Asian Development Bank has raised its lending limit for 2022-2024 to $18bn as it seeks to enhance its response to global crisis and climate change.
The Asian Development Bank (ADB) has approved a new ‘ceiling’ of up to $18bn in policy-based lending for the coming three years as it seeks to improve its crisis-response instruments and support its developing member countries towards a green, resilient, and inclusive recovery.
Tomoyuki Kimura, director general of the ADB’s Strategy, Policy, and Partnerships Department said: “While Asia and the Pacific has made progress in addressing the COVID-19 pandemic, significant risks to the regional economic outlook remain, including new virus variants, inflation threats, financial stress caused by rising interest rates, as well as uncertain ramifications from the Russian invasion of Ukraine. This package of additional assistance will ensure ADB remains responsive to our clients’ needs while helping to address long-term structural challenges facing the region, including climate change, rising inequality, and building resilience to future disasters.”
Expanded lending commitments will support developing member countries to undertake policy reforms and fill gaps in governments’ development financing requirements. The ADB also hopes to enhance the quality of tis lending by providing additional support and strengthening oversight by its board of directors.
The move comes shortly after the V20 group of climate vulnerable nations called for better global financing options that would be fair for all nations facing the worst potential implications of climate change.
ADB has attempted to enhance its Countercyclical Support Facility, which provides fast-disbursing emergency budget support during crises. Revisions include expanding coverage to ADB’s most vulnerable low and lower-middle developing members, increasing the upper limits that can be provided to any one country, enhancing the focus on targeting poor and vulnerable groups, and making lending terms less onerous to improve access to development finance.
ADB’s Contingent Disaster Financing has been strengthened to provide coverage for a broader range of future emergencies, including health crises, and by introducing a multiyear funding replenishment option for DMCs that are exposed to frequent disasters and emergencies.
Ms Kimura explained: “Together, this package of additional support and enhancements to our existing instruments will bolster ADB’s ability to support developing member countries in addressing the challenges they are confronting and to achieve a green, resilient, and inclusive recovery.”
