History

Asian development bank was conceived amid the postwar rehabilitation and
reconstruction efforts of the early 1960s. The vision was of a financial institution that
would be Asian in character and foster economic growth and cooperation in the region then one of the poorest in the world.
A resolution passed at the first Ministerial Conference on Asian Economic Cooperation
held by the United Nations Economic Commission for Asia and the Far East in 1963 set
that vision on the way to becoming reality.
The Philippines capital of Manila was chosen to host the new institution - the Asian
Development Bank - which opened on 19 December 1966, with 31 members that came
together to serve a predominantly agricultural region. Takeshi Watanabe was ADB's first
President.
For the rest of the 1960s, ADB focused much of its assistance on food production and
rural development. Its operations included ADB's first technical assistance, loans,
including a first on concessional terms in 1969, and bond issue in Germany.
ADB's assistance expanded in the 1970s into education and health, and then to
infrastructure and industry. The gradual emergence of Asian economies in the latter part
of the decade spurred demand for better infrastructure to support economic growth.
ADB focused on improving roads and providing electricity.
When the world suffered its first oil price shock, ADB shifted more of its assistance to
support energy projects, especially those promoting the development of domestic
energy sources in member countries.
Cofinancing operations began to provide additional resources for ADB projects and
programs. ADB first bond issue in Asia - worth $16.7 million and issued in Japan - took
place in 1970.
A major landmark was the establishment in 1974 of the Asian Development Fund to
provide concessional lending to ADB's poorest members.At the close of the decade,

some Asian economies had improved considerably and graduated from ADB's regular
assistance.
As the region's economy evolved, it became clear that the private sector was an
important ally in driving growth. ADB thus in the 1980s made its first direct equity
investment and began to use its track record to mobilize additional resources for
development from the private sector.
In the wake of the second oil crisis, ADB continued its support to infrastructure
development, particularly energy projects. ADB also increased its support to social
infrastructure, including gender, microfinance, environmental, education, urban
planning, and health issues.
In 1982, ADB opened its first field office - a Resident Mission in Bangladesh - to bring
operations closer to their intended beneficiaries. Later in the decade, ADB approved a
policy supporting collaboration with nongovernment organizations to address the basic
needs of disadvantaged groups in its developing member countries.
The start of the 1990s saw ADB begin promoting regional cooperation, forging close ties
among neighboring countries in the Greater Mekong Subregion.
In 1995, ADB became the first multilateral organization to have a Board-approved
governance policy to ensure that development assistance fully benefits the poor.
Policies on the inspection function, involuntary resettlement, and indigenous peoples designed to protect the rights of people affected by a project - were also approved.
ADB's membership, meanwhile, continued to expand with the addition of several Central
Asian countries following the end of the Cold War.
In mid-1997, a severe financial crisis hit the region, setting back Asia's spectacular
economic gains. ADB responded with projects and programs to strengthen financial
sectors and create social safety nets for the poor. ADB approved its largest single loan-a
$4 billion emergency loan to the Republic of Korea-and established the Asian Currency
Crisis Support Facility to accelerate assistance.In 1999, recognizing that development
was still bypassing so many in the region, ADB adopted poverty reduction as its
overarching goal.

With the new century, a new focus on helping its developing members achieve the
Millennium Development Goals and making development more effective was adopted
within ADB.
In 2003, a severe acute respiratory syndrome (SARS) epidemic hit the region, making it
clear that fighting infectious diseases requires regional cooperation. ADB began
providing support at national and regional levels to help countries more effectively
respond to avian influenza and the growing threat of HIV/AIDS.
ADB also had to respond to unprecedented natural disasters, committing more than
$850 million for recovery in areas of India, Indonesia, Maldives, and Sri Lanka hit by the
December 2004 Asian tsunami. In addition, a $1 billion line of assistance to help victims
of the October 2005 earthquake in Pakistan was set up.
In 2008, ADB's Board of Directors approved Strategy 2020: The Long-Term Strategic
Framework of the Asian Development Bank 2008-2020, a policy document guiding its
operations to 2020.
In 2009, ADB's Board of Governors agreed to triple ADB's capital base from $55 billion
to $165 billion, giving it much-needed resources to respond to the global economic
crisis. The 200% increase is the largest in ADB's history, and the first since the 1994
100% capital increase.

