Hong Kong: The Asian Development Bank (ADB) will increase its capital base to $165 billion from $55 billion to help boost resources for its development programmes, the bank said in a statement on Thursday.
A higher borrowing base would allow the development bank to raise more funds, which it can lend out to support emerging Asian economies, which are currently feeling the hit from the global economic downturn.
The capital increase, the largest-ever, is the first since its 1994 expansion when it doubled its capital, it said.
In February, a top official at the development bank told Reuters in an interview that ADB aimed to increase its capital by two to three times so it could raise its borrowing ceiling and allow it to leverage by 13 to 15 times.
The borrowing ceiling is expected to be reached by 2011 under the current capital base.
The raise allows it to “substantially increase its support to countries affected by the global downturn, enabling ADB to provide an additional $10 billion from its Ordinary Capital Resources over the next few years for crisis-related assistance.”
Earlier this month, the bank said it will increase lending to nations in the region by about $10 billion in the next two to three years in response to the global financial crisis.
The Manila-based ADB loaned about $10.45 billion in 2008 and is looking to gradually build on this, with an estimated increase of $4 billion-$5 billion in 2009.
The bank has forecast that growth in the Asian developing economies will ease this year to its slowest since the 1997-98 financial crisis.
The ADB said Asia’s developing economies, which include China, India, the economies of Southeast Asia, South Korea and Central Asia, should register average GDP growth of 3.4% this year, down from 6.3% in 2008.