculture practices in Bangladesh, and supporting social welfare reforms in Mongolia to promote human development.
An innovative $100 million TA loan to the Philippines, approved in October 2017, will help the government prepare and deliver infrastructure projects under its Build Build Build program. 
On the funding side, ADB offered new and innovative thematic products such as the health bond and gender bond. This is on top of increased efforts to raise local currency funding to meet the growing demand for nonsovereign local currency loans. ADB’s Indonesian rupiah bond in December was the first bond issued from a multilateral development bank of which Indonesia is a shareholder.
ADB launched three high-impact publications in 2017. Meeting Asia’s Infrastructure Needs estimated Asia and the Pacific’s annual infrastructure needs at $1.7 trillion per year until 2030. A Region at Risk: The Human Dimensions of Climate Change in Asia and the Pacific put forward scenarios of the devastating effects of climate change. The ADB history book, Banking on the Future of Asia and the Pacific focused on the region’s economic development, the evolution of the international development agenda, and the story of ADB over 50 years.
To scale up the bank’s operations with quality, the ADB Board approved the 2018 budget totaling $672.3 million, an increase of 3.9 per cent over 2017, comprising 2.2 per cent  price growth and 1.7 per cent volume growth. This budget supports the ongoing investments in IT reforms and organisational resilience. ADB continues to make its utmost efforts at staff optimization and efficiency measures.
A key priority for ADB in 2018 is to finalise its new corporate strategy, Strategy 2030. ADB’s 51st Annual Meeting of its Board of Governors will be held in Manila again in May after 6 years. Strategy 2030, the impact of technological change and globalization on jobs, aging and longevity dividends, role of women entrepreneurs, and private sector participation in infrastructure development will be among the topics discussed. ADB expects more than 3,000 participants to attend the meeting.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members, 48 from the region.

ADB to double annual climate financing to $6 billion by 2020

Asian Development Bank (ADB) president Takehiko Nakao today announced that ADB will double its annual climate financing to $6 billion by 2020, up from the current $3 billion. ADB's spending on tackling climate change will rise to around 30 per cent of its overall financing by the end of this decade.
ADB's announcement comes against the backdrop of a promise by developed countries to mobilize $100 billion every year from 2020 to counter climate change in developing countries.
Out of the $6 billion, $4 billion will be dedicated to mitigation through scaling up support for renewable energy, energy efficiency, sustainable transport, and building smart cities. The $2 billion will be for adaptation through more resilient infrastructure, climate-smart agriculture, and better preparation for climate-related disasters," ADB said in a press statement.
ADB's doubling of climate financing reflects its strategic priorities as well as the increase in its overall financing capacity by up to 50 per cent due to more efficient use of its balance sheet by combining the equities of its Ordinary Capital Resources and Asian Development Fund (concessional finance window) in 2017.
"World leaders gathering in New York this weekend will commit to achieving 17 historic Sustainable Development Goals (SDGs) by 2030 and ADB stands ready to be an important part of global efforts to finance these goals," Nakao said, adding that nowhere is tackling climate change more critical than in Asia and the Pacific, where rising sea levels, melting glaciers, and weather extremes like floods and droughts are damaging livelihoods and taking far too many lives.
SDG 13 specifically calls for urgent action to combat climate change and its impacts. Also, mitigating and adapting to a changing climate are key to most of the other goals including ending poverty, achieving food and water security, providing access to energy, and building sustainable cities.
Later this year, at the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP21) in Paris, the international community is expected to finalize a new global climate agreement and the way to finance it.
In addition to scaling up its own climate financing, ADB will continue to explore new and innovative co-financing opportunities with public and private partners. For example, ADB will seek to mobilise concessional financing from the Green Climate Fund, which is becoming operational, for ADB's adaptation projects in poorer countries. ADB will tap institutional investment through private equity funds like the ADB-sponsored Asia Climate Partners. ADB will also issue more green bonds as an important source of funding for its climate operations.
Nakao stressed the importance of technology in tackling climate change, and said that ADB will adjust its procurement systems in order to facilitate the integration of cleaner and more advanced technology into its projects. ADB will also strengthen partnerships with centers of excellence across the world to provide its member countries with cutting-edge knowledge and expertise on climate change.

ADB stresses on urgent need to address infrastructure deficits

The Asian Development Bank (ADB) has emphasised on the need to urgently address infrastructure deficits — particularly of power, transport, and water — by forming an enabling policy environment, building capacities, and promoting private sector investment.

Nepal’s capital and bond markets have to be developed to attract and promote private investments, said ADB vice president for Finance and Administration Thierry de Longuemar speaking at the end of his five-day visit to Nepal.

