Bank lending
grew 17.5 percent
last year

The bulk of the Asian Development
Bank's lending in 2000 went to
social infrastructure projects
according to report

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Kyodo New Service

MANILA >> Lending by the Asian Development Bank in 2000 increased by 17.5 percent over the previous year to $5.85 billion, the Manila-based bank said in an annual report released last week.

The bank said it also approved $78.2 million in equity investments and $172 million in technical assistance grants last year.

The ADB approved 90 loans for 74 projects last year, compared with 66 loans for 52 projects in 1999.

Of the amount of loans disbursed, $4.26 billion came from the bank's ordinary capital resources while $1.59 billion was from the concessional Asian Development Fund, which offers loans at low interest rates and lengthy maturity.

The largest portion of lending in 2000 -- $1.4 billion, or 24 percent of the total -- went to social infrastructure projects such as education, health, population, urban development, housing, water supply and sanitation.

Contracts under international bidding for year 2000 Roads and Road Transport -- $652.7 million Electric Power -- $154.2 million Water Supply and Sanitation -- $116.9 million Education -- $92.2 million Railways -- $54.7 million Ports and Shipping -- $44.1 million Health and Population -- $27.8 million Irrigation and Rural Development -- $24.8 million Urban Development and Housing -- $19.1 million Airports and Civil Aviation -- $12.0 million Industrial Crops and Agro-industry -- $10 million Total -- $1.209 billion Source: Asian Development Bank

In line with the ADB's poverty reduction strategy, 40 percent of public-sector loans had poverty reduction as their primary or secondary objective.

Twenty-two developing countries and one regional project received ADB loans in 2000. India got the largest amount, $1.3 billion, or 23 percent, followed by China, Indonesia and Pakistan.

The Japan Fund for Poverty Reduction, established in 2000 with an initial contribution from Japan of $92.6 million, provides grants to ADB-financed projects aimed at poverty reduction and social development. Five projects and programs were approved last year, worth a total $7.5 million.

The report said ADF loan disbursement is expected to increase now that negotiations on the seventh ADF replenishment, aimed at providing resources for concessional loans for 2001 to 2004, have concluded.

The amount agreed to in the September 2000 settlement was $5.65 billion.

Of the amount, $2.91 billion will be contributed by 25 donor countries while the balance will be covered by existing and internal resources.

The bank last year also approved 306 technical assistance grants totaling $172 million, with the largest share, 18 percent, going to improving social infrastructure, followed by agriculture and natural resource projects, finance, and transportation and communication.

Of the total technical assistance approved, $77.7 million came from the Technical Assistance Special Fund, $77.1 million from contributions to the Japan Special Fund, $7.6 million from the Asian Currency Crisis Support Facility and $9.6 million from other sources.

The report said that over the course of the year, the bank approved three important new policies, including a private sector development strategy aimed at strengthening the role of the private sector in developing Asia.

Another policy, the micro-finance strategy, is designed to broaden access by the poor to financial services, while the goal of the resident mission policy is to bring the ADB closer to its constituents by opening resident missions in every developing member country, where feasible.

In 2000, the ADB also began developing a long-term strategic framework for the next 15 years to achieve its vision of a poverty-free region.

However, in a supplemental chapter on children, the annual report also warned that 6 million children under the age of 5 -- more than half the world's total -- die each year in developing Asian nations. Children who die of malnutrition or starvation account for half of these deaths, while the rest die from diseases that could be prevented by vaccination and simple medication.

The report called for increased political will, and for concerted efforts by the public and private sector to address the problem.