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ADB to give its $1.1b income from its OCR for poor, developing countries

It is likely to give $1.0b in loan as budgetary support to bankroll for Bangladesh's FY' 21 budget

FE Report | May 23, 2020 00:00:00

The Asian Development Bank (ADB) will spend its US $1.1 billion income from its hard-term window, the Ordinary Capital Resources (OCR), for the poor and developing countries this year.

The board of governors of the ADB approved the 2019 financial statements and allocation of the net income through its first stage virtual meeting of the 53rd Annual Meeting on Friday, said a statement from ADB's headquarters in Manila.

The Manila-based lender is also likely to provide $1.0 billion in loan as the budgetary support to bankroll for next fiscal year's (FY' 21) national budget of Bangladesh.

The second stage of ADB's Annual Meeting, including seminars with governors and other senior government officials, members of the private sector, representatives of international organisations and civil society bodies, youth, academia, and the media is scheduled for 18-21 September, 2020, in Incheon, South Korea.

The statement said that out of its $1.1 billion net OCR income, $615.7 million would be spent for the ordinary reserve to support ADB's capital adequacy and provide an earnings base to generate net income; and $259.5 million to the Asian Development Fund, which provides grants to ADB's low-income member countries.

Besides, $130 million fund will be spent to the Technical Assistance Special Fund, provides a stable and predictable funding source for ADB's technical assistance as well as increased support to respond to the COVID-19 pandemic; $30 million to the Regional Cooperation and Integration Fund; $24 million to the Climate Change Fund; and $10 million to the Asia Pacific Disaster Response Fund.

ADB said its 2019 net allocable income from the OCR is higher than the $841.4 million recorded in 2018, due largely to an increase in income from lending operations and liquidity investments, as well as a drop in non-sovereign loan loss provisions.

"Our immediate priority is to provide vital support to developing member countries as they confront the COVID?19 pandemic and return their economies to a path of sustainable growth," said ADB President Masatsugu Asakawa in his remarks to the meeting.

Chair of the board of governors and Deputy Prime Minister and Minister of Economy and Finance of the Republic of Korea Hong Nam-K said: "Our choices and efforts today will determine whether we can overcome the current health care and economic crises."

"The ADB should turn this crisis into an opportunity, while enhancing knowledge sharing on COVID-19 policy responses and expanding support for low-income countries and vulnerable groups," he said.

The Manila-based bank on April 13 has already announced a $20 billion response package for the COVID-19 pandemic.

The ADB in its statement said it had also approved a series of measures to streamline its operations for quicker and more flexible delivery of assistance.

The Bank has already provided $100 million funds to Bangladesh government as a quick response to improve the country's COVID-19 health services facilities and another $500 million budgetary support to bankroll the government's development works this year.

The ADB is also likely to provide another $1.0 billion in loan as the budgetary support to bankroll for next fiscal year 2020-21 national budget.

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