Asian Development Bank Definition

What is the Asian Development Bank?

The primary mission of the Asian Development Bank is to “promote economic growth and cooperation” among countries in the Asia-Pacific region. Founded in 1966 and based in Manila, Philippines, the AfDB assists its members and partners by providing loans, technical assistance, grants and equity investments to promote social and economic development.

The AfDB has been responsible for major projects in the region and regularly raises capital through the bond markets. The AfDB also relies on member contributions, loan retained earnings and loan repayments for funding the organization.

Key points to remember

  • The main mission of the Asian Development Bank (ADB) is to promote economic growth and cooperation in the Asia-Pacific region.
  • The majority of AfDB members are in the Asia-Pacific region.
  • The AfDB provides assistance to its developing member countries in the region.
  • It also provides financing to selected private sector projects as well as public-private partnerships through grants, loans, technical assistance and equity investments to promote development.
  • The AfDB is controlled by member countries, with the United States and Japan holding the largest stake.

How the Asian Development Bank Works

The Asian Development Bank provides assistance to its developing member countries, the private sector and Public-private partnerships through grants, loans, technical assistance and equity investments to promote development. The AfDB regularly facilitates policy dialogues and provides advisory services. They also use co-financing operations that draw on official, commercial and export sources of credit while providing assistance.

AfDB membership is open to members and associate members of the United Nations Economic Commission for Asia and the Far East. It is also open to other countries in the region and non-regional developed countries that are members of the UN or one of its specialized agencies.

Funding provided by the Asian Development Bank

The AfDB provides both private and sovereign (public) finance. Private sector efforts focus on projects that help promote private investment in the region that will have a significant development impact and lead to accelerated, sustainable and inclusive growth. Public sector financing provides financing to member countries with flexibility in determining how they can achieve development goals.

In 2021, the AfDB committed nearly US$13.5 billion to help its developing member countries cope with the impacts of the COVID-19 crisis and meet immunization needs, and mobilized US$12.9 billion additional dollars in co-funding from partners. Through a $9 billion Asia-Pacific Vaccine Access Facility, or APVAX, announced in December 2020, the AfDB provided funding for vaccine procurement, logistics and distribution.

The total private financing portfolio stood at $14.2 billion at the end of 2021. In terms of sovereign financing, the AfDB portfolio stood at $104 billion at the end of 2021, consisting of 713 loans, 392 grants, 915 TA projects, a guarantee and 1 Fair investment.

Structure of the Asian Development Bank

According to the AfDB’s website, “The Agreement Establishing the Asian Development Bank, known as the AfDB Charter, vests all powers of the institution in the Board of Governors, which in turn delegates certain of these powers to the Board of Directors. The Board of Directors The Governors meet formally once a year during the Annual Meeting of the AfDB.” The AfDB’s highest decision-making body is its Board of Governors, which includes one representative from each member.

The two main shareholders of the Asian Development Bank are the United States and Japan. Although the majority of Bank members are from the Asia-Pacific region, industrialized countries are also well represented. Regional development banks generally work in harmony with International Monetary Fund (IMF) and the world Bank in their activities.

Relations with Asian Development Bank countries

When the AfDB was founded in 1966, it was made up of 31 members. Since then, membership has grown to 68 members, including 48 regional members and 19 non-regional members. Membership from 2022 includes:

Source: Asian Development Bank
Source: Asian Development Bank

The two main shareholders of the Asian Development Bank are the United States and Japan. The two countries hold a majority stake in the bank with 15.6% each.

Who controls the Asian Development Bank?

The AfDB is governed by a Board of Governors, which represents AfDB member countries. In 2022, the top five AfDB shareholders are Japan and the United States (each with 15.6% of total shares), the People’s Republic of China (6.4%), India (6.3 %) and Australia (5.8%).

Where is the Asian Development Bank headquarters?

The Asian Development Bank is headquartered in Manila, Philippines.

Is India a member of the Asian Development Bank?

Yes, India is a regional member country of AfDB.

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