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ADB operations touch $31.5b in 2016

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AT-KABUL: Asian Development Bank (ADB) operations for Asia and the Pacific reached an all-time high of $31.5 billion in 2016, a 17% increase from $26.9 billion in 2015, ADB said in a preliminary figures released on Sunday.

Approval of ADB loans, grants, technical assistance, and co financing have been growing steadily over the years as development needs in the region continue to rise, the statement added.

“The increase in our development financing to Asia and the Pacific is reflective of our strong commitment to reducing poverty and improving people’s lives in the region,” said ADB President, Takehiko Nakao.

“As ADB celebrates 50 years of development partnership with its member countries, we will strive to remain the region’s premiere development bank by providing financing, knowledge, and partnership,” he said.

“Asia is growing at a steady pace, but more needs to be done to achieve development that is both sustainable and inclusive,” Nakao said, adding that ADB would continue to improve by becoming a stronger, better, and faster bank to help the region achieve its development objectives.

The region faced many challenges such as implementing the Sustainable Development Goals; climate change, increasing inequality, rapid urbanization, aging, and disaster risk management, said the ADB in a statement sent to Afghanistan Times.

According to the statement, approvals of loans and grants for sovereign (government) and non-sovereign (primarily the private sector) operations by ADB itself reached a record $17.5 billion — a 9% increase from $16.0 billion in 2015. Non-concessional loans from ADB’s Ordinary Capital Resources (OCR) amounted to $14.4 billion. Concessional loans and grants from the Asian Development Fund (ADF) reached $3.1 billion, with $2.6 billion going to loans and $518 million to grants.  Technical assistance, meanwhile, increased by around 20% to $170 million from 2015’s $141 million figure.

Among ADB’s operational highlights last year were the approval of several groundbreaking projects such as the contingent disaster risk financing in the Cook Islands, the first privately-financed solar project in Cambodia, results-based lending for an elderly care project in the People’s Republic of China, the development of India’s first coastal industrial corridor, and the $500 million counter-cyclical support to Azerbaijan.  ADB’s Office of Public-Private Partnership entered into five new transaction advisory mandates to prepare and structure PPP projects in 2016, the statement said.

The strong showing of ADB’s operations was based on the larger financing capacity generated by the anticipated merger of the bank’s two main financial instruments — ADF and OCR — which formally took effect on 1 January 2017. With this innovative reform, ADB’s annual approvals of loans and grants will increase up to $20 billion by 2020, the ADB said.

For the period 2017-2020, a successful ADF replenishment, concluded in May 2016, will allow ADB to substantially increase support to the region’s poorest countries. The replenished ADF will also enable ADB to provide grant resources for disaster risk management and regional health initiatives, the statement said.

According to the statement, total disbursements of ADB loans and grants reached $12.5 billion in 2016 — the highest ever. This strong performance is tied to the reforms ADB has implemented to fast track procurement and implementation processes.

Cofinancing also expanded, reaching $13.9 billion in 2016 from $10.7 billion in 2015, a growth of 29%. This is on the back of ADB’s greater partnerships and collaboration with various development stakeholders in the Asia and Pacific region, the ADB added.

The statement furthered, some of the strong partnerships ADB undertook in 2016 include cofinancing with the Asian Infrastructure Investment Bank for a road project in Pakistan and natural gas project in Bangladesh. Agreements were also signed with other development partners including an innovative guarantee agreement with the Swedish International Development Cooperation Agency (Sida) to increase ADB financing by $500 million over the next 10 years, and a landmark agreement with the Japan International Cooperation Agency to finance private sector infrastructure projects for $6 billion.

ADB’s knowledge work was strengthened in 2016 through newly established sector and thematic groups. Important forums on sustainable transport, food security, clean energy, and green business were held. In addition, ADB’s legal office hosted a symposium for Asian Supreme Court judges on law and climate change, and its anticorruption office started supporting tax integrity and transparency of developing member countries in line with international efforts, the statement added.

Based on statement, as Afghanistan’s largest infrastructure development partner, ADB’s investment approvals totaled $550 million in 2016, a 85% increase from $297 million in 2015. Total disbursements of grants reached $235 million in 2016, an increase of 53% from $154 million in 2015 and contract awards achieved a record $550 million. ADB’s infrastructure assistance will have a vital impact on the country’s economic growth, access to services, job creation, and poverty reduction.

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, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members—48 from the region, the statement concluded.