ASIAN DEVELOPMENT BANK
Presented By:
Submitted To:
Aakanshya Ghimire : 08
Rojan Karki
Neeta Pant: 15
Literature
Bitisha Subedi: 23
Table of contents
Governance and
01 Introduction
02 Historical Background 03 Structure
Voting System and 06 Funding and Capital
04 Decision-Making 05 Membership
Process
Loans
09
07 Mission and Vision
08 Function
12 ABD Project In Nepal
10 Key Projects 11 ADB and Nepal
13 Operational Challenges 14 Future Direction
2
Introduction to Asian Development Bank
•Established: 1966
•Purpose: ADB aims to promote social and economic
development in Asia and the Pacific.
•Headquarters: Manila, Philippines
•Focus: Infrastructure, poverty reduction, environmental
sustainability, and regional integration.
Historical Background
•Formation: ADB was created in response to the post-WWII need
for development in Asia.
•First Loan: The first loan was to Thailand for irrigation
development in 1968.
•Milestones:
•1970s: Focused on food security and infrastructure.
•1980s: Shift towards poverty reduction.
•2000s: Sustainable development became a core agenda.
Governance and Structure: President and Board of Directors
•President: The ADB is led by a President, who is elected by the
Board of Governors.
•Board of Governors: Represents member countries, each
appointing one governor and an alternate.
•Board of Directors: 12 directors oversee ADB’s operations. They
are appointed by member countries based on voting power.
5
Voting System and Decision-Making Process
•Voting Power: Based on the financial contributions
of member countries (capital subscription).
•Decision Making: Major decisions require approval
from the Board of Directors, using a majority vote
system.
•Consensus Building: Decisions are often made
through discussions to build consensus.
6
Membership
•Number of Members: 68 members, 49 from Asia-Pacific
and 19 from other regions.
•Eligibility: Open to countries in the Asia-Pacific region, as
well as developed countries from other regions.
•Role of Members: Provide financial support and strategic
guidance to the bank
Funding and Capital: Sources of ADB’s Funding
•Primary Source: Member contributions in the form of paid-in
and callable capital.
•Bonds Issuance: ADB raises funds by issuing bonds in global
capital markets.
•Other Sources: Grants, partnerships, and co-financing from
various international organizations.
Mission and Vision
•Mission: To help developing member countries reduce poverty
and improve the quality of life for their people.
•Vision: A prosperous, inclusive, resilient, and sustainable Asia
and Pacific.
ADB’s Role in Entrepreneurship Development
•Support for SMEs: Provides funding, training, and advisory
services to small and medium enterprises (SMEs).
•Innovative Financing: Encourages entrepreneurship through
programs that support access to finance.
•Infrastructure for Business Growth: Invests in infrastructure
projects that create a conducive environment for business
development.
Functions
• Promote investment in the region of public and private capital for development purposes.
• Provide loans for the economic and social development of the member countries of the
region.
• Provide technical assistance for the preparation, financing and execution of development
projects and programs
• Support public resource mobilization and management to member countries.
• Act as financial intermediary by transferring resources from global capital markets to
developing countries.
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Loans
• Loans are financed from ordinary capital resources (OCR) and the Asian Development
Fund (ADF).
• Middle-income countries borrow from ADB at near-market terms, while lower-income
countries access loans at reduced rates.
• ADB has committed 502 public sector loans, grants, and technical assistance totalling
$8.2 billion to Nepal. ADB’s current sovereign portfolio in Nepal includes 30 loans and 6
grants worth $3.56 billion as of 31 December 2023.
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Types of Loans
• Flexible loan product
• Local currency loan
• Concessional OCR loan
13
Flexible Loan Product
• The Asian Development Bank (ADB) offers its sovereign and sovereign-guaranteed
borrowers a loan product – the Flexible Loan Product (FLP) - based on specified standard
6-month floating reference rates.
• The FLP is a market-based loan product that allows ADB’s efficient intermediation on
the finest possible terms, provides transparent and market-based pricing, and meets
borrowers’ needs to tailor currencies and interest rate basis to suit project needs and
external risk management strategies
14
Local Currency Loan
• To continue meeting borrowers’ evolving financial needs, ADB introduced the local
currency loan (LCL) product in August 2005.
• Aims to reduce currency mismatches in 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.
