The Asian Development Bank (ADB) plans to increase its capital up to threefold from the current 5 trillion yen, it was learned Wednesday.
The capital increase is aimed at strengthening its assistance to developing countries amid the deepening global financial crisis.
It would be the banks first capital boost in 15 years and the largest since is was set up in 1966 with a mission to lend to developing Asian economies that might struggle to raise affordable funds on their own.
The fresh capital would come from the ADBs shareholder nations. Japan and the United States are the biggest contributors with shares of 15,6 percent each in the bank, which has more than 60 member countries.
Lending by the bank has surged since 2006, likely hitting a record 8,9 billion US dollar in 2008 amid ravenous demand from emerging economies in Asia. The bank initially considered raising capital next year but has decided to move the plan ahead in light of the global financial crisis, which has caused an outflow of capital from developing member nations.
The bank reckons it will require triple the capital to meet the increased financing need for railroads, power plants, and other projects in such countries as Indonesia, the Philippines, Vietnam and Bangladesh.
But it may have to settle for a smaller increase of 150 percent or so if big shareholders balk at the proposal. New lending will need to be reduced in 2010 if the additional capital is not raised this year, the bank says.
Kilde: www.worldbank.org