Kinds of loans to Asian

countries
ABD offers different types of loans, grants, technical assistance,
guarantees and debt-management products
These products are financed from ordinary capital resources (OCR) as well as special
and trust funds, of which the Asian Development Fund (ADF) is the largest. Most of
ADB's lending comes from OCR, a pool of funds offered at near-market terms to lowerto middle-income countries. ADF offers loans at very low interest rates and grants that
help reduce poverty in ADBs poorest borrowing countries.

LIBOR-based Loans (LBL)

Most of ADB's new lending from OCR have been London interbank offered rate
(LIBOR)-based loans (LBL). LBL products give borrowers a high degree of flexibility
through

choice of currency and interest rate basis,

a wide selection of repayment terms, and

ability to change the original loan terms during the life of the loan
LBLs may be denominated in US dollars, euros, yen or other foreign currencies in which
ADB can efficiently intermediate. Initially, LBLs carry a floating lending rate consisting of
the 6-month LIBOR or another relevant floating rate benchmark, and an effective
contractual spread and, where applicable, a maturity premium fixed over the life of the
loan. However, the borrower has the option of changing the interest rate basis during the
life of the loan.
The effective contractual spread is 40 basis points for loans negotiated from 1 July 2011
to 31 December 2013, and 50 basis points for loans negotiated on or after 1 January
2014.
On 14 December 2011, the Board of Directors approved the introduction of maturitybased pricing on new LBLs to sovereign borrowers or with sovereign guarantees, and
local currency loans with sovereign guarantees, for which formal loan negotiations are
completed on, or after, 1 April 2012.
Under the new pricing structure, loans with an average loan maturity of up to 13 years
will not attract a maturity premium. Loans with an average loan maturity of greater than
13 years and up to 16 years will be charged a maturity premium of 10 basis points per
annum. Loans with an average loan maturity of greater than 16 years and up to 19
years will be charged a maturity premium of 20 basis points per annum. The maturity

premium will be added to the effective contractual spread of 50 basis points and will be
applied for the life of the loan. The average loan maturity means the weighted average
time to repay a loan and is subject to a limit of 19 years.
For nonsovereign loans, the lending spread is determined on a case-by-case basis so
as to cover ADBs risk exposure to specific borrowers and projects.

Local Currency Loan Product (LCL)

To continue meeting borrowers evolving financial needs, ADB introduced the local
currency loan (LCL) product in August 2005. Private sector enterprises and certain
public sector entities including local governments and public sector enterprises may
avail themselves of LCLs.
LCLs aim to reduce currency mismatches in the developing member countries (DMCs).
Under the LCL window, borrowers have the option of changing the interest rate basis of
an LCL during the life of the loan by requesting an interest rate conversion to fix or unfix
their interest rate, subject to regulatory approvals and relevant swap market
opportunities available to ADB in the local market.

Technical Assistance
Through its technical assistance operations, ADB assists its developing member
countries in:

identifying, formulating, and implementing projects,

improving the institutional capabilities of governments and executing agencies,

formulating development strategies,

promoting the transfer of technology, and

fostering regional cooperation.

Debt Management Products

ADB offers debt management products to members and entities fully guaranteed by
members in relation to their third-party liabilities. In offering debt management products
for third-party liabilities, ADB is able to contribute to the economic development of its
DMCs by allowing members or guaranteed entities to improve debt management,
thereby potentially reducing economic volatility, reducing borrowing costs, improving
access to capital markets, and freeing up scarce financial resources for economic
development.
Debt management products offered by ADB include currency swaps, including local
currency swaps, and interest rate swaps. While currency swaps include the possibility of
members or guaranteed entities transforming a foreign currency liability into a local
currency liability, the reverse transformation of a local currency liability into a foreign
currency liability is not offered.

