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.
5
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
6
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)
7
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
8
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).
9
Related illustrative tables are also
provided in this handbook (Appendix 3B).

Fiduciary Safeguard

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Fiduciary Safeguard
11.11  Since general budget support under stand-alone policy-based lending and
programmatic approach are absorbed into a DMC’s public expenditures in the form
of counterpart funds of loan proceeds, fiduciary arrangements need to be in place
to ensure efficient utilization of overall resources through sound public financial
management.
Loan Proceeds and Disbursement Procedures
11.12  There is considerable flexibility in the use of policy-based loan proceeds to meet a
DMC’s developmental needs. The loan proceeds may be utilized to finance economywide import requirements on the basis of a negative import list, or sector-specific
import requirements on the basis of a positive import list.
11.13  A negative import list specifies imports that are excluded from financing under
the loan, either by item or by specification of the Standard International Trade
Classification. All items not listed may be financed under the loan. In contrast,
a positive import list specifies eligible imports for financing under the loan.
11.14  The proceeds of a policy-based loan for which there is only a negative list of ineligible
items may be disbursed without supporting import documentation if, during each
year
7
in which the proceeds of the policy-based loan are expected to be disbursed,
the value of the DMC’s total imports minus (x) imports from nonmember countries,
(y) ineligible imports, and (z) disbursements made under other official development
assistance, is greater than the amounts expected to be disbursed during such year.
The borrower will be required to submit with each withdrawal request a certification
(Section 11.16) confirming the borrower’s compliance with the above formula
in respect of the period covered by the withdrawal request. Otherwise, import
documentation under existing procedures will still be required.
8
Documentation in
respect of specific imports will continue to be required for policy-based loans for
which a positive list of eligible items is utilized.
11.15  Disbursement under policy-based loans normally takes the form of reimbursement
to the central bank of the DMC acting as a depository. The central bank is generally
responsible for administering policy-based loans in close consultation with the
government and sector-specific entities responsible for implementing the sector
program. Where appropriate, the central bank may disburse the loan through
commercial banks or development finance institutions or both.
7
This will normally be the 1-year period for which trade statistics are maintained by the DMC concerned.
8
ADB. 1998. Simplification of Disbursement Procedures and Related Requirements for Program Loans.Manila.