Ministry of Foreign Affairs
Ministry of Foreign Affairs
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The Asian Development Bank (AsDB)

Updated July 2006


1. Facts

Established:            1966
Headquarters:            Manila, the Philippines
President: Haruhiko Kuroda (Japan), since 2005
Number of member countries: 64 countries – 46 within the Asian and Pacific region and 18 non-regional countries
Board of Directors: 12 members (Executive Directors). The Executive Directors for Japan, China and the US each represent their own countries, but all other Executive Directors represent groups of countries, or constituencies.

The members of the Board of Directors are stationed permanently in Manila, and each board member leads a constituency office consisting of representatives of all the countries in the constituency. The Board meets regularly several times a week.

Norwegian participation on the Board: Norway is in a constituency together with the other Nordic countries plus Canada and the Netherlands.

Canada is permanent head of our constituency office (permanent Executive Director), while the roles of Deputy Executive Director and Adviser rotate among the Netherlands and the Nordic countries.

Norwegian Governor: Anne Margareth Fagertun Stenhammer
Norwegian staff: 4 employees
Website: www.adb.org

The Asian Development Bank (AsDB) provides loans to qualifying regional member countries from the following two sources, or windows:

  • The AsDB finances its lending activities through borrowing from the international capital markets with security in its capital base. The size of its capital base, to which all member countries have contributed according to their relative size in the world economy, has given the AsDB high creditworthiness, enabling it to borrow on extremely favourable terms. The AsDB provides loans to middle-income countries on the same low terms, with the addition of a ½ percentage point margin, which is normally a far more advantageous interest rate than these countries would be able to obtain in the capital markets. The loans are given to national governments and to other institutions with a government guarantee. Around 70 per cent of the AsDB’s total lending is normally financed from ordinary capital resources (OCR).

OCR lending in 2004: NOK 28.51 billion
Largest borrowers (2005): China, Indonesia, Pakistan
Norwegian share of capital base: 0.34 per cent (28th largest shareholder)

  • The AsDF (the Asian Development Fund) is the AsDB’s lending window for the poorest countries, which are unable to meet the terms of ordinary OCR loans. Loans are funded through donor-country development-assistance budgets, and replenishments are negotiated at three-year intervals. AsDF loans are interest-free (though with an administration fee of 1 per cent of the outstanding balance) and instalment-free for up to 10 years, with a repayment period of up to 40 years. These loans are provided to national governments and to other institutions with a government guarantee.

Loans in 2004: NOK 8.9 billion
Largest borrowers (2005): Indonesia, Sri Lanka, Pakistan
Norwegian share of contributions to AsDF: 1.11 per cent of the total donor contribution to the AsDF. The Norwegian contribution to the seventh capital replenishment is NOK 258 million for the four-year period from 2005 to 2008.

Lending profile:  Most new loans granted in 2004 went to the transport and communications sector, followed by the energy sector and industry measures.

2.      Operations

a)      The work of the Executive Board

The Board of Directors is the AsDB’s executive authority and is responsible for the Bank’s operations. The Nordic countries are part of the same constituency in the AsDB, as they are in the other regional development banks and the World Bank, and work closely together, holding weekly telephone conferences and sending joint instructions to the constituency office. The active collaboration of the Nordic countries gives Norway a better opportunity to be heard and to gain acceptance for its views. On 1 September 2004, Finland took over responsibility for coordination between the Nordic countries for a three-year period.

b)      Replenishment negotiations

Replenishment negotiations are not just a matter of financial contributions. They are also an important arena for policy development. They set many conditions for the further activities of the Bank, and they lay down strict guidelines for the Bank’s work in the poorest countries. Experience has shown that replenishment negotiations in the various development banks have an influence on each other, giving a substantial degree of consistency in the individual banks’ policies towards the borrowing countries.

c)      Co-financing

Our co-financing involvement in the international development banks is used to influence these institutions in accordance with Norwegian foreign and international development policy. Co-financing with the AsDB has traditionally focused on typical multi-bilateral projects, such as educational projects for women in developing countries, support for NGOs, etc. Disbursements to these projects are now completed, and a more long-term, strategic form of support to priority thematic areas, preferably in the form of multi-donor funds, will constitute our future co-financing strategy with the AsDB. In 2002 Norway joined the Governance Cooperation Fund established by Canada in 2001, which Denmark also joined in 2003. The Fund builds on the Bank’s Governance Policy and its objectives are to improve the participatory aspects and transparency of decision-making processes in the public sector and to enhance the capacity of governments to implement governance reforms. A similar Poverty and Environment Fund was established in 2003 to support rural community projects that combine the sustainable management of natural resources with poverty reduction strategies.. This also constitutes one of the priority areas in the AsDB’s Environmental Policy, which was approved in 2002. The contributors so far are Norway and Sweden. Norway, Denmark and Canada set up the Gender and Development Fund in 2003. The most important activities include mainstreaming gender issues into operations and competence building within the AsDB and in the developing member countries. Norway also participates in the Bank’s Water Fund, which the Netherlands established in 2001. This fund is used for knowledge and capacity building within the water sector, pilot projects, developing partnerships, and regional measures. In 2005, Norway contributed to a multi-donor fund for result management with a view to strengthening these efforts in the developing member countries.

3.      Norwegian priorities

We will promote central Norwegian development policy objectives as they are formulated in the Report No. 35 to the Storting 2003-04 (“Fighting Poverty Together”) and the Government declaration of 2005 through our engagement in the AsDB, including our involvement on the Board of Directors, our participation in negotiations, co-financing and in other ways. Contributing to the achievement of the Millennium Development Goals, including their implementation at national and regional levels, is a fundamental element of our international development policy, and our participation in the AsDB must reflect this. Coordination at all levels is important in this connection, and must be based on national development strategies and poverty-reduction strategies (PRSs). Coordination of efforts, standardisation of procedures and consolidation of resources are therefore essential in our efforts vis-à-vis the AsDB, and will be given priority. The Bank is becoming increasingly result-oriented in both its internal administration and its operations, and we give this development our full support.

Our policy towards the AsDB is based on the following aims:

  • Integrating the AsDB’s overall objective of poverty reduction into all phases of the bank’s operations (policies, programmes, technical assistance and other activities).
  • Making the AsDB a more integrated part of the international development architecture than is the case at present. This will involve promoting national ownership of projects and programmes financed by the Bank, and will require the Bank to defer to national coordination, for example through active participation in the formulation and follow-up of national PRSs and increased participation in Sector Wide Approaches (SWAps).
  • Ensuring that important cross-cutting issues, such as gender equality, good governance and environmental issues, are more effectively addressed in the AsDB.
  • Promoting a more result-oriented approach in the AsDB, particularly as regards country strategies and in the revised poverty reduction strategy and the implementation of the approved action plan to introduce results-based management within the Bank and in the borrowing countries. It will be important to follow up the work of the Development Effectiveness Committee. The Bank’s evaluation function reports directly to the Board, and is likewise important in this connection.
  • Promoting further improvements in the AsDB’s internal management systems (role upgrades for the vice-presidents, greater transparency of personnel policy, decentralisation) and redirecting the focus of the Board of Directors away from specific projects towards more general issues (such as board decisions on country strategies, etc). The bank should seek contact with civil society and strive for greater transparency.
  • Improving the development impact of the Bank’s private sector efforts, and increasing the Bank’s focus on the framework conditions for the private sector in countries and regions with limited access to international financial markets.