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ADB lent $32bn in 2016

The Manila-based multilateral has also raised $4bn from its largest US dollar bond offering, as part of its plan to raise $25-30bn from the capital markets this year.

The Asian Development Bank said its total lending reached $31.7 billion in 2016, an 18 percent increase from the previous year, according to the annual report released this week.

The figure includes $17.47 billion in approvals for loans and grants, $169 million for technical assistance, and $14.06 billion for co-financing, which increased by 31 percent over 2015. Disbursements stood at $12.26 billion in 2016.

In terms of sectors, energy accounted for nearly one-third of the total lending at $10.39 billion, followed by transport at $5.54 billion. The ADB provided $11.2 billion to Southeast Asia, while central and west Asia, as well as south Asia (Afghanistan, India, Pakistan), each received over $8 billion from the multilateral. 

The ADB’s private sector operations reached $2.5 billion with its own funds. In addition to that, it also generated $5.84 billion in co-financing. “The increase in our development financing to Asia and the Pacific reflects our strong commitment to improving the lives of the people in the region,” said ADB’s president Takehiko Nakao. 

He noted that although the region has exceeded the most optimistic forecasts in terms of economic growth and poverty reduction, there remain significant challenges to be addressed. 

The multilateral has updated its estimate of Asia’s infrastructure gap earlier this year, which now stands at $1.7 trillion a year. In a bid to address the region’s development needs, particularly in the areas of climate change, health, education and gender equality, the ADB scaled up its operations at the beginning of this year through the merger of its Asian Development Fund lending operations with the Ordinary Capital Resources unit.

The merger is expected to increase the ADB’s annual loan and grant approvals by over 50 percent to more than $20 billion by 2020. 

The Manila-based lender has also strengthened its ordinary capital resources recently as it completed the $4 billion issuance of its three-year global benchmark bond today. It is the largest-ever US dollar-denominated offering for the ADB, as part of its plan to raise around $25-30 billion from the capital markets this year. 

Almost 60 percent of the bonds went to central banks and official institutions, 16 percent to banks and 25 percent to fund managers and other types of investors, the ADB said. In terms of geographical distribution, 34 percent of the bonds were placed in Asia, 32 percent in Europe, Middle East and Africa and 34 percent in the Americas.