"These new approaches and concepts will allow ADB to meet in a more efficient and more responsive manner the needs of our developing member countries," said bank vice president Geert van der Linden.
The first reform expands the eligible project costs the bank can finance, to include land acquisition, payments for rights-of-way, taxes and duties, and other expenses such as bank charges and second-hand goods, a statement from the Manila-based ADB said.
Pilot tests are to be made over three years on several products to improve its ability to respond to development financing needs of its poorer member-countries.
A multi-tranche facility would allow ADB to finance long-term projects in structured and staggered multiple loans.
The new model would reduce the negative impact that standard ADB financing now has on a client’s balance sheet and co-financing capabilities, it said.
Another instrument would allow ADB to finance projects of provincial and municipal governments as well as state-owned firms, "provided that it is accompanied or preceded by reforms."
It would also mobilize more funds for poverty-reduction projects, and allow refinancing to fundamentally sound projects with high development impact but weak financing plans.
The bank will also go into local currency lending through bond issues and commercial swaps.
"These new concepts are designed to make ADB more compatible with existing and evolving market practices, as well as to help ADB work better with its development partners and the private sector," said ADB official Bindu Lohani.
"This will reduce currency mismatches and pave the way for ADB to support capital markets development, in line with ADB’s strategic framework," said the ADB treasurer, Mikio Kashiwagi.
The bank approved loans worth $5.3 billion in 2004. — AFP