THE Asian Development Bank (ADB) aims to extend its non-sovereign lending operations (NSOs) to agribusiness, health, education, manufacturing and tourism.
In a recent ADB Town Hall meeting, ADB President Takehiko Nakao said the move will prepare ADB for the graduation of developing member-countries (DMCs) from sovereign borrowing.
Nakao added most of ADB’s DMCs will become either upper middle-income countries, or graduate from sovereign lending by 2020, which have a strong private-sector base.
“NSOs should be guided by a dual mandate of development impact and profitability. For ADB to be a catalyst for private-sector investments, our NSO interventions must be profitable. Such profits contribute to building up our capital, which, in turn, will increase our lending capacity both for sovereign and nonsovereign operations,” Nakao said.
Nakao added, however, this expansion will not disrupt the Manila-based multilateral development bank’s current NSO investments in clean and renewable energy, sustainable transport and financial inclusion.
In its 2016 Annual Report, the ADB reported that its total approvals in its NSOs reached $8.34 billion. Loans obtained from the bank’s Ordinary Capital Resources reached a total of $2.41 billion for these projects.