15
Concessional OCR Loans
• ADB offers loans at very low interest rates to help reduce poverty in ADB's poorest
member countries, and bridge the development gap in the Asia and Pacific region.
• Concessional assistance to DMCs is meant to help them overcome development
challenges, support inclusive and sustainable development, and make progress on the
Sustainable Development Goals.
16
Debt Management Products
• ADB offers debt management products to members and entities fully guaranteed by
members in relation to their third-party liabilities.
• 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.
17
Technical assistance (TA)
• Technical assistance (TA) supports the preparation, financing, and execution of
development projects and programs, including the formulation of specific project
proposals.
• It can also assist DMCs in coordinating their development policies and plans to achieve
better use of their resources.
• TA also facilitates the channeling of ADB’s financial assistance to DMCs by improving
their capacity to absorb external assistance and further their economic development.
• TA supports (i) the preparation, financing, and implementation of development projects
and programs; (ii) knowledge solutions to address key development challenges; and (iii)
capacity development.
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Key Projects
• Uzbekistan : Climate-Resilient Water and Sanitation Services Project
• Viet Nam : Secondary Cities Environment Improvement Project (Dak Nong)
• Cambodia : Grid Expansion for Energy Transition Project
• Georgia : Energy Storage and Green Hydrogen Sector Development Program
• India : Delhi-SNB Regional Rapid Transit System Investment Project
• Philippines : Sustainable Tourism Development Project
• Bangladesh : Northwest Distribution Network Modernization Project
• Sri Lanka : Skills Development System Transformation Program
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ADB and Nepal
• Nepal is a founding member of ADB.
• Development partnership between Nepal and
ADB began in 1968 with a technical assistance
grant, followed by a concessional loan of US$6
million in 1969 for air transport development.
• ADB strongly supports inclusive growth in
Nepal—helping to reduce poverty, lessen
gender and social disparities, build
infrastructure, develop human capital,
transform agriculture, and mitigate the effects
of disasters and climate change.
KATHMANDU, NEPAL (30 April 2024) — Asian Development Bank (ADB)
Vice-President for South, Central and West Asia Yingming Yang met with
Nepal Prime Minister Pushpa Kamal Dahal
20
• As of 31 December 2023, ADB has committed
502 public sector loans, grants, and technical
assistance totaling $8.2 billion to Nepal.
• ADB’s current sovereign portfolio in Nepal
includes 30 loans and 6 grants worth $3.56
billion
• Cumulative sovereign and nonsovereign loan
and grant disbursements to Nepal amount to
$5.39 billion.
• These were financed by regular and
concessional ordinary capital resources, the
Asian Development Fund, and other special
funds.
ASIAN DEVELOPMENT BANK MEMBER FACT SHEET
21
Different Project of ADB in Nepal
Active / Approved Project Proposed Project
• Mechanized Irrigation Innovation Project.
• Kathmandu Valley Water Supply Improvement Project (Phase2).
• Operation and Integration Under the South Asia • South Asia Subregional Electricity Trasmission and Distribution
Subregional Economic Cooperation Program. Strengthening Project.
• Climate-Resilient Landscapes and Livelihoods • Green, Resilient, and Inclusive Development Program (Subprogram 1).
Project.
• Accelerating Climate Action, Innovation, and Private Sector Development
• Role of Artificial Intelligence in Asia’s Growth and through Sector Operations.
Development.
• Irrigation Modernization Enhancement Project.
• Supporting Climate-Resilient and Low-carbon Health
System through the Climate and Health Initiative.
Mechanized Irrigation Innovation Project.
• a $125 million financing package to provide long-term sustainable
solutions to increase year-round access to irrigation water in rural
communities in Rautahat and Sarlahi districts in Madhesh Province,
Nepal.
• will construct a network of deep tube wells equipped with pump
houses, prepaid smart card system, and a dedicated electricity
distribution network.
• The project will construct approximately 900 kilometers of
underground pressure pipe distribution networks to bring irrigation
water from pump houses to farms.
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Climate-Resilient Landscapes and Livelihoods Project.
• The Asian Development Bank (ADB) has approved a $30 million
financing package to improve climate resilience, water resources
management, and livelihoods of communities in Karnali and
Sudurpashchim provinces in Nepal.
• The project aims to build target community households’ resilience
by mitigating water insecurity and diversifying livelihoods to cope
with the impacts of climate change.
