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August 16, 2014

Important Details you should know about Asian Development Bank (ADB)


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The World Bank had been trying to set up re development banks and some regional banks have been established for developing countries in Latin America, Africa and Asia. The Asian Development Bank popularly known as the ADB, was set up in 22nd August 1966. It is a multinational regional development bank established for the purpose of lending funds, promoting investment and providing technical assistance to the developing member countries generally for fostering the economic growth and co-operation in the Asian region. Its Head Quarters are located at Manila in Philippines.

ADB provides various forms of financial assistance to its developing member countries (DMCs). The main instruments are loans, technical assistance (TA), grants, guarantees, and equity investments. These instruments are financed through ordinary capital resources (OCR), Special Funds, and trust funds. ADB operations are financed from OCR and Special Funds. The Charter requires that funds from each resource be kept and used separately. Trust funds are generally financed by contributions and administered by ADB as the trustee.

Objectives and Functions of the ADB

The basic objective behind the establishment for the ADB is to promote economic development of and mutual cooperation among the countries of Asia. The ADB's objective is to help accelerate the process of economic development of developing countries in the Asian Region.

The ADB performs the following functions :
  1. To promote investment of public and private capital for economic development of Asian countries. 
  2. To channelize investible funds of the ADB for the implementation of those projects which are important for the development of major sectors of the country's economies. 
  3. To render assistance to member-countries in coordinating their programmes and policies of economic development and at the same time to promote inter regional trade and cooperation among countries of the Asian region. 
  4. To promote technical assistance for the execution of projects. 
  5. To mobilize funds for economic development of member-countries by extending cooperation to the World Bank ESCAP and other United Nations bodies and public as also private institutions located among member countries. 

Membership, Capital Resources and Organization

The membership of the ADB is open to all countries in Asia, but for procuring additional and substantial financial and other resources, many developed countries of other regions are also admitted as members of the ADB. From 31 members at its establishment in 1966, ADB has grown to encompass 67 members - of which 48 are from within Asia (Regional Members) and the Pacific and 19 are of outside (Non Regional Members).

Some of the important non-regional members of the ADB are :
  • United States
  • United Kingdom
  • West Germany
  • Canada
  • Germany
  • Switzerland

Lending Operations of the ADB

Instruments :

ADB Provides different forms of assistance to governments and private enterprises in its developing member countries based on a member's priorities.

The main instruments are,
  • Loans
  • Technical assistance
  • Grants
  • Guarantees
  • Equity investments

Loan and Grant Resources 

  • ADB's operations are financed issuing bonds, recycling repayments, and receiving contributions from members. About 70% of the bank's cumulative funding comes from its ordinary capital resources.
  • ADB also provides loans from its Special Funds resrurces. One among them is the Asian Development Fund, which provides concessional loans to ADB's least developed member countries. 
  • ADB also manages several trust fund and channel financing grants privided by bilateral donors.  


For every dollar lent by ADB in 2013, an additional 46 cents was mobilized from other official sources and commercial institutions.

Fast Facts of ADB

  • Established on : 22nd August 1966
  • Head Quaters : Manila, Philippines
  • President : Takehiko Nakao
  • Member Countries : 67
    • Regional Members : 48 (New Member - Georgia in 2007)
    • Non Regional Members : 19 (New Member -  Ireland in 2006)
  • Principal Subscriber : Japan (with the subscribed capital 15.670 %)
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