ADB says loan fund for poor nations may reach $12 b

MANILA, (Reuters): The Asian Development Bank (ADB) said on Friday funding for its concessional loan facility for low-income countries may increase by about 6% to around $12 billion despite economic and fiscal constraints faced by donor countries.

The final amount of the Asian Development Fund (ADF) for a four-year cycle ending 2016 will be finalised next week before of the Manila-based bank’s annual meeting, ADB President Haruhiko Kuroda said.

He also told reporters the development lender would seek to re-engage with Myanmar but financial assistance would only resume once the country, one of the bank’s original members, settles arrears worth $490 million.

Many major donors “have a difficult economic and fiscal situation, so we hope as much resources as possible will be provided through ADF,” Kuroda said. “We hope this time something like $12 billion or close to $12 billion.”

The ADF, which provides grants and concessional loans to low-income countries such as Pakistan and Afghanistan, is replenished every four years. For the 2009-2012 cycle, the funding was around $11.3 billion.

The ADB will be ready to support development of Myanmar through technical assistance and capacity building, but an appropriate economic assessment of the resource-rich country was needed, Kuroda said, echoing views of the World Bank.

“There is one big hurdle, not only for the ADB but also I understand the World Bank and a few bilateral donors, to restart financial assistance to Myanmar, because the Myanmar government has accumulated arrears,” he said.

“And the arrears must be cleared before we can start financial assistance.”

Asian Development Bank (ADB) President Haruhiko Kuroda gestures during a news conference at the ADB headquarters in Manila last week. The Asian Development Bank (ADB) said on Friday funding for its concessional loan facility for low-income countries may increase by about 6 percent to around $12 billion despite economic and fiscal constraints faced by donor countries. REUTERS