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ADB to give ADF US$5.6b for LDC’s including Bangladesh |
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September 12, 2000
Dhaka, --– ADB donors have agreed to replenish Asian Development Fund (ADF) with US$5.6 billion for gearing up poverty-reduction operations in the poorer developing member countries, including Bangladesh. The fund, ADF VIII, will cover 4-year period from 2001 to 2004. The announcement was made after the fifth and final meeting of 25 donor countries of the Asian Development Bank in Okinawa, Japan, on September 7. The replenishment compares favorably with a total of $ 5.1 billion in loan approvals expected under ADF VII, covering the period 1997 to 2000, said a statement yesterday. ADF credits are provided on concessional terms to ADB’s poorer developing member countries with limited debt-repayment capacity. It supports poverty reduction through pro-poor sustainable economic growth, the provision of social development such as education and healthcare, and the strengthening of good governance. It typically carries minimal rates of interest over long repayment periods. Of the 29 eligible countries, the main borrowers from ADF currently include Vietnam, Bangladesh, Sri Lanka, Pakistan, Kyrgyz Republic, Nepal and Lao PDR. Under the new replenishment, donors agreed to contribute a total of $ 2.91 billion. The balance of the replenishment is expected from repayments of earlier loans. Japan remains the largest ADF contributor with US$1,061 million followed by the United States $412 million while European donors will make a total contribution of US$860 million. Contributions from the Asia and Pacific region accounted for almost half the total replenished funds. First-time contributors are Portugal, which is expected to become an ADB member this year, and Singapore. “This is a clear and most welcome indication of donors’ support for ADB’s fight against poverty in the Asia and Pacific region,” said ADB President Tadao Chino. The ADB approved its poverty-reduction strategy in November 1999. The Asia and Pacific region, with approximately 900 million people still living in extreme poverty, is home to two-thirds of the world’s absolute poor. The ADF negotiations were co-chaired by ADB Vice President for Finance and administration John Lintjer and the Australian Agency for International Development’s Peter McCawley. In course of the negotiations donors reached agreement on a number of operational priorities as well as approaches for strengthening the multilateral foundation of ADF and ADB. These included plans for a more robust performance-based allocation system for ADF resources as well as greater support for good governance in the region, gender equality, improving the environment, and assisting cooperation among developing member countries. Furthermore, ADB will proceed with planned initiatives, such as the establishment of a Development Effectiveness Committee, to enhance the impact of ADB operations and improve the relationship between the ADB’s management and its shareholders. Established in 1973, ADF has played a significant role in promoting sustainable economic development in low-income countries, particularly benefiting disadvantaged and vulnerable groups. At the end of 1999, ADF loans amounted to US$22.7 billion, or 28 percent of cumulative ADB lending. In 1999, some 33 ADF loans were approved amounting to US$1.1 billion. |