• It will improve watershed management across approximately
200,000 hectares (ha) to mitigate water insecurity and benefit
about 50,000 rural households across 24 municipalities and five
districts in Karnali and Sudurpashchim provinces.
Kathmandu Valley Water Supply Improvement Project (Phase2).
• The project aims to ensure drinking water security in the
Kathmandu Valley and to provide access to safe, sustainable,
resilient, and inclusive water supply services to 2 million people
by
(i) constructing climate- and disaster-resilient urban water supply
infrastructure;
(ii) strengthening systems to improve the efficiency, sustainability,
and resilience of water supply services; and
(iii) enhancing the capacity of urban water supply institutions and
stakeholders.
• The project is a continuation of the ongoing partnership between
the Asian Development Bank (ADB) and the Government of
Nepal to support the water and other urban infrastructure services
sector in the country.
• The ADB approved up to $288 million in financing for this project to
improve livability and economic growth.
South Asia Subregional Electricity Trasmission and Distribution Strengthening
Project.
• $311 million loan to improve and modernize electricity
transmission and distribution infrastructure in Nepal.
• The project will finance a total of 290 kilometers (km) of
power transmission lines from Dailekh to Jumla, New
Butwal to Lamahi, Nijgadh to Ramauli, and Teenpiple and
Okharpauwa. It will also expand, reinforce, and rehabilitate
electricity distribution infrastructure in Karnali and Lumbini
provinces.
• Distributed grid-connected solar photovoltaic generation
facilities with a total capacity of 8 megawatts will be
established in Karnali and other areas.
ABD’s Work in Nepal
• The data reveals that Nepal has prioritized
infrastructure development, energy, and trade
as key areas of focus.
• Sovereign financing plays a crucial role in
supporting these initiatives, while
Nonsovereign financing is concentrated in the
Trade and Supply Chain Finance sector,
potentially fostering private sector growth.
• The largest investments are in Transport,
Agriculture, Energy, and Water and Urban
Infrastructure sectors.
ASIAN DEVELOPMENT BANK MEMBER FACT SHEET
Operational challenges
• The country is highly vulnerable to
• Nepal’s rugged terrain, infrastructure gaps, disasters triggered by natural hazards,
inadequate human capital, and political and climate change, and environmental
policy uncertainty continue to constrain degradation.
economic growth and development.
• Weak governance has long affected the • start-up delays, poor contract management,
effectiveness of development assistance to delays in environmental and land clearances,
Nepal. complex social safeguards measures
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FUTURE DIRECTIONS
• The ADB country partnership strategy, 2020–2024 for Nepal
focuses on three strategic objectives:
I. improving infrastructure for private sector-led growth,
II. improving access to devolved services, and
III. ensuring environmental sustainability and resilience.
• ADB is preparing a new strategy for 2025-2029 that remains
aligned with ADB’s Strategy 2030 and the government’s plan
and policies.
• Gender equality, social inclusion, and disaster resilience will
continue to be prioritized. The bank will also continue to work
with Nepal to further improve public financial management
systems, increase project readiness and effective
implementation, and improve sustainable asset management.
• Future programs will include integrated and innovative
approaches and a greater focus on climate change adaptation
and mitigation.
References
•Asian Development Bank. (n.d.). Asian Development Bank Overview. Retrieved from
https://www.adb.org/about/overview
•Asian Development Bank. (n.d.). A Historical Overview. Retrieved from
https://www.adb.org/about/history
•Asian Development Bank. (n.d.). Governance Structure. Retrieved from
https://www.adb.org/about/governance
•Asian Development Bank. (n.d.). Articles of Agreement. Retrieved from
https://www.adb.org/documents/articles-agreement-adb
•Asian Development Bank. (2023). Financial Report 2023. Retrieved from
https://www.adb.org/documents/financial-report-2023
•Asian Development Bank. (n.d.). Mission and Vision. Retrieved from
https://www.adb.org/about/mission-vision
•Asian Development Bank. (n.d.). Entrepreneurship and Private Sector Development
Initiatives. Retrieved from
https://www.adb.org/what-we-do/sectors/private-sector-development.
• https://startuprise.org/adbs-311-mn-to-nepal-electricity-transmission/
• https://www.adb.org/news/adb-approves-support-deliver-irrigation-water-nepal
