Development demand increasing: ADB
Kathmandu, Apr. 23:
The demand for finance for major infrastructure and development projects in Asia and the Pacific shows no sign of slowing as regional economies seek ways to address moderating economic growth, inequality and significant environmental risks, said the Asian Development Bank (ADB)’s 2015 annual report.
The report showed that total operations surged to US dollar 27.17 billion in 2015—the highest in ADB’s history.
ADB released the report to mark its 50th year of operations in 2016.
The total included $16.29 billion in approvals for loans and grants, $141 million for technical assistance, and $10.74 billion for cofinancing, which increased by a record 16 per cent.
Disbursements, a key factor in improving aid effectiveness, also hit a new record of US dollar 12.22 billion in 2015, an increase of 22 per cent over the previous year, report said.
Private sector operations, a major focus of ADB’s long-term strategy for boosting growth in the region, jumped to $2.63 billion from $1.92 billion in 2014.
These figures update the provisional operations numbers released by ADB in January.
“Our record performance in 2015 reflects a growing demand from the Asia and Pacific region for ADB’s development assistance,” said ADB President Takehiko Nakao in his 2015 annual report message. “Poverty persists despite the region’s impressive growth, and infrastructure and other development needs are monumental.”
ADB estimates that the region needs about $800 billion for infrastructure investments annually, amounting to about 6 per cent of gross domestic product, compared with current investments of about 2-3 per cent in many countries in Asia and the Pacific.
The funding deficit is a key cause of constraints on economic growth and poverty reduction in the region.
The report focused on ADB’s response to help the region address these challenges and to implement the ambitious new development agenda adopted by the international community in 2015.
ADB has committed to playing a central role in financing the Sustainable Development Goals, signed in September 2015, and supporting the new climate deal forged during the 21st Conference of the Parties on climate change in Paris in December, the report said
To deliver on this commitment, ADB in 2015 announced it was significantly scaling up its capacity to provide more financing through a merger of its concessional Asian Development Fund loan portfolio with its ordinary capital resources balance sheet.
Starting from January 2017, this path-breaking reform will almost triple ADB’s equity base and allow it to increase assistance to developing member countries by up to 50 per cent and to its poorest members by up to 70 per cent.
In September, ADB became the first multilateral development bank to commit to a sizeable climate finance target by announcing it would double its annual climate financing to 6 billion US dollar by 2020, ADB said.