ADB offers new financing products

MANILA, Philippines — The Asian Development Bank (ADB) board has approved a set of new products and modalities to support the changing financing needs of its developing member countries. 

These include quick release project readiness financing, policy-based guarantees, as well as financing facilities to support public-private partnership (PPP) and small expenditure financing. 

“ADB’s new products and modalities will support implementation of the forthcoming Strategy 2030, by expanding ADB’s product offering to meet the diverse and evolving needs of our developing member countries,” said ADB president Takehiko Nakao in a statement. 

“These new products will contribute to our efforts to build a stronger, better and faster ADB,” he added. 

ADB said it has implemented various business process reforms to speed up loan processing, introducing a project design facility in 2011 on a pilot basis and improvements to grant-funded technical assistance in 2016. 

It acknowledged, however, that many developing member countries have stressed the need for faster project preparation and implementation to accelerate infrastructure financing. 

The new project readiness financing facility (PRF) would support project preparation and design activities in a faster and more responsive manner. Documentation would be simplified and approvals for the facility would be delegated to the ADB management for an amount not exceeding $15 million.

The small expenditure financing facility would finance activities such as consulting services, pilot testing, and rehabilitation. The borrower can propose eligible activities for funding through the facility using simplified business processes.

Policy-based guarantees (PBG), meanwhile, would cover the credit risk of sovereign borrowing but would be anchored on a set of policy conditions.

The PPP Standby Financing Facility would support government payments to private PPP concessionaires. The facility is intended to help private concessionaries secure timely payments from the government.

ADB said it would launch outreach activities in its developing member countries to raise awareness of the new products and modalities and jointly explore opportunities to apply these in its country programs.