Asian bank looks to increase capital

Speaking to Port Strategy, a spokesman says infrastructure financing needs in the region are estimated at around $300bn a year.

“ADB is now negotiation with its shareholders for an increase in its capital to meet the increasing demand from developing member countries for ADB’s assistance,” he adds.

“ADB is working on an Asian Infrastructure Financing Initiative – a co-financing platform – to pool resources from development partners for infrastructure development in the region. Discussions are being held with several of the region’s governments with a deep pool of reserves, such as Japan, as well as with the Islamic Development Bank, the Korea Export-Import Bank and the Korea Development Bank on how best to tap these resources.”

ADB’s project lending operations will be aimed at sustaining planned levels of development expenditure by increasing the bank’s share where project financing is threatened by a shortfall in counterpart funds, and replacing or supporting through guarantee operations alternative project financing sources that are unavailable because of the crisis.

ADB guarantees used to help mobilise project finance have also been modified under a newly adopted lending limit policy, allowing ADB to support more trade financing and to leverage non-sovereign finance to developing member countries. “As a result, ADB is ready to increase the use of guarantees significantly with an initial proposal to allocate about $2bn for this purpose,” he says. “The first step will be a proposal to expand the successful trade facilitation program from the present amount of $150m to as much as $1bn.”

However, ADB was unable to specify exactly how these initiatives would be applied to ports and terminals.