The Asian Development Bank (ADB) is a multilateral development finance institution
founded in 1966 to promote social and economic progress in its developing member
countries in Asia and the Pacific (see ADB’s website: http://www.adb.org/about/main).
2.2 ADB’s principal functions are
- lending funds,
- providing grants,
- providing technical assistance and advisory services,
- promoting investments for development purposes, and
- assisting in coordinating the development policies and plans of developing
member countries.
Inquiries
2.3 Loan disbursement is handled by the Loan Administration Division of the Controller’s
Department.
2.4 For loan service payments and billing matters, inquiries are addressed to the
Accounting Division of the Controller’s Department.
Loan or Grant Regulations
3.4 The regulations4
further set out conditions for the use of loan or grant proceeds
financed by ADB, or proceeds administered by ADB.
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These documents are expressly
incorporated in the associated loan agreement, guarantee agreement, or grant
agreement. If any provision of a loan agreement, guarantee agreement, or grant
agreement is inconsistent with a provision of these regulations, the provision of the
loan agreement, guarantee agreement, or grant agreement governs.
Loan Documents
3.5 Loan documents
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include the following documents and agreements:
ȕ Thereport and recommendation of the President to the Board of Directors
(RRP) presents the project proposal for consideration by the ADB Board.
ȕ Theproject administration manual (PAM)
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includes all the information and
schedules describing project implementation and project readiness filters
covering major preproject implementation actions (e.g., government approvals,
procurement, and resettlement) to ensure a rapid start-up and enable early
disbursement. It is mandatory
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that the PAM be referenced in the RRP and in
the loan (or facility) agreements, is presented as a stand-alone linked document
to the RRP, and serves as the main document describing implementation details.
The PAM is prepared in the course of loan processing and initially agreed with
the government at the loan fact-finding stage. At loan negotiations, the borrower
and ADB shall review and confirm the PAM agreed during loan fact-finding to
ensure consistency with the loan agreement, and such confirmation shall be
reflected in the minutes of the loan negotiations. The detailed cost estimate by
financier (one schedule included in the PAM) is prepared based on Section J6 of
the ADB Operations Manual (Appendix 3A).
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Related illustrative tables are also
provided in this handbook (Appendix 3B).

agreed between ADB and the borrower

7:46 AM    

Retroactive financing applies to eligible expenditures as agreed between ADB and the
borrower. The loan agreement contains a specific provision indicating the amount and
category of expenditures and the date from which the expenditures are considered
eligible. The amount to be retroactively financed does not exceed 20% of the
loan amount.
Reallocating Loan Proceeds
3.10  The proceeds of an ADB loan are used only for the purposes for which the loan was
approved. No disbursements therefore are made directly from the “unallocated”
category of the loan agreement. ADB may agree to a borrower’s request to reallocate
funds from the “unallocated” or other categories to another allowable category for
project purposes. Normally the loan proceeds are reallocated after project progress
has been reviewed with the borrower during a review mission.
Loan Cancellation
3.11  Provisions for loan cancellation, suspension, and acceleration of maturity are
contained in the Loan Regulations (see Section 3.4 for relevant regulations) which
provide that, after consultation with ADB and with the concurrence of the guarantor,
if any, the borrower may, by notice to ADB, cancel any amount of the loan which
has not been withdrawn. The effective cancellation date is when ADB receives the
borrower’s notice of such cancellation.
3.12  Under the Loan Regulations, ADB may also, by notice to the borrower and the
guarantor, if any, cancel
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any unwithdrawn amount of the loan when
ȕ the borrower’s right to make withdrawals from the loan account has been
suspended for a continuous 30 days;
ȕ ADB determines, at any time and after consultation with the borrower, that any
amount of the loan will not be required for purposes of the project;
ȕ ADB determines, with respect to any contract to be financed out of the
proceeds of the loan, that corrupt or fraudulent practices were engaged in by
representatives of the borrower, the guarantor, or any beneficiary of the loan
during the procurement of goods or services, consultants’ selection, or the
execution of the contract without the borrower or guarantor having taken
appropriate action to remedy the situation;
ȕ ADB determines that the procurement of any goods and services to be financed
out of the proceeds of the loan is inconsistent with the procedure set out in the
loan agreement; or
ȕ an amount of the loan remains unwithdrawn from the loan account by loan
closing date.
3.13  Upon giving such notice, ADB cancels any unwithdrawn amount of the loan.
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The effective date of cancellation is the date of such notice by ADB to the borrower or the date specified in
the notice to the borrower.