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Monday, July 15, 2024

ADB, donors to infuse fresh $5b into two funds

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The Asian Development Bank (ADB) and its donors agreed to a $5-billion replenishment for the bank’s two funds that support developing countries in the region.

The agreement, reached during the ADB’s 57th annual meeting, will replenish the Asian Development Fund (ADF) 14 and the Technical Assistance Special Fund (TASF) 8.

The ADF is ADB’s largest source of grants for its poorest and most vulnerable members. Replenishments occur every four years.

ADF 14, the 13th replenishment since the fund’s establishment, will support grant operations from 2025 to 2028. It represents a 22-percent increase over ADF 13’s $4.1 billion and will provide the largest ever volume of ADF grants to eligible members.

TASF 8 will provide grants for project preparation, capacity building, and technical or policy advice.

“Grants are more important than ever as our poorest and most vulnerable members seek to reverse recent development setbacks and take urgent action to combat the climate crisis,” said ADB President Masatsugu Asakawa.

“This remarkable replenishment demonstrates ADF donors’ continued partnership with ADB to address the pressing development challenges of those most in need,” he said.

ADF 14 prioritizes assistance to small island developing states vulnerable to climate change and countries in fragile or conflict-affected situations. It will also continue to support climate adaptation, disaster risk reduction, regional cooperation, and gender equality initiatives. Additionally, a crisis response window allows for agile assistance in emergencies.

Over $2.5 billion, or 51 percent, of the replenishment comes from donor contributions, including two new donors: Armenia and Georgia.

The bank said this would significantly increase its net income transfers to ADF from $1.2 billion in ADF 13 to $1.6 billion in ADF 14, a 35-percent rise. The remaining $900 million comes from prior ADF cycles and investment income.

The ADB plans to provide $16.7 billion in concessional loans during the ADF 14 period. These loans offer very low interest rates and long repayment terms.

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