ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty.
Established in 1966, it is owned by 68 members—49 from the region.
ORGANIZATION
ACCOUNTABILITY
ADB supports projects in developing member countries that create economic and development impact, delivered through both public and private sector operations, advisory services, and knowledge support.
In the Spotlight
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ADB Capital Management Reforms Unlock $100 Billion in New Funding Over Next Decade to Support Asia and the Pacific
ADB approved capital management reforms that unlock $100 billion in new funding capacity over the next decade to address the region’s overlapping, simultaneous crises. The expansion of available funds will be further leveraged through mobilizing private and domestic capital to move from the billions to trillions required to tackle the climate crisis.
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Q&A: ADB’s Capital Management Reforms
A Capital Adequacy Framework aims at identifying the optimal balance of a financial institution's assets, liabilities, and risks. Capital can be considered adequate if the financial institution is able to honor its obligations if its debtors are unable to pay back what they borrowed or if the market value of liquid assets falls.
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Q&A: The SDGs Won't Be Achieved Without Private Capital. Here's How ADB Mobilizes It
The challenge of achieving the Sustainable Development Goals (SDGs) by 2030 is becoming more difficult—and more costly. Asia and the Pacific, like other regions, is lagging on SDG progress. UNESCAP now says that at this rate the SDGs won’t be achieved until 2065.
Raising Lending Capacity for Asia and the Pacific
In recent crises, ADB and other multilateral development banks (MDBs) have shown they can rapidly evolve to meet the changing needs of the people. It will take further bold reforms to transform the way MDBs operate and support developing members face future challenges.
The stakes could not be any higher, but the journey has already begun.
ADB’s Roadmap to Raise Lending Capacity
Over the last decade, ADB has strived to optimize the use of scarce capital resources provided by shareholders to maximize its support for the poor and vulnerable groups in the Asia-Pacific region. Here’s a look at the initiatives done so far through balance sheet optimization, innovative financing, and collaboration with other MDBs.
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2009
General Capital Increase
It raised ADB’s sustainable level of lending to $11 billion from $4 billion.
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2013
Risk transfer agreement for nonsovereign loan portfolio
Since 2013, ADB has systematically been using risk transfer to private insurance companies and financial institutions to manage nonsovereign portfolio risk.
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2016
Risk transfer agreement for sovereign loan portfolio
ADB transferred the risk of a portfolio of its sovereign loans through a bilateral guarantee issued by the Swedish International Development Cooperation Agency.
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January 2017
Merger of Asian Development Fund and ordinary capital resources (OCR)
The merger enabled a substantial increase in ADB’s annual operations. The merger increased ADB’s sustainable level of lending to $25 billion.
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2019
Diversification of financing terms for regular OCR sovereign lending operations under Strategy 2030
Improved Capital Utilization Ratio by 0.9%.
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2020
Exposure Exchanges
ADB uses Exposure Exchange Agreements (EEAs) to mitigate portfolio concentration risk. ADB signed EEA deals with IDB in 2020 and 2022, and with AfDB in 2023.
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May 2023
Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP)
IF-CAP aims to increase ADB’s lending capacity by up to $15 billion for critical climate projects in Asia and the Pacific.
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September 2023
New Capital Adequacy Framework (CAF)
The capital management reforms unlock $100 billion in new lending capacity over the next decade to address the region’s overlapping, simultaneous crises. ADB’s sustainable level of lending now stands at $36.5 billion.
By the Numbers
$100 billion
New funding over the next decade
to address Asia and the Pacific's
overlapping, simultaneous crises
over $36 billion / year
Expanded new commitments capacity
through an update of ADB's
Capital Adequacy Framework (CAF)
$12 billion
Countercyclical Lending Buffer to support
ADB developing member countries
facing unexpected crises
every 3 years
CAF review cycle to ensure it is
benchmarked against best practices and
aligned with the evolution of ADB’s operations
75% of ADB's operations
Supporting climate action
by 2030
155 million people
Lived in extreme poverty in 2022
and many, in particular women,
face a cost-of-living crisis
"These important reforms will significantly expand ADB’s ability to support a broad range of critical development efforts across Asia and the Pacific, including greater concessional resources for our vulnerable members.
Our decision today is part of ADB’s response to the call for multilateral development banks to do more with our resources and faster. These resources will help the region manage a complex set of overlapping crises, address gender inequality, and provide for basic needs in the context of the existential challenge of climate change. This extra lending power will be extended and leveraged further by renewed efforts to mobilize private and domestic capital and maximize the impact of our work."
- ADB President Masatsugu Asakawa
See also:
Private Sector Financing
ADB focuses on projects that help promote private investments in the region that will have significant development impact and will lead to accelerated, sustainable, and inclusive growth.
Public-Private Partnerships
ADB recognises that public–private partnerships can play an important role in addressing the huge infrastructure investment shortfall in Asia and the Pacific.
Financing Partnerships
ADB and its financing partners pool financial resources, share the risks involved, and combine knowledge and technical expertise in planning and implementing development programs or projects.
Asia and the Pacific's Climate Bank
ADB is playing a leading role with developing member countries and key partners to deploy new and innovative investment, knowledge, and strategies to meet this critical challenge.