According to the ADB, the reforms were introduced through an update of their Capital Adequacy Framework. They expand the bank’s annual new commitments capacity to more than $36 billion—an increase of approximately $10 billion, or about 40%. The reforms also create a Countercyclical Lending Buffer to support ADB developing member countries (DMCs) facing unexpected crises.
The measures, which will enable ADB to provide up to $360 billion of its own financing to its DMCs and private sector clients over the next decade, are designed to ensure ADB maintains its AAA credit rating and its ability to provide DMCs with funding at low cost and with long maturities. The reforms further safeguard ADB’s AAA credit rating through the introduction of a recovery plan that would prevent capital erosion during periods of financial stress.
“These reforms will significantly expand ADB’s ability to support a broad range of critical development efforts across Asia and the Pacific, including greater concessional resources for our vulnerable members,” said ADB President Masatsugu Asakawa. “This extra lending power will be extended and leveraged further by renewed efforts to mobilize private and domestic capital and maximize the impact of our work.”
An estimated 155 million people, or 3.9% of population in Asia and the Pacific, lived in extreme poverty in 2022 and many, in particular women, face a cost-of-living crisis that has made food and other essential commodities and services unaffordable.
