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Regional Knowledge Center

The Asian Development Bank (ADB)

The Asian Development Bank (ADB) is an international development finance institution dedicated to reducing poverty in Asia and the Pacific through loans, grants, research and technical assistance to its member countries, as well as investments in private companies.

Background

The Asian Development Bank (ADB) is a financial institution and regional development bank established on 19 December 1966, which is headquartered in the Ortigas Centre located in Mandaluyong, Metro Manila, Philippines. The company also maintains 31 field offices around the world to promote social and economic development in Asia and the Pacific.

ADB’s clients are ADB’s member governments, who are also ADB’s shareholders. In addition, ADB provides direct assistance to private enterprises of developing member countries through equity investments and loans. ADB’s assistance includes policy dialogues and advisory services. ADB is composed of 67 members. The ADB was modelled closely on the World Bank, and has a similar weighted voting system where votes are distributed in proportion with members' capital subscriptions. ADB is an official United Nations Observer. The three largest countries and regions by subscribed capital and voting power as per 2014 are Japan, the USA and the EU; the next three are China, India and Australia.

Geographical scope

DB assists its members, and partners, by providing loans, technical assistance, grants, and equity investments to promote social and economic development. ADB is composed of 67 members, 48 of which are from the Asia and Pacific region.

Implementation and priority fields

Focus Areas of ADB include:

  • Infrastructure, including energy, transport and communications, water supply and sanitation, and urban development.
  • Environment, Climate Change, and Disaster Risk Management – Environmental sustainability is seen as a prerequisite for economic growth and poverty reduction in Asia and the Pacific according to ADB's long-term strategic framework for 2008-2020.
  • Education
  • Regional Cooperation and Integration (RCI) is a process by which national economies become more interconnected regionally, accelerate economic growth, reduce poverty and economic disparity, raising productivity and employment, and strengthening institutions in Asia.
  • Finance Sector Development – The financial system is the lifeline of a country’s economy.
  • Private Sector Lending.
Funding type

ADB offers a range of financial products that help developing member countries (DMCs) build economic growth and social development. These tools include loans, technical assistance, and grants. The main ADB financial mechanisms are presented in the Box below.

Public Sector (Sovereign) Financing

Public sector (sovereign) financing is extended to DMC governments and public sector entities, such as state-owned enterprises. Sovereign lending or financing secured by a government guarantee forms the greater part of ADB’s development assistance.

Operations are financed from ordinary capital resources and a range of special funds, including the Asian Development Fund, which is the largest. In addition, ADB also mobilizes financial resources through co-financing.

Private Sector (Non-sovereign) Financing

As a catalyst for private investments, ADB provides direct financial assistance to private sector projects. While ADB’s participation is usually limited, it leverages a large amount of funds from commercial sources to finance these projects.

Projects must also have clear development impacts and/or demonstration effects that go beyond the benefits captured in the financial rate of return.

Co-financing Partnerships

Strategic partnerships with other development organizations facilitate a wider flow of financial resources and knowledge to help improve development effectiveness throughout the region.

Results-Based Lending (RBL) for Programs

Results-based lending (RBL) is a performance-based form of financing, where disbursements are linked to the achievement of results rather than to upfront expenditures, as is the case with traditional investment lending.

Trade Finance Program (TFP)

Trade Finance Program (TFP) fills market gaps for trade finance by providing guarantees and loans to banks to support trade.

Project cycle

ADB provides financing for projects that will effectively contribute to the economic and social development of the country concerned and have the strongest poverty reduction impact in conformity with the country and ADB strategies. ADB’s project cycle is shown in figure below with the main stages being:

  1. Country Partnership Strategy: ADB works with each developing member country to define a medium-term development strategy and operational program called a country partnership strategy (CPS). The CPS is aligned with the country’s development plan and poverty reduction goals, and its preparation with the DMC's development planning cycle.
  2. Project Identification/Preparation: ADB often provides grants called project/program preparatory technical assistance to help the government identify and prepare feasible projects (possibly including initial poverty & social analysis and a technical assistance report). During project examination, ADB examines project feasibility through a fact-finding mission.
  3. Approval: (a) Loan Negotiation: drafts of loan agreement and project proposal submitted; (b) Board Approval: ADB's Board of Directors approves by the Report and Recommendation of the President; (c) Loan Signing: the cabinet of the borrowing country's Government and ADB’s President sign; (d) Loan Effectiveness: The loan takes effect once certain conditions are met (legal requirements, cross-effectiveness of co-financing, and subsidiary agreements).
  4. Implementation: The executing agency implements (typically from two to five years), and project consultants are recruited as needed to assist the Government.
  5. Completion and Evaluation: After the project facilities and technical assistance activities are completed, ADB prepares a project completion report to document the experience.

The ADB project cycle

 

ADB project cycle

Contact details

Kazakhstan Resident Mission (KARM) - Asian Development Bank (ADB)
Astana Office 12 Samal Microdistrict, Astana Tower Business Center, 20th Floor Astana 010000, Kazakhstan. Tel: +7 717 2709707, fax: +7 717 2328343; https://www.adb.org/countries/kazakhstan/contacts

Kyrgyz Republic Resident Mission (KYRM) - Asian Development Bank (ADB), 52-54 Orozbekov Street, Bishkek, 720040, Kyrgyz Republic
Tel: +996 312 624195, fax: +996 312 624196; https://www.adb.org/countries/kyrgyz-republic/contacts

Uzbekistan Resident Mission (URM) - Asian Development Bank (ADB),
1 Qoratosh Street, Tashkent 100027, Uzbekistan
Tel: +998 71 1401920 to 1925, fax +998 71 1401976; https://www.adb.org/countries/uzbekistan/contacts

Tajikistan Resident Mission (TJRM) - Asian Development Bank (ADB),
45 Sovetskaya Street, Dushanbe 734001, Tajikistan
Tel: +992 372 271895 / 271897 / 210558, fax: +992 372 289128; https://www.adb.org/countries/tajikistan/contacts

Turkmenistan Resident Mission (TKRM) - Asian Development Bank (ADB),
82, 1972 (Ataturk) Street, Berkarar Business Center Building, Office M1, Ashgabat 744036, Turkmenistan. Tel: +993 12 468730, fax: +993 12 468731; https://www.adb.org/countries/turkmenistan/contacts

This project is funded by the European Union

And implemented by a consortium led by