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).

Where the LC indicates a separate advising bank and nominated commercial bank,

4:27 AM    

Where the LC indicates a separate advising bank and nominated commercial bank,
ADB will issue the commitment letter to the nominated commercial bank, with a
copy provided to the advising bank. Indicating “negotiation with any bank” is not
acceptable.
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8.9  A “transferrable” LC that allows the rights and obligations of the LC beneficiary
(i.e., manufacturer or exporter) to be transferred to another party, thereby creating a
secondary beneficiary, is not acceptable under ADB’s commitment letter procedure.
Therefore, the borrower or executing agency should not have the LC issuing bank
approve a transferrable LC.
8.10  No commitment letter is issued if shipment or LC expiry date fall beyond the loan
closing date.
Accepting the Commitment Letter
8.11  The nominated commercial bank’s first request for payment under the commitment
letter constitutes its acceptance of the terms and conditions of ADB’s commitment.
Payment to Commercial Banks
8.12  ADB pays from the loan account after receipt of the confirmation from the supplier’s
nominated commercial bank (normally a negotiating bank) which has paid for or
agreed to pay in accordance with the LC terms.
8.13  Requests for reimbursement from the nominated commercial bank are made
in authenticated SWIFT or tested telex. The word “Condiment”or the words
“(i) payment has been made or is due and will be promptly made to the
beneficiary under and in full compliance with the terms and conditions of the LC;
(ii) documents were presented within the original or extended expiry date; and
(iii) discrepancies, if any, have been referred to and accepted by LC issuing bank”
must be written on the request for reimbursement (Appendix 8C).
Amendments Requiring ADB’s Prior Approval
8.14  ADB’s prior approval is required for amendments to the LC involving changes such as
ȕ extension of the LC expiry date beyond the loan closing date of the loan account,
as specified in the loan agreement, or otherwise extended by ADB;
ȕ change in the LC’s value or currency;
ȕ description or quantity of goods;
ȕ country of origin;
ȕ beneficiary; and
ȕ terms of payment.
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This is to keep the legal connection between the LC and ADB’s commitment letter, which is addressed to the
specific bank or payee.