What is the Asian Development Bank (ADB)?
– The Asian Development Bank is a multilateral development institution created to support economic and social development in the Asia–Pacific region. Established in 1966 and based in Manila, Philippines, the ADB provides financing, technical help, and advisory services to promote growth, reduce poverty, and foster regional cooperation.
Key functions and instruments (definitions)
– Loan: a debt instrument the ADB lends to governments (sovereign loans) or to private borrowers.
– Sovereign financing: funding provided to national governments or public-sector entities; terms and oversight reflect government involvement.
– Private-sector financing: loans, equity, or guarantees directed to private companies or projects to catalyze private investment.
– Grant: non-repayable funding for projects with public-good objectives (e.g., capacity building).
– Technical assistance (TA): advisory work, policy advice, capacity building, and project preparation.
– Equity investment: the ADB takes an ownership stake in a project or company.
– Co‑financing: partner funding from other official agencies, commercial lenders, or export-credit agencies that supplements ADB financing.
– Retained earnings: profits the bank keeps from past operations that can be used to support future lending.
How the ADB operates (overview)
1. Raise funds: the ADB issues bonds in international capital markets and receives member subscriptions and retained earnings.
2. Approve projects: member-country requests, project proposals, and strategic priorities guide approvals by the bank’s governing bodies.
3. Provide finance and assistance: the ADB uses a mix of loans, grants, technical assistance, and equity to finance projects in member countries and private-sector initiatives.
4. Leverage partners: the bank frequently arranges co‑financing so partner institutions increase project size and share risk.
5. Monitor and advise: the ADB runs project supervision, policy dialogues, and capacity-building programs to improve outcomes.
Structure and governance (who controls it)
– Highest authority: the Board of Governors, with one governor per member country. This body sets major policy and meets formally once a year.
– Delegated management: the Board of Directors carries out much of the institution’s ongoing decision-making on behalf of the governors.
– Major shareholders: the United States and Japan are the largest shareholders (each holding about 15.6% of voting power).