ADB funds merger — what it means for stakeholders

ADB President Takehiko Nakao recently announced a major financial shake-up to better mobilize the bank's resources by absorbing the Asian Development Fund into the balance sheet of its Ordinary Capital Resources. How will this play out? Photo by: ADB

During the Asian Development Bank’s recent annual meeting in Astana, Kazakhstan, President Takehiko Nakao hinted at a major operational move that could potentially beef up the bank’s financial muscle without necessarily asking for more money from its shareholders.

Nakao plans to merge two of the bank’s financial instruments — the Asian Development Fund and the Ordinary Capital Resources — to optimize ADB’s resources and thus finance more development projects in Asia-Pacific by “doing more with less.”

“The rationale is to do more for poverty alleviation in the region, with less burden on the donors by introducing a mild market leverage that would not impact the financial strength [or] credit rating of ADB, nor the core mandate [or] strategy,” a senior bank official told Devex.

ADF, a special fund established in 1973, offers “loans at very low interest rates as well as grants to help reduce poverty in ADB’s poorest countries.” The fund is currently at about $33.3 billion, most of which comes from donors and bank shareholders.

This article is for Devex Members

For full access to the content of the article sign in or join Devex.

About the author

  • Lean 2

    Lean Alfred Santos

    Lean Alfred Santos is a Devex development reporter focusing on the development community in Asia-Pacific, including major players such as the Asian Development Bank and the Asian Infrastructure Investment Bank. Prior to joining Devex, he covered Philippine and international business and economic news, sports and politics. Lean is based in Manila.