Multitranche Financing Facility (MFF)

An MFF is a financing modality that supports a client's medium- to long-term investment
program or plan. ADB's Board of Directors approves a maximum amount for an MFF,
and the conditions under which financing will be provided. On the basis of the Board's
approval, and at the client's request, ADB Management converts portions of the facility
amount into a series of tranches to finance eligible investments. A tranche can be a loan
(other than program or a sector development program loans), grant, guarantee, or ADBadministered cofinancing. Financing terms and conditions can differ between tranches.
The overall amount of the MFF is not recorded as a legally binding financial commitment
on the part of either ADB or its clients; only the amounts converted (into loans, grants,
guarantees or ADB-administered cofinancing) are recorded as committed, if and when
approved.
The ADB also offers hard loans from ordinary capital resources (OCR) on commercial
terms, and the Asian Development Fund (ADF) affiliated with the ADB extends "soft
loans from special fund resources with concessional conditions. For OCR, members
subscribe capital, including paid-in and callable elements, a 50% paid-in ratio for the
initial subscription, 5% for the Third General Capital Increase (GCI) in 1983 and 2% for
the Fourth General Capital Increase in 1994. The ADB borrows from international
capital markets with its capital as guarantee.

In 2009, ADB obtained member-contributions for its Fifth General Capital Increase of
200%, in response to a call by G20 leaders to increase resources of multilateral
development banks so as to support growth in developing countries amid the global
financial crisis. For 2010 and 2011, a 200% GCI allows lending of $12.5 billion to 13
billion in 2010 and about $11 billion in 2011. With this increase, the bank's capital base
tripled from $55 billion to $165 billion.

Member countries of Asian development bank

The regional and non-regional members of Asian

development bank are as following
Afghanistan ,Austria, Armenia, Belgium, Australia, Canada,
Azerbaijan, Denmark, Bangladesh, Finland, Bhutan, France, Brunei
Darussalam, Germany, Cambodia, Ireland, China, Peoples Italy
Republic of Luxembourg Cook Islands, The Netherlands ,Fiji,
Norway, Georgia, Portugal, Hong Kong, China ,Spain India,
Sweden, Indonesia, Switzerland, Maldives ,Japan ,Turkey,
Kazakhstan, United Kingdom, Kiribati United States, Korea,
Republic of Kyrgyz, Republic Lao Peoples Democratic Republic,
Malaysia, Palau, Papua New Guinea, Philippines, Samoa ,Marshall
Islands States of Mongolia, Myanmar ,Nauru, Nepal , Viet Nam,
Timor-Leste Tonga, Turkmenistan , Singapore, Solomon Islands, Sri
Lanka, Taipei, China Tajikistan, Thailand, New Zealand and
PAKISTAN.

Loans availed by Pakistan

As a foundation member of the Asian Development Bank (ADB), the
Government of Pakistan has been working with ADB since 1966.

Assistance from ADB has helped to strengthen Pakistans social and

environmental safeguards, integrate environmentally sustainable measures
into government projects and programs, and strengthen public
communication and information sharing with partners.
Today, ADB remains one of Pakistans largest development partners, having
provided more than $25 billion in loans, as well as more than $200 million in
grants, as of 31 December 2014. This funding has included 316 loans to
improve Pakistans infrastructure and services, and to support reforms.
ADB and the Government of Pakistan have implemented the country
partnership strategy (CPS), 20092013, a $4.4 billion lending program to
facilitate structural change, promote investment, and improve Pakistans
institutional effectiveness.
In 2014, ADB approved $1.4 billion in new commitments to assist Pakistan
achieve key infrastructure development and reform targets.
Cumulative disbursements to Pakistan for lending and grants financed by
ordinary capital resources, the Asian development funds and other special
funds are to be amounted to $18 billion.

ADB support projects and programs

ADB has committed $5.1 billion in ongoing operational funding to develop
Pakistans energy security, transportation infrastructure, irrigation networks,
urban services, social protection services, and reforms.
ADB is Pakistans largest partner in the energy sector, with energy projects
comprising more than half the ADB portfolio for the country. In 2014, ADB
approved assistance packages to help Pakistan undertake key reforms in the
power sector. This included funding to ensure energy delivery to industrial
and private consumers, and to build two vital power generation plants in
Sindh Province. The Jamshoro Power Generation Project, once completed in
2018, will add 1,300 megawatts (MW) to the countrys electricity grid.
Reliability of the power distribution network is also being enhanced through
the investment of $167.2 million to upgrade 284 grid stations.
In the transport sector, the FaisalabadGojra Motorway, 58 kilometers (km) of
new roadway funded by ADB, is likely to open to traffic in 2015. In 2014, ADB
approved a loan of $195 million for the National Highway Network
Development in Balochistan Project, and two loans totaling $327 million to
build the 59-km HasanabdalHavelian Expressway. These projects will
significantly improve regional connectivity and transport efficiency.

