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ADB operations grow 26% to $32 bn in 2017, exposure to water dips

New Delhi : The Asian Development Bank (ADB) has said its total operations saw a 26 per cent increase in 2017 to $32.2 billion but its disbursements dropped to $11.1 billion during the year from $12.3 billion in 2016.

For India, the Manila-based lenders sovereign commitment was to the tune of $4.2 billion, including loans of over $2.7 billion. The official co-financing amount was $1.52 billion while grant accounted for just $27.9 million.

Overall in the water and other urban infrastructure services sector, commitments including loans, co-financing and grants were to the tune of $1.87 billion in 2017 as against $2.19 billion in the previous year.

While loans to the sector came down to $1.62 billion from $1.71 billion in 2016, co-financing too dropped in the sector during 2017, with loans and trade finance amounting to just $146.2 million in 2017 as against $422.1 million in 2016.

For India, there was just one loan of $275 million in the segment during 2017.

In May 2017, ADB had approved a $275 million loan to help support and improve urban services delivery among poor communities, particularly on water supply and sanitation, in Madhya Pradesh.

ADB’s total operations of $32.2 billion last year consisted of $20.1 billion in loans, grants, and investments from its own resources, a rise of 51 per cent from 2016), and including non-sovereign operations of $2.3 billion (a 31 per cent increase from 2016); $11.9 billion in co-financing from bilateral and multilateral agencies and other financing partners besides and $201 million in technical assistance, which saw a 11 per cent jump over 2016.

Overall sovereign and non-sovereign commitments in 2016 were to the tune of $25.47 million.

In its Annual Report 2017, which was released on April 24, the ADB said the figures are based on ADB’s new performance measure of “commitments,” or the amount of loans, grants, and investments signed in a given year.

ADB introduced this measure in 2017 to promote project readiness at approval stage, expedite post-approval steps, and get closer to project disbursement, by placing more emphasis on when the projects are signed, rather than when they are approved by ADB’s Board of Directors.

“We began a new chapter in meeting development needs across Asia and the Pacific in 2017,” said ADB President Takehiko Nakao. “With the merger of the bank’s concessional Asian Development Fund lending operations with the ordinary capital resources balance sheet from the start of 2017, ADB has a solid capital base to support our operations going forward.”

“We continue to combine finance with innovative solutions to respond better to the region’s diverse and specific challenges and needs, such as rapid urbanization, climate change, and growing demand for water and energy", Nakao added.

ADB’s financing of climate mitigation and adaptation reached a record $4.5 billion in 2017, a 21 per cent increase from the previous year. The Bank said it was now in a good position to achieve its $6 billion annual climate financing target by 2020.

ADB also mobilized an additional $606 million from external financing, bringing total climate financing to $5.2 billion last year.

However, ADB’s disbursements dipped to $11.1 billion in 2017 and co-financing also fell short of ADB’s targets.

“We will come up with concrete measures to increase disbursements and cofinancing, building on the new ADB procurement policy approved in April 2017 and ongoing efforts to leverage the bank’s resources,” said Nakao.

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