Expressing ADB’s commitment to continue supporting Nepal’s development efforts, de Longuemar discussed the ongoing Capital Markets and Infrastructure Capacity Support Project supported by ADB to develop Nepal’s bond market and create an enabling environment for public private partnership in infrastructure development.

He also discussed the opportunity for ADB to issue local currency bonds that will help provide long-term financing for private infrastructure investment and also help develop the country’s bond markets.

During his visit to Nepal, he met finance minister Barshaman Pun, central bank governor Dr Yubaraj Khatiwada, chief secretary Leela Mani Poudyal, finance secretary Shanta Raj Subedi and other senior government officials and discussed about ADB operations in the country.

"Nepal has the potential to achieve stronger economic growth rate, given its natural resource endowments, human capital and strategic geographic location," he said, adding that achieving stronger growth is also imperative for reducing poverty, and establishing lasting peace and stability.

"It will require substantial increase in investments by both the public and private sectors,” de Longuemar added.

The ADB vice president also visited ADB-assisted Kali Gandaki ‘A’ Hydroelectric Plant and observed its latest operation of hydropower generation and mitigation of social and environmental impacts and discussed the prospect for further hydropower development in the country.

Thierry de Longuemar had assumed his position in November 2011 and oversees the operations of the Office of the Secretary, Office of the General Counsel, Budget, Personnel and Management Systems Department, Office of Administrative Services, Controller’s Department and the Treasury Department.

With over 26 years of experience in both multilateral financial institutions and private banking, de Longuemar is responsible for the overall efficiency and effectiveness of ADB’s financial and administrative management.

ADB has worked in partnership with the Nepali government since the country joined ADB as a founding member in 1966. As of 31 September 2012, Nepal has received 158 loans/grants — 122 sovereign Asian Development Fund (ADF) loans ($2,775.88 million), five non-sovereign loans ($58.64 million), and 32 ADF grants ($763.25 million), totalling $3,597.77 million.

ADB director-general reiterates commitment to support economic development

The Asian Development Bank (ADB) will continue to work closely with the government of Nepal in helping to reduce poverty and promote inclusive growth for all Nepalis, said director-general of ADB’s South Asia department Juan Miranda at the end of his two-day visit to Nepal here today.
Miranda said that he has been following developments in Nepal with keen interest.
“ADB appreciates that Nepal has maintained steady economic growth and macroeconomic stability despite challenging conditions,” he said, stressing the importance of staying the course on economic reforms and development to address poverty and other development challenges as well as achieve higher economic growth.
During Nepal visit Miranda met with finance minister, vice-chair and members of the National Planning Commission (NPC), chief secretary, other senior government officials, development partners, private sector representatives, and the media.
His discussions focused on the need for addressing infrastructure bottlenecks with accelerated development project implementation and private sector investments, and building stronger capacities, governance systems, and enabling environment to support these ends.  
He sought the government’s support and active participation by all stakeholders in the formulation of ADB’s new Country Partnership Strategy for Nepal.  In this context it was agreed that ADB’s support would be more selective and focused addressing the country’s development constraints including energy, transport, urban and rural infrastructure, and skills development. In support of these priorities, ADB will also promote governance, private sector development, regional integration, gender and social inclusion, and climate change adaption.
Miranda also discussed the Melamchi Water Supply Project. “We had a productive discussion with the Ministry of Urban Development on the specific actions to move forward, including the smooth settlement with the outgoing contractor, and swift selection of an internationally reputed, committed and dedicated contractor who can deliver high quality infrastructure in a timely and efficient way,” he said, adding that ADB remains fully committed to providing the necessary support to the government to ensure that the project is completed by early 2016 or earlier, given the importance of the project to alleviating acute water supply shortages for the 2.6 million people in the Kathmandu Valley.
Miranda also discussed the country’s critical energy shortages and reiterated ADB’s commitment to supporting the Government in resolving the issue.
In meetings with the secretaries of the Ministries of Energy and Finance, he discussed the proposed 140MW Tanahu Hydropower Project, which is at an advanced stage of preparation. Discussion focused on the financing structure, and the need and steps to engage highly qualified construction supervisors and contractors to achieve timely construction of this critical infrastructure.      
During his meetings with development partners and private sector representatives, Miranda discussed the current situation in Nepal and highlighted the importance of closer collaboration between development partners and private investors in helping the government create a conducive environment for development.
ADB has worked in partnership with the government of Nepal since the country joined ADB as a founding member in 1966. As of 31 August 2012, Nepal has received 158 loans/grants —122 sovereign Asian Development Fund (ADF) loans ($2,775.88 million), 5 non-sovereign loans ($58.64 million), and 31 ADF grants ($742.25 million) - totaling $3,576.77 million in support.