To improve the capacity and efficiency of Pakistans aged irrigation system,

ADB is providing a multitranche financing facility (MFF) of $700 million
forfinancing for 29 private sector projects in Pakistan. Total outstanding
balances and commitments of ADBs private sector transactions in the
country as of 31 December 2014 was $639.6 million, representing 8.06% of
ADBs total nonsovereign portfolio. Power and energy infrastructure projects
are among the priorities for private sector operations. Other priorities include
transport and communication, urban publicprivate partnerships, and social
sectors.
ADBs Trade Finance Program (TFP) fills market gaps by providing guarantees
and loans through partner banks in support of trade. The TFP has done over
10,300 transactions supporting over $20.5 billion in trade and over 6,000
small and medium-sized enterprises since 2004. In 2014, the TFP supported
$3.8 billion in trade through over 1,900 transactions. In Pakistan, the TFP
works with 11 banks and has supported over $8.9 billion in trade between
2,613 transactions.
In addition to filling market gaps, the TFPs objective is to mobilize private
sector capital/involvement in developing Asia. In Pakistan, 53.6% of the $8.9
billion in Through the TFP was cofinanced by the private sector.
Enrollment in local colleges, 2005

Pakistan: Cumulative Lending,

Grant, and Technical Assistance

Sector
Agriculture, Natural Resources,
and Rural Development
Education
Energy
Finance
Health
Industry and Trade
Multisector
Public Sector Management
Transport
Water and Other Urban
Infrastructure and Services
Total

No.

Amount
($ million)c

Approvals%c

165
31
114
80
31
40
33
79
64

3,958.68
506.90
6,836.42
3,108.34
793.59
1,126.00
1,756.86
3,615.27
3,369.22

15.28
1.96
26.38
12.00
3.06
4.35
6.78
13.95
13.00

48
685

840.77
25,912.04

3.24
100.00

Cummulative Financing By Project

Table 3.Pakistan: Cumulative

Nonsovereign Financing
by Product
Number of Projects

29
Amount ($ million)

Loans

662.90

Equity Investments

53.38

Guarantees

210.61

B Loans

129.90

Total

1,056.79

Pakistan Project Success Rate

Table 4. Pakistan: Project Success Rates

Year

(%)

No. of Independently
Evaluated Projects
and Programs

2007

50.00

2008

28.57

2009

15

2010

20.00

10

2011

40.00

2012

33.33

2014

Total

22.00

50

Success Rate

 = nil.
Note: Year refers to the circulation year of the project completion report (PCR). Compared with the numbers in previous years fact sheets, the success rates reported here are based on
the ratings from validated PCRs and independently evaluated performance evaluation reports only and do not include self-evaluations. With small sample size, the success rate does not
necessarily represent country operations performance.

Source: PCR validation reports and project/program performance evaluation reports ratings database as of 31 December 2014.

Types of Loans Given by ADB

Country

Projects

Pakistan

Gulpur
Hydropow
er Project

Pakistan

Tribal
Areas
Water
Resources
Developm
ent
Project
Social
Protectio
n
Developm
ent
Project
Sindh
Cities
Improvem
ent
Agricultur
e
Investme
nt
Program

Pakistan

Pakistan

Pakistan

Types of

Approval

Status

Approval

Assistance

Number/s
LN7201-01

Approved

17 Apr
2015

3239

Approved

15 Dec
2014

Loan

3049

Approved

22 Oct
2013

Loan

2975
2976

Approved

18 Dec 2012

Loan

2841

Approved

22 Dec 2011

Private
Sector
Loan and
Equity
Loan

Date