The Asian Development Bank (ADB) has approved capital management reforms that unlock $100 billion in new funding capacity over the next decade, aimed at addressing the region’s concurrent crises.
The reforms, introduced through an update of ADB’s Capital Adequacy Framework (CAF), are set to expand the bank’s annual new commitments capacity to over $36 billion, representing an increase of approximately $10 billion or about 40 percent.
The multilateral agency said in a statement that the expansion has been achieved by optimizing ADB’s prudential level of capitalization while maintaining its overall risk appetite.
Moreover, the reforms establish a Countercyclical Lending Buffer to provide support to ADB’s developing member countries (DMCs) facing unforeseen crises.
These measures will empower ADB to offer up to $360 billion of its own financing to its DMCs and private sector clients over the next decade.
“These important reforms will significantly expand ADB’s ability to support a broad range of critical development efforts across Asia and the Pacific, ADB president Masatsugu Asakawa said.
“Our decision today is part of ADB’s response to the call for multilateral development banks (MDBs) to do more with our resources and faster. These resources will help the region manage a complex set of overlapping crises, address gender inequality, and provide for basic needs in the context of the existential challenge of climate change. 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,” he added.